# EDGAR Filing Document

**Accession Number:** 0001179821
**File Stem:** 0001193125-25-165500
**Filing Date:** 2025-7
**Character Count:** 2029412
**Document Hash:** 3df61b12ccb92a596dc2eeeb04ff4937
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-165500.hdr.sgml**: 20250725

**ACCESSION NUMBER**: 0001193125-25-165500

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 111

**CONFORMED PERIOD OF REPORT**: 20250329

**FILED AS OF DATE**: 20250725

**DATE AS OF CHANGE**: 20250725

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BIRKS GROUP INC.
- **CENTRAL INDEX KEY:** 0001179821
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-JEWELRY STORES [5944]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **FISCAL YEAR END:** 0330

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32635
- **FILM NUMBER:** 251152155

**BUSINESS ADDRESS:**
- **STREET 1:** 2020 ROBERT BOURASSA
- **STREET 2:** SUITE 200
- **CITY:** MONTREAL
- **STATE:** A8
- **ZIP:** H3A 2A5
- **BUSINESS PHONE:** 514-397-2592

**MAIL ADDRESS:**
- **STREET 1:** 2020 ROBERT BOURASSA
- **STREET 2:** SUITE 200
- **CITY:** MONTREAL
- **STATE:** A8
- **ZIP:** H3A 2A5

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Birks Group Inc.
- **DATE OF NAME CHANGE:** 20131003

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BIRKS & MAYORS INC.
- **DATE OF NAME CHANGE:** 20051115

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HENRY BIRKS & SONS INC
- **DATE OF NAME CHANGE:** 20020809

?xml version='1.0' encoding='ASCII'? 20-F

##### [**Table of Contents**](#toc)
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 29, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from to

Commission file number: 001-32635

## BIRKS GROUP INC.
(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant's name into English)

Canada

(Jurisdiction of incorporation or organization)

2020 Robert-Bourassa Blvd.

Montreal Québec

Canada

H3A 2A5

(Address of principal executive offices)

Katia Fontana, 514-397-2592 (telephone), 514-397-2537 (facsimile)

2020 Robert-Bourassa Blvd.

Suite 200

Montreal Québec

Canada

H3A 2A5

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

<u>Title of each class</u> <u>Trading Symbol</u> <u>Name of each exchange on which registered</u> <br> Class A Voting Shares, without nominal or par value BGI NYSE American LLC

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None.

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None.

The number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the Annual Report was:

---

| | |
|:---|:---|
| 11876717 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A Voting Shares, without nominal or par value |
| 7717970 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class B Multiple Voting Shares, without nominal or par value |
| 0 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series A Preferred Shares, without nominal or par value, issuable in series |

---

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ | Non-accelerated filer | ☒ |
|  |  |  |  | Emerging Growth Company | ☐ |

---

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued Other ☐ <br> by the International Accounting Standards Board ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ☐ Item 18 ☐

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Auditor Firm ID: 85 Auditor Name : KPMG LLP &nbsp;&nbsp;&nbsp;&nbsp; Auditor Location: Montreal, QC, Canada

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##### [**Table of Contents**](#toc)

#### **TABLE OF CONTENTS**

---

| | | | |
|:---|:---|:---|:---|
|  |  | **Page** | **Page** |
| **[<u>Part I</u>](#toc81203_1)** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 1. | [Identity of Directors, Senior Management and Advisers](#toc81203_2) |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 2. | [Offer Statistics and Expected Timetable](#toc81203_3) |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 3. | [Key Information](#toc81203_4) |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 4. | [Information on the Company](#toc81203_5) |  | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 4A. | [Unresolved Staff Comments](#toc81203_6) |  | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 5. | [Operating and Financial Review and Prospects](#toc81203_7) |  | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 6. | [Directors, Senior Management and Employees](#toc81203_8) |  | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 7. | [Major Shareholders and Related Party Transactions](#toc81203_9) |  | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 8. | [Financial Information](#toc81203_10) |  | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 9. | [The Offer and Listing](#toc81203_11) |  | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 10. | [Additional Information](#toc81203_12) |  | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 11. | [Quantitative and Qualitative Disclosures About Market Risk](#toc81203_13) |  | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 12. | [Description of Securities Other than Equity Securities](#toc81203_14) |  | 55 |
| **[<u>Part II</u>](#toc81203_15)** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 13. | [Defaults, Dividend Arrearages and Delinquencies](#toc81203_16) |  | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 14. | [Material Modifications to the Rights of Security Holders and Use of Proceeds](#toc81203_17) |  | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 15. | [Controls and Procedures](#toc81203_18) |  | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16A. | [Audit Committee Financial Expert](#toc81203_19) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16B. | [Code of Ethics](#toc81203_20) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16C. | [Principal Accountant Fees and Services](#toc81203_21) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16D. | [Exemptions from the Listing Standards for Audit Committees](#toc81203_22) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16E. | [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](#toc81203_23) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16F. | [Change in Registrant's Certifying Accountant](#toc81203_24) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16G. | [Corporate Governance](#toc81203_25) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16H. | [Mine Safety Disclosure](#toc81203_26) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16I. | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#toc81203_27) |  | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16J. | [Insider Trading Policies](#toc81203_28) |  | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 16K. | [Cybersecurity](#toc81203_29) |  | 58 |
| **[Part III](#toc81203_30)** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 17. | [Financial Statements](#toc81203_31) |  | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 18. | [Financial Statements](#toc81203_32) |  | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Item 19. | [Exhibits](#toc81203_33) |  | 60 |

---

i

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##### [**Table of Contents**](#toc)

#### INTRODUCTION

#### References
Unless the context otherwise requires, the terms "Birks Group," "the Company," "we," "us," and "our" are used in this Annual Report to refer to Birks Group Inc., a Canadian corporation, and its subsidiaries on a consolidated basis. In addition, (i) the term "Mayors" refers to Mayor's Jewelers, Inc., a Delaware corporation, and its wholly-owned subsidiary, Mayor's Jewelers of Florida, Inc., a Florida corporation, until October 23, 2017, upon which date it was sold to a third party, and (ii) "the merger" refers to the merger of Mayors with a wholly-owned subsidiary of the Company, as approved by the stockholders on November 14, 2005. The term "Birks" refers to Henry Birks & Sons Inc., the legal name of Birks Group prior to the merger.

#### Presentation of Financial and Other Information
Throughout this Annual Report, we refer to our fiscal year ending March 29, 2025, as fiscal 2025, and our fiscal years ended March 30, 2024, and March 25, 2023, as fiscal 2024 and 2023, respectively. Our fiscal year ends on the last Saturday in March of each year. The fiscal years ended March 29, 2025 and March 25, 2023 consisted of 52 weeks each, whereas the fiscal year ended March 30, 2024 consisted of 53 weeks.

All figures presented in this Form 20-F are in Canadian dollars unless otherwise specified.

#### Current Developments

#### External risk factors
The Company believes recent general economic conditions, business and retail climates, and geopolitical instability, which includes heightened inflation, stock market volatility, high interest rates and tariffs and retaliatory tariffs, could lead to a slow-down in certain segments of the global economy and affect customer behavior and the amount of discretionary income spent by potential consumers to purchase the Company's products. If global economic, financial market and geopolitical conditions persist or worsen, the Company's sales may decrease, and the Company's financial condition and results of operations may be adversely affected.

#### Acceptance of Compliance Plan by NYSE American
On February 25, 2025, the Company was notified by NYSE American LLC ("NYSE American") that it was not in compliance with the continued listing standards set forth in Section 1003(a)(i) and (ii) of the NYSE American Company Guide (the "Company Guide"). Section 1003(a)(i) applies if a listed company has stockholders' equity of less than U.S. $2.0 million and has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years. Section 1003(a)(ii) applies if a listed company has stockholders' equity of less than U.S. $4.0 million and has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Company reported stockholders' deficit of U.S. $6.1 million (CAD $(8.2) million) as of September 28, 2024, and net losses in two of its three most recent fiscal years ended March 30, 2024 and in three of its four most recent fiscal years ended March 30, 2024. The Company was not eligible for any exemption in Section 1003(a) of the Company Guide from the stockholders' equity requirements.

In accordance with the procedures and requirements of Section 1009 of the Company Guide, the Company submitted its plan of compliance on March 27, 2025, addressing how the Company intends to regain compliance with Section 1003(a)(i) and (ii) of the Company Guide. On May 13, 2025, NYSE American notified the Company that it accepted the Company's plan and granted the Company an extension for its continued listing until August 25, 2026 (the "Plan Period").

The Company is subject to periodic review by NYSE American during the Plan Period. If the Company does not regain compliance by the end of the Plan Period, or if the Company does not make progress consistent with the plan during the Plan Period, NYSE American may initiate delisting procedures as appropriate.

Receipt of the non-compliance and acceptance notices does not affect the Company's business, operations, financial or liquidity condition, or reporting requirements with the Securities and Exchange Commission. During this time, the Company's Class A voting shares will continue to be listed and trade under the symbol "BGI."

#### Significant Transaction
On June 6, 2025, the Company entered into a share purchase agreement (the "Share Purchase Agreement") with the shareholders of 1067830 Ontario Limited ("the Target"), a company incorporated under the laws of Ontario, to acquire the Target and its wholly-owned subsidiaries which operate four retail locations in Toronto, Ontario, under the European Boutique brand and are engaged primarily in luxury timepieces and jewelry retail activities. The purchase was completed on July 8, 2025, for a total consideration of $9.0 million, of which $7.0 million payable at closing and $2.0 million is payable over two years from closing, subject to certain adjustments customary for and acquisition of this nature (the "European Acquisition").

On June 26, 2025, Mangrove Holding S.A., one of the Company's controlling shareholders, entered into a loan agreement with the Company to advance $3.75 million of additional indebtedness (the "Mangrove Loan") to fund the Company's working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026.

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##### [**Table of Contents**](#toc)
In conjunction with the closing of the European Acquisition, on July 8, 2025, the Company entered into an amendment to the Amended Term Loan (defined below) with Crystal Financial LLC (D/B/A SLR Credit Solutions) ("SLR"), whereby SLR provided the Company with an additional term loan of $13.5 million to fund the European Acquisition and to fund ordinary course working capital (the "Incremental Loan"). The Incremental Loan bears interest at the same rate as the current term loan with SLR which is CORRA plus (i) a CORRA adjustment of 0.32% and (ii) 7.75%, and is repayable, in full, on December 24, 2026.

In addition, contemporaneously with the Incremental Loan, on July 8, 2025, the Company entered into an amendment and waiver to the Amended Credit Facility (as defined below) with Wells Fargo Capital Canada Corporation ("Wells Fargo") whereby Wells Fargo waives certain provisions of the existing Amended Credit Facility to permit the European Acquisition, the Incremental Loan and the Mangrove Loan.

#### Forward-Looking Information
This Annual Report and other written reports and releases and oral statements made from time to time by the Company contain forward-looking statements which can be identified by their use of words like "plans," "expects," "believes," "will," "anticipates," "intends," "projects," "estimates," "could," "would," "may," "planned," "goal," and other words of similar meaning. All statements that address expectations, possibilities or projections about the future, including, without limitation, statements about our strategies for growth, expansion plans, sources or adequacy of capital, expenditures and financial results are forward-looking statements. These risks and uncertainties include, but are not limited to the following: (i) heightened inflationary pressure and interest rates, a decline in consumer discretionary spending, and increased cost of borrowing or deterioration in consumer financial position; (ii) economic, political and market conditions, including the economies of Canada and the U.S., which could adversely affect the Company's business, operating results or financial condition, including its revenue and profitability, through the impact of changes in the real estate markets, changes in the equity markets and decreases in consumer confidence and the related changes in consumer spending patterns, and the impact on store traffic, tourism and sales, as well the recently imposed tariffs (and retaliatory measures), possible changes therefrom and other trade restrictions; (iii) the impact of fluctuations in foreign exchange rates, increases in commodity prices and borrowing costs and their related impact on the Company's costs and expenses; (iv) the Company's ability to maintain and obtain sufficient sources of liquidity to fund its operations, to achieve planned sales, gross margin and net income, to keep costs low, to implement its business strategy, to maintain relationships with its primary vendors, to source raw materials, to mitigate fluctuations in the availability and prices of the Company's merchandise, to compete with other jewelers, to succeed in its marketing initiatives (including with respect to Birks branded products), and to have a successful customer service program; (v) the Company's plan to evaluate the productivity of existing stores, close unproductive stores and open new stores in new prime retail locations, renovate existing stores and invest in its website and e-commerce platform; (vi) the Company's ability to execute its strategic vision; and (vii) the Company's ability to invest in and finance capital expenditures.

One must carefully consider such statements and understand that many factors could cause actual results to differ from the forward-looking statements, such as inaccurate assumptions and other risks and uncertainties, some known and some unknown. No forward-looking statement is guaranteed, and actual results may vary materially. Such statements are made as of the date provided, and we assume no obligation to update any forward-looking statements to reflect future developments or circumstances.

One should carefully evaluate such statements by referring to the factors described in our filings with the Securities and Exchange Commission ("SEC"), especially on this Form 20-F and our Forms 6-K. Particular review is to be made of Items 3, 4 and 5 of this Form 20-F where we discuss in more detail various important risks and uncertainties that could cause actual results to differ from expected or historical results. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. Since it is not possible to predict or identify all such factors, the identified items are not a complete statement of all risks or uncertainties.

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##### [**Table of Contents**](#toc)

#### PART I
**Item 1.** **Identity of Directors, Senior Management and Advisers** <br>

Not applicable.

**Item 2.** **Offer Statistics and Expected Timetable** <br>

Not applicable.

**Item 3.** **Key Information** <br>

A. [Reserved]

B. Capitalization and Indebtedness.

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

#### RISK FACTORS

#### Risks Related to Global and Economic Conditions
***Our business depends, in part, on factors affecting consumer spending that are out of our control. A downturn in the global economy, including as a result of general economic conditions, such as inflation, interest rate increases, or tariffs or retaliatory tariffs, can significantly affect consumer purchases of discretionary items, which could materially impact our sales, profitability and financial condition.***

Our business, like other retailers, depends on consumer demand for our products and our sales are affected by discretionary spending by consumers. Consequently, our business is sensitive to a number of factors that are beyond our control, and that influence consumer spending, including general economic conditions, interest and tax rates, inflation, tariffs and retaliatory tariffs, consumer confidence in future economic conditions, domestic and international geopolitical conditions, the availability of consumer credit, consumer indebtedness levels, tourism, recession and fears of recession, disposable consumer income, level of customer traffic in shopping malls and other retail centers, conditions in the housing market, consumer perceptions of personal well-being and security, fuel prices, inclement weather, foreign exchange rates, sales tax rate increases, pandemics, epidemics, disease outbreaks, and other public health crises, and war and fears of war. Jewelry and timepiece purchases are discretionary for consumers and may be particularly and disproportionately affected by adverse trends in the general economy and the equity markets. Adverse changes in factors affecting discretionary consumer spending could reduce consumer demand for our products, resulting in a reduction in our sales and harming our business, operating results and cash flows. Recent geopolitical events and general economic conditions, such as rising inflation, could lead to a slow-down in certain segments of the global economy and could affect the amount of discretionary income available for certain consumers to purchase our products. If adverse global economic and financial market conditions persist, our sales could decrease, and our financial condition and results of operations could be adversely affected. The risk of recession is growing, notably in light of the significant increase in interest and inflation rates and could further have an adverse impact on our business and results of operations.

A substantial portion of our customers use credit, either from our private label and proprietary credit cards or another consumer credit source, to purchase jewelry and timepieces. When there is a downturn in the general economy, fewer people may use or be approved for credit, which could result in a reduction in net sales and/or an increase in credit losses, which in turn could lead to an unfavorable impact on our overall profitability. The current inflationary environment, high interest rates, and the increase in cost of sales could negatively affect consumer spending and have adverse effects on our business and our financial results. Any of these factors could have a material adverse impact on our business, financial results, and the execution of our strategic plan. We have seen decreases in consumer spending, and such trends may continue. If periods of decreased consumer spending continue, our sales could be negatively impacted, and our financial condition and results of operations could be adversely affected. Consequently, our belief that we currently have sufficient liquidity to fund our operations is based on certain assumptions about the future state of the economy, the future availability of borrowings to fund our operations and our future operating performance. To the extent that the economy and other conditions affecting our business are significantly worse than we anticipate, we may not achieve our projected level of financial performance, and we may determine that we do not have sufficient capital to fund our operations.

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##### [**Table of Contents**](#toc)
***Our business, financial condition, results of operations and cash flows have been and may continue to be adversely impacted by the COVID-19 pandemic or other public health crisis, disease outbreak, epidemic or pandemic.***

A public health crisis or disease outbreak, epidemic or pandemic, such as COVID-19, or the threat or fear of such events, has adversely impacted and could continue to adversely impact our business. Consumer demand may be impacted amidst the uncertainty caused by a public health crisis, disease outbreak, epidemic or pandemic which could negatively impact our retail business. Our business is particularly sensitive to reductions in discretionary spending by consumers. A public health crisis, disease outbreak, epidemic or pandemic may cause significant uncertainty and disruption in the financial markets both globally and in Canada, which may lead to a decline in discretionary spending by consumers, and which in turn may impact, materially, our business, sales, financial condition and results of operations. Our retail business is sensitive to tourism and a public health crisis, disease outbreak, epidemic or pandemic may impact tourism. A public health crisis, disease outbreak, epidemic or pandemic may also disrupt our global supply chain network, including shortages of certain products due to disruptions in manufacturing by our suppliers, as well as costs of production and distribution.

#### Financial and Liquidity Risks

#### The financial statements have been prepared assuming that the Company will continue as a going concern.
We have an accumulated deficit of $138.3 million as of March 29, 2025, and a net loss of approximately $12.8 million for the fiscal year ended March 29, 2025 and have negative cash flows from operations. The Company received two loans in July 2025 to finance the European Acquisition and support working capital needs (see Current Developments). Our audited financial statements for the fiscal year ended March 29, 2025, were prepared under the assumption that the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Additional financing or capital required may not be available on commercially reasonable terms or may not be available at all. If we are unable to meet our financial projections or renew our debt agreements when they become due in December 2026, we may need to raise additional funds through public or private equity or debt financing, including funding from governmental sources, which may not be possible as the success of raising additional funds is beyond our control. The sale or issuance of additional equity securities could result in significant dilution to our current shareholders, and the securities issued in future financings may have rights, preferences and privileges that are senior to those of our common stock. Failure to obtain such additional financing or capital could have an adverse impact on our liquidity and financial condition including our ability to continue as a going concern, in which case we would need to cease our operations. In addition, should a substantial doubt exist in the Company's ability to continue as a going concern, this would trigger an event of default on both the Amended Credit Facility and the Amended Term Loan, and a cross-default on the Company's other loans. The event of default would result in the debt balances becoming immediately due.

#### The level of our indebtedness could adversely affect our operations, liquidity and financial condition.
Our debt levels fluctuate from time to time based on seasonal working capital needs. In fiscal 2025, the Company's total indebtedness increased by $9.6 million driven primarily by an increase in bank indebtedness as a result of negative cash flows from operations. In fiscal 2024, the Company's total indebtedness increased by $8.1 million driven primarily by an increase in bank indebtedness as a result of negative cash flows from operations. Along with the increase in bank indebtedness, interest expense also increased as a result of the level indebtedness and the interest rates. The following table sets forth our total indebtedness (including bank indebtedness and current and long-term portion of debt), total stockholders' equity (deficiency), total capitalization and ratio of total indebtedness to total capitalization as of March 29, 2025, and March 30, 2024 (dollars in thousands):

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| | | |
|:---|:---|:---|
|  | March 29, 2025 | March 30, 2024 |
|  Total indebtedness (consisting of bank indebtedness and long-term debt, including current portion) | $99864 | $90311 |
|  Total stockholders' equity (deficiency) | $(18011) | $(5149) |
|  Total capitalization | $81853 | $85162 |
|  Ratio of total indebtedness to total capitalization | 122.0% | 106.0% |

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Our ratio of total indebtedness to total capitalization is high due to lack of capital injection and increasing debt. It has worsened progressively from 101.8% as of March 27, 2021, as total indebtedness has increased and stockholders' deficiency increased from net losses over the period. This level of leverage could adversely affect our results of operations, liquidity and financial condition. Some examples of how high levels of indebtedness could affect our results of operations, liquidity and financial condition may include the following:

• make it difficult for us to satisfy our obligations with respect to our indebtedness;

• increase our vulnerability to adverse economic and industry conditions;

• increase our vulnerability to fluctuations in interest rates;

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• require us to dedicate a substantial portion of cash from operations to the payment of debt service, thereby reducing the availability of cash to fund working capital, capital expenditures and other general corporate purposes;

• limit our ability to obtain additional financing for working capital, capital expenditures, general corporate purposes or acquisitions;

• place us at a disadvantage compared to our competitors that have a lower degree of leverage; and

• negatively affect the price of our stock.

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Consequently, our belief that we currently have sufficient liquidity to fund our operations is based on certain assumptions about the future state of the economy, the future availability of borrowings to fund our operations and our future operating performance. To the extent that the economy and other conditions affecting our business are significantly worse than we anticipate, we may not achieve our projected level of financial performance, and we may determine that we do not have sufficient capital to fund our operations in which case we would need to cease our operations.

***Significant restrictions on our borrowing capacity could result in our inability to fund our cash flow requirements or maintain minimum excess availability requirements under the terms of our secured asset-based credit facility needed to support our day-to-day operations and our ability to continue as a going concern.***

Our ability to meet our cash flow requirements in order to fund our operations is dependent upon our ability to attain profitable operations, adhere to the terms of our committed financings, obtain favorable payment terms from suppliers as well as to maintain positive excess availability levels under our Amended Credit Facility (as defined below) and our Amended Term Loan (as defined below). The Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan.

Our Amended Credit Facility and Amended Term Loan are subject to cross default provisions with all other loans pursuant to which if we are in default of any other loan, we will immediately be in default of both the Amended Credit Facility and the Amended Term Loan. In the event that excess availability falls below the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan, this would be considered an event of default under the Amended Credit Facility and Amended Term Loan, that provides the lenders the right to require the outstanding balances borrowed under our Amended Credit Facility and Amended Term Loan to become due immediately, which would result in cross defaults on our other borrowings. We expect to be above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan for at least the next twelve months from the date of issuance of the financial statements.

On October 23, 2017, the Company entered into a credit facility with Wells Fargo Canada Corporation for a maximum amount of $85.0 million and maturing in October 2022. On December 24, 2021, the Company entered into an amended and restated senior secured revolving credit facility ("Amended Credit Facility") with Wells Fargo Capital Finance Corporation Canada ("Wells Fargo", successor to Wells Fargo Canada Corporation). The Amended Credit Facility extended the maturity date of the Company's pre-existing loan from October 2022 to December 2026. The Amended Credit Facility, also provides the Company with an option to increase the total commitments thereunder by up to $5.0 million. The Company will only have the ability to exercise this accordion option if it has the required borrowing capacity at such time. On September 6, 2024, the Company exercised the option to increase the maximum amount under the facility by $5.0 million to reach $90.0 million. The Amended Credit Facility bears interest at a rate of the Canadian Dollar Offered Rate ("CDOR") plus a spread ranging from 1.5% - 2.0% depending on the Company's excess availability levels. On June 26, 2024, the Company entered into an amendment to the Amended Credit Facility with Wells Fargo. The amendment replaces the interest rate of CDOR plus a spread ranging from 1.5% - 2% depending on the Company's excess availability levels for the interest rate of the Canadian Overnight Repo Rate Average ("CORRA") plus a CORRA adjustment ranging from 0.30% to 0.32% and a spread ranging from 1.5% - 2% depending on the Company's excess availability levels. On July 8, 2025, the Company entered into an amendment and waiver to the Amended Credit Facility whereby Wells Fargo waives certain provisions of the existing Amended Credit Facility to permit the European Acquisition, the Incremental Loan and the Mangrove Loan. The Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan. The Company was above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan throughout fiscal 2025 and 2024.

On June 29, 2018, the Company secured a $12.5 million Term Loan maturing in October 2022 with Crystal Financial LLC (D/B/A SLR Credit Solutions) ("SLR"). On December 24, 2021, the Company entered into an amended and restated senior secured term loan ("Amended Term Loan") with SLR. The Amended Term Loan extended the maturity date of the Company's pre-existing loan from October 2022 to December 2026. The Amended Term Loan is subordinated in lien priority to the Amended Credit Facility and bears interest at a rate of CDOR plus 7.75%. The Amended Term Loan also allows for periodic revisions of the annual interest rate to CDOR plus 7.00% or CDOR plus 6.75% depending on the Company complying with certain financial covenants. On June 26, 2024, the Company entered into an amendment to the Amended Term Loan with SLR. The amendment replaces the interest rate of CDOR plus 7.75% (or CDOR plus 7.00% or CDOR plus 6.75% depending on the Company complying with certain financial covenants) for the interest rate of CORRA plus a CORRA adjustment of 0.32% and 7.75% (or CORRA plus a CORRA adjustment of 0.32% plus 7.00% or CORRA plus a CORRA adjustment of 0.32% plus 6.75% depending on the Company complying with certain financial covenants). On July 8, 2025, the Company entered into an amendment to the Amended Term Loan whereby SLR provided the Company with an additional term loan of $13.5 million to fund the European Acquisition and to fund ordinary course working capital (the "Incremental Loan"). Under the Amended Term Loan, the Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility. The Amended Term Loan is required to be repaid upon maturity.

Our borrowing capacity under both the Amended Credit Facility and Amended Term Loan is based upon the value of our inventory and accounts receivable, which are periodically assessed by our lenders and based upon these reviews, our borrowing capacity could be significantly increased or decreased.

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Our lenders under our Amended Credit Facility and our Amended Term Loan may impose, at any time, discretionary reserves, which would lower the level of borrowing availability under our credit facilities (customary for asset-based loans), at their reasonable discretion, to: i) ensure that we maintain adequate liquidity for the operation of our business, ii) cover any deterioration in the value of the collateral, and iii) reflect impediments to the lenders to realize upon the collateral. There is no limit to the amount of discretionary reserves that our lenders may impose at their reasonable discretion.

No discretionary reserves were imposed during fiscal 2025, fiscal 2024, and fiscal 2023, by the Company's senior secured lenders.

For fiscal 2025, 2024 and 2023, the Company reported net losses of $12.8 million, $4.6 million and $7.4 million, respectively. The Company used cash from operating activities of $1.9 million, $0.2 million and $6.9 million in fiscal 2025, 2024 and 2023, respectively. The Company had a negative working capital as at March 29, 2025, March 30, 2024 and March 25, 2023. The Company had a negative working capital (defined as current assets less current liabilities) of $23.1 million as at March 29, 2025 and $11.1 million as at March 30, 2024, which has deteriorated over the past several years. The Company has continued to increase its bank indebtedness each year over the past several years and related interest expense, and as of March 29, 2025, the balance is $73.6 million. There has been no equity infusion in the Company in many years resulting in a shareholders' deficiency of $18.0 million as of March 29, 2025.

Maintenance of sufficient availability of funding through an adequate amount of committed financing is necessary for the Company to fund its day-to-day operations. If the Company does not generate profitable operations and positive cash flows from operations in future periods, the Company may be unable to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company's ability to make scheduled payments of principal, or to pay the interest or additional interest, if any, or to fund planned capital expenditures and operations will depend on its ability to maintain adequate levels of available borrowing and its future performance, may be subject to general economic, financial, competitive, legislative and regulatory factors, as well as other events that are beyond the Company's control.

On August 24, 2021, the Company entered into a new 10-year loan agreement with Investissement Québec, the sovereign fund of the province of Québec, for an amount of up to $4.3 million to be used specifically to finance the digital transformation of the Company through the implementation of an omni-channel e-commerce platform and enterprise resource planning system. As of March 29, 2025, the Company has $4.3 million outstanding on the loan. The term loan with Investissement Québec requires the Company, on an annual basis, to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. As of March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88. Starting in fiscal 2026 and for the duration of the loan, the interest rate will be adjusted depending on the current ratio calculated at year end.

On July 8, 2020, the Company secured a new six-year term loan with Investissement Québec, in the amount of $10.0 million, as amended. The secured term loan was used to fund the working capital needs of the Company, of which $2.8 million is outstanding as at March 29, 2025. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. As of March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88. Starting in fiscal 2026 and for the duration of the loan, the interest rate will be adjusted depending on the current ratio calculated at year end.

There is no assurance the Company will meet its working capital ratio covenant at March 28, 2026, or future years, or that if not met, waivers would be available. If a waiver is not obtained, cross defaults with our Amended Credit Facility and our Amended Term Loan would arise.

On July 15, 2024, the Company obtained a support letter ("Shareholder Support Letter") from one if its shareholders, Mangrove Holding S.A., providing financial support in an amount of up to $3.75 million, of which $1.0 million would be available after January 1, 2025. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2025, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in meeting its minimum excess availability levels at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under this support letter will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2025. On November 27, 2024, the support letter was extended until December 31, 2025.

On June 26, 2025, the Shareholder Support Letter was terminated and replaced with the Mangrove Loan whereby Mangrove entered into a loan agreement with the Company to advance $3.75 million of additional indebtedness to fund the Company's working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026.

On July 21, 2025, the Company obtained support letters providing financial support to the Company for an aggregate total amount of up to $1.5 million from (i) Mangrove (one of the Company's controlling shareholders) for up to $500,000, (ii) Davide Barberis Canonico (a member of the Company's Board of Directors) for up to $800,000, and (iii) Marco Pasteris (the Company's Vice-President, Finance) for $200,000. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2026, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in meeting its minimum excess availability levels at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under these support letters will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2026.

In addition, on July 21, 2025, the Company obtained from Mangrove a deferral of interest payments payable in relation to the cash advance outstanding of U.S. $1.5 million and the Mangrove Loan of $3.75 million, of up to a maximum of $813,227, effective immediately and through to July 31, 2026.

The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Additional financing or capital that may be required may not be available on commercially reasonable terms, or may not be available at all.

If we are unable to meet our financial projections, in order to invest in growth initiatives, we may need to raise additional funds through public or private equity or debt financing, including funding from governmental sources, which may not be possible as the success of raising additional funds is beyond our control. The sale or issuance of additional equity securities could result in significant dilution to our current shareholders, and the securities issued in future financings may have rights, preferences and privileges that are senior to those of our common stock. Failure to obtain such additional financing or capital could have an adverse impact on our liquidity and financial condition including our ability to continue as a going concern.

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The terms of our Amended Credit Facility and Amended Term Loan expire in December 2026, and as such, financing may be unavailable in amounts or on terms similar to the current agreements or acceptable to us, if at all, which could have a material adverse impact on our business, including our ability to continue as a going concern.

The Company continues to be actively engaged in identifying alternative sources of financing that may include raising additional funds through public or private equity, the disposal of assets, and debt financing, including funding from governmental sources which may not be possible as the success of raising additional funds is beyond the Company's control. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that could restrict the Company's operations. Financing may be unavailable in amounts or on terms acceptable to the Company if at all, which may have a material adverse impact on its business, including its ability to continue as a going concern.

#### Operational Risks
***Our business could be adversely affected if we are unable to continue to lease retail stores in prime locations and successfully negotiate favorable lease terms.***

Historically, we have generally been successful in negotiating and improving leases for renewal as our current leases near expiration. As of May 31, 2025, we had 25 leased retail stores. The leases are generally in prime retail locations and generally have lease terms of ten years, with rent being a fixed minimum base plus, for certain stores, a percentage of the store's sales volume (subject to some adjustments) over a specified threshold. Many uncontrollable factors can impact our ability to renew these leases, including but not limited to, competition for key locations from other retailers. Only four of the Company's store leases are renewable within the next two years and such stores generated approximately 15.8% of our fiscal 2025 net sales. The capital expenditures related to remodeling some of our retail stores are estimated to be approximately $2.1 million during fiscal 2026. These planned capital expenditures are at the discretion of the Company, are not required by our landlords, and are not yet fully committed. We expect to be able to finance these capital expenditures with internally generated funds and existing financing arrangements. The Company also continues to be actively engaged in identifying alternative sources of financing that may include raising additional funds through public or private equity, the disposal of assets, and debt financing, including funding from government sources. However, in the future, if we are unsuccessful at negotiating favorable renewal terms, locations or if more capital is required to meet landlord requirements for remodeling or relocating retail stores and we are unable to secure the necessary funds to complete these projects, our business, financial condition, and operating results could be adversely affected. In addition, we may not be able to locate suitable alternative sites in a timely manner. Our sales, earnings and cash flows will decline if we fail to maintain existing store locations, renew leases or relocate to alternative sites, in each case on attractive terms.

***Our business could be adversely affected if our relationships with any primary vendors are terminated or if the delivery of their products is delayed or interrupted.***

We compete with other jewelry and timepiece retailers for access to vendors that will provide us with the quality and quantity of merchandise necessary to operate our business, and our merchandising strategy depends upon our ability to maintain good relations with significant vendors. Certain brand name timepiece and jewelry manufacturers have distribution agreements with our Company that, among other things, provide for specific sales locations, yearly renewal terms and early termination provisions at the manufacturer's discretion. In fiscal 2025, merchandise supplied by our largest luxury timepiece supplier and sold through our stores accounted for approximately 29% of our total net sales (27% in fiscal 2024). Our relationships with primary suppliers are generally not pursuant to long-term agreements. We obtain materials and manufactured items from third-party suppliers. Any delay or interruption in our suppliers' abilities to provide us with necessary materials and components, may require us to seek alternative supply sources. Any delay or interruption in receiving supplies or a reduction in product allocations could impair our ability to supply products to our stores and, accordingly, could have a material adverse effect on our business, results of operations and financial condition. The abrupt loss of any of our significant third-party suppliers or a decline in the quality or quantity of materials supplied by any third-party suppliers could cause significant disruption in our business.

#### We may not successfully manage our inventory, which could have an adverse effect on our net sales, profitability, cash flow and liquidity.
As a retail business, our results of operations are dependent on our ability to manage our inventory. To properly manage our inventory, we must be able to accurately estimate customer demand and supply requirements and purchase new inventory accordingly. If we fail to sell our inventory, we may be required to write-down our inventory or pay our vendors without new purchases, creating additional vendor financing, which would have an adverse impact on our earnings and cash flows. Additionally, a significant portion of the merchandise we sell is carried on a consignment basis prior to sale or is otherwise financed by vendors, which reduces our required capital investment in inventory. Any significant change in these consignment or vendor financing relationships could have a material adverse effect on our net sales, cash flows and liquidity.

#### Fluctuations in the availability and prices of our raw materials and finished goods may adversely affect our results of operations.
We offer a large selection of distinctive high-quality merchandise, including diamond, gemstone and precious metal jewelry, rings, wedding bands, earrings, bracelets, necklaces, timepieces and gifts. Accordingly, significant changes in the availability or prices of diamonds, gemstones, and precious metals we require for our products could adversely affect our earnings. We do not hedge a material portion of the price of raw materials. A significant increase in the price and availability of these materials could adversely affect our net sales and gross margins.

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***Any difficulty or delay in executing or integrating an acquisition, a business combination or a major business or strategic initiative could have a material adverse impact on expected returns and other projected benefits from such an exercise.***

We have recently completed the European Acquisition in July 2025 and we may continue to make acquisitions in the future based on available opportunities in the market. All acquisitions involve numerous inherent challenges, such as our ability to properly evaluate acquisition opportunities and risks during diligence and our ability to balance resource constraints as we begin to integrate an acquired company into our existing business. Other risks and uncertainties related to our acquisitions include failing to meet sales and profitability expectations; delayed or unrealized costs savings or synergy opportunities; unknown and underestimated liabilities; and difficulties integrating operations, personnel, financial systems and technology systems. Similarly, the acquisition of companies with operating margins lower than ours may cause a lower operating margin for the Company as a whole. Further, our ability to retain key employees of an acquired company, maintain pre-acquisition cultural dynamics and team morale, and foster the entrepreneurial spirit of an acquired company, particularly while implementing policies, procedures and compliance measures we require, may impact our ability to successfully integrate an acquisition. A significant transaction could also disrupt the operation of our current business activities and divert significant management time and resources. The long-term growth of our business depends on the successful execution of our evolving business and strategic initiatives. Any number of factors could impact the success of these initiatives, many of which are out of our control, and there can be no assurance that they will be successful or deliver their anticipated benefits. Some initiatives may require us to devote significant management, financial and other resources and may expose us to new and unforeseen risks and challenges. We may also incur significant asset impairment and other charges in connection with any such initiative or an acquisition. If we are unable to execute or integrate an acquisition, major business or strategic initiative or a transformation plan, this could have a significant adverse effect on our results of operations. Our current borrowing agreements place certain limited constraints on our ability to make an acquisition, and future borrowing agreements could place tighter constraints on such actions

#### We may not be able to adequately protect our intellectual property and may be required to engage in costly litigation as a protective measure.
To establish and protect our intellectual property rights, we rely upon a combination of trademark and trade secret laws, together with licenses, exclusivity agreements and other contractual covenants. In particular, the "Birks" trademarks are of significant value to our operations. The measures we take to protect our intellectual property rights may prove inadequate to prevent misappropriation of our intellectual property. Monitoring the unauthorized use of our intellectual property is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resources, may result in counterclaims or other claims against us and could significantly harm our results of operations.

#### A significant data privacy breach or security breach of our information systems could disrupt or negatively affect our business.
The protection of customer, employee and company data is important to us, and our customers expect that their personal information will be adequately protected. The regulatory environment surrounding information security and data privacy is becoming increasingly demanding, as requirements in respect of personal data use and processing, including significant penalties for non-compliance, continues to evolve in the various jurisdictions in which the Company does business. Although we have developed and implemented systems and processes that are designed to protect our information and prevent data loss and other security breaches, such measures cannot provide absolute security and our business could still be exposed to risks. Attacks may be targeted at us, our vendors or customers, or others who have entrusted us with information. Data and security breaches can also occur as a result of non-technical issues including intentional or inadvertent breach by employees or persons with whom we have commercial relationships that result in the unauthorized release of personal or confidential information. We rely upon information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including e-commerce sales, supply chain, merchandise distribution, customer invoicing and collection of payments. We use information technology systems to record, process and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements. Additionally, we collect and store sensitive data, including intellectual property, proprietary business information, the proprietary business information of our customers and suppliers, as well as personally identifiable information of our customers and employees, in our information technology systems. The secure operation of these information technology networks, and the processing and maintenance of this information is critical to our business operations and strategy. Cyber-attacks, security breaches, and data breaches have become more prevalent and may occur in our systems in the future. A significant breach of customer, employee or company data could damage our reputation, our relationship with customers and the Birks brand and could result in lost sales, sizable fines, violation of applicable privacy and other laws, significant breach-notification costs and lawsuits as well as adversely affect results of operations. In addition, it could harm our ability to execute our business and adversely impact sales, costs and earnings. Because of the rapidly evolving types of cyber-attacks and the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate cost-effective preventative measures. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. We are currently operating under a hybrid work policy whereby employees are able to work from home for a certain number of days per week. Remote work could increase our cyber security risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could adversely impact our business operations.

#### Failure to successfully implement or make changes to information systems could disrupt or negatively impact our business.
In addition to regularly evaluating and making changes and upgrades to our information systems, we had started the implementation of a new enterprise resource planning ("ERP") system with the Microsoft Dynamics D365 for Retail platform in order to update our retail systems including point of sale (POS), supply chain, warehouse management, wholesale, and finance. While we follow a disciplined methodology when evaluating and making such changes, there can be no assurances that we will successfully implement such changes, that such changes will occur without disruptions to our operations, that the new or upgraded systems will achieve the desired business objectives or that the internal controls will be effective in preventing misstatements in financial reporting. Any such disruptions, inadequate internal controls or the failure to successfully implement new or upgraded systems such as those referenced above, could have a material adverse effect on our results of operations and could also affect our reputation, our relationship with customers and our brands.

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#### Our customer, employee and vendor relationships could be negatively affected if we fail to maintain our corporate culture and reputation.
We believe we have a well-recognized culture and reputation that our consumers associate with a high level of integrity, customer service and quality merchandise, and it is one of the reasons customers shop with us and employees choose us as a place of employment. Any significant damage to our reputation could diminish customer trust, weaken our vendor relationships, reduce employee morale and productivity and lead to difficulties in recruiting and retaining qualified employees.

We believe that the customer experience we offer to our clients has a direct impact on our sales and results from operations. Changes in the employment market, and competition for qualified sales professionals could result in the Company incurring higher labor costs. A shortage of qualified individuals and higher labor costs could result in disruptions to the performance of sales associates and an inability to recruit, train, motivate and retain suitably qualified sales associates, which could adversely impact sales and earnings.

#### Inability to retain key employees and personnel may adversely affect our results of operations.
The Company is dependent on key employees and having sufficient personnel and could be materially adversely affected by a shortfall of personnel or by substantial turnover. The Company is dependent on its ability to attract and retain a variety of employees, including senior leadership, managers, store personnel and other key employees having the necessary industry experience, qualifications and knowledge in order to execute its business plan and operate its business. If the Company were to experience a shortfall or a substantial turnover in its key employees (including as a result of the more competitive labor market), the Company, its business, results from operations and financial condition could be materially adversely affected.

***Failure to attract and retain qualified executive officers, managers and other key employees could materially and adversely affect the Company's business, results of operations or financial condition.***

A few key employees are responsible for the management of the Company and the loss of any one of these employees could have negative repercussions for the Company. The Company's success is also dependent on its continuing ability to identify, hire, train, retain and motivate highly qualified personnel. Failure to attract and retain qualified executive officers, managers and other key employees could materially and adversely affect the Company's business, results of operations or financial condition.

#### Risks Related to External Factors, including Regulations

#### We are exposed to currency exchange risks that could have a material adverse effect on our results of operations and financial condition.
A portion of the purchases we make from our suppliers are denominated in currencies other than the Canadian dollar. As a result, a depreciation of the Canadian dollar against these currencies would increase the cost of acquiring those goods in Canadian dollars, which would have a negative effect on our gross profit margin. In addition, material fluctuations in foreign currency exchange rates could reduce our borrowing availability under our Amended Credit Facility, which is denominated in Canadian dollars, and limit our ability to finance our operations.

#### We operate in a highly competitive and fragmented industry.
The retail jewelry and timepiece business is highly competitive and fragmented, and we compete with nationally-recognized jewelry chains as well as a large number of independent regional and local jewelry and timepiece retailers and other types of retailers who sell jewelry, timepieces, and gift items, such as department stores and mass merchandisers. We also compete with e-commerce sellers of jewelry and timepieces. Because of the breadth and depth of this competition, we are constantly under competitive pressure that both constrains pricing and requires extensive merchandising and marketing efforts in order for us to remain competitive.

#### We are controlled by a single shareholder whose interests may be different from yours.
As of May 31, 2025, The Grande Rousse Trust ("Grande Rousse") beneficially owns or controls 69.6% of all classes of our outstanding voting shares, which are directly owned by Mangrove and Montel Sarl ("Montel"), previously Montrovest B.V. Montel and Mangrove own 45.2% and 24.5% of our outstanding voting shares respectively. The trustee of Grande Rousse is Meritus Trust Company Limited (the "Trustee"). Confido Limited has the power to remove the Trustee and as a result may be deemed to have beneficial ownership of the Class A voting shares held by Montel and Mangrove. Under our restated articles, Montel and Mangrove, as holders of the Class B multiple voting shares, have the ability to control most actions requiring shareholder approval, including electing the members of our Board of Directors and the issuance of new equity.

Grande Rousse, Montel and Mangrove may have different interests than you have and may make decisions that do not correspond to your interests. In addition, the fact that we are controlled by one shareholder may have the effect of delaying or preventing a change in our management or voting control.

#### Terrorist acts or other catastrophic events could have a material adverse effect on our business and results of operations.
Terrorist acts, acts of war or hostility, natural disasters or other catastrophic events could have an immediate disproportionate impact on discretionary spending on luxury goods upon which our operations are dependent, and could have a material adverse impact on our business and results of operations. We have been, and may continue to be affected in the future, by widespread protests such as the protests related to social injustices that took place in various cities across Canada in February 2022. Such protests can disrupt foot traffic at our stores, thereby negatively impacting sales, cause temporary store closures, and lead to inventory shrinkage, and property damage, all of which could adversely impact our sales and results from operations.

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#### Environmental and climate changes could affect the Company's business.
The Company recognizes that climate change is a serious risk to society and therefore continues to take steps to reduce the Company's impact on the environment. Adverse effects of climate change, such as extreme weather events, particularly over a prolonged period of time, could negatively impact the Company's business and results of operations if such conditions limit our consumer's ability to access our stores, cause our consumers to limit discretionary spending, or disrupt our supply chains or distribution channels. Social, ethical and environmental matters influence the Company's reputation, demand for merchandise by consumers, the ability to recruit staff, relations with suppliers and standing in the financial markets. The Company's success is dependent on the strength and effectiveness of its relationships with its various stakeholders: customers, shareholders, employees and suppliers. In recent years, stakeholder expectations have increased, as these stakeholders expect businesses to consider social, ethical, and environmental impacts while making business decisions, and the Company's success and reputation will depend on its ability to meet these higher expectations. The Company's success also depends upon its reputation for integrity in sourcing its merchandise, which, if adversely affected could impact consumer sentiment and willingness to purchase the Company's merchandise.

#### Legal and Compliance Risks

#### Applicable laws and regulations related to consumer credit may adversely affect our business.
The operation of our credit business subjects us to substantial regulation relating to disclosure and other requirements upon origination, servicing, debt collection and particularly upon the amount of finance charges we can impose. Any adverse change in the regulation of consumer credit could adversely affect our earnings. For example, new laws or regulations could limit the amount of interest or fees we, or our banks, can charge on consumer loan accounts, or restrict our ability to collect on account balances, which could have a material adverse effect on our earnings. Compliance with existing and future laws or regulations could require material expenditures or otherwise adversely affect our business or financial results. Failure to comply with these laws or regulations, even if inadvertent, could result in negative publicity, and fines, either of which could have a material adverse effect on our results of operations.

***The Company conducts retail operations in Canada and conducts some wholesale operations in North America, the United Kingdom and the European Union, which wholesale operations will be wound down by the end 2025. The Company sources its inventory from several suppliers within and outside North America, and has cross border financing arrangements. As a result, the Company is subject to the risks of doing business in jurisdictions within and outside North America.***

The Company generates substantially all of its net sales in Canada. The Company also relies on certain foreign third-party vendors and suppliers. As a result, the Company is subject to the risks of doing business in jurisdictions within and outside North America, including:

• the laws, regulations and policies of governments relating to loans and operations, the costs or desirability of complying with local practices and customs and the impact of various anti-corruption, anti-money laundering and other laws affecting the activities of the Company;

• potential negative consequences from changes in taxation policies or currency restructurings;

• potential negative consequences from the application of taxation policies, including transfer pricing rules and sales tax matters;

• import and export licensing requirements and regulations, as well as unforeseen changes in regulatory requirements;

• economic instability in foreign countries;

• uncertainties as to enforcement of certain contract and other rights;

• the potential for rapid and unexpected changes in government, economic and political policies, political or civil unrest, acts of terrorism or the threat of boycotts; and

• inventory risk exposures.

Changes in regulatory, political, economic, or monetary policies and other factors could require the Company to significantly modify its current business practices and may adversely affect its future financial results. For example, the Company could be adversely impacted by U.S. trade policies, legislation, treaties and tariffs, including trade policies and tariffs affecting China, the E.U., Canada and Mexico, as well as retaliatory tariffs by such countries. Such tariffs and, if enacted, any further legislation or actions taken by the U.S. government that restrict trade, such as additional tariffs or trade barriers, and other protectionist or retaliatory measures taken by governments in Europe, Asia and elsewhere, could have a negative effect on the Company's ability to sell products in or source products from those markets.

While these factors and the effect of these factors are difficult to predict, any one or more of them could lower the Company's revenues, impact its cash flow, increase its costs, reduce its earnings or disrupt its business.

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#### Risks Related to Class A Voting Shares

#### Our share price could be adversely affected if a large number of Class A voting shares are offered for sale or sold.
Future issuances or sales of a substantial number of our Class A voting shares by us, Montel, Mangrove, or another significant shareholder in the public market could adversely affect the price of our Class A voting shares, which may impair our ability to raise capital through future issuances of equity securities. As of May 31, 2025, we had 11,876,717 Class A voting shares issued and outstanding. Sales of restricted securities in the public market, or the availability of these Class A voting shares for sale, could adversely affect the market price of Class A voting shares.

***As a retailer of jewelry and timepieces with a limited public float, the price of our Class A voting shares may fluctuate substantially, which could negatively affect the value of our Class A voting shares and could result in securities class action claims against us.***

The price of our Class A voting shares may fluctuate substantially due to, among other things, the following factors: (1) fluctuations in the price of the shares of a small number of public companies in the retail jewelry business; (2) additions or departures of key personnel; (3) announcements of legal proceedings or regulatory matters; and (4) general volatility in the stock market. The market price of our Class A voting shares could also fluctuate substantially if we fail to meet or exceed expectations for our financial results or if there is a change in financial estimates or securities analysts' recommendations.

Significant price and value fluctuations have occurred in the past with respect to the securities of retail jewelry and related companies. In addition, because the public float of our Class A voting shares is relatively small, the market price of our Class A voting shares is likely to be volatile. There is limited trading volume in our Class A voting shares, rendering them subject to significant price volatility. In addition, the stock market has experienced volatility that has affected the market prices of equity securities of many companies, and that has often been unrelated to the operating performance of such companies. A number of other factors, many of which are beyond our control, could also cause the market price of our Class A voting shares to fluctuate substantially. In the past, following periods of downward volatility in the market price of a company's securities, class action litigation has often been pursued. If our Class A voting shares were similarly volatile and litigation was pursued against us, it could result in substantial costs and a diversion of our management's attention and resources.

***We are governed by the laws of Canada, and, as a result, it may not be possible for shareholders to enforce civil liability provisions of the securities laws of the U.S.***

We are governed by the laws of Canada. Our assets are located outside the U.S. and our directors and officers are residents outside of the U.S. As a result, it may be difficult for investors to effect service within the U.S. upon us or our directors and officers, or to realize in the U.S. upon judgments of courts of the U.S. predicated upon civil liability of Birks Group and such directors or officers under U.S. federal securities laws. There is doubt as to the enforceability in Canada by a court in original actions, or in actions to enforce judgments of U.S. courts, of the civil liabilities predicated upon U.S. federal securities laws.

***We are subject to the continued listing requirements of the NYSE American. If we are unable to comply with such requirements, our common stock could be delisted from the NYSE American, which would limit investors' ability to effect transactions in our common stock and subject us to additional trading restrictions.***

Our common stock is currently listed on NYSE American. In order to maintain our listing, we must maintain certain share prices, financial and share distribution targets, including maintaining a minimum amount of stockholders' equity and a minimum number of public shareholders. NYSE American may delist the securities of any issuer for other reasons involving the judgment of NYSE American.

On February 25, 2025, the Company was notified by NYSE American LLC ("NYSE American") that it was not in compliance with the continued listing standards set forth in Section 1003(a)(i) and (ii) of the NYSE American Company Guide (the "Company Guide"). Section 1003(a)(i) applies if a listed company has stockholders' equity of less than U.S. $2.0 million and has reported losses from continuing operations and/or net losses in two of its three most recent fiscal years. Section 1003(a)(ii) applies if a listed company has stockholders' equity of less than U.S. $4.0 million and has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Company reported stockholders' deficit of U.S. $6.1 million (CAD $(8.2) million) as of September 28, 2024, and net losses in two of its three most recent fiscal years ended March 30, 2024 and in three of its four most recent fiscal years ended March 30, 2024. The Company was not eligible for any exemption in Section 1003(a) of the Company Guide from the stockholders' equity requirements.

In accordance with the procedures and requirements of Section 1009 of the Company Guide, the Company submitted its plan of compliance on March 27, 2025, addressing how the Company intends to regain compliance with Section 1003(a)(i) and (ii) of the Company Guide. The plan includes various initiatives, supported by a capital injection that may not be available on commercially reasonable terms, or may not be available at all. On May 13, 2025, NYSE American notified the Company that it accepted the Company's plan and granted the Company an extension for its continued listing until August 25, 2026 (the "Plan Period").

As previously reported, in August 2020, December 2020 and July 2021, the Company was notified by NYSE American that it was not in compliance with the continued listing standards set forth in Section 1003(a)(i), (ii) and (iii) of the Company Guide. In February 2022, the Company was notified by NYSE American that it was back in compliance with all the continued listing standards set forth in Section 1003(a)(i), (ii), and (iii) of the Company Guide.

The Company is subject to periodic review by NYSE American during the Plan Period. If the Company does not regain compliance by the end of the Plan Period, or if the Company does not make progress consistent with the plan during the Plan Period, NYSE American may initiate delisting procedures as appropriate. We cannot assure that we will make sufficient progress to regain compliance with Sections 1003(a)(i) and 1003(a)(ii) by August 25, 2026 under our initial plan or any revision we make to such plan or that NYSE American will accept any revisions we propose to make to our initial plan, or that delisting proceedings may not be instituted against us based on our not meeting certain elements of the near-term milestones we had included as part of the compliance plan we submitted. If delisting proceedings are instituted against us, we would have the right to appeal any delisting determination.

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If NYSE American delists our common stock from trading on the exchange and we are not able to list our securities on another national securities exchange, we expect our common stock would qualify to be quoted on an over-the-counter market. If this were to occur, we could experience a number of adverse consequences, including: limited availability of market quotations for the common stock; reduced liquidity for our securities; our common stock being categorized as a "penny stock," which requires brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock; and decreased ability to issue additional securities or obtain additional financing in the future.

***We expect to maintain our status as a "foreign private issuer" under the rules and regulations of the SEC and, thus, are exempt from a number of rules under the Exchange Act of 1934 and are permitted to file less information with the SEC than a company incorporated in the U.S.***

As a "foreign private issuer," we are exempt from rules under the Exchange Act of 1934, as amended ("the Exchange Act") that impose certain disclosure and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and "short-swing" profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our Class A voting shares. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, nor are we required to comply with Regulation Fair Disclosure, which restricts the selective disclosure of material information. Accordingly, there may be less publicly available information concerning us than there is for other U.S. public companies.

***If we were treated as a passive foreign investment company ("PFIC") some holders of our Class A voting shares would be subject to additional taxation, which could cause the price of our Class A voting shares to decline.***

We believe that our Class A voting shares should not be treated as stock of a PFIC for U.S. federal income tax purposes, and we expect to continue operations in such a manner that we will not be a PFIC. If, however, we are or become a PFIC, some holders of our Class A voting shares could be subject to additional U.S. federal income taxes on gains recognized with respect to our Class A voting shares and on certain distributions, plus an interest charge on certain taxes treated as having been deferred under the PFIC rules.

***We have identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses or identify additional material weaknesses or significant deficiencies in the future, it could reduce confidence in our financial statements and negatively affect our Company and the price of our securities.***

We are subject to reporting obligations under U.S. securities laws. Section 404 of the Sarbanes-Oxley Act requires us to prepare a management report on the effectiveness of our internal control over financial reporting. In connection with its evaluation for the year ended March 29, 2025, our management identified material weaknesses in our internal control over financial reporting. These material weaknesses related to (i) the lack of sufficient accounting and financial reporting personnel to appropriately segregate duties in the preparation and review of certain account reconciliations (purchases and leases) and journal entries, (ii) the insufficient design of certain management review controls (assessment of future operation and inventory reserves) due to the inadequate retention of documentary evidence including management's assessment related to the completeness and accuracy of the underlying information and (iii) the insufficient design of a control related to the review of the classification of a cash flow transaction. While we have started to design a remediation plan, there is no guarantee that we will successfully remediate these material weaknesses. These material weaknesses have arisen, in part, from our size, limited resources and inability to segregate duties. Although we have initiated a plan to remedy the material weaknesses, we cannot assure you that we have identified all material weaknesses or that we will not in the future have additional control deficiencies or material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses or if we identify additional significant deficiencies or material weaknesses in our internal control over financial reporting in the future, it could have a material adverse effect on our operations, our financial condition and the trading price of our stock. Furthermore, our auditors do not audit our internal controls over financial reporting due to our market capitalization, and therefore, there has been no independent attestation of our internal controls over financial reporting.

***If the costs and burden of being a public company outweigh its benefits, we may in the future decide to discontinue our status as a publicly traded company.***

As a public company, we currently incur significant legal, accounting and other expenses. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC and the NYSE American, have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls as well as mandating certain corporate governance practices. Our management and other personnel devote a substantial amount of time and financial resources to these compliance initiatives. As such, if it is determined in the future that the costs and efforts of being a public company outweigh the benefits of being a public company, we may decide to discontinue our status as a publicly traded or registered company.

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**Item 4.** **Information on the Company** <br>

#### THE COMPANY

#### Corporate History and Overview
Birks Group is a leading designer of fine jewelry and operator of luxury jewelry, timepieces and gifts retail stores in Canada. The Company also has a small wholesale division with wholesale customers in North America, the E.U., and the U.K., which division will be wound down by the end of 2025. As of May 31, 2025, Birks Group operated 17 retail stores under the Maison Birks brand in most major metropolitan markets in Canada, one retail location in Montreal under the Birks brand, one retail location in Montreal under the TimeVallée brand, one retail location in Calgary under the Brinkhaus brand, one retail location in Vancouver under the Graff brand, one retail location in Vancouver under the Patek Philippe brand, and three retail locations in Laval, Ottawa, and Toronto under the Breitling brand. For fiscal 2025, the Company's net sales were $177.8 million.

Birks' predecessor company was founded in Montreal in 1879 and developed over the years into Canada's premier designer, manufacturer and retailer of fine jewelry, timepieces, sterling and plated silverware and gifts. In addition to being a nationwide retailer with a strong brand identity, we are also highly regarded in Canada as a jewelry designer. We believe that operating our stores under the Maison Birks brand and the fact that we sell Birks branded jewelry distinguishes us from many competitors because of our long-standing reputation and heritage, our ability to offer distinctively designed, exclusive products, and by placing a strong emphasis on providing a superior shopping experience to our clients.

Birks was purchased by Borgosesia Acquisitions Corporation in 1993, a predecessor company of Regaluxe Investment S.á.r.l., which is referred to in this Annual Report as Regaluxe. Effective March 28, 2006, Regaluxe was acquired through a merger with Iniziativa S.A. ("Iniziativa"). As of May 31, 2007 and June 4, 2007, respectively, following a reorganization, Iniziativa and Montrolux S.A. transferred all of the shares they respectively held in the Company to their parent company, Montrovest B.V. ("Montrovest" now known as Montel). Following the 1993 acquisition of Birks, Birks' operations were evaluated and a program of returning Birks to its historic core strength as the leading Canadian prestige jeweler was initiated.

In August 2002, Birks invested $23.6 million to acquire approximately 72% of the voting control in Mayors, which was experiencing an unsuccessful expansion beyond its core markets and was incurring significant losses.

Between August 2002 and November 2005, it became apparent to both Mayors and Birks management that it was in the best interests of the shareholders to combine its operations. The Company believed that such combination would create a stronger capital base, improve operating efficiencies, reduce the impact of regional issues, simplify the corporate ownership of Mayors, eliminate management and board of directors' inefficiencies with managing intercompany issues, and possibly increase shareholder liquidity. Upon the consummation of the merger on November 14, 2005, each outstanding share of Mayors common stock not then owned by Birks was converted into 0.08695 Class A voting shares of Birks. As a result of the merger, Mayors common stock ceased trading on the American Stock Exchange ("AMEX") and Birks Group began trading on the AMEX, which is now known as the NYSE American, under the trading symbol "BGI." Following the merger, Birks Group worked very diligently to fully integrate the Birks business with Mayors. As a result of the merger, we believe Birks Group improved operational efficiencies and diversity and depth of its products and distribution capabilities.

In December 2015, Montrovest (now known as Montel) transferred a portion of its Class A and Class B voting shares to Mangrove and as a result Montel owned 49.2% of the voting shares of the Company and Mangrove owned 26.7%.

In August 2017, Birks entered into the Stock Purchase Agreement with Aurum, the largest fine watch and jewelry retailer in the U.K., to sell its wholly- owned subsidiary Mayors. The Aurum Transaction (as defined below) closed on October 23, 2017 for total cash consideration of $135.0 million (U.S. $106.8 million). As part of the transaction, Birks entered into a 5-year distribution agreement with Aurum to sell Birks fine jewelry in the U.K. at Mappin & Webb, Goldsmiths stores and on their e-commerce websites.

In April of 2021, the Company entered into a joint venture with FWI LLC ("FWI") to form RMBG Retail Vancouver ULC ("RMBG"). During fiscal 2023, the joint venture company became operational. RMBG operates a boutique in Vancouver, retailing third party branded watches, sales of which were historically recognized at the Company's Vancouver Flagship location and are now recognized through the joint venture company. The Company and FWI both contributed certain assets for a 49% and 51% equity interest respectively in RMBG, the legal entity comprising the joint venture.

On June 6, 2025, the Company entered into a share purchase agreement (the "Share Purchase Agreement") with the shareholders of 1067830 Ontario Limited ("the Target"), a company incorporated under the laws of Ontario, to acquire the Target and its wholly-owned subsidiaries which operate four retail locations in Toronto, Ontario, under the European Boutique brand and are engaged primarily in luxury timepieces and jewelry retail activities. The purchase was completed on July 8, 2025, for a total consideration of $9.0 million, of which $7.0 million will be paid at closing and $2.0 million will be paid over a two-year period from closing, subject to certain adjustments customary for and acquisition of this nature (the "European Acquisition").

In the last three fiscal years, we invested a total of approximately $25.4 million in capital expenditures primarily associated with the remodeling of our existing store network, as well as a digital transformation of the Company including the continued evolution of our e-commerce platform. During fiscal 2025, we invested a total capital expenditure of $7.5 million, including a total of $2.7 million of leasehold improvements, store equipment and assets for the construction of two new stores in Montreal, opened in September 2024, $0.8 million for a new store in Vancouver, $0.6 million for other new stores, $2.4 million for the partial renovation of two stores in Ontario, $0.5 million was invested for various digital transformation initiatives including improvement of our e-commerce platform and $1.5 million towards various visual merchandising and other equipment.

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During fiscal 2024, total capital expenditures of $7.2 million including $1.5 million of leasehold improvement to initiate the construction of a new store in Montreal, that opened in September 2024. In addition, we invested $3.2 million for the completion of renovations that started in fiscal 2023 and other partial renovations in certain stores to accommodate brand movement. $1.3 million was invested for various digital transformation initiatives including improvement of our e-commerce platform (included in intangible assets), as well as $0.3 million towards various wholesale and visual merchandising projects.

Although the capital allocated to capital expenditures is reduced for fiscal 2026, we currently expect to continue to invest in capital expenditures to make on-going strategic improvements to our retail network in fiscal 2026 and fiscal 2027, all the while focusing on operations and on delivering a return on our strategic investment spending during the last fiscal year. We expect to finance these capital expenditures from operating cash flows, and existing financing arrangements including tenant allowances from certain of our landlords and capital lease financing.

The Company regularly reviews the locations of its retail network that leads to decisions that impact the opening, relocation or closing of these locations. During fiscal 2025, we finalized the construction of two new stores in Montreal which opened in September 2024, we executed a partial renovation of one store in Toronto, completed a partial renovation of a store in Vancouver, and we finalized a partial renovation of a store in Ottawa. During fiscal 2025, the Company closed one store operating under the Maison Birks brand. During fiscal 2024, we launched the construction of two new stores in Montreal, which were planned to open in August 2024 and opened in September 2024, we executed a partial renovation of two stores in Toronto and one store in Calgary and we launched a partial renovation of a store in Ottawa. During fiscal 2024, we also closed three Maison Birks stores: one in Burlington, Ontario, one in Mississauga, Ontario and one in Calgary, Alberta.

Our sales are divided into two principal product categories: (i) jewelry and other, and (ii) timepieces. Jewelry and other also includes sales of other product offerings we sell such as giftware, as well as repair and custom design services.

The following table compares our sales of each product category for the last three fiscal years (dollars in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Fiscal Year-Ended** | **Fiscal Year-Ended** | **Fiscal Year-Ended** | **Fiscal Year-Ended** | **Fiscal Year-Ended** | **Fiscal Year-Ended** |
|  | **March 29, 2025** | **March 29, 2025** | **March 30, 2024** | **March 30, 2024** | **March 25, 2023** | **March 25, 2023** |
|  Jewelry and other | $68927 | 38.8% | $86256 | 46.6% | $86525 | 53.1% |
|  Timepieces | 108880 | 61.2% | 99019 | 53.4% | 76425 | 46.9% |
|  Total | $177807 | 100% | $185275 | 100% | $162950 | 100% |

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Jewelry and other product category sales have decreased in fiscal 2025 as compared to fiscal 2024, as a result of the exit of a jewelry brand from two stores in fiscal 2025 for which total sales have not been fully replaced by other brands. Jewelry and other product category sales have remained relatively stable in fiscal 2024 as compared to fiscal 2023. We believe the Company's product assortment at lower price points continued to be impacted by increased inflation and heightened interest rates all directly impacting discretionary consumer spending in fiscal years 2025, 2024 and 2023.

The increase in sales from the timepieces product category in fiscal 2025 as compared to fiscal 2024 is attributable to growth in third-party timepiece brands primarily resulting from continued strong consumer demand for these products, improved merchandising, as well as the introduction of a TimeVallée store in Montreal and two new Breitling boutiques in fiscal 2025. The increase in sales from the timepieces product category in fiscal 2024 as compared to fiscal 2023 is attributable to growth in third-party timepiece brands primarily resulting from the renovations and improved merchandising of two of our key locations at the end of fiscal 2023.

Birks Group is a Canadian corporation. Our corporate headquarters are located at 2020 Robert-Bourassa Boulevard, Suite 200, Montreal, Québec, Canada H3A 2A5. Our telephone number is (514) 397-2501. Our website is <u>www.birksgroup.com.</u>

The U.S. Securities and Exchange Commission ("SEC") maintains a website that contains reports, proxy and information statements, and other information regarding issuers (including Birks Group) that file electronically with the SEC at http://www.sec.gov. The Company also maintains a public website at <u>http://www.birks.com</u> and <u>http://www.maisonbirks.com.</u>

#### Products
We offer distinctively designed, exclusive products and a large selection of distinctive high-quality merchandise at various price points. This merchandise includes our own Birks branded designed jewelry, and designer jewelry, that include diamonds, gemstones, and precious metals.

Our Birks brand consists of internally developed luxury fine jewelry and bridal collections as well as gift items. Part of our strategy is to increase our exclusive offering of internally designed goods sold to our customers, consisting primarily of fine jewelry and bridal offerings, all of which leverage the Birks brand loyalty in their respective markets and in order to differentiate our products with unique and exclusive designs.

Our stores, operating under the Maison Birks, Birks, Brinkhaus, Breitling, Graff Patek Philippe, and TimeVallée brands, carry a large selection of prestigious brand name timepieces including timepieces made by Rolex, Tudor, Baume & Mercier, Breitling, Cartier, Chaumet, Frédérique Constant, Graff, Grand Seiko, IWC, Jaeger Lecoultre, Longines, Montblanc, Panerai, Patek Philippe, Roger Dubuis and Tag Heuer. We also carry an exclusive collection of high-quality jewelry that we design. We emphasize Birks brand jewelry offerings but also include other designer jewelry made by Chaumet, Dinh Van Paris, Fope, Fred, Graff, Marco Bicego, Messika, Roberto Coin, and Yoko London. We also offer a variety of high-quality giftware, including writing instruments made by Montblanc.

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We have one primary channel of distribution, the retail division, which accounts for approximately 94% of net sales during fiscal 2025, fiscal 2024 and fiscal 2023, as well as three other channels of distribution, namely e-commerce, gold exchange, and wholesale (which will be wound down by the end of 2025), which combined accounted for approximately 6% of net sales during each of fiscal 2025, fiscal 2024 and fiscal 2023.

#### Product Design, Development, Sourcing and Manufacturing
We established a product development process that supports our strategy to further develop and enhance our product offering in support of the Birks brand development. During fiscal 2025, 2024, and 2023, approximately 31%, 41%, and 41%, respectively, of our jewelry products acquired for sale were internally designed and sourced. A significant portion of internally designed products are associated with the Bridal segment, which is largely reliant on customized special orders. Products that are not designed and manufactured for us, are sourced from suppliers worldwide, enabling us to sell an assortment of fine quality merchandise often not available from other jewelers in our markets. Our staff of buyers procures distinctive high-quality merchandise directly from manufacturers, diamond cutters, and other suppliers worldwide. Our loose stone acquisition team, product sourcing team and category managers specialize in sourcing merchandise in categories such as diamonds, precious gemstones, pearls, timepieces, gold jewelry, and giftware. Retail and merchandising personnel frequently visit our stores and those of competitors to compare value, selection, and service, as well as to observe client reaction to merchandise selection and determine future needs and trends.

#### Availability of Products
Although purchases of several critical raw materials, notably platinum, gold, silver, diamonds, pearls and gemstones, are made from a relatively limited number of sources, we believe that there are numerous alternative sources for all raw materials used in the manufacture of our finished jewelry, and that the failure of any principal supplier would not have a material adverse effect on our operations. Any material changes in foreign or domestic laws and policies affecting international trade may have a material adverse effect on the availability of the diamonds, other gemstones, precious metals and non-jewelry products we purchase. Significant changes in the availability or prices of diamonds, gemstones and precious metals we require for our products could adversely affect our earnings. We do not maintain long-term inventories or otherwise hedge a material portion of the price of raw materials. A significant increase in the price of these materials could adversely affect our net sales, gross margin and earnings. However, in the event of price increases, we will generally attempt to pass along any price increases to our customers.

In fiscal 2025, we purchased jewelry, timepieces and giftware for sale in our stores and online from several suppliers. Many of these suppliers have long-standing relationships with us. We compete with other jewelry and timepiece retailers for access to vendors that will provide us with the quality and quantity of merchandise necessary to operate our business. Our relationships with primary suppliers are generally not pursuant to long-term agreements. Although we believe that alternative sources of supply are available, the abrupt loss of any of our key vendors, or a decline in the quality or quantity of merchandise supplied by our vendors could cause significant disruption in our business. In fiscal 2025, merchandise supplied by our largest luxury timepiece supplier and sold through our stores accounted for approximately 29% of our total net sales. If our largest luxury timepiece supplier terminated its distribution agreements with us, such termination would have a material adverse effect on our business, financial condition and operating results.

#### Impact of inflation
We believe that in fiscal 2025, 2024 and 2023, inflation, interest rates, and the volatility in the stock market may have had an impact on consumer discretionary spending, and on our sales results and results from operations. Luxury jewelry and timepiece purchases are considered discretionary spending. As such, if inflation, interest rates, and volatility in the stock market could negatively impact consumer discretionary spending, it could also negatively impact our future sales results and operating performance.

The cost of gold and diamonds continued to increase in fiscal 2025 after continuing to fluctuate during fiscal 2024 with an increase in the first months of the year, and a decrease in the summer months before increasing once again during the holiday season. During fiscal 2023, diamond and gold costs increased throughout the year. As a result of these fluctuations, we have increased retail prices on certain product categories to offset such cost increases in fiscal 2023 but maintained retail prices stable during fiscal 2024 and fiscal 2025. Refer to Item 1A, Risk Factors, for further information on the potential impacts and risk associated with inflation.

#### Seasonality
Our sales are highly seasonal, with the third fiscal quarter (which includes the holiday shopping season) historically contributing significantly higher net sales than any other quarter during the year. Net sales in the first, second, third and fourth quarters in fiscal 2025 were 23%, 22%, 34% and 21%, respectively, in fiscal 2024 were 24%, 23%, 33% and 20%, respectively, in fiscal 2023 were 26%, 22%, 33% and 19%, respectively.

#### Retail Operations, Merchandising and Marketing

#### General
We believe we are differentiated from most of our competitors because we offer distinctively designed, exclusive products and a selection of distinctive high-quality merchandise at a wide range of price points. We keep the majority of our inventory on display in our stores rather than at our distribution facility. Although each store stocks a representative selection of jewelry, timepieces, and giftware, certain inventory is tailored to meet local tastes and historical merchandise sales patterns of specific stores.

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We believe that our stores' elegant surroundings and distinctive merchandise displays play an important role in providing an atmosphere that encourages sales. We pay careful attention to detail in the design and layout of each store, particularly lighting, colors, choice of materials, and placement of display cases. We also use window displays as a means of attracting walk-in traffic and reinforcing our distinctive image. Our marketing department designs and creates window and store merchandise case displays for all of our stores. Window displays are frequently changed to provide variety and to reflect seasonal events such as the November – December Holiday Season, Valentine's Day, Mother's Day and Father's Day.

#### Personnel and Training
We place substantial emphasis on the professionalism of our sales force to maintain our position as a leading prestige jeweler. We strive to hire only highly motivated, professional and customer-oriented individuals. All new sales professionals attend an intensive training program where they are trained in technical areas of the jewelry and timepiece business, specific sales and service techniques and our commitment to client service. Management believes that attentive personal service and knowledgeable sales professionals are key components to our success.

As part of our commitment to continuous, on-the-job training, we have established "Birks University", a formalized system of in-house training with a primary focus on client service, selling skills and product knowledge that involves extensive training, the use of detailed operational manuals, in-store mentorship programs and a leading edge product knowledge program which includes on-line quizzes. In addition, we conduct in-house training seminars on a periodic basis and administer training modules with audits to (i) enhance the quality and professionalism of all sales professionals, (ii) measure the level of knowledge of each sales professional, (iii) update sales professionals on changes to our credit programs available to customers and changes to applicable laws, including anti-money laundering legislation, and (iv) identify needs for additional training. We also provide all management team members with more extensive training that emphasizes leadership skills, general management skills, "on-the-job" coaching and training instruction techniques.

#### Advertising and Promotion
One of our key marketing goals is to build on our reputation in our core markets as a leading luxury jewelry brand offering high quality merchandise in an elegant, sophisticated environment. For example, we frequently run advertisements that associate the Birks brand with internationally recognized brand names. Advertising and promotions for all stores are developed by our personnel in conjunction with outside creative professionals.

Our advertising reinforces our role as a world-class luxury brand that aims to deliver a total shopping experience that is as memorable as our merchandise. Our marketing efforts consist of advertising campaigns on digital platforms (including on our website and on social media), billboards, print, direct mail, special events, media and public relations, distinctive store design, elegant displays, partnerships with key suppliers and associations with prestige institutions. The key goals of our marketing initiatives are to enhance customer awareness and appreciation of our retail brand, Maison Birks, as well as our Birks product brand, and to increase customer traffic, client acquisition and retention and net sales.

#### Credit Operations
We have a private label credit card, which is administered by a third-party financial institution that owns the credit card receivable balances. We also have a Birks proprietary credit card, which we administer. Our credit programs are intended to complement our overall merchandising and sales strategy by encouraging larger and more frequent sales to a loyal customer base. Sales under the Birks private label credit card and the Birks in-house credit card accounted for approximately 16.9% of our net sales during fiscal 2025, 18.9% of our net sales during fiscal 2024 and 15.6% during fiscal 2023. We have continued to implement attractive term plans during fiscal 2025. Sales under the Birks private label credit cards are generally made without credit recourse to us.

#### Distribution
Our retail locations receive the majority of their merchandise directly from our distribution warehouse located in Montreal, Québec. Merchandise is shipped from the distribution warehouse utilizing various air and ground carriers. We also transfer merchandise between retail locations to balance inventory levels and to fulfill client requests, and a portion of the merchandise is delivered directly to the retail locations from suppliers.

#### Competition
The North American retail jewelry industry is highly competitive and fragmented, with a few very large national and international competitors and many medium and small regional and local competitors. The market is also fragmented by price and quality. Our competitors include national and international jewelry chains as well as independent regional and local jewelry and timepiece retailers. We also compete with other types of retailers such as department stores and specialty stores and, to a lesser extent, catalog showrooms, discounters, direct mail suppliers, televised home shopping networks, and pure e-commerce players. Many of these competitors have greater financial resources than we do. We believe that competition in our markets is based primarily on the total brand experience including trust, quality craftsmanship, product design and exclusivity, product selection, marketing and branding elements (including web), service excellence, including after-sales service, and, to a certain extent, price. With the on-going consolidation of the retail industry, we believe that competition with other general and specialty retailers and discounters will continue to increase. Our success will depend on various factors, including general economic and business conditions affecting consumer spending, the performance of national and international retail operations, the acceptance by consumers of our merchandising and marketing programs, store locations and our ability to properly staff and manage our stores.

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#### Regulation
Our operations are affected by numerous federal and provincial laws that impose disclosure and other requirements upon the origination, servicing and enforcement of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider. In addition to our private label and proprietary credit cards, credit to our clients is primarily available through third-party credit cards such as American Express<sup>®</sup>, Discover<sup>®</sup>, MasterCard<sup>®</sup>, Union Pay<sup>®</sup> and Visa<sup>®</sup>, without recourse to us in the case of a client's failure to pay. Any change in the regulation of credit that would materially limit the availability of credit to our traditional customer base could adversely affect our results of operations and financial condition.

We generally utilize the services of independent customs agents to comply with U.S. and Canadian customs laws in connection with our purchases of gold, diamond and other jewelry merchandise from foreign sources.

Diamonds extracted from certain regions in Africa, including Zimbabwe, that are believed to be used to fund terrorist activities, are considered conflict diamonds. We have designed a conflict minerals compliance initiative to implement a consistent, company-wide compliance process which includes:

• Educating our employees and suppliers about conflict minerals;

• Establishing a cross-functional management team with members of senior management and subject-matter experts from relevant functions such as supply chain, product development, merchandising, legal and finance responsible for implementing our conflict minerals compliance strategy; and

• Reporting mechanisms for questions and concerns, including a toll-free confidential and anonymous hotline.

We support the Kimberley Process, an international initiative intended to ensure diamonds are not illegally traded to fund conflict. As part of this initiative, we require our diamond suppliers to acknowledge compliance with the Kimberley Process and invoices received for diamonds purchased by us must include certification from the vendor that the diamonds and diamond containing jewelry are conflict free. Through this process and other efforts we believe that the suppliers from whom we purchase diamonds exclude conflict diamonds from their inventories.

Our compliance program has been designed to conform, in all material respects, with the framework in The Organization of Economic Co-operation and Development ("OECD") Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Second Edition), and the related gold supplement for conflict minerals. In addition, we have adopted a conflict minerals policy which has been communicated to our suppliers and is included in our Merchandise Quality Manual and available under "Corporate Governance" on the "Investor Relations" webpage of our website at www.birks.com. Our conflict mineral policy indicates that suppliers who do not comply with this policy will be reviewed and evaluated accordingly for future business and sourcing decisions.

In August 2012, the SEC issued rules that require companies that manufacture products using certain "conflict minerals", including gold, to determine whether those minerals originated in the Democratic Republic of Congo or adjoining countries ("DRC"). If the minerals originate in the DRC, or if companies are not able to establish where they originated, extensive disclosure regarding the sources of those minerals, and in some instances an independent audit of the supply chain is required. We filed our twelfth disclosure report on May 30, 2025 for the calendar year ended December 31, 2024. We determined that we had no reason to believe that any conflict minerals necessary to the functionality or production of our products may have originated in the DRC.

#### Trademarks and Copyrights
The designations Birks, and the Birks logos, are our principal trademarks and are essential to our ability to maintain our competitive position in the prestige jewelry segment. We maintain a program to protect our trademarks and will institute legal action where necessary to prevent others from either registering or using marks that are considered to create a likelihood of confusion with our trademarks. We are also the owner of the original jewelry designs.

#### Organizational Structure
Not applicable.

#### Properties
We lease all of our store locations as well as our corporate head office which includes a distribution center. We believe that all of our facilities are well maintained and in good condition and are adequate for our current needs. We actively review all leases that expire within the next 12 months to determine whether to renew the leases. Over the past few years, we have also decreased the number of stores we operate by closing certain underperforming stores. Going forward, we plan to continue to evaluate the productivity of our existing stores and close unproductive stores. In addition, we plan to continue to review opportunities to open new stores in new prime retail locations when the right opportunities exist.

Following is a list of all our properties as of March 29, 2025:

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| | | | |
|:---|:---|:---|:---|
|  | **Size**<br>**(Square Feet)** | **Expiration of Lease** | **Location** |
|  **Operating Stores** |  |  |  |
|  Bayshore Centre | 1099 | September 2027 | Ottawa, ON |
|  Bloor Flagship Store | 9695 | January 2026 | Toronto, ON |
|  Birks Royalmount | 500 | July 2034 | Montreal, QC |
|  Brinkhaus | 3221 | March 2027 | Calgary, AB |
|  Breitling Laval | 257 | August 2032 | Laval, QC |
|  Breitling Rideau Center | 550 | May 2034 | Ottawa, ON |
|  Breitling Sherway Gardens | 705 | October 2034 | Etobicoke, ON |
|  Carrefour Laval | 2288 | August 2032 | Laval, QC |
|  Chinook Shopping Centre | 4186 | October 2032 | Calgary, AB |
|  DIX-30 Mall | 1645 | July 2033 | Brossard, QC |
|  Fairview Pointe-Claire | 1450 | August 2030 | Pointe-Claire, QC |
|  First Canadian Place | 2243 | August 2028 | Toronto, ON |
|  Graff Boutique | 850 | October 2028 | Vancouver, BC |
|  Montreal Flagship Store | 7714 | April 2032 | Montreal, QC |
|  Patek Philippe Boutique | 850 | October 2028 | Vancouver, BC |
|  Place Ste-Foy | 1472 | September 2027 | Ste-Foy, QC |
|  Rideau Centre | 2195 | May 2034 | Ottawa, ON |
|  Sherway Gardens | 1952 | October 2034 | Etobicoke, ON |
|  Southgate Shopping Centre | 1300 | April 2028 | Edmonton, AB |
|  TimeVallée Royalmount | 2800 | July 2034 | Montreal, QC |
|  Toronto Dominion Square | 5568 | August 2030 | Calgary, AB |
|  Vancouver Flagship Store | 20221 | August 2032 | Vancouver, BC |
|  West Edmonton Mall | 2244 | January 2026 | Edmonton, AB |
|  Willowdale Fairview Mall | 1543 | August 2029 | North York, ON |
|  Yorkdale | 2817 | October 2026 | Toronto, ON |
|  **Other Properties** |  |  |  |
|  Montreal corporate office | 26423 | May 2033 | Montreal, QC |

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Total annual base rent for the above locations for fiscal 2025 was approximately $9.7 million.

#### Diversity, Equity and Inclusion Throughout the Company
We strive to embed diversity, equity and inclusion ("DE&I") in our corporate culture and provide our employees across Canada with equal opportunities and a sense of belonging, regardless of their background, experience or beliefs. This creates a better work environment and fosters individual and team growth, allowing us to better serve our customers and attract the best diverse talent.

We promote equal opportunity in recruitment, hiring, promotion, compensation, employee development such as training, and all other terms and conditions of employment. As such, all decisions regarding these matters are made without bias relating to race, national or ethnic origin, color, religion, age, gender, sex, sexual orientation, matrimonial status, civil status, physical or mental ability, or thoughts and beliefs, in each case in accordance with the laws of the jurisdictions in which we operate and as set out in our Code of Conduct.

Some of the Company's tangible initiatives to promote DE&I and foster a more inclusive culture where everyone feels they belong include:

• The establishment of a Diversity & Inclusion Task Force (the "Task Force") in July 2020, which has expanded to 10 members spanning multiple functions, regions and levels within the Company and led by a senior executive, namely Miranda Melfi. The Task Force has developed recommendations to create opportunities that promote cultural awareness and open dialogue and facilitate inclusion at all levels of the Company, which are being implemented by the relevant departments of the Company. Such recommendations were developed based on an analysis of the valuable feedback received from survey results and team lead interviews conducted with employees, department heads and team leads throughout the Company. The Task Force has been renamed the Diversity, Equity and Inclusion Committee (the "DE&I Committee").

• A mandatory two-session training course on diversity, inclusion and unconscious bias was delivered by an external consultant with subject matter expertise in DE&I, to all of the Company's employees as well as the Board of Directors. The course, which emphasizes both the Company's and employee's responsibility to build an inclusive culture, has become a part of the Company's training program, and all new employees must complete the course as part of their onboarding.

• A mandatory training course on anti-racism was also delivered by an external consultant with subject matter expertise in DE&I, to all of the Company's employees.

• As part of the Company's commitment to enhance DE&I in the workplace, the Company made available to its employees two mandatory online courses covering (i) inclusive language and communication, and (ii) micro-aggressions in the workplace.

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• An annual calendar highlighting various societal, cultural and religious days of importance was developed in order to create awareness and to publicly recognize the diversity of the Company's workforce and to foster a more inclusive environment.

• Flexible work arrangements are offered to office employees, allowing office employees (i) a flexible work schedule, (ii) the opportunity to telework within a hybrid work model, and (iii) a summer schedule allowing employees to take a few Friday afternoons off during the summer.

#### Environmental, Social and Governance Highlights
The Company is committed to enhancing its Environmental, Social and Governance ("ESG") practices and disclosure. We organize our ESG efforts around three pillars: (1) Environmental, (2) Social, and (3) Governance. These pillars are reflective of the integrity of the Birks brand and are embedded in our operations and culture. They specifically focus on our employees, communities, operations and products, and priorities are distributed across our value chain from raw material sourcing and third-party manufacturing, our stores, head office, distribution center and our watch and jewelry ateliers, through to our products' use and end of life impacts. We believe this approach creates value for all of our stakeholders, including our customers, employees, suppliers and partners, and the communities we serve, in turn creating long-term value for our shareholders.

Some of the highlights of our key initiatives and achievements are described below.

#### Environmental
Our commitment to sustainable business operations spans from the products we offer to our customers, to our store construction, maintenance and operations, to our supply chain and packaging initiatives, and to an ethical sourcing program. In addition, our Birks branded jewelry collections are inspired by the Canadian nature which we believe contributes to keeping the environment in the front and center.

*Recycling and Waste Management* 

• Since 2014, we have been reporting verified conflict-free gold to the U.S. Securities and Exchange Commission;

• We have recovered approximately 1,057 troy ounces of gold and platinum in fiscal 2025 through our Maison Birks Gold Exchange Program;

• We have recovered approximately 11% of our diamonds in fiscal 2025 through our diamond upgrade program that were sold or made available for sale;

• Following the recommendations of our former paperless committee, we have implemented initiatives which led to the reduction of our consumption of paper and ink by (i) reducing the number of documents being printed, (ii) reducing the number of printers, (iii) providing two computer screens to employees which allow them to view documents on two screens thereby reducing the need to print, and (iv) offering and encouraging our customers to use the option of electronic statements.

*Sourcing and Quality Assurance* 

• We uphold high standards in quality and maintain a global sourcing program to obtain high-quality products from our suppliers around the world.

• To ensure that suppliers adhere to our standards of social and environmental responsibility, we also have a global responsible sourcing program and support the Kimberley Process, which is an international certification initiative that regulates trade in rough diamonds and is intended to ensure that diamonds are not illegally traded to fund conflict thereby protecting human rights and the environment. As part of this initiative, we require our diamond suppliers to acknowledge compliance with the Kimberley Process and invoices received for diamonds purchased by us must include certification from the vendor that the diamonds and diamond containing jewelry are conflict free.

• In addition, we maintain high standards of diamond traceability and in keeping with our commitment to responsible sourcing, we provide a Birks Canadian Diamond Certificate for every newly sourced, individually registered Canadian diamond (of 0.18 carats and larger) that are set in our diamond engagement rings. The Certificate provides an individual Birks Canadian Diamond Identification Number which allows for detailed traceability of the diamond from the mine to the Birks engagement ring.

**S***ustainable Packaging* 

• We are currently working with suppliers to find ways to make our Birks bags more recyclable. We have set goals to lessen the environmental impact of our Birks bags by prioritizing recycling and reuse, and selecting more sustainable materials.

*Bee Protection* 

• One of the Company's objectives is to spread awareness to ensure the longevity of bees. The world population of bees is decreasing at an alarming rate due to climate change, pesticides, insecticides, loss of habitat and new diseases. Bees play a pivotal role in maintaining and protecting natural ecosystems and biodiversity contributing to the overall wellbeing of our environment. To that end, the Company is working with Pollinator Partnership Canada and Alvéole Urban Beekeeping, to help ensure the longevity of Canada's world-renowned natural environment. The Company is proud to home beehives in Montreal managed by Alvéole.

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#### Social
The Company is committed to corporate social responsibility. Our core values are at the root of all of our human capital management programs, policies and practices. We aim to support our employees by offering training, competitive wages, flexible ways of working, and opportunities for growth. We believe these efforts help our employees deliver great customer experience and reflect our core values.

*Employee Engagement* 

• As discussed above under "Diversity, Equity and Inclusion Throughout the Company", we created a DE&I Committee. We strive to create an inclusive and respectful environment that encourages our employees to bring their whole selves to work every day. We have a zero-tolerance policy for discrimination or harassment.

• We strive to maintain an open and ongoing dialogue with our employees, which helps us to make Birks Group a better, more fulfilling place to work. Throughout the year, we engage our employees through a variety of remote and on-site events, including training, and health and wellness activities. We also actively seek employee feedback through formal and informal touchpoints. We use the feedback from these touchpoints to help improve the overall employee experience.

*Employee Development* 

• We invest in the development of our employees to enable them to thrive in our highly competitive industry. As such, we offer our employees the opportunity to benefit from development opportunities. We invest in ongoing growth and development by integrating our culture and values into our management practices, providing leadership coaching and support, and empowering our employees to learn new skills through diverse learning opportunities and challenging work experiences.

• The Company continually refreshes its product knowledge training to retain our competitive edge in the jewelry industry. Our retail employees are highly skilled professionals as a result of our continuous training and development of their skillsets.

• We equip our leaders with the tools they need to develop themselves and their teams through several programs designed to help them lead inclusively, empower their teams, and serve as mentors for our employees. Employees in management positions can also participate in courses or programs designed to build critical skills, grow as effective leaders and strengthen our culture, such as training on leadership skills, inclusiveness, employee engagement, and unconscious bias.

*Commitment to Equitable and Competitive Compensation and Benefits* 

• We are committed to equal opportunity and treatment for all employees which includes equal career advancement opportunities and equitable and competitive compensation and benefits.

• Consistent with our core values, we invest in our employees by offering competitive compensation including bonuses based on Company performance and individual performance, as well as a broad range of benefits.

• We make compensation and benefits investments to ensure our compensation and benefits packages reflect the evolving circumstances across our markets.

Subject to certain eligibility requirements, our employees can take advantage of a range of benefits including a group insurance plan (health, dental and life insurance and short-term and long-term disability insurance), telemedicine, an employee assistance program, a generous merchandise discount, vacation days and personal days, as well as a flexible work schedule and hybrid work model for head office employees.

*Health and Safety as a Priority* 

• Birks Group is committed to the health and safety of its employees, every day and especially in times of crisis. We provide safe and clean facilities, comply with all applicable workplace safety laws and have safety policies and procedures to articulate our expectations with respect to managing the health and safety aspects of our retail stores, head office, distribution center and our watch and jewelry ateliers. We are dedicated to the overall wellbeing of our employees and hence we offer a comprehensive health and safety program including an employee assistance program which offers confidential counseling and support services, and virtual care which provides remote access to healthcare professionals. These programs ensure our employees have the resources they need to support their physical and mental health and overall wellbeing.

*Digital Transformation and New Ways of Working* 

• To deliver a seamless customer and employee experience, we regularly invest in digital tools to improve employee productivity, engagement, and performance. As more customers shop digitally, we have adapted by adding more roles in e-commerce fulfillment and our home office employees have accelerated tech-based solutions that enhance the customer and employee experiences. The Company provided greater flexibility and new options to customers with browsing, shopping, and pickup .

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• During the pandemic, digital learning became very important, and the Company accelerated the implementation of digital meeting platforms for collaboration. Our employees embraced technology to connect, learn, and collaborate as they attained results. The Company provided training sessions for retail employees on the technology and the ability of virtual selling.

• We have established an artificial intelligence ("AI") committee whose purpose is to explore and integrate AI technologies in order to enhance our business processes and drive efficiencies throughout the organization. We offer a variety of training designed to help employees confidently use available AI tools and discover ways that AI can facilitate their daily work.

*Strengthen our Communities* 

One of our core values is giving back and we support our communities in a number of ways. The Company has made monetary or in-kind donations to various non-profit organizations, such as the following:

• First Assist, an Indigenous-led charitable organization that provides education and sports integration programs to enhance the mental, emotional and physical well-being of youth in Indigenous Communities across Canada.

• The Get Real Movement, a Canadian non-profit organization focused on combatting 2SLGBTQ+ discrimination, racism, and bullying in schools, summer camps, and workplaces.

• Vancouver General Hospital Foundation.

• Quebec Breast Cancer Foundation.

In May 2024, we published our first report under the *Fighting Against Forced Labour and Child Labour in Supply Chains Act*. (Canada), which describes, among other things, the policies and steps implemented and taken by the Company with respect to forced labour and child labour. In May 2025, we published our second report which is available on our website at www.birks.com.

#### Governance
Birks has a strong commitment to ethics and integrity, which serve as the foundation of our business and the guiding principles behind the decisions we make every day. As part of the governance pillar, we strive to continue to make sound strategic decisions and maintain high ethical standards.

Supported by management, the Company's Board of Directors is the ultimate steward of ESG matters. Management is responsible for the development and implementation of ESG strategies and continues to work toward enhancing disclosure in this regard. The leadership and execution of ESG priorities is shared across a number of departments.

Together, the Board of Directors and management have full oversight and accountability for the Company's ESG activities and performance. We believe this allocation of responsibilities to be the most effective means at the moment to drive accountability for ESG matters, and we will regularly re-evaluate our approach to ensure its effectiveness.

As part of the Company's enterprise risk management framework, the committees of the Board receive regular reports from management on the principal risks and opportunities of the Company's business relating to the committees' oversight responsibilities which are also discussed at the Board on a regular basis, including key areas which are material to the business from an ESG perspective.

Hence, ESG matters described herein are considered to mitigate risks and maximize our positive impacts. We continue to identify and monitor relevant risks and compliance expectations through ongoing assessments.

To date, the Company has implemented various programs, corporate policies and other initiatives to support the execution of its ESG priorities. These include but are not limited to the following:

• Our Board of Directors consists of a majority of independent directors. All of our directors, other than Messrs. Rossi di Montelera and Bédos, have been affirmatively determined by the Board of Directors to be independent in accordance with the NYSE American Company Guide (even though due to the Company's controlled company status it may be exempted from the independence requirement).

• The Company's Code of Conduct for directors, officers and employees.

• An anonymous and confidential whistleblowing line hosted by a third-party.

• A responsible sourcing program.

• The Company's anti-money laundering program.

• Oversight of data privacy and security through the audit and corporate governance committee.

• An assessment process for the Chief Executive Officer, the Board, the committees and the directors, individually.

• Policy Regarding the Mandatory Recovery of Compensation (i.e., claw back policy) and incentive compensation claw back policy in our Omnibus Long-Term Incentive Plan (for grants made after September 2016).

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Furthermore, the Board has incorporated consideration of DE&I matters into its governance practices as provided in the Company's Board Diversity, Equity and Inclusion Policy. This is achieved through ensuring that diversity considerations are taken into account in Board of Directors vacancies. Additionally, the compensation and nominating committee considers the Board's diversity in its regular assessment of the Board's effectiveness, and its periodic review of the composition of the Board. As part of the selection process for new directors, a skills matrix is used to assess the overall strengths of directors and to assist in the ongoing renewal process of the Board of Directors, which skills matrix includes various ESG related skills.

Diversity considerations are also taken into account in senior management succession planning, committing to retention and development to ensure that our most talented employees are promoted from within the organization, and ensuring that diversity is taken into account when identifying and fostering the development of high-potential individuals within our Company.

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| **Item 4A.** | **Unresolved Staff Comments**  |

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Not applicable

**Item 5.** **Operating and Financial Review and Prospects** <br>

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this Annual Report. The following discussion includes certain forward-looking statements. For a discussion of important factors, including the continuing development of our business, actions of regulatory authorities and competitors and other factors which could cause actual results to differ materially from the results referred to in the forward-looking statements, see Item 3., "Key Information" under the heading "Risk Factors" and the discussion under the heading "Forward-Looking Information" at the beginning of this Annual Report.

Throughout this Annual Report, we refer to our fiscal year ended March 29, 2025, as fiscal 2025, and our fiscal years ended March 30, 2024, and March 25, 2023, as fiscal 2024 and fiscal 2023, respectively. Our fiscal year ends on the last Saturday in March of each year. The fiscal years ended March 29, 2025 and March 25, 2023 consisted of 52 weeks each, whereas the fiscal year ended March 30, 2024 consisted of 53 weeks.

#### Overview
Birks Group is a leading designer of fine jewelry and operator of luxury jewelry stores in Canada. The Company also has a small wholesale division with wholesale customers in North America, the E.U., and the U.K., which division will be wound down by the end of 2025. As of March 29, 2025, we have two reportable segments, "Retail" and "Other." Retail consists of our retail operations whereby we operate 17 stores across Canada under the Maison Birks brand, one retail location under the Birks brand, one retail location under the TimeVallée brand, one retail location under the Brinkhaus brand, one retail location under the Graff brand, one retail location under the Patek Philippe brand, and three retail locations under the Breitling brand. Other consists primarily of our e-commerce business, our gold exchange business and our wholesale business which is being wound down by the end of 2025.

As of March 29, 2025, our retail operation's total square footage was 79,365. The average square footage of our five Maison Birks flagship stores was approximately 9,477 while the average square footage for all other Maison Birks retail stores was approximately 1,825. The average square footage of the Brinkhaus, Graff and Patek Philippe locations was 1,640. The average square footage of the Breitling locations was 504.

#### Investment in RMBG Joint Venture
In April of 2021, the Company entered into a joint venture with FWI LLC ("FWI") to form RMBG Retail Vancouver ULC ("RMBG"). During fiscal 2023, the joint venture became operational. RMBG operates a boutique in Vancouver, retailing third party branded watches, sales of which were historically recognized at the Company's Vancouver Flagship location and are now recognized through the joint venture. The Company and FWI both contributed certain assets for a 49% and 51% equity interest respectively in RMBG, the legal entity comprising the joint venture. FWI has controlled the joint venture since its inception. The Company has determined that it has significant influence but not control over RMBG and therefore has applied the equity method of accounting to account for its investment in RMBG. Such accounting treatment has an impact on period-to-period comparisons of sales, gross profit, operating expenses, and operating income, as the Company's share of RMBG's profits are now recorded within Equity in earnings of joint venture, net of taxes on the Company's condensed consolidated statements of operations.

#### Description of Operations
Our net sales are comprised of revenues, net of discounts, in each case, excluding sales tax. Sales are recognized at the point of sale when merchandise is taken or shipped. Sales of consignment merchandise are recognized on a full retail basis at such time that the merchandise is sold. Revenues for gift certificates and store credits are recognized upon redemption. Customers use cash, debit cards, third-party credit cards, private label credit cards and proprietary credit cards to make purchases. The level of our sales is impacted by the number of transactions we generate and the size of our average sales transaction.

Our operating costs and expenses are primarily comprised of cost of sales and selling, general and administrative expenses ("SG&A"). Cost of sales includes cost of merchandise, direct inbound freight and duties, direct labor related to repair services, the costs of our design and creative departments, inventory shrink, damage and inventory reserves, jewelry, watch and giftware boxes, as well as product development costs. SG&A includes, among other things, all non-production payroll and benefits (including non-cash compensation expense), store and head office occupancy costs, overhead, credit card fees, information systems, professional services, consulting fees, repairs and maintenance, travel and entertainment, insurance, legal, human resources and training expenses. Occupancy, overhead and depreciation are generally less variable relative to net sales than other components of SG&A, such as credit card fees and certain elements of payroll, such as commissions. Another significant item in SG&A is marketing expenses, which include marketing, public relations and advertising costs (net of amounts received from vendors for cooperative advertising) incurred to increase customer awareness of both the Birks product brand and our third party product brands. Marketing has historically represented a significant portion of our SG&A. As a percentage of net sales, marketing expenses represented 2.6%, 3.7%, and 5.0% of sales for fiscal 2025, fiscal 2024, and fiscal 2023, respectively. Additionally, SG&A includes indirect costs such as freight, including inter-store transfers, receiving costs, distribution costs, and warehousing costs. Depreciation and amortization includes depreciation and amortization of our stores and head office, including leasehold improvements, furniture and fixtures, computer hardware and software and amortization of intangibles.

Our attention remains focused on the execution of our short-term and long-term strategic plans.

Over the short-term, we will focus our efforts on those strategies and key drivers of our performance that are necessary in the current business climate, which include our ability to:

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• grow sales, gross margin rate and gross profits;

• manage expenses and assets efficiently in order to optimize profitability and generate positive operating cash flow with the objective of growing earnings before interest, tax, depreciation and amortization ("EBITDA");

• align our operations to effectively and efficiently deliver benefits to our shareholders;

• successfully integrate the European Acquisition and achievement of identified synergies; and

• maintain flexible and cost effective sources of borrowings to finance our operations and strategies.

Over the long-term, we believe that the key drivers of our performance will be our ability to:

• continue to develop our Birks product brand through the expansion of all sales channels including e-commerce;

• execute our merchandising strategy to increase net sales and maintain and expand gross margin by lowering discounts, developing and marketing higher margin exclusive and unique products, and further developing our internal capability to develop and source products;

• execute our marketing strategy to enhance customer awareness and appreciation of the Birks product brand as well as our third party product brands with an objective of maintaining and eventually increasing customer traffic, client acquisition and retention and net sales through regional, national and international advertising campaigns using digital channels (including our website), billboards, print, direct mail, community relations, media and public relations, partnerships with key suppliers, and associations with prestige institutions;

• provide a superior omni-channel client experience through consistently outstanding customer service that will ensure customer satisfaction and promote frequent customer visits, customer loyalty, and strong customer relationships;

• increase our retail stores' average retail transaction, conversion rate, productivity of our store professionals, inventory and four-wall profitability; and

• recruit and retain top talent whose values are aligned with our omni-channel strategic visions.

#### Fiscal 2025 Summary
Total net sales for fiscal 2025 were $177.8 million compared to $185.3 million in fiscal 2024, a decrease of $7.5 million, or 4.0%. The decrease in net sales in fiscal 2025 was primarily driven by the results of the Company's retail channel. Net retail sales were $7.3 million lower than fiscal 2024, a decrease primarily due to the decrease in third party branded jewelry sales, following the exit of a jewelry brand from two stores, partially offset by an increase in branded timepieces sales throughout the retail network.

• Comparable store sales decreased by 3.4% in fiscal 2025 compared to fiscal 2024 mainly due to lower third party branded jewelry sales following the exit of a jewelry brand from two stores, partially offset by an increase in third-party branded timepiece sales and an increase in average sales transaction value. When excluding the third-party jewelry brand movement, the comparable store sales increased by 6.9%, mainly driven by timepiece sales.

• Total gross profit for fiscal 2025 was $66.3 million, or 37.3% of net sales, compared to $73.6 million, or 39.7% of net sales in fiscal 2024. This decrease in gross profit was primarily due to the decreased sales volume experienced during fiscal 2025 due to third-party branded jewelry sales following the exit of a jewelry brand from two stores, and a foreign exchange loss due to the strengthening of the U.S. dollar, partially offset by the increased sales of third-party branded timepieces. The decrease of 240 basis points in gross margin percentage resulted primarily from the sales mix with decreased sales from third-party branded jewelry, as well as a foreign exchange loss.

• SG&A expenses in fiscal 2025 were $59.5 million, or 33.5% of net sales, compared to $65.7 million, or 35.5% of net sales in fiscal 2024, a decrease of $6.2 million. The main drivers of the decrease in SG&A expenses in fiscal 2025 include lower occupancy costs ($2.7 million) mainly due to store closures and store lease modifications, lower marketing costs ($2.3 million) mainly due to lower brand development initiatives, lower compensation costs ($0.5 million) mainly due to lower sales volume and head count reduction, lower general operating costs ($0.4 million) and lower non-cash based compensation expense ($0.3 million) mainly due to fluctuations in the Company's stock price during the fiscal year. As a percentage of sales, SG&A expenses in fiscal 2025 decreased by 200 basis points as compared to fiscal 2024.

• The Company's EBITDA<sup>(1)</sup> for fiscal 2025 was $9.2 million, a decrease of $0.8 million, compared to an EBITDA<sup>(1)</sup> of $10.0 million for fiscal 2024.

• The Company's reported operating loss for fiscal 2025 was $5.5 million, a decrease of $6.7 million, compared to a reported operating income of $1.2 million for fiscal 2024.

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• The Company recognized interest and other financing costs of $9.7 million in fiscal 2025, an increase of $1.7 million, compared to recognized interest and other financing costs of $8.0 million in fiscal 2024. This increase is due an increase in the average amount outstanding on the amended credit facility, additional borrowings, and a foreign exchange loss of $1.0 million in fiscal 2025 versus a foreign exchange gain of $0.2 million in fiscal 2024 on our U.S. dollar denominated debt.

• The Company recognized a net loss for fiscal 2025 of $12.8 million, or $0.66 per share, compared to a net loss for fiscal 2024 of $4.6 million, or $0.24 per share.

(1) This is a non-GAAP financial measure defined below under "Non-GAAP Measures" and accompanied by a reconciliation to the most directly comparable GAAP financial measure.

#### Comparable Store Sales
We use comparable store sales as a key performance measure for our business. Comparable store sales include stores open in the same period in both the current and prior year. We include our e-commerce sales in comparable store calculations. Stores enter the comparable store calculation in their thirteenth full month of operation under our ownership. Stores that have been resized and stores that are relocated are evaluated on a case-by-case basis to determine if they are functionally the same store or a new store and then are included or excluded from comparable store sales, accordingly. Comparable store sales measures the percentage change in net sales for comparable stores in a period compared to the corresponding period in the previous year. If a comparable store is not open for the entirety of both periods, comparable store sales measures the change in net sales for the portion of time that such store was open in both periods. We believe that this measure provides meaningful information on our performance and operating results. However, readers should know that this financial metric has no standardized meaning and may not be comparable to similar measures presented by other companies.

The percentage increase (decrease) in comparable store sales for the periods presented below is as follows:

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|:---|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** |
|  Comparable store sales | -3.4% | 7.5% | 2.9% |

---

The decrease in comparable store sales of 3.4% during fiscal 2025 was mainly due to lower third-party branded jewelry sales following the exit of a jewelry brand from two stores, partially offset by an increase in third-party branded timepiece sales and an increase in average sales transaction value. When excluding the third-party jewelry brand movement, the comparable store sales increased by 6.9%, mainly driven by timepiece sales.

The increase in comparable store sales of 7.5% during fiscal 2024 was driven by strong third-party branded timepiece sales. Furthermore, the comparable store sales increase was influenced by an increase in average sales transaction value, partially offset by a decrease in units sold.

#### Fiscal 2025 Compared to Fiscal 2024
The following table sets forth, for fiscal 2025 and fiscal 2024, the amounts in our consolidated statements of operations:

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 29, 2025** | **March 30, 2024** |
|  | **(In thousands)** | **(In thousands)** |
|  Net sales | $177807 | $185275 |
|  Cost of sales | 111499 | 111720 |
|  Gross profit | 66308 | 73555 |
|  Selling, general and administrative expenses | 59518 | 65705 |
|  Depreciation and amortization | 7733 | 6639 |
|  Impairment of long-lived assets | 4592 |  |
|  Total operating expenses | 71843 | 72344 |
|  Operating income (loss) | (5535) | 1211 |
|  Interest and other financial costs | 9712 | 8007 |
| (Loss) income before taxes and equity in earnings of joint venture | (15247) | (6796) |
|  Income taxes (benefits) |  |  |
|  Equity in earnings of joint venture, net of taxes of $0.9 million ($0.8 million in 2024) | 2428 | 2165 |
|  Net (loss) income, net of tax | $(12819) | $(4631) |

---

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##### [**Table of Contents**](#toc)
*Net Sales* 

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 29, 2025** | **March 30, 2024** |
|  | **(In thousands)** | **(In thousands)** |
|  Net sales – Retail | $166564 | $173846 |
|  Net sales – Other | 11243 | 11429 |
|  Total Net Sales | $177807 | $185275 |

---

Total net sales for fiscal 2025 were $177.8 million compared to $185.3 million in fiscal 2024, a decrease of $7.5 million, or 4.0%. The decrease in net sales in fiscal 2025 was primarily driven by the results of the Company's retail channel. Net retail sales were $7.3 million lower than fiscal 2024, a decrease primarily due to the decrease in third-party branded jewelry sales, following the exit of a jewelry brand from two stores, offset by an increase in branded timepieces sales throughout the retail network. The net retail sales decrease was also driven by a decrease in units sold, partially offset by an increase in average sales transaction value. The decrease in Net Sales – Other of $0.2 million is primarily due to an increase of $1.2 million or 20.0% in our e-commerce business offset by a decrease of $1.0 million or -35% in our wholesale business following the Company's decision to discontinue unprofitable wholesale activities and a decrease of our gold exchange business due to less gold exchange activities.

*Gross Profit* 

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 29, 2025** | **March 30, 2024** |
|  | **(In thousands)** | **(In thousands)** |
|  Gross Profit – Retail | $61507 | $68370 |
|  Gross Profit – Other | 4801 | 5185 |
|  Total Gross Profit | $66308 | $73555 |
|  Gross Margin (Total Gross Profit as a % of Total Net Sales) | 37.3% | 39.7% |

---

Total gross profit for fiscal 2025 was $66.3 million, or 37.3% of net sales, compared to $73.6 million, or 39.7% of net sales in fiscal 2024. This decrease of $7.3 million in gross profit was primarily attributable to lower sales volume in the retail segment, specifically in third-party branded jewelry sales due to a brand exit, and a foreign exchange loss due to the strengthening of the U.S. dollar, partially offset by an increase in sales volume of branded timepieces sales. The decrease of 240 basis points in gross margin percentage resulted primarily from the sales mix, with decreased sales from third-party branded jewelry, a foreign exchange loss, partially offset by an increase in branded timepieces sales.

Gross Profit – Retail for fiscal 2025 was $61.5 million, or 36.9% of Net Sales – Retail, compared to $68.4 million, or 39.3% of Net Sales – Retail for fiscal 2024. There was a decrease of $6.9 million in Gross Profit – Retail, as well as a decrease in Gross Margin Percentage – Retail by 240 basis points driven by the above-mentioned factors. Gross Profit – Other for fiscal 2025 was $4.8 million, or 42.7% of Net Sales – Other compared to $5.2 million, or 45.4% of Net Sales – Other for fiscal 2024, which is a decrease of $0.38 million driven by the increase in e-commerce sales offset by a decrease in wholesale activity, resulting in an unfavorable gross margin mix. The decrease in gross margin percentage for Gross Profit – Other of 270 basis points is primarily due to the sales mix in e-commerce and wholesale business, and gold exchange activities.

*SG&A Expenses* 

SG&A expenses in fiscal 2025 were $59.5 million, or 33.5% of net sales, compared to $65.7 million, or 35.5% of net sales in fiscal 2024, a decrease of $6.2 million. The main drivers of the decrease in SG&A expenses in fiscal 2025 include lower occupancy costs ($2.7 million) mainly due to store closures and store lease modifications, lower marketing costs ($2.3 million) mainly due to lower brand development initiatives, lower compensation costs ($0.5 million) mainly due to lower sales volume and head count reduction, lower general operating costs ($0.4 million) and lower non-cash based compensation expense ($0.3 million) mainly due to fluctuations in the Company's stock price during the fiscal year. As a percentage of sales, SG&A expenses in fiscal 2025 decreased by 200 basis points as compared to fiscal 2024 reflecting the Company's focus on cost management and containment.

*Depreciation and Amortization* 

Depreciation and amortization expense in fiscal 2025 was $7.7 million compared to $6.6 million in fiscal 2024. This increase was driven by the early termination of a store lease in fiscal 2025 resulting in accelerated depreciation.

*Impairment of long-lived assets* 

Impairment of long-lived assets in fiscal 2025 was $4.6 million compared to nil in fiscal 2024. These impairment charges are related to certain software costs associated with the delay in completing the implementation of the Company's new ERP system.

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*Interest and Other Financing Costs* 

Interest and other financing costs in fiscal 2025 were $9.7 million compared to $8.0 million in fiscal 2024, an increase of $1.7 million, driven primarily by a foreign exchange loss of $1.0 million relating to the strengthening of the U.S. dollar compared to the Canadian dollar as well as an increase in the average amount outstanding throughout the year of the Amended Credit Facility during fiscal 2025 compared to fiscal 2024.

*Income Tax Expense* 

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of March 29, 2025, the Company did not have any accrued interest related to uncertain tax positions due to available tax loss carry forwards. The tax years 2018 through 2025 remain open to examination in the major tax jurisdictions in which the Company operates. We have continued to record a 100% valuation allowance on the full value of the deferred tax assets generated during these periods as the criteria for recognition of these assets was not met on March 29, 2025.

*Equity in earnings of joint venture, net of taxes* 

During fiscal 2025, the Company recognized $2.4 million of equity in earnings of joint venture, net of taxes, compared to $2.2 million of equity in earnings of joint venture, net of taxes in fiscal 2024 as a result of its investment in the RMBG joint venture accounted for under the equity method of accounting.

#### Fiscal 2024 Compared to Fiscal 2023
The following table sets forth, for fiscal 2024 and fiscal 2023, the amounts in our consolidated statements of operations:

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 30, 2024** | **March 25, 2023** |
|  | **(In thousands)** | **(In thousands)** |
|  Net sales | $185275 | $162950 |
|  Cost of sales | 111720 | 94990 |
|  Gross profit | 73555 | 67960 |
|  Selling, general and administrative expenses | 65705 | 66095 |
|  Depreciation and amortization | 6639 | 5673 |
|  Total operating expenses | 72344 | 71768 |
|  Operating income (loss) | 1211 | (3808) |
|  Interest and other financial costs | 8007 | 5581 |
| (Loss) income before taxes and equity in earnings of joint venture | (6796) | (9389) |
|  Income taxes (benefits) |  |  |
|  Equity in earnings of joint venture, net of taxes of $0.8 million ($0.7 million in 2023) | 2165 | 1957 |
|  Net (loss) income, net of tax | $(4631) | $(7432) |

---

*Net Sales* 

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 30, 2024** | **March 25, 2023** |
|  | **(In thousands)** | **(In thousands)** |
|  Net sales – Retail | $173846 | $153110 |
|  Net sales – Other | 11429 | 9840 |
|  Total Net Sales | $185275 | $162950 |

---

Total net sales for fiscal 2024 were $185.3 million compared to $163.0 million in fiscal 2023, which is an increase of $22.3 million, or 13.7%. Net retail sales were $20.7 million higher than the comparable prior year period. The increase in retail sales in fiscal 2024 was primarily driven by the strong performance of third-party branded timepieces and jewelry, including at the newly renovated Chinook and Laval stores, partially offset by a decrease in Birks product brand sales. The net retail sales increase was driven by an increase in average sales transaction value, partially offset by a slight decrease in units sold. The increase in Net Sales – Other of $1.6 million is primarily due to an increase in sales of 26.8% from our e-commerce business due to on-line exclusive product offerings and improved site functionalities. Additionally, the increase in Net Sales – Other was further driven by an increase of 34.4% from our gold exchange business, partially offset by a decrease in our wholesale activity.

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*Gross Profit*

---

| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 30, 2024** | **March 25, 2023** |
|  | **(In thousands)** | **(In thousands)** |
|  Gross Profit – Retail | $68370 | $64031 |
|  Gross Profit – Other | 5185 | 3929 |
|  Total Gross Profit | $73555 | $67960 |
|  Gross Margin (Total Gross Profit as a % of Total Net Sales) | 39.7% | 41.7% |

---

Total gross profit for fiscal 2024 was $73.6 million, or 39.7% of net sales, compared to $68.0 million, or 41.7% of net sales in fiscal 2023. This increase in gross profit was primarily driven by the increased sales volume experienced in the period driven by strong third-party branded timepieces and jewelry, partially offset by higher product, packaging and costs of sales. The decrease of 200 basis points in gross margin percentage was primarily resulting from the sales mix with increased sales from third-party branded timepieces and jewelry partially offset by lower promotions and discounting. Gross Profit – Retail for fiscal 2024 was $68.4 million, or 39.3% of Net Sales – Retail, compared to $64.0 million, or 41.7% of Net Sales – Retail for fiscal 2023. Although there was an increase of $4.3 million in Gross Profit – Retail, Gross Margin Percentage – Retail decreased by 240 basis points driven by the above-mentioned factors. Gross Profit – Other for fiscal 2024 was $5.2 million, or 45.5% of Net Sales – Other compared to $3.9 million, or 41.3% of Net Sales – Other for fiscal 2023, which is an increase of $1.3 million driven by the increase in volume of e-commerce and gold exchange. The increase in gross margin of 420 basis points is primarily driven by the sales mix in e-commerce, gold exchange and wholesale business.

*SG&A Expenses*

SG&A expenses in fiscal 2024 were $65.7 million, or 35.5% of net sales, compared to $66.1 million, or 40.6% of net sales in fiscal 2023, a decrease of $0.4 million. The main drivers of the decrease in SG&A expenses in fiscal 2024 include lower marketing costs ($1.3 million) and lower non-cash stock based compensation expense ($2.0 million) due to the fluctuations in the Company's stock price during the fiscal year, offset by higher compensation costs ($1.5 million) primarily due to longer store opening hours compared to fiscal 2023, higher credit card costs ($1.1 million) due to higher cost on private label credit cards and proprietary credit cards, higher occupancy costs ($0.4 million) and higher general operating costs and variable costs ($0.3 million). As a percentage of sales, SG&A expenses in fiscal 2024 decreased by 510 basis points as compared to fiscal 2023.

*Depreciation and Amortization*

Depreciation and amortization expense in fiscal 2024 was $6.6 million compared to $5.7 million in fiscal 2023. This increase was driven primarily by $0.5 million accelerated depreciation due to modified terms of a vendor agreement as well as $0.4 million due to accelerated depreciation related to store closures in fiscal 2024.

*Interest and Other Financing Costs*

Interest and other financing costs in fiscal 2024 were $8.0 million compared to $5.6 million in fiscal 2023, an increase of $2.4 million, driven primarily by an increase of 210 basis points of the weighted average interest rate of the Amended Credit Facility (defined below) and Amended Term Loan (defined below), as well as explained by an increase in the average amount outstanding on the Amended Credit Facility (defined below) during fiscal 2024 compared to fiscal 2023.

*Income Tax Expense*

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of March 30, 2024, the Company did not have any accrued interest related to uncertain tax positions due to available tax loss carry forwards. The tax years 2017 through 2024 remain open to examination in the major tax jurisdictions in which the Company operates. We have continued to record a 100% valuation allowance on the full value of the deferred tax assets generated during these periods as the criteria for recognition of these assets was not met on March 30, 2024.

*Equity in earnings of joint venture, net of taxes*

During fiscal 2024, the Company recognized $2.2 million of equity in earnings of joint venture, net of taxes, compared to $2.0 million of equity in earnings of joint venture, net of taxes in fiscal 2023 as a result of its investment in the RMBG joint venture accounted for under the equity method of accounting.

#### Selected Financial Data
The following income statement data and balance sheet data as of March 29, 2025 and March 30, 2024 and for the years ended March 29, 2025, March 30, 2024, and March 25, 2023 have been derived from our audited consolidated financial statements, which are included elsewhere in this Annual Report. The following financial data as of March 25, 2023, March 26, 2022 and March 27, 2021 and for the years ended March 26, 2022 and March 27, 2021 have been derived starting with our audited consolidated financial statements not included in this Annual Report. The EBITDA and Adjusted EBITDA data below are non-GAAP measures. All fiscal years in the table below consisted of 52 weeks except for the period ended March 30, 2024 which consisted of 53 weeks. The historical results included below and elsewhere in this Annual Report are not necessarily indicative of our future performance.

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The data presented below is only a summary and should be read in conjunction with our audited consolidated financial statements, including the notes thereto, included elsewhere in this Annual Report. You should also read the following summary data in conjunction with Item 5, "Operating and Financial Review and Prospects" included elsewhere in this Annual Report.

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#### Income Statement Data:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** | **March 26, 2022** | **March 27, 2021** |
|  | **(In thousands, except per share data)** | **(In thousands, except per share data)** | **(In thousands, except per share data)** | **(In thousands, except per share data)** | **(In thousands, except per share data)** |
|  Net sales | $177807 | $185275 | $162950 | $181342 | $143068 |
|  Cost of sales | 111499 | 111720 | 94990 | 105122 | 86718 |
|  Gross profit | 66308 | 73555 | 67960 | 76220 | 56350 |
|  Selling, general and administrative expenses | 59518 | 65705 | 66095 | 65942 | 53713 |
|  Depreciation and amortization | 7733 | 6639 | 5673 | 5809 | 5458 |
|  Impairment of long-lived assets <sup>(1)</sup> | 4592 |  |  |  |  |
|  Total operating expenses | 71843 | 72344 | 71768 | 71751 | 59171 |
|  Operating (loss) income | (5535) | 1211 | (3808) | 4469 | (2821) |
|  Interest and other financial costs | 9712 | 8007 | 5581 | 3182 | 3017 |
| (Loss) income from before income taxes | (15247) | (6796) | (9389) | 1287 | (5838) |
|  Income tax (recovery) expense |  |  |  |  |  |
|  Equity in earnings of joint venture, net of taxes of $0.9 million ($0.8 million in fiscal 2024 and $0.7 million in fiscal 2023) | 2428 | 2165 | 1957 |  |  |
|  Net (loss) income attributable to common Shareholders | $(12819) | $(4631) | $(7432) | $1287 | $(5838) |
|  Net (loss) income per common share, basic | $(0.66) | $(0.24) | $(0.40) | $0.07 | $(0.32) |
|  Net (loss) income per common share, diluted | $(0.66) | $(0.24) | $(0.40) | $0.07 | $(0.32) |
|  Weighted average common shares outstanding | 19357 | 19058 | 18692 | 18346 | 18005 |
|  Weighted average common shares outstanding – diluted | 19357 | 19058 | 18692 | 18794 | 18005 |
|  Dividends per share |  |  |  |  |  |

---

#### Non-GAAP Measures\*:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** | **March 26, 2022** | **March 27, 2021** |
|  | | | **(In thousands)** | | |
|  EBITDA | $4626 | $10015 | $3822 | $10278 | $2637 |
|  Adjusted EBITDA | $9218 | $10015 | $3822 | $10278 | $2637 |

---

#### Balance Sheet Data:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** | **March 26, 2022** | **March 27, 2021** |
|  | | | **(In thousands)** | | |
|  Working capital | $(23120) | $(11059) | $(8367) | $1899 | $(2882) |
|  Total assets | $196080 | $203268 | $196981 | $183261 | $201680 |
|  Bank indebtedness | $73630 | $63372 | $57890 | $43157 | $53387 |
|  Long-term debt (including current portion) | $26234 | $26939 | $24313 | $23500 | $26022 |
|  Operating lease liability (including current portion) | $45558 | $66311 | $69747 | $73720 | $73011 |
|  Stockholders' equity (deficiency) | $(18011) | $(5149) | $(603) | $5864 | $(1422) |
|  Common Stock: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Value | $100609 | $98480 | $96774 | $95638 | $95116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares | 19595 | 19166 | 18830 | 18516 | 18329 |

---

\* As described in the section Non-GAAP Measures.

<sup>(1)</sup> Non-cash impairment of long-lived assets in fiscal 2025 related to certain software costs associated with the delay in completing the implementation of the Company's new ERP system.

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#### Dividends and Dividend Policy
We have not paid dividends since 1998 and do not currently intend to pay dividends on our Class A voting shares or Class B multiple voting shares in the foreseeable future. Our ability to pay dividends on our Class A voting shares and Class B multiple voting shares are restricted by our credit agreements. See Item 5, "Operating and Financial Review and Prospects — Liquidity and Capital Resources." If dividends were declared by our Board of Directors, shareholders would receive a dividend equal to the per share dividend we would pay to holders of our Class A voting shares or holders of Class B multiple voting shares. Dividends we would pay to U.S. holders would generally be subject to withholding tax. See Item 10, "Additional Information —Taxation."

#### NON-GAAP MEASURES
The Company reports financial information in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), and accordingly provide GAAP financial measures, including net income (loss). The Company's performance is monitored and evaluated using various sales and earnings measures that are adjusted to include or exclude amounts from the most directly comparable GAAP measure ("non-GAAP measures"). The Company presents such non-GAAP measures in reporting its financial results to assist in business decision making and to provide key performance information to senior management. The Company believes that this additional information provided to investors and other external stakeholders will allow them to evaluate the Company's operating results using the same financial measures and metrics used by the Company in evaluating performance. The Company does not, nor does it suggest that investors and other external stakeholders should, consider non-GAAP measures in isolation from, or as a substitute for, financial information prepared in accordance with U.S. GAAP. These non-GAAP measures may not be comparable to similarly titled measures presented by other companies. In addition to our results determined in accordance with U.S. GAAP, we use non-GAAP measures including: "EBITDA", "adjusted operating expenses", "adjusted operating loss" and "adjusted EBITDA".

#### NET INCOME (LOSS) AND EBITDA
"EBITDA" is defined as net income (loss) before interest expense and other financing costs, income taxes expense (recovery) and depreciation and amortization.

#### Reconciliation of Total Operating Expenses, Operating Income (Loss) and Net Income (Loss) to Adjusted Operating Expenses, Adjusted Operating Loss, EBITDA and Adjusted EBITDA
The Company evaluates its operating earnings performance using financial measures which exclude expenses associated with operational restructuring plans and impairment losses. The Company believes that such measures provide useful supplemental information with which to assess the Company's results relative to the corresponding period in the prior year and can result in a more meaningful comparison of the Company's performance between the periods presented. There was an expense of $4.6 million associated with an impairment loss in fiscal 2025 The table below provides a reconciliation of the non-GAAP measures presented to the most directly comparable financial measures calculated with GAAP.

#### Total Adjusted Operating Expenses

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** |
| **($000's)** | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** | **March 26, 2022** | **March 27, 2021** |
|  **Total operating expenses (GAAP measure)** | $**71843** | $**72344** | $**71768** | $**71751** | $**59171** |
|  *as a % of net sales* | *40.4 %* | *39.0 %* | *44.0 %* | *39.6 %* | *41.4 %* |
|  Remove the impact of: |  |  |  |  |  |
|  Impairment of long-lived assets (a) | 4592 |  |  |  |  |
|  **Total adjusted operating expenses (non-GAAP measure)** | $**67251** | $**72344** | $**71768** | $**71751** | $**59171** |
|  *as a % of net sales* | *37.8 %* | *39.0 %* | *44.0 %* | *39.6 %* | *41.4 %* |

---

#### Adjusted operating income (loss)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** |
| **($000's)** | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** | **March 26, 2022** | **March 27, 2021** |
|  **Operating income (loss) (GAAP measure)** | $**(5535)** | $**1211** | $**(3808)** | $**4469** | $**(2821)** |
|  *as a % of net sales* | *-3.1 %* | *0.7 %* | *-2.3 %* | *2.5 %* | *-2.0 %* |
|  Add the impact of: |  |  |  |  |  |
|  Impairment of long-lived assets (a) | 4592 |  |  |  |  |
|  **Adjusted operating income (loss) (non-GAAP measure)** | $**(943)** | $**1211** | $**(3808)** | $**4469** | $**(2821)** |
|  *as a % of net sales* | *-0.53 %* | *0.7 %* | *-2.3 %* | *2.5 %* | *-2.0 %* |

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#### EBITDA & Adjusted EBITDA

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** | **For the fiscal year ended** |
| **($000's)** | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** | **March 26, 2022** | **March 27, 2021** |
|  **Net income (loss) (GAAP measure)** | $**(12819)** | $**(4631)** | $**(7432)** | $**1287** | $**(5838)** |
|  *as a % of net sales* | *-7.2 %* | *-2.5 %* | *-4.6 %* | *0.7 %* | *-4.1 %* |
|  Add the impact of: |  |  |  |  |  |
|  Interest expense and other financing costs | 9712 | 8007 | 5581 | 3182 | 3017 |
|  Income taxes expense (recovery) |  |  |  |  |  |
|  Depreciation and amortization | 7733 | 6639 | 5673 | 5809 | 5458 |
|  **EBITDA (non-GAAP measure)** | $**4626** | $**10015** | $**3822** | $**10278** | $**2637** |
|  *as a % of net sales* | *2.6 %* | *5.4 %* | *2.3 %* | *5.7 %* | *1.8 %* |
|  Add the impact of: |  |  |  |  |  |
|  Impairment of long-lived assets (a) | 4592 |  |  |  |  |
|  **Adjusted EBITDA (non-GAAP measure)** | $**9218** | $**10015** | $**3822** | $**10278** | $**2637** |
|  *as a % of net sales* | *5.2 %* | *5.4 %* | *2.3 %* | *5.7 %* | *1.8 %* |

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(a) Non-cash impairment of long-lived assets in fiscal 2025 related to certain software costs associated with the delay in completing the implementation of the Company's new ERP system.

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#### Liquidity and Capital Resources
The Company's ability to fund its operations and meet its cash flow requirements is dependent upon its ability to maintain positive excess availability under the Company's Amended Credit Facility. As of March 29, 2025, bank indebtedness consisted solely of amounts owing under the Company's Amended Credit Facility, which had an outstanding balance of $73.6 million ($73.8 million net of $0.2 million of deferred financing costs) on its maximum $90.0 million credit facility, which is used to finance working capital and capital expenditures, provide liquidity to fund the Company's day-to-day operations and for other general corporate purposes. The Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan. In the event that excess availability falls below the minimum requirement, this would be considered an event of default under the Amended Credit Facility and Amended Term Loan, that could result in the outstanding balances borrowed under the Company's Amended Credit Facility and Amended Term Loan becoming due immediately, which would also result in cross defaults on the Company's other borrowings. Similarly, both the Company's Amended Credit Facility and Amended Term Loan are subject to cross default provisions with all other loans pursuant to which if the Company is in default of any other loan, the Company will immediately be in default of both the Amended Credit Facility and Amended Term Loan. The Company was above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan throughout fiscal 2025. In addition, the Company expects to be above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan for at least the next twelve months from the date of this Form 20-F.

On October 23, 2017, the Company entered into a credit facility with Wells Fargo Canada Corporation for a maximum amount of $85.0 million and maturing in October 2022. On December 24, 2021, the Company entered into the Amended Credit Facility with Wells Fargo Capital Finance Corporation Canada ("Wells Fargo", successor to Wells Fargo Canada Corporation). The Amended Credit Facility extended the maturity date of the Company's pre-existing loan from October 2022 to December 2026. The Amended Credit Facility also provides the Company with an option to increase the total commitments thereunder by up to $5.0 million. The Company will only have the ability to exercise this accordion option if it has the required borrowing capacity at such time. On September 6, 2024, the Company exercised the option to increase the maximum amount under the facility by $5.0 million to reach $90.0 million. The Amended Credit Facility bears interest at a rate of CDOR plus a spread ranging from 1.5% - 2.0% depending on the Company's excess availability levels. On June 26, 2024, the Company entered into an amendment to the Amended Credit Facility with Wells Fargo. The amendment replaces the interest rate of CDOR plus a spread ranging from 1.5% - 2% depending on the Company's excess availability levels for the interest rate of CORRA plus a CORRA adjustment ranging from 0.30% to 0.32% and a spread ranging from 1.5% - 2% depending on the Company's excess availability levels. On July 8, 2025, the Company entered into an amendment and waiver to the Amended Credit facility whereby Wells Fargo waives certain provisions of the existing Amended Credit Facility to permit the European Acquisition, the Incremental Loan and the Mangrove Loan. The Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan. The Company was above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan throughout fiscal 2025.

On June 29, 2018, the Company secured a $12.5 million term loan maturing in October 2022 with SLR . On December 24, 2021, the Company entered into the Amended Term Loan with SLR. The Amended Term Loan extended the maturity date of the Company's pre-existing loan from October 2022 to December 2026. The Amended Term Loan is subordinated in lien priority to the Amended Credit Facility and bears interest at a rate of CDOR plus 7.75%. The Amended Term Loan also allows for periodic revisions of the annual interest rate to CDOR plus 7.00% or CDOR plus 6.75% depending on the Company complying with certain financial covenants. On June 26 2024, the Company entered into an amendment to the Amended Term Loan with SLR. The amendment replaces the interest rate of CDOR plus 7.75% (or CDOR plus 7.00% or CDOR plus 6.75% depending on the Company complying with certain financial covenants) for the interest rate of CORRA plus a CORRA adjustment of 0.32% and 7.75% (or CORRA plus a CORRA adjustment of 0.32% plus 7.00% or CORRA plus a CORRA adjustment of 0.32% plus 6.75% depending on the Company complying with certain financial covenants). On July 8, 2025, the Company entered into an amendment to the Amended Term Loan whereby SLR provided the Company with an additional term loan of $13.5 million to fund the European Acquisition and to fund ordinary course working capital (the "Incremental Loan"). Under the Amended Term Loan, the Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan. The Term Loan is required to be repaid upon maturity.

The Company's borrowing capacity under both the Amended Credit Facility and the Amended Term Loan is based upon the value of the Company's inventory and accounts receivable, which is periodically assessed by its lenders, and based upon these reviews the Company's borrowing capacity could be significantly increased or decreased.

The Company's Amended Credit Facility and its Amended Term Loan are subject to cross default provisions with all other loans pursuant to which if the Company is in default of any other loan, the Company will immediately be in default of both its Amended Credit Facility and its Amended Term Loan. In the event that excess falls below the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan this would be considered an event of default under the Company's Amended Credit Facility and its Amended Term Loan, that provides the lenders the right to require the outstanding balances borrowed under the Company's Amended Credit Facility and its Amended Term Loan to become due immediately, which would result in cross defaults on the Company's other borrowings. The Company expects to be above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan for at least the next twelve months from the date of issuance of these financial statements.

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The Amended Credit Facility and Amended Term Loan also contain limitations on the Company's ability to pay dividends, more specifically, among other limitations, the Company can pay dividends only at certain excess borrowing capacity thresholds. The Company is required to either i) maintain excess availability of at least 40% of the borrowing base in the month preceding payment or ii) maintain excess availability of at least 25% of the borrowing base and maintain a fixed charge coverage ratio of at least 1.10 to 1.00. Other than these financial covenants related to paying dividends, the terms of the Amended Credit Facility and Amended Term Loan provide that no financial covenants are required to be met other than already described.

The Company's lenders under its Amended Credit Facility and Amended Term Loan may impose, at any time, discretionary reserves, which would lower the level of borrowing availability under the Company's credit facilities (customary for asset-based loans), at their reasonable discretion, to: i) ensure that the Company maintain adequate liquidity for the operation of its business, ii) cover any deterioration in the value of the collateral, and iii) reflect impediments to the lenders to realize upon the collateral. There is no limit to the amount of discretionary reserves that the Company's lenders may impose at their reasonable discretion. No discretionary reserves have been imposed by the Company's senior secured lenders since the inception of the loans.

The Company's ability to make scheduled payments of principal, or to pay the interest, or to fund planned capital expenditures will also depend on its ability to maintain adequate levels of available borrowing, adhere to all financial covenants with its lenders, obtain favorable payment terms from suppliers and its future performance, which may be subject to general economic, financial, competitive, legislative and regulatory factors, as well as other events that are beyond the Company's control. See "Risk Factors" for additional information.

Borrowings under our Amended Credit Facility for the periods indicated in the table below were as follows:

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| | | |
|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** |
|  | **March 29, 2025** | **March 30, 2024** |
|  | **(In thousands)** | **(In thousands)** |
|  Credit facility availability | $89174 | $76741 |
|  Amount borrowed at year end | $73630 | $63372 |
|  Excess borrowing capacity at year end (before minimum threshold) | $15544 | $13369 |
|  Average outstanding balance during the year | $69747 | $61507 |
|  Average excess borrowing capacity during the year | $4715 | $13484 |
|  Maximum borrowing outstanding during the year | $77286 | $69051 |
|  Minimum excess borrowing capacity during the year | $1903 | $10048 |
|  Weighted average interest rate for the year | 7.3% | 7.8% |

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*Investissement Québec* 

On August 24, 2021, the Company entered into a new 10-year loan agreement with Investissement Québec, the sovereign fund of the province of Québec, for an amount of up to $4.3 million to be used specifically to finance the digital transformation of the Company through the implementation of an omni-channel e-commerce platform and enterprise resource planning system. As of March 29, 2025, the Company has $4.3 million outstanding on the loan. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. As of March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88.

On July 8, 2020, the Company secured a new six-year term loan with Investissement Québec, in the amount of $10.0 million, as amended. The secured term loan was used to fund the working capital needs of the Company, of which $2.8 million is outstanding at March 30, 2025. On January 4, 2023, the Company received a loan forgiveness in the amount of $0.2 million that is being recognized over the term of the loan. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. As of March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88.

*Other Financing* 

As of March 29, 2025, the Company had a balance of $2.2 million (U.S. $1.5 million) outstanding from an original $6.7 million (U.S. $5.0 million) cash advance from one of our controlling shareholders, Montel. This advance is payable upon demand by Montel once conditions stipulated in our Amended Credit Facility permit such a payment. The conditions that are required to be met are the same as those that are required to be met for the Company to pay dividends (outlined in above section). This advance bears an annual interest rate of 11%, net of any withholding taxes, representing an effective interest rate of approximately 12%.

On March 26, 2020, the Company secured a 6-year term loan with Business Development Bank of Canada (BDC), as amended, for an amount of $0.4 million to be used specifically to finance the renovations of the Company's Brinkhaus store location in Calgary, Alberta. As of March 29, 2025, the Company has $0.2 million outstanding on the loan. The loan bears interest at a rate of 8.3% per annum and is repayable in 72 monthly payments from June 26, 2021, the date of the drawdown.

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On July 14, 2023, the Company entered into a financing agreement for a capital lease facility financing with Varilease Finance Inc. relating to certain equipment consisting of leasehold improvements, furniture, security equipment and related equipment for store construction and renovation. The maximum borrowing amount under this facility is U.S $3.6 million (CAD $4.7 million). By the end of fiscal 2024, the Company had borrowed a total amount of U.S. $2.4 million (CAD $3.3 million) against this facility. The capital lease financing bears interest at 20% annually and is repayable over 24 months. As of March 29, 2025, the Company has U.S. $0.6 million (CAD $0.9 million) outstanding under this facility.

On February 1, 2024, the Company entered into a financing agreement for a capital lease facility financing with Varilease Finance Inc. relating to certain equipment consisting of leasehold improvements, furniture, security equipment and related equipment for the construction of a new store. The maximum borrowing amount under this facility is U.S. $2.5 million (CAD $3.4 million). During fiscal 2025, the Company had borrowed a total amount of U.S. $2.4 million (CAD $3.3 million) against this facility. The capital lease financing bears interest at approximately 14% annually and is repayable over 24 months. As of March 29, 2025, the Company has U.S. $1.9 million (CAD $2.8 million) outstanding under this facility.

On June 3, 2024, the Company entered into a financing agreement for a capital lease facility financing with Varilease Finance. Inc relating to certain equipment consisting of leasehold improvements, furniture, security equipment and related equipment for the partial renovation of a store. The maximum borrowing amount under this facility is U.S. $0.6 million (CAD $0.8 million). During fiscal 2025, the Company had borrowed a total amount of U.S. $0.6 million (CAD $0.8 million) against this facility. The capital lease financing bears interest at approximately 14% annually and is repayable over 24 months. As of March 29, 2025, the Company had U.S. $0.5 million (CAD $0.7 million) outstanding under this facility.

On July 15, 2024, the Company obtained a support letter ("Shareholder Support Letter") from one if its shareholders, Mangrove, providing financial support in an amount of up to $3.75 million, of which $1.0 million would be available after January 1, 2025. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2025, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in maintaining minimum excess availability at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under this support letter will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2025. On November 27, 2024, the support letter was extended until December 31, 2025.

On June 26, 2025, the Shareholder Support Letter was terminated and replaced with a loan agreement whereby Mangrove entered into a loan agreement with the Company to advance $3.75 million of additional indebtedness to fund the Company's working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026.

On July 21, 2025, the Company obtained support letters from Mangrove (one of its controlling shareholders), a member of the Company's Board of Directors and an officer of the Company, providing financial support for an aggregate total amount of up to $1.5 million. The amount can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2026, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in meeting its minimum excess availability at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under these support letters will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2026.

In addition, on July 21, 2025, the Company obtained from Mangrove a deferral of interest payments payable in relation to the cash advance outstanding of U.S. $1.5 million and the Mangrove Loan of $3.75 million, of up to a maximum of $813,227, effective immediately and through to July 31, 2026.

*Cash Flows from Operating, Investing and Financing Activities* 

The following table summarizes cash flows from operating, investing and financing activities:

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| | | | |
|:---|:---|:---|:---|
| **(in thousands)** | **Fiscal 2025** | **Fiscal 2024** | **Fiscal 2023** |
|  Net cash provided by (used in): |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating activities | $(1912) | $(170) | $(6925) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Investing activities | (7549) | (7235) | (9414) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financing activities | 9187 | 7926 | 15588 |
|  Net increase (decrease) in cash and cash equivalents | $(274) | $521 | $(751) |

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Net cash used in operating activities was $1.9 million in fiscal 2025 as compared to net cash used in operating activities in fiscal 2024 of $0.2 million. The $1.9 million decrease in cash flows from operating activities was primarily the result of a $8.2 million increase in net loss in fiscal 2025 versus fiscal 2024 offset by an increase of $4.6 million non-cash impairment of long-lived assets, $2.5 million of net cash generated by the change in working capital, of which year over year changes included an inventory increase of $17.2 million in fiscal 2025 compared to an increase of $10.7 million in fiscal 2024 (reduced cash from operations by $6.5 million) driven by lower turnover and higher purchases of inventory when compared to fiscal 2024, a decrease in accounts receivable of $1.8 million in fiscal 2025 compared to a decrease in accounts receivable of $4.2 million in fiscal 2024 (increased cash from operations of $2.3 million) driven by shorter-term credit plans offered to clients compared to fiscal 2024, an increase in accounts payable of $15.3 million in fiscal 2025 compared to an increase of $5.5 million in fiscal 2024 (increased cash from operations by $9.7 million) driven in part by the increase in inventory and longer payment terms with certain vendors, an increase in Other long-term liabilities of $1.8 million in fiscal 2025 compared to an increase of $2.3 million in fiscal 2024 (decreased cash from operations by $0.5 million) driven by an increase of supplier financing agreements in fiscal 2025 compared to a decrease of $1.5 million in fiscal 2024 (increased cash from operations of $0.5 million) driven by repayments of rent deferrals. In fiscal 2025, the Company received a dividend from RMBG of $1.3 million and is included in operating activities.

Net cash used in operating activities was $0.2 million in fiscal 2024 as compared to net cash used in operating activities in fiscal 2023 of $6.9 million. The $6.7 million increase in cash flows from operating activities was primarily the result of (i) a $2.8 million decrease in net loss in fiscal 2024 versus fiscal 2023, and (ii) a decrease of $3.5 million in net cash used by changes in working capital, of which year over year changes included an inventory increase of $10.7 million in fiscal 2024 compared to an increase of $9.5 million in fiscal 2023 (reduced cash from operations by $1.3 million) driven by lower turnover and higher purchases of inventory when compared to fiscal 2023, a decrease in accounts receivable of $4.2 million in fiscal 2024 compared to an increase in accounts receivable of $0.3 million in fiscal 2023 (increased cash from operations of $4.4 million) driven by shorter-term credit plans offered to clients compared to fiscal 2023, an increase in accounts payable of $5.5 million in fiscal 2024 compared to an increase of $9.0 million in fiscal 2023 (increased cash from operations by $3.5 million) driven in part by the increase in inventory, an increase in Other long-term liabilities of $2.3 million in fiscal 2024 compared to a decrease of $0.03 million in fiscal 2023 (increased cash from operations of $2.3 million) driven by an increase of supplier financing agreements, and offset by a decrease in accrued liabilities of $0.8 million in fiscal 2024 compared to an increase of $1.7 million in fiscal 2023 (increased cash from operations of $0.9 million) driven by repayments of rent deferrals.

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During fiscal 2025, net cash used in investing activities was $7.5 million compared to $7.2 million used during fiscal 2024. The $0.3 million increase in net cash used in investing activities was primarily attributable to an increase in capital expenditures in fiscal 2025 compared to fiscal 2024.

During fiscal 2024, net cash used in investing activities was $7.2 million compared to $9.4 million used during fiscal 2024. The $2.2 million decrease in net cash used in investing activities was primarily attributable to a decrease in capital expenditures in fiscal 2024 compared to fiscal 2023.

Net cash provided by financing activities was $9.2 million in fiscal 2025, as compared to net cash provided by financing activities of $7.9 million during fiscal 2024. The $1.3 million increase in cash flows from financing activities was primarily due to a $10.2 million increase in bank indebtedness in fiscal 2025 compared to a $5.4 million increase in bank indebtedness in fiscal 2024, an increase in long-term debt of $1.6 million in fiscal 2024 compared to nil in 2025, and a drawdown in capital lease funding of $3.5 million in fiscal 2025 compared to $4.2 million in fiscal 2024, offset by an increase in repayment of Obligations under capital leases of $2.5 million in fiscal 2025 compared to $1.1 million in fiscal 2024. Debt increased in fiscal 2025 versus fiscal 2024 to support the working capital needs and finance ongoing capital projects such as store renovations and costs related to the digital transformation of the Company. Repayments of Long-term debt were $1.9 million in fiscal 2025 compared to $2.0 million in fiscal 2024.

The following table details capital expenditures in fiscal 2025, 2024, and 2023:

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| | | | |
|:---|:---|:---|:---|
| | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** |
| | **March 29, 2025** | **March 30, 2024** | **March 25, 2023** |
| | | **(In thousands)** | |
|  Leasehold improvements | $5491 | $3883 | $3772 |
|  Electronic equipment, computer hardware and software | 328 | 1120 | 2919 |
|  Furniture and fixtures and equipment | 1188 | 1279 | 2019 |
|  Intangible assets <sup>(1)</sup> | 542 | 953 | 1921 |
|  Total capital expenditures <sup>(2)</sup> | $7549 | $7235 | $10631 |

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(1) Relates to the new e-commerce platform system totaling $0.5 million in fiscal 2025, $1.0 million in fiscal 2024 and $1.9 million in fiscal 2023.

(2) Includes capital expenditures financed by finance leases of $3.5 million in fiscal 2025, $4.2 million in fiscal 2024, and nil in fiscal 2023 as well as capital expenditures included in accounts payable and accrued liabilities of $1.1 million as of March 29, 2025, $1.5 million as of March 30, 2024, and $2.3 million as of March 25, 2023.

In the last three fiscal years, we invested a total of approximately $25.4 million in capital expenditures primarily associated with the remodeling of our existing store network. In 2025, we finalized the construction of two new stores in Montreal which opened in September 2024, two boutiques under the Breitling brand and partially renovated the Vancouver store to introduce the Roger Dubuis brand. In 2024, we launched the construction of a new store in Montreal (which opened in September 2024) and we completed the remodeling of our Laval store and one of our Calgary stores. In the last three years, we also invested in a new e-commerce platform.

In fiscal 2026, the Company expects to spend up to $1.5 million in capital expenditures, primarily related to the completion of the smaller projects in various stores. We expect to finance these capital expenditures from operating cash flows, and existing financing arrangements including tenant allowances from our landlords and lease financing. The Company continues to be actively engaged in identifying alternative sources of financing that may include raising additional funds through public or private equity, the disposal of assets, and debt financing, including funding from governmental sources.

Maintenance of sufficient availability of funding through an adequate amount of committed financing is necessary for us to fund our day-to-day operations. Our ability to make scheduled payments of principal, or to pay the interest or additional interest, if any, or to fund planned capital expenditures and store operations will depend on our ability to maintain adequate levels of available borrowing, obtain favorable payment terms from suppliers and our future performance, which may be subject to general economic, financial, competitive, legislative and regulatory factors, as well as other events that are beyond our control. We believe that we currently have sufficient working capital to fund our operations. This belief is based on certain assumptions about the state of the economy, the availability of borrowings to fund our operations and estimates of projected operating performance. To the extent that the economy and other conditions affecting our business are significantly worse than we anticipate, we may not achieve our projected level of financial performance and we may determine that we do not have sufficient capital to fund our operations. See "Risk Factors" for additional information.

The Company believes that it will be able to adequately fund its operations and meet its cash flow requirements for at least the next twelve months. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate.

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#### Commitments and Contractual Obligations
The following table discloses aggregate information about our contractual cash obligations as of March 29, 2025, and the periods in which payments are due:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments due by Period** | **Payments due by Period** | **Payments due by Period** | **Payments due by Period** | **Payments due by Period** |
| | **Total** | **Less Than<br>1 Year** | **2-3 Years** | **4-5 Years** | **More than<br>5 Years** |
|  | | | **(In thousands)** | **(In thousands)** | |
|  <u>Contractual Obligations</u> |  |  |  |  |  |
|  Debt maturities<sup>(1)</sup> | $100350 | $4860 | $89759 | $1720 | $4011 |
|  Other long-term liabilities<sup>(2)</sup> | 11220 | 6750 | 4285 | 66 | 119 |
|  Interest on long-term debt<sup>(3)</sup> | 4683 | 2173 | 1719 | 555 | 236 |
|  Operating lease obligations<sup>(4)</sup> | 63325 | 11146 | 18296 | 15095 | 18788 |
|  Total | $179578 | $24929 | $114059 | $17436 | $23154 |

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The Company has commitments to maintain the appearance of stores and has planned for capital expenditures in fiscal 2026 and beyond but has no minimum commitment for these planned projects.

(1) Includes bank indebtedness in the 2-3 years category to reflect the current expiration date of the Amended Credit Facility.

(2) The amount of less than one year is recorded within accrued liabilities and accounts payable.

(3) Excludes interest payments on amounts outstanding under our Amended Credit Facility as the outstanding amounts fluctuate based on our working capital needs. Interest charges associated to Amended Credit Facility, net of deferred financing costs, were $4.9 million in fiscal 2025, $4.7 million in fiscal 2024, and $4.8 million in fiscal 2023. Interest expense on other variable rate long-term debt was calculated assuming the rates in effect at March 29, 2025. Interest charges associated to long-term debt, net of deferred financing costs, were $2.7 million in fiscal 2025, $2.3 million in fiscal 2024, and $4.6 million in fiscal 2023.

(4) The operating lease obligations do not include insurance, taxes and common area maintenance (CAM) charges to which we are obligated. CAM charges were $4.7 million in fiscal 2025, $5.0 million in fiscal 2024, and $4.9 million in fiscal 2023.

In addition to the above and as of March 29, 2025, we had $0.2 million of outstanding letters of credit.

#### Research and Development, Patents and Licenses, etc.
None.

#### Trend Information
During fiscal 2025, we were faced with several challenges impacting our results, including the full year impact of the exit of a third-party jewelry brand from two stores as well as an increase in costs of sales in relation to the strengthening of the U.S. dollar versus the Canadian dollar. During fiscal 2025, we were also impacted by the partial renovations of three stores. Although two of these stores remained opened during partial renovations, store traffic, customer experience and sales were negatively affected. We opened a new store in Montreal under the Birks brand and TimeVallée in September 2024. However, due to delays in the completion of the mall, there were still numerous tenant vacancies resulting in lower foot traffic and affecting sales. We also believe that heightened inflationary pressure on consumers' discretionary spending, particularly on the Company's product assortments at lower and mid-price points, and the continuous impact of the increased cost of borrowing in fiscal 2025 affected our results. The Company's working capital has worsened during fiscal 2025 and the indebtedness has increased as a result of negative cash-flow.

During fiscal 2024, we were faced with several challenges impacting our results, including the temporary impact on sales of store closures during renovations at three key stores in fiscal 2023. These stores gradually reopened during the first quarter of fiscal 2024 and were fully operational during the second quarter of fiscal 2024. During fiscal 2024, we were also impacted by the partial renovations at two stores. Although these two stores remained open during partial renovations, store traffic, customer experience and sales were negatively affected. We also believe that heightened inflationary pressure on consumers' discretionary spending, particularly on the Company's product assortments at lower and mid-price points, and the continuous impact of the increased cost of borrowing in fiscal 2024 affected our results. We were still able to benefit from the positive impacts of the major renovations made to our flagship locations in Montreal, Toronto and Vancouver in prior years, on customer experience, customer acquisition and retention, and on sales during the fiscal year. We also benefited from our improved assortment of third-party branded watches across our retail network and e-commerce channel. Increased competition for space in Canada continued to put pressure on occupancy costs and space retention for key locations. During fiscal 2025 and fiscal 2024, we completed the remodeling and renovations of stores in Toronto, Ottawa, Vancouver, Calgary, and Laval, Quebec and opened two new stores in Montréal.

We continue to successfully pursue our strategy to develop the Birks product brand, and in fiscal 2024, we launched several new collections under the Birks brand. In addition, we continued to pursue our strategies to enhance our customers' in-store experience which includes the remodeling of our retail network with the goal of providing our clients with an engaging buying experience.

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Our gross profit margin decreased in fiscal 2025, driven primarily by a decrease in sales volume of third party branded jewelry as well as a foreign exchange loss due to the strengthening of the U.S. dollar. Going forward, we believe that our gross profit margin will stabilize and begin to increase as we continue to promote the development of the Birks product brand which we expect will provide us with higher gross profit margins. Furthermore, we also intend to continue to execute our merchandising strategy to expand gross margins by developing and marketing exclusive and unique third-party branded products with higher margins.

Our SG&A expenses as a percentage of sales decreased to 33.5% in fiscal 2025 from 35.5% in fiscal 2024. The main drivers of the decrease in SG&A expenses in fiscal 2025 include lower occupancy costs ($2.7 million) mainly due to store closures and store lease modifications, lower marketing costs ($2.3 million) mainly due to lower brand development initiatives, lower compensation costs ($0.5 million) mainly due to lower sales volume and head count reduction, lower general operating costs ($0.4 million) and lower non-cash based compensation expense ($0.3 million) mainly due to fluctuations in the Company's stock price during the fiscal year. As a percentage of sales, SG&A expenses in fiscal 2025 decreased by 200 basis points as compared to fiscal 2024. We intend to continue to look for cost containment initiatives and saving opportunities when feasible.

In the past, we have also decreased the number of stores we operate through the closure of underperforming stores. Going forward, we plan to continue to evaluate the productivity of our existing stores and close unproductive stores. In addition, we plan to continue to review opportunities to open new stores in new prime retail locations when the right opportunities exist. Moreover, we plan to continue to invest in our website and e-commerce platform to bolster our online distribution channel which represents an area of focus for us going forward.

#### Leases
The Company leases office, distribution, and retail facilities. Certain retail store leases may require the payment of minimum rent and contingent rent based on a percentage of sales exceeding a stipulated amount. The Company's lease agreements expire at various dates through 2034, are subject, in many cases, to renewal options and provide for the payment of taxes, insurance and maintenance. Certain leases contain escalation clauses resulting from the pass-through of increases in operating costs, property taxes and the effect on costs from changes in consumer price indices, which are considered as variable costs.

The Company determines its lease payments based on predetermined rent escalations, rent-free periods and other incentives. The Company recognizes rent expense on a straight-line basis over the related terms of such leases, including any rent-free period and beginning from when the Company takes possession of the leased facility. Variable operating lease expenses, including contingent rent based on a percentage of sales, CAM charges, rent related taxes, mall advertising and adjustments to consumer price indices, are recorded in the period such amounts and adjustments are determined. Lease terms occasionally include renewal options for additional periods of up to 6 years. The Company uses judgment when assessing the renewal options in the leases and assesses whether or not it is reasonably certain to exercise these renewal options if they are within the control of the Company. Any renewal options not reasonably certain to be exercised are excluded from the lease term. There is generally no readily determinable discount rate implicit in the Company's leases. Accordingly, the Company uses its incremental borrowing rate for a term that corresponds to the applicable lease term in order to measure its lease liabilities and has elected to use such rates based on lease terms remaining as of March 29, 2025 and any new leases entered into thereafter.

The amounts of the Company's operating lease right-of-use ("ROU") asset and current operating lease liabilities are presented separately on the Consolidated Balance Sheet as of March 29, 2025. Most of the Company's leases are operating leases as of March 29, 2025. The Company records lease expenses within selling, general and administrative expenses. The Company monitors for events or changes in circumstances that require a reassessment of one of its leases. ROU assets, as part of the group of assets, are periodically reviewed for impairment.

The Company uses the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

Payments arising from operating lease activity, as well as variable and short-term lease payments not included within the operating lease liability, are included as operating activities on the Company's consolidated statement of cash flows. Operating lease payments representing costs to ready an asset for its intended use (i.e. leasehold improvements) are represented within investing activities within the Company's consolidated statements of cash flow.

#### Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions about future events and their impact on amounts reported in the financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results may differ from those estimates. These estimates and assumptions are evaluated on an on-going basis and are based on historical experience and on various factors that are believed to be reasonable. We have identified certain critical accounting policies as noted below.

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#### Going concern assumption
Our consolidated financial statements have been prepared on a going concern basis in accordance with generally accepted accounting principles in the U.S. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. In evaluating our ability to continue as a going concern, we are required to determine whether we have the ability to fund our operations and meet our cash flow requirements. This evaluation requires us to estimate and forecast our cash flows and excess availability levels under various scenarios for at least twelve months from the date the financial statements were authorized for issuance. Significant estimates that have the greatest impact on our analysis include our estimate of sales, gross margins and operating costs, capital expenditures, estimates of collateral values of inventory and accounts receivable performed by our lenders throughout the year which could increase or decrease our availability under our senior secured credit facility, estimates of forecasted working capital levels, timing of inventory acquisitions, vendor terms and payments, interest rate and foreign exchange rate assumptions and forecasted excess availability levels under the senior secured credit facility and senior secured term loan. Furthermore, we have also made judgments on whether any reserves would be imposed by our senior secured lenders. Significant variances from our assumptions used in preparing our going concern analysis could significantly impact our ability to meet our projected cash flows. Our ability to meet our projected cash flows could also be impacted if our senior secured lenders impose additional restrictions on our ability to borrow on our collateral or if we do not adhere to the applicable financial covenant under our Amended Credit Facility and Amended Term Loan, which would be considered an event of default.

The Company funds its operations primarily through committed financing under its Amended Credit Facility and Amended Term Loan described in Note 6 of our consolidated financial statements included elsewhere in this 20-F. The Amended Credit Facility along with the Amended Term Loan are used to finance working capital, finance capital expenditures, provide liquidity to fund the Company's day-to-day operations and for other general corporate purposes. The Company's ability to meet its cash flow requirements in order to fund its operations is dependent upon its ability to attain profitable operations, obtain favorable payment terms from suppliers, as well as to maintain specified excess availability levels under its Amended Credit Facility and its Amended Term Loan. The Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan. In the event that excess availability falls below the minimum requirement, this would be considered an event of default under the Amended Credit Facility and under the Amended Term Loan, that could result in the outstanding balances borrowed under the Company's Amended Credit Facility and Amended Term Loan becoming due immediately, which would result in cross defaults on the Company's other borrowings. The Company met its excess availability requirement as defined in the Amended Credit Facility and Amended Term Loan as of and throughout the year ended March 29, 2025 and as of the date the financial statements were authorized for issuance, and expects to be above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan for at least the next twelve months. The Company estimated and forecasted cash flows and excess availability levels under various scenarios for at least the next twelve months from the date the financial statements were authorized for issuance.

The term loans with Investissement Québec require the Company to maintain on an annual basis a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. As of March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88.

#### Reserves for slow-moving finished goods inventories
We reserve inventory for estimated slow-moving finished goods inventory equal to the difference between the cost of inventory and net realizable value, which is based on assumptions about future demand and market conditions. The allowance for slow-moving finished goods inventory is equal to the difference between the cost of inventories and the estimated selling prices. There is estimation uncertainty in relation to the identification of slow-moving finished goods inventories which are based on certain criteria established by the Company's management. The criteria includes consideration of operational decisions by management to discontinue ordering the inventory based on sales trends, market conditions, and the aging of inventories. Estimation uncertainty also exists in determining the expected selling prices and associated gross margins through normal sales channels based on assumptions about future demand and market conditions for those slow-moving inventories.

#### Recent Accounting Pronouncements
See Note 2 (s) to the consolidated financial statements included in this Form 20-F.

#### Safe Harbor
See section entitled "Forward-Looking Information" at the beginning of this Annual Report on Form 20-F.

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**Item 6.** **Directors, Senior Management and Employees** <br>

#### EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth information about our executive officers and directors, and their respective ages and positions as of May 31, 2025. During fiscal 2025, the Company had four executive officers.

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
|  Niccolò Rossi di Montelera | 52 | Executive Chairman of the Board & Director |
|  Jean-Christophe Bédos | 60 | President, Chief Executive Officer & |
|  Davide Barberis Canonico | 59 | Director |
|  Maria Eugenia Girón | 61 | Director |
|  Emilio B. Imbriglio | 65 | Director |
|  Louis-Philippe Maurice | 43 | Director |
|  Deborah Shannon Trudeau | 69 | Director |
|  Joseph F.X. Zahra | 69 | Director |
|  Katia Fontana | 55 | Vice President and Chief Financial Officer |
|  Maryame El Bouwab | 47 | Vice President Merchandising, Planning and Supply Chain |
|  Miranda Melfi | 61 | Vice President, Human Resources, Chief Legal Officer & Corporate Secretary |

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#### Directors
*Niccolò Rossi di Montelera,* age 52, was elected to the Company's Board of Directors on September 23, 2010 and served as Vice-Chairman of the Company's Board of Directors from June 2015 until being appointed Executive Chairman of the Board effective January 1, 2017. Mr. Rossi di Montelera's term as a director of Birks Group expires in 2025. Mr. Rossi di Montelera was a consultant for Gestofi from August 2009 until December 31, 2016 and provided consulting services to the Company in the areas of new product and brand development in addition to being involved with the Company's business development activities and strategic initiatives. From 2007 to 2009, he served as the Company's Group Divisional Vice President responsible for product development, wholesale and e-commerce. From 2005 to 2006, he served as the Company's Group Director responsible for product development. From 2002 to 2003, he worked at Regaluxe Investments SA and was responsible for the North American business development for Royale de Champagne and from 1999 to 2002 he was a Project Leader for Ferrero Group. He was a member of the Supervisory Board of Directors of Montrovest until June 30, 2012. Mr. Rossi di Montelera is the son of Dr. Rossi di Montelera, who was the Company's Chairman of the Board until December 31, 2016, and is the brother-in-law of Mr. Carlo Coda-Nunziante who was the Company's Vice President, Strategy until March 31, 2018.

*Jean-Christophe Bédos,* age 60, was appointed to the Company's Board of Directors on April 19, 2012. He was the Company's Chief Operating Officer from January 2012 to March 2012 and became the Company's President and Chief Executive Officer on April 1, 2012. He became a director of Birks Group on April 19, 2012 and his term as a director expires in 2025. He has over 35 years of experience in merchandising, marketing, branding and product development in the global retail luxury sector. Mr. Bédos was President and Chief Executive Officer of French jeweler Boucheron from May 2004 to September 2011. Prior to that, he was the Managing Director of Cartier France from 2002 to 2004, and International Executive Manager alongside the President and Chief Executive Officer of Richemont International from 2000 to 2002. Mr. Bédos started his career in the jewelry industry at Cartier in 1988. He also served as a director and Vice-Chairman of the Board of The Montreal General Hospital Foundation until June 18, 2025.

*Davide Barberis Canonico,* age 59, was elected to the Company's Board of Directors on September 12, 2013. Mr. Canonico's term as a director of Birks Group expires in 2025. From January 1, 2016 until April 2018, Mr. Canonico was also the Chief Executive Officer of Autofil Yarn Ltd., a company in the textile industry supplying yarn to the automotive industry with manufacturing facilities in the United Kingdom and Bulgaria and was the Group Strategy Director from June 2015 to December 2015. From 1998 to March 2016, he was President and Chief Executive Officer of Manifattura di Ponzone S.p.A., an Italian family-owned company in the textile industry. From 2001 to 2015, he was also a member of the board of Sinterama S.p.A., a company in the textile industry with manufacturing facilities worldwide. He was a member of the Supervisory Board of Montrovest B.V. until April 2018. He also serves as a director of a number of other corporate boards.

*Maria Eugenia Girón*, age 61, was elected to the Company's Board of Directors on September 14, 2023. Ms. Gir*ó*n's term as a director of Birks Group expires in 2025. She is a corporate director. She serves as director of several private and publicly-listed companies operating in the following industries: asset management, automotive, confectionery and footwear. Since 2018, she is European Innovation Council Expert and Jury Member of the Executive Agency for Small and Medium-size Enterprises of the European Commission. She was the Founder and Executive Director of IE Premium & Prestige Business Observatory (IE Business School), a centre that conducts applied research on luxury and premium consumption, from 2010 to 2019, and an advisor and partner of Silvercloud, an investment vehicle of Marwyn Management Partners investing in companies in the premium and luxury industry from 2010 to 2013. From 1997 to 2006, Ms. Girón was the Chief Executive Officer of Carrera Y Carrera, a Spanish high-end jewellery brand and from 1992 to 1997, she held several senior management positions with Loewe, a luxury goods company. She is Vice-Chair of Oceana, a leading ocean conservation global organization, and a director of Royal Tapestry Manufacturing. She was a director of a number of non-profit organizations including IC-A, Instituto de Consejeros y Administradores (the Spanish association of independent directors dedicated to the creation and dissemination of good corporate governance practices) and IE University.

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*Emilio B. Imbriglio*, age 65, was elected to the Company's Board of Directors on September 22, 2022. Mr. Imbriglio's term as a director of Birks Group expires in 2025. He is a corporate director. Mr. Imbriglio has been a Chartered Professional Accountant since 1982. From 2002 to 2013, Mr. Imbriglio lead Raymond Chabot Grant Thornton LLP's ("RCGT") corporate finance unit which included M&A, financing, business valuation and public-private partnerships. He was also the Chair of the Board of RCGT from 2011 to 2013. In 2013, Mr. Imbriglio was named President and Chief Executive Officer of RCGT and served in that capacity until he retired in 2021. Mr. Imbriglio also has been and currently is a director of a number of other private companies, non-profit organizations as well as public company corporate boards.

*Louis-Philippe Maurice*, age 43, was elected to the Company's Board of Directors on September 14, 2023. Mr. Maurice's term as a director of Birks Group expires in 2025. Since 2011, he has been the CEO & Co-founder and a member of the board of directors of Busbud Inc., a global mobility and travel group offering a leading platform for booking bus, train and ridesharing tickets in over 80 countries worldwide, since 2011. He is an entrepreneur with over 20 years of experience leading technology start-ups and developing innovative e-commerce & consumer web products on a global scale. From 2007 to 2009, he worked in Silicon Valley at Yahoo and LinkedIn in product management, marketing and business development. From 2017 until 2023, Mr. Maurice was a member of the board directors of Raymond Chabot Grant Thornton LLP, a leading professional services firm in Canada in the areas of assurance, tax, advisory services and business recovery and reorganization.

*Deborah Shannon Trudeau*, age 69, was elected to the Company's Board of Directors on September 22, 2022. Ms. Trudeau's term as a director of Birks Group expires in 2025. She is former Senior Vice-President of International Business and Licensing at Trudeau Corporation, a Canadian family-owned company founded in 1889 that distributes high-end European crystal and glassware products and is a global leader in the design, creation, marketing and distribution of its own Trudeau-branded lifestyle kitchenware and tableware products. She has over 30 years of experience in leading strategic partnerships, licensing collaborations and business model innovations that expanded Trudeau Corporation's market presence to over 60 countries. She continues to serve on Trudeau Corporation's Advisory Board. In addition, from 2017 to 2023, Ms. Trudeau has been Vice-Chair of the Board of Royal Canadian Mint, a for-profit crown corporation and a producer of circulation coins for Canada and other countries, of numismatic coins and gold and silver bullion. She has been and currently is a director of several other private companies, non-profit organizations as well as public company corporate boards including Crescita Therapeutics Inc.

*Joseph F.X. Zahra,* age 69, was appointed to the Company's Board of Directors on November 9, 2016. Mr. Zahra's term as a director of Birks Group expires in 2025. Mr. Zahra is a founding partner and director of SurgeAdvisory Limited, an advisory firm which focuses on strategy and transformation management, succession planning and boardroom coaching operating in Malta, since January 1, 2017. Prior thereto, he was a founding partner and managing director of MISCO, an independent consulting group operating in Malta, Cyprus and Italy from 1983 to 2016. Mr. Zahra also serves as director of several private, publicly-listed and regulated companies operating in the following industries: financial services (insurance and investment services), oil services, transportation, retail and hospitality. Mr. Zahra is also chairman of the board of directors of Vodafone Holdings and chairman of the audit committee of CPHCL Ltd., and member of the audit committee of United Finance plc and of Vodafone Insurance Ltd. He also serves as chairman of the investment committee of Pendergardens Developments plc and is a member of the investment committee of Chasophie Group Limited and the underwriting committee of Vodafone Insurance Ltd. Mr. Zahra was director of the Central Bank of Malta from 1992 to 1996 and served as executive chairman of Bank of Valletta Plc from 1998 to 2004, Maltacom Plc in 2003 and Middlesea Insurance Plc from 2010 to 2012. Mr. Zahra was appointed as one of the five international auditors at the Prefettura per gli Affari Economici of the Holy See from 2010 to 2014 and was the president of the economic and administrative reform commission (COSEA) from 2013 to 2014 as well as Vice Coordinator of the Council for the Economy of the Holy See from 2014 to 2020.

#### Other Executive Officers
*Katia Fontana,* age 55, is our Vice President, Chief Financial Officer and has been with Birks Group since January 13, 2020. Prior to joining us, she was Chief Financial Officer at Avenir Global, a holding company for communications and public relations firms. Prior thereto, she was with Groupe Dynamite Inc., an apparel retailer, from 2004 to 2018 in various positions, including Chief Financial Officer, Vice President, Finance and Administration and Director, Finance. From 1993 to 2004, Ms. Fontana was with Deloitte in its audit and assurance practice. She also serves as a member of the board of directors of Aéroports de Montréal.

*Maryame El Bouwab*, age 47, is our Vice President, Merchandising, Planning and Supply Chain. She has been with the Company since March 2013. Prior to her current position, she was the Company's Vice President, Planning and Supply Chain from June 1, 2018 to September 30, 2018 and Vice President, Merchandise Planning from February 1, 2017 to May 31, 2018. From March 2013 to February 2017, she was the Company's Director of Merchandise Planning. Prior to joining the Company, Ms. El Bouwab was, from 2005 to 2012, with Mexx Canada and Lucky Brand Jeans and held the position of Merchandising and Planning Manager.

*Miranda Melfi,* age 61, is our Vice President, Human Resources, Chief Legal Officer and Corporate Secretary and has been with Birks Group since April 2006. Prior to her current position, she was our Vice President, Legal Affairs and Corporate Secretary from April 2006 to September 2018. Prior to joining us, Ms. Melfi was with Cascades Inc., a publicly-traded pulp and paper company for eight years and held the position of Vice President, Legal Affairs, Boxboard Group. From 1994 to 1998, Ms. Melfi was Vice President, Legal Affairs and Corporate Secretary at Stella- Jones Inc., a publicly-traded wood products company, and from 1991 to 1994, practiced corporate, commercial and securities law with Fasken Martineau DuMoulin LLP. She also serves as a member of the Board of Governors of Concordia University.

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#### COMPENSATION OF DIRECTORS AND OFFICERS

#### Director Compensation
Until September 30, 2022, each director who was not an employee of the Company was entitled to receive an annual fee of U.S. $25,000 (approximately $33,700 in Canadian dollars) for serving on our Board of Directors, U.S. $1,500 (approximately $2,000 in Canadian dollars) for each Board meeting attended in person or by video conference and U.S. $750 (approximately $1,000 in Canadian dollars) for each Board meeting lasting over one (1) hour attended by phone or by video conference. The chairperson of each of the audit and corporate governance committee, and the compensation and nominating committee received an additional annual fee of U.S. $10,000 and U.S. $8,000 (approximately $13,500 and $10,800 in Canadian dollars) respectively. The members of the audit and corporate governance committee, and the compensation and nominating committee received an additional annual fee of U.S. $5,000, and U.S. $4,000 (approximately $6,700 and $5,400 in Canadian dollars), respectively, and the independent member of the executive committee received an additional annual fee of U.S. $4,000 (approximately $5,400 in Canadian dollars). The chairperson and any other members of any special independent committee of directors that may be established from time to time is entitled to receive compensation as may be determined by the Board of Directors for his or her service on such committee.

Since October 1, 2022, each director who is not an employee of the Company is entitled to receive an annual fee of U.S. $45,000 (approximately $60,600 in Canadian dollars) for serving on the Company's Board of Directors. The chairperson of each of the audit and corporate governance committee, and the compensation and nominating committee received an additional annual fee of U.S. $15,000 and U.S. $12,000 (approximately $20,200 and $16,200 in Canadian dollars) respectively. The members of the audit and corporate governance committee, and the compensation and nominating committee received an additional annual fee of U.S. $8,000 and U.S. $6,000 (approximately $10,800 and $8,100 in Canadian dollars), respectively, and the independent member of the executive committee received an additional annual fee of U.S. $4,000 (approximately $5,400 in Canadian dollars). The chairperson and any other members of any special independent committee of directors that may be established from time to time is entitled to receive compensation as may be determined by the Board of Directors for his or her service on such committee.

Since September 2018 and every September thereafter until September 2022, each director who is not an employee of the Company is entitled to receive deferred stock units equal to a value of U.S. $25,000 (approximately $33,700 in Canadian dollars). In July 2022, the chairman of the Special Committee and each member of the Special Committee was paid U.S. $5,000 (approximately $6,700 in Canadian dollars). All directors were reimbursed for reasonable travel expenses incurred in connection with the performance of their duties as directors.

From and including September 2023 and every September thereafter, each director who is not an employee of the Company is entitled to receive deferred stock units equal to a value of U.S. $45,000 (approximately $60,600 in Canadian dollars).

On November 15, 2016, the Company's Board of Directors approved annual payments of €200,000 (approximately $310,000 in Canadian dollars) and €50,000 (approximately $78,000 in Canadian dollars) to Mr. Niccolò Rossi di Montelera for his role as Executive Chairman of the Board and Chairman of the Executive Committee, respectively, effective January 1, 2017.

#### Executive Compensation
We are a "foreign private issuer" under U.S. securities laws and not a reporting issuer under Canadian securities laws and are therefore not required to publicly disclose detailed individual information about executive compensation under U.S. securities laws to the extent that we comply with the rules of our home jurisdiction. As such, the executive compensation of our Chief Executive Officer, Chief Financial Officer and three other most highly compensated executive officers are detailed in our Management Proxy Circular described below. Under the *Canada Business Corporations Act*, being the statute under which we were incorporated, we are required to provide certain information on executive compensation. The aggregate compensation paid by us to our four executive officers was approximately $1,770,000 (annual salary).

The summary compensation table regarding our Chief Executive Officer, Chief Financial Officer and three other most highly compensated executive officers and the long-term incentive award grants and exercise of long-term incentive award tables in our Management Proxy Circular will be filed on Form 6-K with the SEC in connection with our 2025 Annual Meeting of Shareholders.

#### Birks Group Incentive Plans
The following plan makes reference to stock prices; since BGI trades publicly on the NYSE American, all stock prices are denominated in U.S. dollars.

#### Long-Term Incentive Plan
In 2006, Birks Group adopted a Long-Term Incentive Plan to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and consultants and to promote the success of Birks Group's business.

In general, the Long-Term Incentive Plan is administered by Birks Group's Board of Directors or a committee designated by the Board of Directors (the "Administrator"). Any employee or consultant selected by the Administrator is eligible for any type of award provided for under the Long-Term Incentive Plan, except that incentive stock options may not be granted to consultants. The selection of the grantees and the nature and size of grants and awards are wholly within the discretion of the Administrator.

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In the event of a change in control of Birks Group, the Administrator, at its sole discretion, may determine that all outstanding awards shall become fully and immediately exercisable and vested. In the event of dissolution or liquidation of Birks Group, the Administrator may, at its sole discretion, declare that any stock option or stock appreciation right shall terminate as of a date fixed by the Administrator and give the grantee the right to exercise such option or stock option right.

In the event of a merger or asset sale or other change in control, as defined by the Long-Term Incentive Plan, the Administrator may, in its sole discretion, take any of the following actions or any other action the Administrator deems to be fair to the holders of the awards:

• Provide that all outstanding awards upon the consummation of such a merger or sale shall be assumed by, or an equivalent option or right shall be substituted by, the successor corporation or parent or subsidiary of such successor corporation;

• Prior to the occurrence of the change in control, provide that all outstanding awards to the extent they are exercisable and vested shall be terminated in exchange for a cash payment equal to the change in control price; or

• Prior to the occurrence of the change in control, provide for the grantee to have the right to exercise the award as to all or a portion of the covered stock, including, if so determined by the Administrator, in its sole discretion, shares as to which it would not otherwise be exercisable.

The Long-Term Incentive Plan authorized the issuance of 900,000 Class A voting shares, which consisted of authorized but unissued Class A voting shares. In no event can the Company issue Class A voting shares or awards requiring the Company to issue Class A voting shares under the Long-Term Incentive Plan, if such issuance, when combined with the Class A voting shares issuable under any of the Company's other equity incentive award plans and all other Class A voting shares issuable under the Long-Term Incentive Plan would exceed 1,304,025 Class A voting shares, unless the issuance of such shares or awards in excess of this limit is approved by the shareholders. However, this limit does not restrict the Company's ability to issue awards under the Long-Term Incentive Plan that are payable other than in shares, including cash-settlement stock appreciation rights. The Long-term Incentive Plan expired on February 10, 2016 and no further awards will be granted under this plan. However, this plan will remain effective until the outstanding awards issued thereunder terminate or expire by their terms.

As of May 31, 2025, there were no outstanding available awards under the Long-Term Incentive Plan.

#### Omnibus Long-Term Incentive Plan
On August 15, 2016, the Board of Directors adopted the Company's Omnibus Long-Term Incentive Plan (the "Omnibus LTIP"), and same was approved by the Company's shareholders on September 21, 2016. Under the Omnibus LTIP, the Company's directors, officers, senior executives and other employees of the Company or one of its subsidiaries, consultants and service providers providing ongoing services to the Company and its affiliates may from time-to-time be granted various types of compensation awards, as same are further described below. The Omnibus LTIP is meant to replace the Company's former equity awards plans. A total of 1,000,000 shares of the Company's Class A voting shares are reserved for issuance under the Omnibus LTIP. On January 11, 2022 and September 22, 2022, the Board of Directors and a majority of shareholders, respectively, approved the increase to the maximum number of Class A voting shares reserved for issuance under the Omnibus LTIP from 1,000,000 to 1,500,000. In no event shall the Company issue Class A voting shares, or awards requiring the Company to issue Class A voting shares, pursuant to the Omnibus LTIP if such issuance, when combined with the Class A voting shares issuable upon the exercise of awards granted under the Company's former plan or any other equity awards plan of the Company, would exceed 1,796,088 Class A voting shares, unless such issuance of Class A voting shares or awards is approved by the shareholders of the Company. This limit shall not restrict however, the Company's ability to issue awards under the Omnibus LTIP that are payable other than in shares. As of May 31, 2025, the only awards outstanding under the Omnibus LTIP were 331,764 deferred stock units granted to members of the Company's Board of Directors which were converted from cash-settled to share-settled awards on December 20, 2021 and 231,621 cash-settled deferred stock units granted to members of the Company's Board of Directors

#### BOARD PRACTICES
Our by-laws state that the Board of Directors will meet immediately following the election of directors at any annual or special meeting of the shareholders and as the directors may from time to time determine. See "Item 10. Additional Information—Articles of Incorporation and By-laws."

Under our Restated Articles of Incorporation, our directors serve one-year terms although they will continue in office until successors are appointed. None of the members of our Board has service agreements providing for benefits upon termination of employment, except for Mr. Bédos, our President and Chief Executive Officer. See "Item 10. Additional Information—Material Contracts—Employment Agreements."

Our Board of Directors has determined that six of our eight directors (Davide Barberis Canonico, Maria Eugenia Girón, Emilio B. Imbriglio, Louis-Philippe Maurice, Deborah Shannon Trudeau and Joseph F.X Zahra) qualify as independent directors within the meaning of Section 803A of the NYSE American Company Guide.

All of the directors on our compensation and audit committees were independent as well as the corporate governance committee until it was eliminated in September 2019. As a consequence of the elimination of the corporate governance and nominating committee, the audit and corporate governance committee as well as the compensation and nominating committee were formed. The corporate governance responsibilities of the committee were transferred to the audit committee and the nomination responsibilities were transferred to the compensation committee.

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We are a "controlled company" (one in which more than 50% of the voting power is held by an individual, a group or another company) within the meaning of the rules of the NYSE American. Accordingly, we are not required under the NYSE American rules to have a majority of independent directors, a nominating and corporate governance committee and a compensation committee (each of which, under the NYSE American rules, would otherwise be required to be comprised entirely of independent directors). Since November 2005, our Board of Directors has been comprised of a majority of independent directors, except for (i) fiscal year 2013 following the appointment of Mr. Bédos, our President and Chief Executive Officer, as an additional director of the Company, during which period our Board of Directors was comprised of 50% independent directors, (ii) part of fiscal year 2015 following the 2014 annual shareholder meeting where four of the Company's eight directors qualified as independent directors, (iii) part of fiscal year 2016 following the resignation of Mr. Guthrie J. Stewart in December 2015 until the appointment of Mr. Louis L. Roquet in May 2016, and (iv) part of fiscal year 2017 until the appointment of Mr. Joseph F.X. Zahra, during which period our Board of Directors was comprised of a majority of non-independent directors.

Notwithstanding the fact that we qualify for the "controlled company" exemption, we maintain an audit and corporate governance committee and a compensation and nominating committee comprised solely of independent directors.

In relation to fiscal year 2025, the Company's Board of Directors held a total of eleven board meetings and fourteen committee meetings. With respect to such period, three directors attended 100% of the meetings of the Board of Directors, three directors attended 91% and two directors attended 64% of the board meetings.

Our Board of Directors is supported by committees, which are working groups that analyze issues and provide recommendations to the Board of Directors regarding their respective areas of focus. The executive officers interact periodically with the committees to address management issues. During fiscal 2025, our Board of Directors was composed of the three main committees below. The Board of Directors may from time to time also create special committees of the Board as needed.

1. *Audit and Corporate Governance Committee*. We have a separately designated standing audit and corporate governance committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The audit and corporate governance committee operates under a written charter adopted by the Board of Directors. The audit and corporate governance committee reviews the scope and results of the annual audit of our consolidated financial statements conducted by our independent auditors, the scope of other services provided by our independent auditors, proposed changes in our financial accounting standards and principles, and our policies and procedures with respect to its internal accounting, auditing and financial controls. The audit and corporate governance committee also examines and considers other matters relating to our financial affairs and accounting methods, including selection and retention of our independent auditors. The audit and corporate governance committee is also responsible for overseeing the Company's major risk exposures, cybersecurity and data privacy risks and protocols. In addition, the audit and corporate governance committee has oversight responsibility on all aspects of the Company's corporate governance policies as well as the oversight and review of all related party transactions. In relation to fiscal 2025, the audit and corporate governance committee held six meetings. With respect to such period, all the members of the audit and corporate governance committee attended 100% of these meetings, except for one member who attended 83% of the committee meetings. During fiscal 2025, the audit and corporate governance committee was comprised of Emilio B. Imbriglio (Chair), Davide Barberis Canonico, and Maria Eugenia Girón, each of whom was financially literate and an independent (as defined by the NYSE American listing standards and SEC rules), non-employee director of the Company. We have determined that Emilio B. Imbriglio is an "audit committee financial expert" as this term is defined under SEC rules. Neither the SEC nor the NYSE American requires us to designate an "audit committee financial expert". A copy of the audit committee charter is available on the Company's website at <u>www.birks.com</u>.

2. *Compensation and Nominating Committee*. We have a standing compensation committee. The compensation and nominating committee operates under a written charter adopted by the Board of Directors. The purpose of the compensation and nominating committee is to recommend to the Board of Directors (i) director compensation and (ii) executive compensation, including base salaries, bonuses and long-term incentive awards for the Chief Executive Officer and certain other executive officers of Birks Group. The compensation and nominating committee also establishes criteria for goals and objectives for variable compensation, evaluates the performance of the Chief Executive Officer on an annual basis and provides recommendations to the Board of Directors regarding Chief Executive Officer and senior management succession plans. Certain decisions regarding compensation of certain other executive officers are reviewed by the compensation committee. In relation to fiscal year 2025, the compensation and nominating committee held four meetings and all members of the compensation and nominating committee attended 100% of these meetings with respect to that period. During fiscal year 2025, the compensation and nominating committee was comprised of Deborah Shannon Trudeau (Chair), Davide Barberis Canonico, Louis-Philippe Maurice and Joseph F.X. Zahra (until September 19, 2024). Each member of the compensation and nominating committee is an independent (as defined by the NYSE American listing standards), non-employee director of the Company.

The compensation and nominating committee is also responsible for nominating potential nominees to the Board of Directors. The Company's policy with regard to the consideration of any director candidates recommended by a shareholder is that it will consider such candidates and evaluate such candidates by the same process as candidates identified by the compensation and nominating committee. The Company has adopted a policy requiring that a director nominee, whether such candidate was recommended by the compensation and nominating committee or a shareholder, should possess, at least, integrity and commitment to service on the board. In addition to those minimum qualifications, the compensation and nominating committee will consider the following qualities or skills, which the Board as a whole should possess: business judgment, financial literacy, public company experience, accounting and finance experience, industry knowledge, diversity and the ability to provide strategic insight and direction. A detailed discussion of each of these attributes can be found in the compensation and nominating committee charter, which is available on the Company's website at <u>www.birks.com</u>.

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3. *Executive Committee.* We have a standing executive committee. The executive committee operates under a written charter adopted by the Board of Directors. The purpose of the executive committee is to provide a simplified review and approval process in between meetings of the Board of Directors for certain corporate actions. The intent of the executive committee is to facilitate our efficient operation with guidance and direction from the Board of Directors. The goal is to provide a mechanism that can assist in our operations, including but not limited to monitoring the implementation of policies, strategies and programs. In addition, the executive committee's mandate is to assist the Board with respect to the development, continuing assessment and execution of the Company's strategic plan. The executive committee is comprised of at least three members of the Board of Directors. Vacancies on the committee are filled by majority vote of the Board of Directors at the next meeting of the Board of Directors following the occurrence of the vacancy. During fiscal year 2025, the executive committee consisted of Niccolò Rossi di Montelera (Chair), Jean-Christophe Bédos, Davide Barberis Canonico, and Maria Eugenia Girón. In relation to fiscal year 2025, the executive committee held four meetings. All of the members of the executive committee attended 100% of these meetings with respect to such period. Messrs. Barberis Canonico and Mrs. Girón are independent, non-employee directors of the Company.

#### EMPLOYEES
As of March 29, 2025, we employed approximately 293 persons, including 16 employees on temporary leave. None of our employees are governed by a collective bargaining agreement with a labor union. We believe our relations with our employees are good and we intend to continue to place an emphasis on recruiting, training, retraining and developing the best people in our industry.

Retail employees include only those employees within our retail selling locations, while administration includes all other activities including corporate office, merchandising, supply chain operations, e-commerce sales and support, wholesale sales and gold exchange. The table below sets forth headcount by category in the periods indicated.

---

| | |
|:---|:---|
|  | **Total** |
|  **<u>As of March 29, 2025:</u>** |  |
|  Administration and operating support | 118 |
|  Retail | 175 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 293 |
|  **<u>As of March 30, 2024:</u>** |  |
|  Administration and operating support | 123 |
|  Retail | 167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 290 |
|  **<u>As of March 25, 2023:</u>** |  |
|  Administration and operating support | 142 |
|  Retail | 171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 313 |

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#### SHARE OWNERSHIP
The following table sets forth information regarding the beneficial ownership of our Class A voting shares as of May 31, 2025, based on 11,876,717 Class A voting shares, by each executive officer and each director:

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| | | | |
|:---|:---|:---|:---|
| **Name of Beneficial Owner** | **Number of Class A<br>Voting Shares<br>Beneficially Owned** | **Options/DSUs<br>to Purchase<br>Shares** | **Percentage of<br>Beneficially Owned** |
|  **Niccolò Rossi di Montelera** |  | 110588<sup>(1)</sup> | \* |
|  **Jean-Christophe Bédos** | 92633 |  | \* |
|  **Davide Barberis Canonico** |  | 110588<sup>(1)</sup> | \* |
|  **Maria Eugenia Girón** |  |  |  |
|  **Emilio B. Imbriglio** |  |  |  |
|  **Louis-Philippe Maurice** |  |  |  |
|  **Deborah Shannon Trudeau** |  |  |  |
|  **Joseph F.X. Zahra** |  | 110588<sup>(1)</sup> | \* |
|  **Katia Fontana** | 30700 |  | \* |
|  **Maryame El Bouwab** | 50000 |  | \* |
|  **Miranda Melfi** | 48624 |  | \* |

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\* Less than 1%. 

(1) Includes deferred stock units to acquire an equivalent amount of Class A voting shares upon exercise following the departure of the director at a price of $0 per share. The deferred stock units are redeemable during the period commencing on the day immediately following the departure of the director and ending on December 31 of the following year.

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For arrangements involving the issuance or grant of options or shares of the Company to such named executive officers and other employees, see above under the heading "Compensation of Directors and Officers" and Item 10. "Additional Information—Material Contracts—Employment Agreements."

#### DISCLOSURE OF REGISTRANT'S ACTIONS TO RECOVER ERRONEOUSLY AWARDED COMPENSATION
Not applicable.

**Item 7.** **Major Shareholders and Related Party Transactions** <br>

#### MAJOR SHAREHOLDERS
The following table sets forth information regarding the beneficial ownership of our Class A voting shares as of May 31, 2025 by each person or entity who beneficially owns 5% or more of outstanding voting securities, including the Class A voting shares and/or Class B multiple voting shares. The major shareholders listed with Class B multiple voting shares are entitled to ten votes for each Class B multiple voting share held, whereas holders of Class A voting shares are entitled to one vote per Class A voting share held. Unless otherwise indicated in the table, each of the persons named below, to the Company's knowledge, has sole voting and investment power with respect to the voting shares beneficially owned by them. The calculation of the percentage of outstanding shares is based on 11,876,717 Class A voting shares and 7,717,970 Class B multiple voting shares outstanding on May 31, 2025, adjusted where appropriate, for shares of stock beneficially owned but not yet issued.

Beneficial ownership is determined under rules issued by the SEC. Under these rules, beneficial ownership includes any of the Class A voting shares or Class B multiple voting shares as to which the individual or entity has sole or shared voting power or investment power and includes any shares as to which the individual or entity has the right to acquire beneficial ownership within 60 days through the exercise of any warrant, stock option or other right. The inclusion in this Annual Report of such voting shares, however, does not constitute an admission that the named individual is a direct or indirect beneficial owner of such voting shares. The voting shares that a person has the right to acquire within 60 days of May 31, 2025 are deemed outstanding for the purpose of calculating the percentage ownership of such person, but are not deemed outstanding for the purpose of calculating the percentage owned by any other person listed. For information regarding entities or persons that directly or indirectly control us, see "Item 3. Key Information – Risk Factors – Risks Related to the Company."

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| | | |
|:---|:---|:---|
| **Name of Beneficial Owner<sup>(1)</sup>** | **Number of Class A<br>Voting Shares<br>Beneficially Owned** | **Percentage of Beneficially<br>Owned** |
|  The Grande Rousse Trust<sup>(2)</sup> | 13646692 | 69.65% |
|  Meritus Trust Company Limited<sup>(3)</sup> | 13646692 | 69.65% |
|  Montel S.à.r.l<sup>(4)</sup> | 8846692 | 56.73% |
|  Mangrove Holding S.A.<sup>(5)</sup> | 4800000 | 30.23% |
|  Jason Edward Maynard <sup>(6)</sup> | 2876314 | 24.22% |

---

(1) Unless otherwise noted, each person has sole voting and investment power over the shares listed opposite its name.

(2) Includes 13,646,692 Class A voting shares, of which 7,717,970 Class A voting shares to which Montel and Mangrove collectively would be entitled upon conversion of the Class B multiple voting shares held by Montel and Mangrove collectively. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting share held and each Class B multiple voting share is convertible into one Class A voting share. The shares held by Montel and Mangrove collectively are beneficially owned by The Grande Rousse Trust. Montrovest merged with its parent company, Montel, on August 3, 2018 (the "Montrovest Merger"), and as such, all of the shares held by Montrovest at the time of the Montrovest Merger are now held by Montel. Confido Limited has the power to remove the trustee of The Grande Rousse Trust. As a result, Confido Limited may be deemed to have beneficial ownership of the Class A voting shares held by Montel or Mangrove.

(3) Trustee of The Grande Rousse Trust. Includes 13,646,692 Class A voting shares, of which 7,717,970 Class A voting shares to which Montel and Mangrove collectively would be entitled upon conversion of the Class B multiple voting shares held by Montel and Mangrove collectively. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting share held and each Class B multiple voting share is convertible into one Class A voting share. The shares held by Montel and Mangrove collectively are beneficially owned by The Grande Rousse Trust.

(4) Comprised of 8,846,692 Class A voting shares, of which 3,717,970 Class A voting shares, to which Montel would be entitled upon conversion of the Class B multiple voting shares held by Montel and Mangrove collectively. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting share held and each Class B multiple voting share is convertible into one Class A voting share.

(5) Includes 4,800,000 Class A voting shares, of which 4,000,000 Class A voting shares to which Mangrove would be entitled upon conversion of the Class B multiple voting shares held by Mangrove. The Class B multiple voting shares entitle the holder to ten votes for each Class B multiple voting share held and each Class B multiple voting share is convertible into one Class A voting share. The Grande Rousse Trust is the sole shareholder of Mangrove.

(6) Based on information received from Jason E. Maynard as at May 31, 2025.

As of May 31, 2025, there were a total of 197 holders of record of our Class A voting shares, of which 154 were registered with addresses in the United States. Such United States record holders were, as of such date, the holders of record of approximately 44% of our outstanding Class A voting shares. The number of record holders in the United States is not representative of the number of beneficial holders nor is it representative of where such beneficial holders are resident since many of these Class A shares were held of record by brokers or other nominees. None of our Class B multiple voting shares are held in the United States. Each Class B multiple voting share entitles the holder to ten (10) votes at all meetings of our shareholders (except meetings at which only holders of another specified class of shares are entitled to vote pursuant to the provisions of our restated articles or the *Canada Business Corporations Act*).

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#### RELATED PARTY TRANSACTIONS

#### Management Consulting Services Agreement
Effective January 1, 2016, the Company entered into a management consulting services agreement with Gestofi S.A. ("Gestofi"), all in accordance with the Company's Code of Conduct relating to related party transactions. Under the management consulting services agreement, Gestofi provides the Company with services related to the obtaining of financing, mergers and acquisitions, international expansion projects, and such other services as the Company may request. Under the agreement, the Company paid an annual retainer of €140,000 (approximately $202,000 in Canadian dollars). The original term of the agreement was until December 31, 2016 and the agreement was automatically extended for successive terms of one year as neither party gave a 60 days' notice of its intention not to renew. The yearly renewal of the agreement was subject to the review and approval of the Company's corporate governance and nominating committee (and now is subject to the review and approval of the Company's audit and corporate governance committee) and the Board of Directors in accordance with the Company's Code of Conduct relating to related party transactions. In November 2018, the agreement was renewed on the same terms and conditions except that the retainer was reduced to €40,000 (approximately $61,000 in Canadian dollars). In March 2019, the agreement was amended to (i) waive the yearly retainer and reimburse only the out-of-pocket expenses related to the services, and (ii) allow for a success fee to be mutually agreed upon between the Company and Gestofi in the event that financing or a capital raise is achieved. The agreement has been renewed annually since November 2019 and was renewed in November 2024 for an additional one-year term on the same terms and conditions. In fiscal 2025, 2024, and 2023, the Company incurred expenses of €11,350 (approximately $17,000 in Canadian dollars), €28,000 (approximately $41,000 in Canadian dollars) and nil, respectively, under this agreement to Gestofi.

#### Cash Advance Agreements
The Company has a cash advance outstanding from one of its controlling shareholders, Montel (formerly Montrovest), of U.S. $1.5 million (approximately $2.2 million in Canadian dollars) originally received in May 2009 from Montrovest. This cash advance was provided to the Company by Montrovest to finance working capital needs and for general corporate purposes. This advance and any interest thereon is subordinated to the indebtedness of the Company's Amended Credit Facility and Amended Term Loan. This cash advance bears an annual interest rate of 11%, net of withholding taxes, representing an effective interest rate of approximately 12%, and is repayable upon demand by Montel once conditions stipulated in the Company's Amended Credit Facility permit such a payment. At March 29, 2025 and March 30, 2024, advances payable to Montel amounted to U.S. $1.5 million (approximately $2.2 million and $2.0 million in Canadian dollars, respectively).

On July 28, 2017, the Company received a U.S. $2.5 million (approximately $3.3 million in Canadian dollars) loan from Montel, to finance its working capital needs. The loan bears interest at an annual rate of 11%, net of withholding taxes, representing an effective interest rate of approximately 12%, and is due and payable in two equal payments of U.S. $1.25 million (approximately $1.55 million in Canadian dollars) in each of July 2018 and July 2019. During fiscal year 2019, U.S. $1.25 million (approximately $1.55 million in Canadian dollars) was repaid. In May 2019, Montel granted the Company a one-year extension of the term of the outstanding balance of U.S. $1.25 million ($1.8 million in Canadian dollars) which was scheduled to be fully repaid in July 2019. In December 2019, the Company obtained a new one-year moratorium on principal repayments and as such the loan will become due in December 2020. In June 2020, the Company obtained a new moratorium on principal repayments and as such the loan will become due at the earliest of August 31, 2021 or 10 days following a recapitalization. During fiscal 2022, the remaining principal balance on the loan of approximately U.S. $1.25 million ($1.6 million in Canadian dollars) was repaid. At March 29, 2025 and March 30, 2024, loans payable to Montel amounted to nil and nil.

Due to the Montrovest Merger, Montrovest's separate legal existence ceased and as a result of such merger, the cash advance agreements as well as the loan agreement have been assumed by Montel.

#### Reimbursement Letter Agreement
In accordance with the Company's Code of Conduct related to related party transactions, in April 2011, the Company's corporate governance and nominating committee and Board of Directors approved the reimbursement to Regaluxe Srl, of certain expenses, such as rent, communication, administrative support and analytical service costs, incurred in supporting the office of Dr. Lorenzo Rossi di Montelera, the Company's then Chairman, and of Mr. Niccolò Rossi di Montelera, the Company's Chairman of the Executive Committee and the Company's current Executive Chairman of the Board, for the work performed on behalf of the Company, up to a yearly maximum of U.S. $260,000 (approximately $340,000 in Canadian dollars). The yearly maximum was reduced to U.S. $130,000 (approximately $170,000 in Canadian dollars). This agreement has been renewed annually and was renewed in March 2019 for an additional one-year term, except that the only services being reimbursed are for administrative support and analytical services costs and in March 2020, for an additional one-year, except expenses were as of then being charged in Euro (€). During fiscal 2025, 2024, and 2023, the Company incurred expenses of €17,000, €17,000, and €24,000, (approximately $26,000, $25,000, and $35,000 in Canadian dollars) respectively to Regaluxe Srl under this agreement.

#### Distribution Agreement
In April 2011, our corporate governance and nominating committee and Board of Directors approved the Company's entering into a Wholesale and Distribution Agreement with Regaluxe Srl. Under the agreement, Regaluxe Srl is to provide services to the Company to support the distribution of the Company's products in Italy through authorized dealers. The initial one-year term of the agreement began on April 1, 2011. Under this agreement, the Company pays Regaluxe Srl a net price for the Company's products equivalent to the price, net of taxes, for the products paid by retailers to Regaluxe Srl less a discount factor of 3.5%. The agreement's initial term was until March 31, 2012, and may be renewed by mutual agreement for additional one- year terms. This agreement has been renewed annually and in March 2023, the agreement was renewed for an additional one-year term. This agreement was not renewed in March 2024. During fiscal year 2025, fiscal 2024 and fiscal 2023, the Company did not make any payments to Regaluxe Srl under this agreement.

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#### Consulting Agreement
On March 28, 2018, the Company's Board of Directors approved the Company's entry into a consulting services agreement with Carlo Coda Nunziante effective April 1, 2018. Under the agreement, Carlo Coda Nunziante, the Company's former Vice President, Strategy, and brother-in-law to the Executive Chairman of the Board, is providing advice and assistance on the Company's strategic planning and business strategies for a total annual fee, including reimbursement of out-of-pocket expenses of €146,801 (approximately $222,000 in Canadian dollars), net of applicable taxes. During fiscal 2025, 2024 and 2023, the Company incurred charges of €37,000, €149,000 and €149,000 (approximately $55,000, $217,000 and $205,000 in Canadian dollars), including applicable taxes, respectively. This agreement was extended for a six (6) month period and ended on September 30, 2024.

#### Retail Support and Administrative Service Fee
The Company provides RMBG with retail support and administrative services, and charges RMBG for these related services. During fiscal 2025, the Company charged $520,623 to RMBG. $612,500 during fiscal 2024 and nil during fiscal 2023.

#### RMBG Dividend
In December 2024, the Company received a dividend from RMBG in the amount of U.S. $960,784 (approximately $1.38 million in Canadian dollars) based on its respective joint venture shareholdings.

#### Support Letters and Loan
On July 15, 2024, the Company obtained a support letter (the "Shareholder Support Letter") from one if its controlling shareholders, Mangrove, providing financial support in an amount of up to $3.75 million that is available until July 31, 2025, of which up to $2.75 million is available prior to January 1, 2025 and an additional amount of up to $1.0 million would be available after January 1, 2025. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2025, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in maintaining the minimum excess availability at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under this support letter will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2025. On November 27, 2024, the support letter was extended until December 31, 2025.

On June 26, 2025, the Shareholder Support Letter was terminated and replaced with a loan agreement whereby Mangrove entered into a loan agreement with the Company to advance $3.75 million of additional indebtedness to fund the Company's working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026.

On July 21, 2025, the Company obtained support letters providing financial support to the Company for an aggregate total amount of up to $1.5 million from (i) Mangrove (one of the Company's controlling shareholders) for up to $500,000, (ii) Davide Barberis Canonico (a member of the Company's Board of Directors) for up to $800,000, and (iii) Marco Pasteris (the Company's Vice-President, Finance) for $200,000. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2026, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or maintaining minimum excess availability at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under these support letters will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2026.

In addition, on July 21, 2025, the Company obtained from Mangrove a deferral of interest payments payable in relation to the cash advance outstanding of U.S. $1.5 million and the Mangrove Loan of $3.75 million, of up to a maximum of $813,227, effective immediately and through to July 31, 2026.

**Item 8.** **Financial Information** <br>

#### Consolidated Financial Statements
See Item 18. "Financial Statements."

#### Dividend Policy
For a discussion of our dividend policy, see Item 3. "Key Information—Dividends and Dividend Policy."

#### Legal Proceedings
We are from time to time involved in litigation incident to the conduct of our business. Although such litigation is normally routine and incidental, it is possible that future litigation can result in large monetary awards for compensatory or punitive damages. We believe that no litigation that is currently pending or threatened will have a material adverse effect on our financial condition.

#### Significant Changes
No significant changes have occurred since the date of the annual financial statements included in this Annual Report.

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**Item 9.** **The Offer and Listing** <br>

#### TRADING MARKET
Effective November 15, 2005, our Class A voting shares were listed and began to trade on the NYSE American and are currently trading under the symbol "BGI."

**Item 10.** **Additional Information** <br>

#### ARTICLES OF INCORPORATION AND BY-LAWS
Our Restated Articles of Incorporation do not restrict the type of business that we may carry on. A copy of our Restated Articles of Incorporation were set out in the F-4 registration statement (File No. 333-126936) that was filed with the SEC on July 27, 2005 and subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005, and which we incorporate by reference. A copy of our By-law No. One is contained as an exhibit to the Form 20-F that we filed with the SEC on July 3, 2012, and which we incorporate by reference. Additionally, certain rights of our shareholders pursuant to our Restated Articles of Incorporation, our By-laws and the *Canada Business Corporations Act* were set out in the F-4 registration statement (File No. 333-126936) that was filed with the SEC on July 27, 2005, and which we incorporate by reference herein and we refer you to the headings therein entitled "Description of Birks Capital Stock" and "Comparison of Stockholder Rights."

On April 19, 2012, our Board of Directors approved an amendment to our By-laws to, among other things, add the title and description of the Vice Chairman position, revise the declaration of dividends section of the By-laws, and add a banking and borrowing arrangements section to the By-laws. Under Canadian law, the amendment to our By-laws had to be ratified by the shareholders of the Company. At our 2012 Annual and Special Meeting of Shareholders, our shareholders ratified the amendment to our By-laws.

On September 12, 2013, at our Annual Meeting of Shareholders, our shareholders approved articles of amendment to our Restated Articles of Incorporation to change our corporate name to Birks Group Inc. A copy of the articles of amendment is filed with our Annual Report on Form 20-F filed with the SEC on July 25, 2014.

On September 24, 2014, at our Annual Meeting of Shareholders, our shareholders approved articles of amendment to our Restated Articles of Incorporation to allow our board of directors, at any time and from time to time, to issue preferred shares for an aggregate consideration to be received by the Company of up to five million Canadian dollars ($5,000,000) which shall be subject to a 5% dividend limitation as contained in the Restated Articles of Incorporation. A copy of the articles of amendment is filed with our Annual Report on Form 20-F filed with the SEC on June 26, 2015.

#### MATERIAL CONTRACTS
We have not entered into any material contract other than in the ordinary course of business and other than those described below or in Items 4, 5, 7 and 19 of this Annual Report on Form 20-F.

#### Employment Agreements

#### Jean-Christophe Bédos
On January 4, 2012, we entered into an employment agreement, or the "Agreement", with Jean-Christophe Bédos, who became the President & Chief Executive Officer effective April 1, 2012, and prior to that was our Chief Operating Officer. The Agreement provides Mr. Bédos with a base salary of $700,000 an annual cash bonus set at a minimum of $282,500 for fiscal year ended March 30, 2013, of which $141,250 was paid during fiscal 2012 and $141,250 was paid in fiscal 2014, an annual target cash bonus of 85% of base salary based on achievement of a targeted level of performance and performance criteria set by the Company, an option to purchase 150,000 shares of the Company's Class A voting shares which vested over three years and other health and retirement benefits. Mr. Bédos' base salary was increased to $730,000, $750,000 and $770,000, effective October 1, 2015, November 1, 2016 and October 1, 2021, respectively. If Mr. Bédos is terminated without "cause" or resigns for "good reason," as these terms are defined in the Agreement, the Agreement provides that Mr. Bédos will receive (i) any earned and accrued but unpaid base salary, (ii) up to 12 months of salary in lieu of further salary or severance payments, which may be increased by one additional month after five years of service for each additional year of service thereafter, up to a maximum of eighteen months after ten years of service, (iii) certain health benefits for the period that the severance will be payable in, and (iv) his bonus through the date of termination and up to twelve months average annual cash bonus (based on the average annual cash bonus paid to him over the previous three fiscal years). Mr. Bédos is prohibited from competing with us during his employment and for a period of twelve months thereafter.

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#### EXCHANGE CONTROLS
There are currently no laws, decrees, regulations or other legislation in Canada that restricts the export or import of capital or that affects the remittance of dividends, interest or other payments to non-resident holders of our securities other than withholding tax requirements. There is no limitation imposed by Canadian law or by our Restated Articles of Incorporation or our other organizational documents on the right of a non-resident of Canada to hold or vote our Class A voting shares, other than as provided in Investment Canada Act.

The Investment Canada Act requires notification and, in certain cases, advance review and approval by the federal minister of Innovation, Science and Economic Development of the acquisition by a "non-Canadian" of "control of a Canadian business", all as defined in the Investment Canada Act. Generally, the threshold for review will be higher in monetary terms, and in certain cases an exemption will apply, for an investor ultimately controlled by persons who are WTO investors or trade agreement investors, in each case within the meaning of the Investment Canada Act. The Investment Canada Act also provides for review of investments in Canada, including by acquisition of the whole or part of any entity with operations in Canada, if the aforementioned Minister determines that such an investment may be injurious to national security.

#### TAXATION

#### MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF OWNING AND DISPOSING OF BIRKS CLASS A VOTING SHARES
The following discussion is based on the U.S. Internal Revenue Code of 1986, as amended (the Code), applicable Treasury regulations, administrative rulings and pronouncements and judicial decisions currently in effect, all of which could change. Any change, which may be retroactive, could result in U.S. federal income tax consequences different from those discussed below. The discussion is not binding on the Internal Revenue Service, and there can be no assurance that the Internal Revenue Service will not disagree with or challenge any of the conclusions described below.

Except where specifically noted, the discussion below does not address the effects of any state, local or non-U.S. tax laws (or other tax consequences such as estate or gift tax consequences). The discussion below relates to persons who hold Birks Group Class A voting shares as capital assets within the meaning of Section 1221 of the Code. The tax treatment of those persons may vary depending upon the holder's particular situation, and some holders may be subject to special rules not discussed below. Those holders would include, for example:

• banks, insurance companies, trustees and mutual funds;

• tax-exempt organizations;

• financial institutions;

• pass-through entities and investors in pass-through entities;

• traders in securities who elect to apply a mark-to-market method of accounting;

• broker-dealers;

• holders who are not U.S. Holders (as defined below);

• persons whose "functional currency" is not the U.S. dollar;

• holders who are subject to the alternative minimum tax; and

• holders of Birks Group Class A voting shares who own 5% or more of either the total voting power or the total value of the outstanding Class A voting shares of Birks Group.

**Holders should consult their own tax advisors concerning the U.S. federal income tax consequences of the ownership of Birks Group Class A voting shares in light of their particular situations, as well as any consequences arising under the laws of any other taxing jurisdiction.** 

As used in this document, the term "U.S. Holder" means a beneficial holder of Birks Group Class A voting shares that is (1) an individual who is a U.S. citizen or U.S. resident alien, (2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the U.S. or any political subdivision of the U.S., (3) an estate which is subject to U.S. federal income tax on its worldwide income regardless of its source or (4) a trust (x) that is subject to primary supervision of a court within the U.S. and the control of one or more U.S. persons as described in Section 7701(a)(30) of the Code or (y) that has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

If a partnership holds Birks Group Class A voting shares, the U.S. federal income tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partners of partnerships that hold Birks Group Class A voting shares should consult their tax advisors regarding the U.S. federal income tax consequences to them.

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#### Dividends and Distributions
Subject to the passive foreign investment company (PFIC) rules discussed below, the gross amount of dividends paid to U.S. Holders of our Class A voting shares, including amounts withheld to reflect Canadian withholding taxes, will be treated as dividend income to these U.S. Holders, to the extent paid out of current or accumulated earnings and profits, as determined under U.S. federal income tax principles. This income will be includable in the gross income of a U.S. Holder on the day actually or constructively received by the U.S. Holder. Dividends generally will not be eligible for the dividends received deduction allowed to corporations upon the receipt of dividends distributed by U.S. corporations.

Subject to certain conditions and limitations, Canadian withholding taxes on dividends may be treated as foreign taxes eligible for credit against a U.S. Holder's U.S. federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on our Class A voting shares will be treated as income from sources outside the U.S. and generally will constitute "passive income." Special rules apply to certain individuals whose foreign source income during the taxable year consists entirely of "qualified passive income" and whose creditable foreign taxes paid or accrued during the taxable year do not exceed $300 ($600 in the case of a joint return). U.S. Holders should consult their tax advisors to determine their eligibility to use foreign tax credits.

To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits for a taxable year, the distribution first will be treated as a tax-free return of capital, causing a reduction in the adjusted basis of our Class A voting shares (thereby increasing the amount of gain, or decreasing the amount of loss, to be recognized by the U.S. Holder on a subsequent disposition of the Class A voting shares), and the balance in excess of adjusted basis will be taxed as capital gain recognized on a sale or exchange.

With respect to certain U.S. Holders who are not corporations, including individuals, certain dividends received from a qualified foreign corporation may be subject to reduced rates of taxation. A "qualified foreign corporation" includes a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States which the U.S. Treasury determines to be satisfactory for these purposes and which includes an exchange of information program. U.S. Treasury guidance indicates that the current income tax treaty between Canada and the U.S. meets these requirements, and we believe we are eligible for the benefits of that treaty. In addition, a foreign corporation is treated as a qualified foreign corporation with respect to dividends received from that corporation on shares that are readily tradable on an established securities market in the U.S. Our Class A voting shares, which are listed on the NYSE American, should be considered readily tradable on an established securities market in the U.S. Individuals that do not meet a minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as "investment income" pursuant to Section 163(d)(4) of the Code will not be eligible for the reduced rates of taxation regardless of the trading status of our Class A voting shares. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met. U.S. Holders should consult their own tax advisors regarding the application of these rules given their particular circumstances. The rules governing the foreign tax credit are complex. Certain U.S. Holders of our Class A voting shares may not be able to claim a foreign tax credit with respect to amounts withheld for Canadian withholding taxes. U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

#### Sale or Exchange of Class A Voting Shares
For U.S. federal income tax purposes, subject to the rules relating to PFICs described below, a U.S. Holder generally will recognize taxable gain or loss on any sale or exchange of our Class A voting shares in an amount equal to the difference between the amount realized for our Class A voting shares and the U.S. Holder's tax basis in such shares. This gain or loss will be capital gain or loss and generally will be treated as U.S. source gain or loss. Long-term capital gains recognized by certain U.S. Holders who are not corporations, including individuals, generally will be subject to a maximum rate of U.S. federal income tax of currently 23.8%, which includes the 3.8% Medicare surtax imposed by Section 1411 of the Code. The deductibility of capital losses is subject to limitations.

#### Passive Foreign Investment Company
We believe that our Class A voting shares should not be treated as stock of a PFIC for U.S. federal income tax purposes, and we expect to continue our operations in such a manner that we will not be a PFIC. In general, a company is considered a PFIC for any taxable year if either (i) at least 75% of its gross income is passive income or (ii) at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income. The 50% of value test is based on the average of the value of our assets for each quarter during the taxable year. If we own at least 25% by value of another company's stock, we will be treated, for purposes of the PFIC rules, as owning our proportionate share of the assets and receiving our proportionate share of income of the other company. Based on the nature of our income, assets and activities, and the manner in which we plan to operate our business in future years, we do not expect that we will be classified as a PFIC for any taxable year.

If, however, we are or become a PFIC, U.S. Holders could be subject to additional U.S. federal income taxes on gain recognized with respect to our Class A voting shares and on certain distributions, plus an interest charge on certain taxes treated as having been deferred by the U.S. Holder under the PFIC rules.

#### Backup Withholding and Information Reporting
In general, information reporting requirements will apply to dividends in respect of our Class A voting shares or the proceeds received on the sale, exchange, or redemption of our Class A voting shares paid within the United States (and in certain cases, outside of the U.S.) to U.S. Holders other than certain exempt recipients (such as corporations), and a 24% backup withholding tax may apply to these amounts if the U.S. Holder fails to provide an accurate taxpayer identification number, to report dividends required to be shown on its U.S. federal income tax returns or, in certain circumstances, to comply with applicable certification requirements. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a refund or credit against the U.S. Holder's U.S. federal income tax liability, provided that the required information or appropriate claim for refund is furnished to the Internal Revenue Service in a timely manner.

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#### Certain Information Reporting Obligations
Certain U.S. Holders are required to report their ownership of specified foreign financial assets, including stock or securities issued by non-U.S. entities, subject to exceptions, by including a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they own such assets. U.S. Holders are urged to consult their own tax advisors regarding information reporting requirements relating to the ownership of Class A voting shares.

#### MATERIAL CANADIAN FEDERAL INCOME TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF OUR CLASS A VOTING SHARES
The following discussion is a summary of the material Canadian federal income tax considerations under the Income Tax Act (Canada) and the regulations adopted thereunder, as amended (referred to in this Form 20-F as the "Canadian Tax Act") of the ownership of our Class A voting shares, generally applicable to holders of our Class A voting shares who, for purposes of the Canadian Tax Act and at all relevant times, are not (and are not deemed to be) resident in Canada, are the beneficial owners of our Class A voting shares, hold our Class A voting shares as capital property, deal at arm's length and are not affiliated with Birks Group, and who do not use or hold (and are not deemed to use or hold) Class A voting shares in connection with carrying on business or part of a business in Canada (referred to in this Form 20-F as "Non-resident Holders"). This discussion does not apply to Non-resident Holders that are insurers that carry on an insurance business in Canada and elsewhere or an "authorized foreign bank" (as defined under the Canadian Tax Act).

This summary is based upon the current provisions of the Canadian Tax Act, the current provisions of the Canada-United States Income Tax Convention (1980), as amended, if applicable (referred to in this Form 20-F as the "Convention"), all specific proposals to amend the Canadian Tax Act publicly announced by the Minister of Finance of Canada prior to the date hereof (referred to in this Form 20-F as the "Tax Proposals") and the current published administrative and assessing practices of the Canada Revenue Agency. This summary assumes that the Tax Proposals will be enacted substantially as proposed and does not otherwise take into account or anticipate any change in law or administrative and assessing practices, whether by legislative, governmental or judicial action, although no assurance can be given in these respects. This summary does not take into account or consider any provincial, territorial or foreign income tax legislation or considerations. For purposes of the Canadian Tax Act, all amounts relevant in computing a Non-resident Holder's liability under the Canadian Tax Act must be computed in Canadian dollars. Amounts denominated in a currency other than Canadian dollars (including adjusted cost base and proceeds of disposition) must be converted into Canadian dollars based on the prevailing exchange rate at the relevant time.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to Non-resident Holders of our Class A voting shares. Accordingly, Non-resident Holders of our Class A voting shares should consult their own tax advisors with respect to their particular circumstances.

#### DIVIDENDS

#### Dividends on Our Class A Voting Shares
Dividends paid or credited (or deemed to have been paid or credited) on our Class A voting shares to a Non-resident Holder will be subject to Canadian withholding tax of 25% of the gross amount of those dividends (subject to reduction in accordance with an applicable income tax convention between Canada and the Non-resident Holder's country of residence). In the case of a Non-resident Holder who is a resident of the U.S. for purposes of the Convention, is entitled to the benefits of the Convention (referred to in this Form 20-F as a "U.S. Holder") and is the beneficial owner of the dividend, the rate of withholding tax will generally be reduced to 15% or, if the Non-resident Holder is a corporation that owns at least 10% of our voting shares, to 5%. Non-resident Holders are advised to consult their tax advisors for advice having regard to their particular circumstances.

#### Disposition of Our Class A Voting Shares
A Non-resident Holder will not be subject to tax under the Canadian Tax Act in respect of any capital gain realized by that Non-resident Holder on a disposition (or deemed disposition) of a Class A voting share, unless the Class A voting share constitutes "taxable Canadian property" (as defined in the Canadian Tax Act) of the Non-resident Holder at the time of disposition and the Non-resident Holder is not entitled to relief under an applicable income tax convention between Canada and the Non-resident Holder's country of residence. If at the time of such disposition the Class A voting shares are listed on a "designated stock exchange" (which includes the NYSE American), the Class A voting shares will generally not constitute taxable Canadian property of a Non-resident Holder unless (A) at any time during the 60-month period that ends at the time the Class A voting shares are disposed of, both (i) 25% or more of the issued shares of any class of the capital stock of the Corporation were owned by or belonged to one or any combination of (a) the Non-resident Holder, (b) persons with whom the Non-resident Holder did not deal at arm's length, and (c) partnerships in which the Non-resident Holder or a person referred to in (b) holds a membership interest, directly or indirectly, through one or more partnerships, and (ii) more than 50% of the fair market value of the Class A voting shares was derived, directly or indirectly, from one or any combination of real or immovable property situated in Canada, "Canadian resource properties", "timber resource properties" (as such terms are defined under the Canadian Tax Act) or options in respect of, interests in, or civil law rights in, any such properties (whether or not such properties exist), or (B) the Class A voting shares are otherwise deemed to be taxable Canadian property. Generally, to the extent that the Class A voting shares are no longer listed on a "designated stock exchange" at the time of their disposition, the above- listed criteria (with the exception of (i)) will apply to determine if the Class A voting shares are "taxable Canadian property".

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Non-resident Holders whose Class A voting shares are, or may be, taxable Canadian property should consult their tax advisors for advice having regard to their particular circumstances.

#### STATEMENTS BY EXPERTS
Not applicable.

#### DOCUMENTS ON DISPLAY
We file reports, including Annual Reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC that apply to foreign private issuers. Filings we make electronically with the SEC are also available to the public on the Internet at the SEC's website at *http://www.sec.gov*.

#### SUBSIDIARY INFORMATION
Not applicable.

#### ANNUAL REPORT TO SECURITY HOLDERS
Not applicable.

**Item 11.** **Quantitative and Qualitative Disclosures about Market Risk** <br>

We are exposed to various market risks. Market risk is the potential loss arising from adverse changes in market prices and rates. We have not entered into derivative or other financial instruments for trading or speculative purposes.

#### Interest Rate Risk
We are exposed to market risk from fluctuations in interest rates. Borrowing under the Amended Credit Facility and the Amended Term Loan bear interest at floating rates, which are based on CORRA plus a CORRA adjustment of 0.32% plus a fixed additional interest rate. As of March 29, 2025, we have not hedged these interest rate risks. As of March 29, 2025, we had approximately $86.0 million of floating-rate debt. Accordingly, our net income will be affected by changes in interest rates. Assuming a 100-basis point increase or decrease in the interest rate under our floating rate debt, our interest expense on an annualized basis would have increased or decreased, respectively, by approximately $0.9 million.

#### Currency Risk
The Company has changed its reporting currency in fiscal 2019 from U.S. dollars to Canadian dollars for the period commencing April 1, 2018 in order to better reflect the fact that subsequent to the Company's divestiture of its former wholly-owned subsidiary, Mayor's Jewelers Inc. on October 23, 2017, its business is primarily conducted in Canada, and a substantial portion of its revenues, expenses, assets, and liabilities are denominated in $CAD. The Company's functional currency remains $CAD.

To mitigate the impact of foreign exchange volatility on our earnings, from time to time we may enter into agreements to fix the exchange rate of U.S. dollars to Canadian dollars. For example, we may enter into agreements to fix the exchange rate to protect the principal and interest payments on our U.S. dollar denominated debt and other liabilities held in our Canadian operation. If we do so, we will not benefit from any increase in the value of the Canadian dollar compared to the U.S. dollar when these payments become due. As of March 29, 2025, we had not hedged these foreign exchange rate risks. As of March 29, 2025, we had approximately $71.7 million of net liabilities subject to foreign exchange rate risk related to changes in the exchange rate between the U.S. dollar and Canadian dollar, which would impact the level of our earnings if there were fluctuations in U.S. and Canadian dollar exchange rate. Assuming a 100-basis point strengthening or weakening of the Canadian dollar in relationship to the U.S. dollar, as of March 29, 2025, our earnings would have increased or decreased, respectively, by approximately $0.7 million. This analysis does not consider the impact of fluctuations in U.S. and Canadian dollar exchange rates on the translation of Canadian dollar results into U.S. dollars. Changes in the exchange rates of Canadian dollars to U.S. dollars could also impact our Canadian sales and gross margin if the Canadian dollar strengthens significantly and impacts our Canadian consumers' behavior.

#### Commodity Risk
The nature of our operations results in exposure to fluctuations in commodity prices, specifically diamonds, platinum, gold and silver. We do not currently use derivatives to hedge these risks. Our retail sales and gross margin could be materially impacted if prices of diamonds, platinum, gold or silver rise so significantly that our consumers' behavior changes or if price increases cannot be passed onto our customers.

**Item 12.** **Description of Securities Other than Equity Securities** <br>

Not applicable.

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#### PART II
**Item 13.** **Defaults, Dividend Arrearages and Delinquencies** <br>

Not applicable.

**Item 14.** **Material Modifications to the Rights of Security Holders and Use of Proceeds** <br>

Not applicable.

**Item 15.** **Controls and Procedures** <br>

#### Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e) and 15d-15(e), as of the end of the period covered by this Annual Report on Form 20-F. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 29, 2025, our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e), were not effective due to the material weaknesses noted in Management's Annual Report on Internal Control over Financial Reporting.

#### Management's Annual Report on Internal Control over Financial Reporting
Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to consolidated financial statements preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our Chief Executive Officer and Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of the end of the period covered by this Annual Report based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on that assessment, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 29, 2025, the Company did not maintain effective internal control over financial reporting due to the following material weaknesses in its internal control over financial reporting:

• The lack of sufficient accounting and financial reporting personnel to appropriately segregate duties in the preparation and review of certain account reconciliations (purchases and leases) and journal entries;

• The insufficient design of certain management review controls (assessment of future operation and inventory reserves) due to the inadequate retention of documentary evidence including management's assessment related to the completeness and accuracy of the underlying information; and

• The insufficient design of a control related to the review of the classification of a cash flow transaction.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented on a timely basis.

Notwithstanding these material weaknesses described above, our management, including our Chief Executive Officer and our Chief Financial Officer, has concluded that the consolidated financial statements included in this Annual Report on Form 20-F are fairly presented, in all material respects, in accordance with generally accepting accounting principles in the United States for each of the periods presented herein. These material weaknesses did not result in a material restatement of the Company's previously released consolidated financial statements. However, such weaknesses did result in misstatements that were identified and corrected in the consolidated financial statements as of and for the year ended March 29, 2025.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting. As a non-accelerated filer, our report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only our report on internal controls over financial reporting in this Annual Report.

#### Remediation Efforts to Address the Material Weakness
We are committed to remediate the material weaknesses in our internal control over financial reporting and will implement additional processes, procedures, policies, and controls designed to address the underlying causes associated with the above-mentioned deficiencies. Our internal control remediation efforts include the following:

• establishing adequate review and approval processes, controls and procedures based on roles and responsibilities of each accounting member;

• enhancing policies and procedures to retain adequate documentary evidence for certain management review controls in order to validate the completeness and accuracy of the underlying information; and

• redesigning controls related to the proper classification of a cash flow transaction.

#### Changes in Internal Control over Financial Reporting
Except for the material weaknesses disclosed above, there were no changes in our internal control over financial reporting that occurred during the period covered by this Annual Report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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| **Item 16A.** | **Audit Committee Financial Expert**  |

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The Board of Directors determined that Emilio B. Imbriglio, an independent director, meets the requirements to be designated an "audit committee financial expert" as such term is defined by the SEC. See "Item 6. Directors, Senior Management and Employees—Board Practices."

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| **Item 16B.** | **Code of Ethics**  |

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We have adopted a code of ethics, within the meaning of this Item 16B of Form 20-F under the Exchange Act. Our code of ethics applies to our Chief Executive Officer, Chief Financial Officer, Treasurer, Controller, principal accounting officer, and persons performing similar functions . Our code of ethics is available on our website at <u>www.birks.com.</u> If we amend the provisions of our code of ethics that apply to our Chief Executive Officer, Chief Financial Officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website at the same address within five business days following the date of such amendment or waiver. We also have a similar code of ethics that applies to our financial directors. The Company has also adopted a Code of Conduct that applies to all employees of the Company.

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| **Item 16C.** | **Principal Accountant Fees and Services**  |

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During fiscal 2025 and fiscal 2024, we retained KPMG LLP, our independent registered public accountant, to provide services in the following categories and amounts:

#### Audit Fees
The aggregate fees for professional services rendered by KPMG LLP for the audit and interim review of our consolidated financial statements was

$1,217,075 in fiscal 2025 and $760,350 in fiscal 2024 for the audit and interim review of our consolidated financial statements and auditor's involvement in a registration statement.

#### Audit Related Fees
During fiscal 2025 and fiscal 2024, KPMG LLP provided audit related services for a total amount of nil and nil, respectively.

#### Tax Fees
During fiscal 2025 and fiscal 2024, KPMG LLP provided tax advisory services for a total amount of $nil and $22,753, respectively.

#### All Other Fees
During fiscal 2025 and fiscal 2024, KPMG LLP provided other services for a total amount of $nil and $23,005, respectively, related to assurance reports.

#### Pre-Approval Policies and Procedures
The audit and corporate governance committee has established a pre-approval policy as described in Rule 2-01(c)(7)(i) of Regulation S-X. The audit and corporate governance committee approves in writing, in advance, any audit or non-audit services provided to Birks Group by the independent accountants that are not specifically disallowed by the Sarbanes-Oxley Act of 2002. None of the services described in Item 16C were approved by the audit and corporate governance committee pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X.

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| **Item 16D.** | **Exemptions from the Listing Standards for Audit Committees**  |

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Not applicable.

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| **Item 16E.** | **Purchases of Equity Securities by the Issuer and Affiliated Purchasers**  |

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We did not, nor did any affiliated purchaser, purchase any of our equity securities during fiscal 2025.

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|:---|:---|
| **Item 16F.** | **Change in Registrant's Certifying Accountant**  |

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Not applicable.

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|:---|:---|
| **Item 16G.** | **Corporate Governance**  |

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Our securities are listed on the NYSE American. There are no significant ways in which our corporate governance practices differ from those followed by domestic companies under the listing standards of that exchange except for proxy delivery requirements. The NYSE American requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings and requires that these proxies be solicited pursuant to a proxy statement that conforms to the proxy rules of the U.S. Securities and Exchange Commission. As a foreign private issuer, the Company is exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Act. The Company solicits proxies in accordance with applicable rules and regulations in Canada.

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| **Item 16H.** | **Mine Safety Disclosure**  |

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Not applicable.

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| **Item 16I.** | **Disclosure Regarding Foreign Jurisdictions that Prevent Inspections**  |

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Not applicable.

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Item 16J. Insider Trading Policies

We have adopted an insider trading policy, which governs the purchase, sale and other dispositions of our securities by our directors, officers and other employees. This policy promotes compliance with applicable securities laws and regulations, including those that prohibit insider trading. A copy of our Insider Trading Policy was filed as an exhibit to our annual report on Form 20-F filed with the SEC on July 16, 2024.

Item 16K. Cybersecurity Risk Management Strategy

The safety and security of our customers' and employees' personal information is of utmost importance to us. This includes working to put in place appropriate administrative, physical and technical cybersecurity safeguards to help protect the confidentiality, integrity, and availability of the data assets that keep our operation running and securely store the information in our care. We have developed and implemented a cybersecurity risk management program intended to protect the Company and its customers from data loss, unauthorized access, use or disclosure of data as well as to prevent service interruptions.

Our cybersecurity team assesses, identifies and manages risks related to cybersecurity threats and is responsible for:

• proactive detection and assessment of threats and vulnerabilities through vulnerability testing, penetration testing and attack simulation;

• development of risk-based action plans to manage identified vulnerabilities and implementation of new protocols and infrastructure improvements;

• cybersecurity incident investigations, with the assistance of third-party experts as required;

• monitoring threats to sensitive data and unauthorized access to Company systems, with assistance of third-party data loss prevention software and a third-party security operations center;

• developing and executing protocols to ensure that information regarding cybersecurity incidents is promptly shared with our executive officers, audit and corporate governance committee and Board of Directors, as appropriate, to allow for risk and materiality assessments and to consider disclosure and notice requirements;

• developing and implementing periodic training on cybersecurity, information security and threat awareness; and

• collaborating with law enforcement and other companies on cybersecurity incidents and best practices.

There were no cybersecurity incidents during the fiscal year 2025 that resulted in an interruption to our operations, known losses of any critical data or otherwise had a material impact on the Company's strategy, financial condition or results of operations. However, the scope and impact of any future incident cannot be predicted. See "Item 3D–Risk Factors" for more information on how material cybersecurity attacks may impact our business.

Governance

Our cybersecurity risk management program is overseen by our Chief Financial Officer ("CFO") and Chief Privacy Officer ("CPO"). The CFO assists the Board of Directors and our executive officers in fulfilling their responsibilities for cybersecurity governance, approval and oversight through the periodic reporting and review of security strategy and risk management practices. Our current CFO has over 15 years of experience in information security, and her background includes technical experience, strategy and architecture focused roles, cyber and threat experience, and various leadership roles. Our current CPO has over 20 years of experience in information security, and his background includes technical experience, strategy and architecture focused roles, cyber and threat experience, and various leadership roles. Our cybersecurity risk management program is integrated into our overall risk management processes and shares common reporting channels and governance processes that apply across the enterprise to other legal, compliance, strategic, operational, and financial risk governance programs.

Our Board of Directors recognizes the importance of robust cybersecurity management programs and is actively engaged in overseeing and reviewing the Company's cybersecurity risk profile and exposures. Our Board of Directors has delegated the oversight of our process for assessing, identifying and managing material risks related to cybersecurity threats to the audit and corporate governance committee.

The responsibilities of the audit and corporate governance committee include reviewing the cybersecurity threat landscape facing the Company, as well as our strategy, policies and procedures to mitigate cybersecurity risks and any significant cybersecurity incidents. The audit and corporate governance committee also considers the impact of emerging cybersecurity developments and regulations that may affect the Company.

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The audit and corporate governance committee meet periodically with relevant members of management who provide reports on cybersecurity matters including, among others: recent external cybersecurity threats and attack trends; updates to threat monitoring processes; cybersecurity awareness training and stress testing; cybersecurity plan; and cybersecurity programs. The audit and corporate governance committee has also directed management to inform the committee promptly and, when appropriate, the Board of Directors, of any investigation of a material cybersecurity incident. Where an update has not been provided directly to the Board of Directors, the audit and corporate governance committee provides the full Board of Directors with updates on cybersecurity risks and incidents and other matters as needed, and reports to the Board of Directors on an ad hoc basis with respect to material incidents and other developments that the audit and corporate governance committee believes should have the Board of Directors' consideration. The audit and corporate governance committee and the Board of Directors may engage third party advisors and experts and meet with the Company's external advisors on cybersecurity matters, as appropriate.

Item 17. Financial Statements

Not applicable.

Item 18. Financial Statements

The financial statements required by this item are found at the end of this Annual Report beginning on page F-1.

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#### PART III
**Item 19.** **Exhibits** <br>

The following exhibits are part of this Annual Report on Form 20-F.

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|:---|:---|
| **Exhibit<br>Number** | **Description of Document** |
| 1.1 | [Restated Articles of Incorporation of Birks Group Inc., effective as of November 14, 2005. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.](http://www.sec.gov/Archives/edgar/data/1179821/000090956705001182/t16549exv3w1.txt) |
| 1.2 | [Articles of Amendment of Birks Group Inc., effective as of October 1, 2013. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on July 25, 2014.](http://www.sec.gov/Archives/edgar/data/1179821/000119312514280412/d732195dex11.htm) |
| 1.3 | [Articles of Amendment of Birks Group Inc. effective as of October 3, 2014. Incorporated by referenced from Birks Group Inc.'s Form 20-F filed with the SEC on June 26, 2015.](http://www.sec.gov/Archives/edgar/data/1179821/000119312515237397/d943603dex13.htm) |
| 1.4 | [By-law No. One of Birks Group Inc. adopted on December 28, 1998 and amended on April 9, 2012. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on July 3, 2012.](http://www.sec.gov/Archives/edgar/data/1179821/000119312512293411/d361035dex12.htm) |
| 2.1 | [Form of Birks Class A voting share certificate as amended as of October 1, 2013. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on July 25, 2014.](http://www.sec.gov/Archives/edgar/data/1179821/000119312514280412/d732195dex21.htm) |
| 2.2 | [Description of Capital Stock. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 8, 2020.](http://www.sec.gov/Archives/edgar/data/1179821/000119312520189784/d947809dex441.htm) |
| 4.1 | [Agreement and Plan of Merger and Reorganization, dated as of April 18, 2005, as amended as of July 27, 2005, among Henry Birks & Sons Inc., Mayor's, Inc. and Birks Merger Corporation, a wholly-owned subsidiary of Henry Birks & Sons Inc. Incorporated by reference from the Henry Birks & Sons Inc. Registration Statement on Form F-4 originally filed with the SEC on July 27, 2005 and as subsequently amended on September 8, 2005, September 21, 2005 and September 29, 2005.](http://www.sec.gov/Archives/edgar/data/1179821/000090956705001489/t18022fv4za.htm#139) |
| 4.2 | [Form of Directors and Officers Indemnity Agreement. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on June 23, 2023.](http://www.sec.gov/Archives/edgar/data/1179821/000119312523172888/d414349dex42.htm) |
| 4.3 | [Agreement of Principal Lease between 7739907 Canada Inc. and Birks Group Inc. executed on March 17, 2017. Incorporated by reference from the Birks Group Inc.'s Form 6-K filed with the SEC on May 12, 2017.](http://www.sec.gov/Archives/edgar/data/1179821/000119312517170292/d428939dex992.htm) |
| 4.4 | [Employment Agreement between Miranda Melfi and Birks Group dated February 24, 2006. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on July 19, 2006.](http://www.sec.gov/Archives/edgar/data/1179821/000119312506149161/dex427.htm) |
| 4.5 | [Management Consulting Services Agreement between Birks Group Inc. and Gestofi S.A. entered into as of November 20, 2015. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on June 30, 2016.](http://www.sec.gov/Archives/edgar/data/1179821/000119312516637910/d256018dex418.htm) |
| 4.6 | [Birks Group Inc. Long-Term Incentive Plan. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on July 19, 2006.](http://www.sec.gov/Archives/edgar/data/1179821/000119312506149161/dex444.htm) |
| 4.7 | [Birks Group Inc. Omnibus Long-Term Incentive Plan as amended on January 11, 2022. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on June 24, 2022](http://www.sec.gov/Archives/edgar/data/1179821/000119312516693905/d225654dex991.htm) |
| 4.8 | [Form of Stock Appreciation Rights Agreement. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 18, 2007.](http://www.sec.gov/Archives/edgar/data/1179821/000119312507136863/dex461.htm) |
| 4.9 | [Loan Agreement between Birks Group Inc. and Investissement Québec entered into on July 8, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 8, 2020.](http://www.sec.gov/Archives/edgar/data/1179821/000119312520189784/d947809dex415.htm) |
| 4.10 | [Amendment dated February 18, 2021, to the Loan Agreement between Birks Group Inc. and Investissement Québec entered into on July 8, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 17, 2021.](http://www.sec.gov/Archives/edgar/data/1179821/000119312521193376/d187171dex416.htm) |
| 4.11\* | [Amendment dated July 14, 2025, to the Loan Agreement between Birks Group Inc. and Investissement Québec entered into on July 8, 2020 and to the Loan Agreement between Birks Group Inc. and Investissement Québec entered into on August 24, 2021.](d81203dex411.htm) |

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| 4.12 | [Amended and Restated Cash Advance Agreement between Birks Group Inc. and Montrovest B.V., dated June 8, 2011. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 8, 2011.](http://www.sec.gov/Archives/edgar/data/1179821/000119312511184958/dex466.htm) |
| 4.13+ | [Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos, dated January 4, 2012. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on June 23, 2023.](http://www.sec.gov/Archives/edgar/data/1179821/000119312511184958/dex465.htm) |
| 4.14+ | [Amendment Letter to Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos dated April 18, 2013. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on June 23, 2023.](http://www.sec.gov/Archives/edgar/data/1179821/000119312523172888/d414349dex413.htm) |
| 4.15+ | [Amendment Letter to Employment Agreement between Birks Group Inc. and Jean-Christophe Bédos effective October 1, 2015. Incorporated by reference from the Birks Group Inc.'s Form 20-F filed with the SEC on June 23, 2023.](http://www.sec.gov/Archives/edgar/data/1179821/000119312523172888/d414349dex414.htm) |
| 4.16 | [Canadian Offering Memorandum, dated as of April 27, 2012. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-1 filed with the SEC on April 27, 2012.](http://www.sec.gov/Archives/edgar/data/1179821/000119312512191750/d341067dex1059.htm) |
| 4.17 | [Form of Subscription Rights Certificate. Incorporated by reference from the Birks Group Inc. Registration Statement on Form F-1 filed with the SEC on May 24, 2012.](http://www.sec.gov/Archives/edgar/data/1179821/000119312512247330/d341067dex42.htm) |
| 4.18 | [Consulting Services Agreement between Carlo Coda Nunziante and Birks Group Inc., dated March 31, 2018. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 3, 2018.](http://www.sec.gov/Archives/edgar/data/1179821/000119312518212317/d659798dex442.htm) |
| 4.19\*+ | [Amendment Letter to Consulting Services Agreement between Carlo Coda Nunziante and Birks Group Inc. dated March 31, 2018, effective June 12, 2024.](d81203dex419.htm) |
| 4.20 | [Credit Agreement by and among Crystal Financial LLC, as Agent, the lenders that are parties thereto as the Lenders, and Birks Group Inc. dated as of June 29, 2018. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 3, 2018.](http://www.sec.gov/Archives/edgar/data/../../../ix?doc=/Archives/edgar/data/0001179821/000119312524181045/d795080d20fa.htm) |
| 4.21 | [Amendment No.1 to the Credit Agreement by and among by and among the lenders thereto as lenders, Crystal Financial LLC, as agent, and Birks Group Inc. dated as of April 18, 2019. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 8, 2020.](http://www.sec.gov/Archives/edgar/data/1179821/000119312520189784/d947809dex437.htm) |
| 4.22 | [Amendment No.2 to the Credit Agreement by and among by and among the lenders thereto as lenders, Crystal Financial LLC, as agent, and Birks Group Inc. dated as of July 3, 2020. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 17, 2021.](http://www.sec.gov/Archives/edgar/data/1179821/000119312521193376/d187171dex437.htm) |
| 4.23 | [Amendment No.3 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC, as administrative agent and Birks Group Inc. dated as of August 31, 2021<u>. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312522180536/d369158dex440.htm) |
| 4.24 | [Amendment No.4 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC, as administrative agent and Birks Group Inc. dated as of December 15, 2021. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312522180536/d369158dex441.htm) |
| 4.25 | [Amendment No.5 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC, as administrative agent and Birks Group Inc. dated as of December 24, 2021. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312522180536/d369158dex442.htm) |
| 4.26 | [Amendment No.6 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC, as administrative agent and Birks Group Inc. dated as of June 26, 2024. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex423.htm) |
| 4.27\*++ | [Amendment No.7 to the Credit Agreement by and among the lenders thereto as lenders, Crystal Financial LLC (D/B/A SLR Credit Solutions), as administrative agent and Birks Group Inc. dated as of July 8, 2025.](d81203dex427.htm) |
| 4.28 | [Employment Agreement dated June 29, 2018 entered into between Birks Group Inc. and Maryame El Bouwab. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on July 13, 2018.](http://www.sec.gov/Archives/edgar/data/1179821/000119312518217710/d511086dex991.htm) |
| 4.29 | [Employment Agreement dated December 18, 2019 entered into between Birks Group Inc. and Katia Fontana. Incorporated by reference from the Birks Group Inc. Annual report on Form 20-F filed with the SEC on July 8, 2020.](http://www.sec.gov/Archives/edgar/data/1179821/000119312520189784/d947809dex440.htm) |
| 4.30 | [Loan Agreement between Birks Group Inc. and Investissement Québec entered into on August 24, 2021, as amended. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 18, 2021.](http://www.sec.gov/Archives/edgar/data/1179821/000119312521333792/d248301d6k.htm#tx248301_9) |
| 4.31 | [Amended and Restated 2021 Credit Agreement by and among Wells Fargo Capital Finance Corporation Canada, as Administrative Agent, the Lenders that are parties thereto as the Lenders, and Birks Group Inc., as Borrower, dated as of December 24, 2021. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on June 24, 2022.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312522180536/d369158dex448.htm) |

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| &nbsp;&nbsp;&nbsp;&nbsp;4.32 | [First Amendment to Amended and Restated Credit Agreement by and among Birks Group Inc., as Borrower, Cash, Gold & Silver Inc. and Birks Investments Inc. as Guarantors, Wells Fargo Capital Finance Corporation Canada, as Administrative Agent, and the Lenders that are parties thereto as the Lenders, dated as of June 26, 2024. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex428.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.33\*++ | [Second Amendment to Amended and Restated Credit Agreement by and among Birks Group Inc., as Borrower, Cash, Gold & Silver Inc. and Birks Investments Inc. as Guarantors, Wells Fargo Capital Finance Corporation Canada, as Administrative Agent, and the Lenders that are parties thereto as the Lenders, dated as of July 8, 2025.](d81203dex433.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.34 | [Master Lease Agreement between Varilease Finance, Inc. and Birks Group Inc. made as of July 14, 2023 ("Master Lease Agreement"). <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex429.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.35 | [Schedule No. 01 to the Master Lease Agreement entered into between Varilease Finance, Inc. and Birks Group Inc. dated July 14, 2023. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex430.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.36 | [Schedule No. 02 to the Master Lease Agreement entered into between Varilease Finance, Inc. and Birks Group Inc. dated February 1, 2024. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex431.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.37 | [Schedule No. 03 to the Master Lease Agreement entered into between Varilease Finance, Inc. and Birks Group Inc. dated February 1, 2024. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex432.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.38 | [Schedule No. 04 to the Master Lease Agreement entered into between Varilease Finance, Inc. and Birks Group Inc. dated June 3, 2024. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex433.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.39 | [Shareholder Support Letter entered into between Mangrove Holding S.A. and Birks Group Inc. on November 27, 2024. Incorporated by reference from the Birks Group Inc. Form 6-K filed with the SEC on November 27, 2024.](http://www.sec.gov/Archives/edgar/data/1179821/000119312524267273/d882038dex998.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.40\* | [Loan Agreement entered into between Mangrove Holding S.A. and Birks Group Inc. dated June 26, 2025.](d81203dex440.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.41\*++ | [<u>Share Purchase Agreement entered into between Birks Group Inc. and</u> with the shareholders of 1067830 Ontario Limited (the "Vendors") and <u>Jordan Sutkiewicz as representatives of the Vendors dated June 6, 2025.</u>](d81203dex441.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.42\*+ | [Amendment No. 1 to the Share Purchase Agreement dated June 6, 2025 between Birks Group Inc. and with the shareholders of 1067830 Ontario Limited (the "Vendors") and Jordan Sutkiewicz as representative of the Vendors entered into on June 28, 2025.](d81203dex442.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.43\* | [Shareholder Support Letter entered into between Mangrove Holding S.A., Montel S.à.r.l. and Birks Group Inc. on July 21, 2025.](d81203dex443.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.44\* | [Support Letter entered into between Davide Barberis Canonico and Birks Group Inc. on July 21, 2025.](d81203dex444.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.45\* | [Support Letter entered into between Marco Pasteris and Birks Group Inc. on July 21, 2025.](d81203dex445.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;8.1\* | [Subsidiaries of Birks Group Inc.](d81203dex81.htm) |
| 11.1++ | [Birks Group Inc. Policy, Procedures and Guidelines Governing Insider Trading and Disclosure. Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex111.htm) |
| 12.1\* | [Certification of President and Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).](d81203dex121.htm) |
| 12.2\* | [Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a).](d81203dex122.htm) |
| 13.1\* | [Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](d81203dex131.htm) |
| 13.2\* | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](d81203dex132.htm) |
| 15.1\* | [Consent of KPMG LLP.](d81203dex151.htm) |
| 97.1 | <u>[Birks Group Inc. Policy Regarding the Mandatory Recovery of Compensation](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex971.htm)</u>[. <u>Incorporated by reference from the Birks Group Inc. Annual Report on Form 20-F filed with the SEC on July 16, 2024.</u>](http://www.sec.gov/Archives/edgar/data/1179821/000119312524179721/d795080dex971.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104.1\* | The cover page for the Company's Annual Report on Form 20-F for the year ended March 29, 2025, has been formatted in Inline XBRL and is contained in Exhibit 101. |

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\* Filed herewith.

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| + | Certain confidential information contained in this exhibit has been redacted pursuant to Item 4 of the "Instructions As To Exhibits" of Form 20-F because (i) the Company customarily and actually treats the redacted information as private or confidential and (ii) the omitted information is not material. The Company hereby agrees to furnish an unredacted copy of the exhibit to the Commission upon request.  |

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|:---|:---|
| ++ | Schedules and other similar attachments to this exhibit have been omitted pursuant to the Instructions As To Exhibits of Form 20-F. The Registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request.  |

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#### SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

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|:---|:---|
|  | **BIRKS GROUP INC.** |
| Date: July 25, 2025 | /s/ Katia Fontana |
|  | Katia Fontana, |
|  | *Vice President and Chief Financial Officer* |

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#### INDEX TO FINANCIAL STATEMENTS

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|:---|:---|
|  | Page |
| [Report of Independent Registered Public Accounting Firm](#fin81203_1) | F-2 |
| [Consolidated Balance Sheets as of March 29, 2025 and March 30, 2024](#fin81203_2) | F-4 |
| [Consolidated Statements of Operations for the Fiscal Years Ended March 29, 2025, March 30, 2024, and March 25, 2023](#fin81203_3) | F-5 |
| [Consolidated Statements of Other Comprehensive Income (loss) for the Fiscal Years Ended March 29, 2025, March 30, 2024, and March 25, 2023](#fin81203_4) | F-6 |
| [Consolidated Statements of Changes in Stockholders' Equity (deficiency) for the Fiscal Years Ended March 29, 2025, March 30, 2024, and March 25, 2023](#fin81203_5) | F-7 |
| [Consolidated Statements of Cash Flows for the Fiscal Years Ended March 29, 2025, March 30, 2024, and March 25, 2023](#fin81203_6) | F-8 |
| [Notes to Consolidated Financial Statements](#fin81203_7) | F-9 |

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#### **Table of Contents**

#### Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors

Birks Group Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Birks Group Inc. (the Company) as of March 29, 2025 and March 30, 2024, the related consolidated statements of operations, other comprehensive income (loss), changes in stockholders' equity (deficiency), and cash flows for each of the years ended March 29, 2025, March 30, 2024 and March 25, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 29, 2025 and March 30, 2024, and the results of its operations and its cash flows for each of the years ended March 29, 2025, March 30, 2024 and March 25, 2023, in conformity with U.S. generally accepted accounting principles.

#### Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

#### Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

#### Assessment of the Company's ability to continue as a going concern
As discussed in Note 1 to the consolidated financial statements, the Company prepares its consolidated financial statements on a going concern basis. The Company believes that it will be able to adequately fund its operations and meet its cash flow requirements for at least twelve months from the date of issuance of these financial statements. The Company funds its operations primarily through committed financing under its senior secured credit facility and its senior secured term loan. The Company's ability to meet its cash flow requirements in order to fund its operations is dependent upon its ability to attain profitable operations, successfully integrate the strategic acquisition, adhere to the terms of its committed financings, obtain favorable payment terms from suppliers, as well as to maintain minimum excess availability, as defined under its senior secured credit facility and its senior secured term loan. Management estimated and forecasted cash flows and excess availability levels under various scenarios for at least the next twelve months from the date the financial statements were authorized for issuance.

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#### **Table of Contents**
We identified the assessment of the Company's ability to continue as a going concern and related disclosures as a critical audit matter. There was uncertainty associated with the future outcome of events and circumstances underlying significant assumptions. In addition, there was significant auditor judgment involved in assessing management's cash flow forecast under various scenarios, specifically forecasted sales and gross margins, operating costs, favorable payment terms from suppliers, excess availability levels and working capital ratio.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of the internal control related to management's going concern assessment. We assessed management's ability to forecast by comparing prior year forecasts to actual results and excess availability achieved. We assessed management's estimated forecasted sales, gross margins and operating costs used in management's forecasted cash flows, excess availability levels and working capital ratio and adherence to the terms of its committed financings under various scenarios. This assessment included the impact of the newly acquired retail locations on the forecasted cash flows. We assessed the financial support letters received by management. We evaluated the assumptions in the forecasted cash flows and the various scenarios, related to cost reductions and obtaining favorable payment terms from suppliers by understanding the nature of management's plans and whether they were probable. We examined the results of operations and excess availability levels after year-end, up to the date of our auditor's report, and compared them to management's forecasted excess availability levels. We assessed the adequacy of the disclosures related to the application of the going concern assessment.

#### Evaluation of the reserve for slow-moving finished goods inventories
As discussed in Note 4 to the consolidated financial statements, the inventories reserve balance as of March 29, 2025 is $2,436 thousand, which includes the reserve for slow-moving finished goods inventories. As discussed in Note 2(e), inventories are stated at the lower of average cost and net realizable value, which is the estimated selling price in the ordinary course of business. The reserve for slow-moving finished goods inventories is equal to the difference between the cost of inventories and the estimated selling prices, resulting in the expected gross margin There is estimation uncertainty in relation to the identification of slow-moving finished goods inventories which are based on certain criteria established by the Company's management. The criteria include consideration of operational decisions by management to discontinue the ordering of the inventory based on sales trends, market conditions, and the aging of the inventories. Estimation uncertainty also exists in determining the expected selling prices and associated gross margins through normal sales channels, which are based on assumptions about future demand and market conditions for those slow-moving inventories.

We identified the evaluation of the reserve for slow-moving finished goods inventories as a critical audit matter. A higher degree of auditor judgement and increased audit effort was required to evaluate the identification of the slow-moving finished goods inventories based on the Company's established criteria, and the expected selling prices for those slow-moving finished goods inventories.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the slow-moving inventory reserve, including the control related to the identification of the slow-moving finished goods inventories based on the Company's established criteria and the estimated reserve percentage. We evaluated the criteria used by the Company to identify slow-moving finished goods inventories by considering the aging of finished goods inventories on-hand, historic inventory turnover, historic sales trends and historic gross margin analysis. We evaluated the Company's criteria and assumptions used in the reserve for slow-moving finished goods inventories by analyzing the reserve trends, movements of the specific inventory status year-over-year and business plans, and the impact of changes on the reserve. We compared the estimated selling price and the associated gross margins utilized in the prior year to the actual gross margins in the current year to evaluate the Company's ability to accurately estimate the reserve. We developed an expectation of the slow-moving reserve using historic inventory activity and gross margin rates and compared our expectation to the amount recorded by the Company. We assessed the sufficiency of the reserves at year-end by analyzing sales and gross margins subsequent to year-end.

/s/ KPMG LLP

We have served as the Company's auditor since 2000.

Montreal, Canada

July 25, 2025

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BIRKS GROUP INC.

Consolidated Balance Sheets

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|:---|:---|:---|
|  | As of | As of |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
| Assets |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1509 | $1783 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable and other receivables | 6608 | 8455 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 116277 | 99067 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets | 2072 | 2913 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 126466 | 112218 |
| Long-term receivables | 1084 | 1571 |
| Equity investment in joint venture | 5169 | 4122 |
| Property and equipment | 25380 | 25717 |
| Operating lease right-of-use asset | 34964 | 51753 |
| Intangible assets and other assets | 3017 | 7887 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total non-current assets | 69614 | 91050 |
| Total assets | $196080 | $203268 |
| Liabilities and Stockholders' Equity (Deficiency) |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank indebtedness | $73630 | $63372 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 58114 | 43011 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 6053 | 6112 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of long-term debt | 4860 | 4352 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 6929 | 6430 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 149586 | 123277 |
| Long-term debt | 21374 | 22587 |
| Long-term portion of operating lease liabilities | 38629 | 59881 |
| Other long-term liabilities | 4502 | 2672 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term liabilities | 64505 | 85140 |
| Stockholders' equity (deficiency): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class A common stock – no par value, unlimited shares authorized, issued and outstanding 11,876,717 (11,447,999 as of March 30, 2024) | 42854 | 40725 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class B common stock – no par value, unlimited shares authorized, issued and outstanding 7,717,970 | 57755 | 57755 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock – no par value, unlimited shares authorized, none issued |  |  |
| Additional paid-in capital | 19719 | 21825 |
| Accumulated deficit | (138295) | (125476) |
| Accumulated other comprehensive income (loss) | (44) | 22 |
| Total stockholders' equity (deficiency) | (18011) | (5149) |
| Total liabilities and stockholders' equity (deficiency) | $196080 | $203268 |

---

See accompanying notes to consolidated financial statements

---

| | |
|:---|:---|
| On behalf of the Board of Directors: |  |
| /s/ Jean-Christophe Bédos | /s/ Emilio B. Imbriglio |
| Jean-Christophe Bédos, Director | Emilio B. Imbriglio, Director |

---

------

BIRKS GROUP INC.

Consolidated Statements of Operations

---

| | | | |
|:---|:---|:---|:---|
|  | Fiscal Year | Fiscal Year | Fiscal Year |
|  | March 29, 2025 | March 30, 2024 | March 25, 2023 |
| Net sales | $177807 | $185275 | $162950 |
| Cost of sales | 111499 | 111720 | 94990 |
| Gross profit | 66308 | 73555 | 67960 |
| Selling, general and administrative expenses | 59518 | 65705 | 66095 |
| Depreciation and amortization | 7733 | 6639 | 5673 |
| Impairment of long-lived assets | 4592 |  |  |
| Total operating expenses | 71843 | 72344 | 71768 |
| Operating income (loss) | (5535) | 1211 | (3808) |
| Interest and other financial costs | 9712 | 8007 | 5581 |
| (Loss) income before taxes and equity in earnings of joint venture | (15247) | (6796) | (9389) |
| Income taxes (benefits) |  |  |  |
| Equity in earnings of joint venture, net of taxes of $0.9 million ($0.8 million in fiscal 2024 and $0.7 million in fiscal 2023) | 2428 | 2165 | 1957 |
| Net (loss) income, net of tax | $(12819) | $(4631) | $(7432) |
| Weighted average common shares outstanding: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 19357 | 19058 | 18692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | 19357 | 19058 | 18692 |
| Net (loss) income per common share: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | $(0.66) | $(0.24) | $(0.40) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | (0.66) | (0.24) | (0.40) |

---

See accompanying notes to consolidated financial statements

------

BIRKS GROUP INC.

Consolidated Statements of Other Comprehensive Income (loss)

---

| | | | |
|:---|:---|:---|:---|
|  | Fiscal Year Ended | Fiscal Year Ended | Fiscal Year Ended |
|  | March 29, 2025 | March 30, 2024 | March 25, 2023 |
|  | | (In thousands) | |
|  Net (loss) income | $(12819) | $(4631) | $(7432) |
|  Other comprehensive (loss) income: |  |  |  |
| Foreign currency translation adjustments <sup>(1)</sup> | (66) | 58 | (6) |
|  Total other comprehensive (loss) income | $(12885) | $(4573) | $(7438) |

---

(1) Item that may be reclassified to the Statement of Operations in future periods

See accompanying notes to consolidated financial statements.

------

BIRKS GROUP INC.

Consolidated Statements of Changes in Stockholders' Equity (deficiency)

(In thousands of dollars except shares amounts)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Voting common<br>stock<br>outstanding | Voting<br>common<br>stock | Additional<br>paid-in capital | Accumulated<br>deficit | Accumulated<br>other<br>comprehensive<br>loss | Total |
|  Balance at March 26, 2022 | 18515913 | $95638 | $23669 | $(113413) | $(30) | $5864 |
|  Net loss |  |  |  | (7432) |  | (7432) |
|  Cumulative translation adjustment<sup>(1)</sup> |  |  |  |  | (6) | (6) |
|  Total comprehensive loss |  |  |  |  |  | (7438) |
|  Compensation expense resulting from equity settled<br> restricted stock units granted to Management |  |  | 549 |  |  | 549 |
|  Exercise of stock options and warrants | 315056 | 1136 | (714) |  |  | 422 |
| Balance at March 25, 2023 | 18830969 | 96774 | 23504 | (120845) | (36) | (603) |
|  Net loss |  |  |  | (4631) |  | (4631) |
|  Cumulative translation adjustment<sup>(1)</sup> |  |  |  |  | 58 | 58 |
|  Total comprehensive loss |  |  |  |  |  | (4573) |
|  Compensation expense resulting from equity settled<br> restricted stock units granted to Management |  |  | 27 |  |  | 27 |
|  Settlement of stock units | 335000 | 1706 | (1706) |  |  |  |
|  Balance at March 30, 2024 | 19165969 | 98480 | 21825 | (125476) | 22 | (5149) |
|  Net loss |  |  |  | (12819) |  | (12819) |
|  Cumulative translation adjustment<sup>(1)</sup> |  |  |  |  | (66) | (66) |
|  Total comprehensive loss |  |  |  |  |  | (12885) |
|  Settlement of stock units | 408718 | 2088 | (2088) |  |  |  |
| Exercise of stock options | 20000 | 41 | (18) |  |  | 23 |
|  Balance at March 29, 2025 | 19594687 | $100609 | $19719 | $(138295) | $(44) | $(18011) |

---

(1) The change in cumulative translation adjustments is not due to reclassifications out of accumulated other comprehensive income (loss).

See accompanying notes to consolidated financial statements.

------

BIRKS GROUP INC.

Consolidated Statements of Cash Flows

---

| | | | |
|:---|:---|:---|:---|
|  | Fiscal Year Ended | Fiscal Year Ended | Fiscal Year Ended |
|  | March 29, 2025 | March 30, 2024 | March 25, 2023 |
|  | In thousands | In thousands | In thousands |
| Cash flows from (used in) operating activities: |  |  |  |
| Net income (loss) | $(12819) | $(4631) | $(7432) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 7733 | 6639 | 5673 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of long-lived assets | 4592 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net change of operating lease right-of-use assets and liabilities | (4039) | (1372) | (1544) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leasehold inducements received | 1889 | 825 | 661 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease modifications | (1320) | 31 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt costs | 134 | 214 | 190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation expenses resulting from equity settled restricted stock units |  | 27 | 549 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity in earnings of joint venture | (2428) | (2165) | (1957) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividend received from investment in joint venture | 1381 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operating activities, net | 222 | 26 | 232 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Increase) decrease in: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, other receivables and long-term receivables | 1840 | 4176 | (260) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (17210) | (10710) | (9450) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets | 841 | (219) | (872) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 15257 | 5521 | 9044 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities and other long-term liabilities | 2015 | 1468 | (1759) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by operating activities | (1912) | (170) | (6925) |
| Cash flows (used in) provided by investing activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions to property and equipment | (7007) | (6282) | (8378) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additions to intangible assets and other assets | (542) | (953) | (1036) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (7549) | (7235) | (9414) |
| Cash flows provided by (used in) financing activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in bank indebtedness | 10202 | 5372 | 14642 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Drawdown on capital lease funding | 3535 | 4208 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in long-term debt |  | 1552 | 2748 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of long-term debt | (1898) | (2012) | (2095) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of obligations under finance lease | (2549) | (1091) | (72) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of loan origination fees and costs | (126) | (103) | (57) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise of stock options and warrants | 23 |  | 422 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 9187 | 7926 | 15588 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (decrease) increase in cash and cash equivalents | (274) | 521 | (751) |
| Cash and cash equivalents, beginning of year | 1783 | 1262 | 2013 |
| Cash and cash equivalents, end of year | $1509 | $1783 | $1262 |
| Supplemental disclosure of cash flow information: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $8458 | $7802 | $5087 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash transactions: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment and intangible assets additions included in accounts payable and accrued liabilities | $1057 | $1455 | $2283 |

---

See accompanying notes to consolidated financial statements.

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BIRKS GROUP INC.

Notes to Consolidated Financial Statements

Years ended March 29, 2025, March 30, 2024 and March 25, 2023

Birks Group Inc. ("Birks Group" or "Birks" or "the Company") is incorporated under the Canada Business Corporations Act. The principal business activities of the Company and its subsidiaries are the design of fine jewelry and the operation of retail sale of luxury jewelry, timepieces and gifts. The Company's consolidated financial statements are prepared using a fiscal year which consists of 52 or 53 weeks and ends on the last Saturday in March of each year. The fiscal years ended March 29, 2025 and March 25, 2023 consist of fifty-two week periods, whereas the fiscal year ended March 30, 2024 consists of a fifty-three week period.

1. Basis of presentation:

Throughout these consolidated financial statements, the Company refers to the fiscal year ending March 29, 2025, as fiscal 2025, and the fiscal years ended March 30, 2024, and March 25, 2023, as fiscal 2024 and 2023, respectively. Our fiscal year ends on the last Saturday in March of each year.

These consolidated financial statements, which include the accounts of Birks Group for all periods presented for the fiscal years ended March 29, 2025, March 30, 2024, and March 25, 2023, are reported in accordance with accounting principles generally accepted in the U.S. These principles require management to make certain estimates and assumptions that affect amounts reported and disclosed in the financial statements and related notes.

The most significant estimates and judgments include the assessment of the going concern assumption, the valuation of inventories, and accounts receivable, deferred tax assets, and the recoverability of long-lived assets and right of use assets. Actual results could differ from these estimates. Periodically, the Company reviews all significant estimates and assumptions affecting the financial statements relative to current conditions and records the effect of any necessary adjustments. All significant intercompany accounts and transactions have been eliminated upon consolidation.

The consolidated financial statements are presented in Canadian dollars, the Company's functional and reporting currency.

Future operations

These financial statements have been prepared on a going concern basis in accordance with generally accepted accounting principles in the U.S. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company funds its operations primarily through committed financing under its senior secured credit facility and its senior secured term loan described in Note 6. The senior secured credit facility along with the senior secured term loan are used to finance working capital, finance capital expenditures, provide liquidity to fund the Company's day-to-day operations and for other general corporate purposes.

The Company believes recent general economic conditions, business and retail climates and geopolitical instability, which includes heightened inflation, stock market volatility and high interest rates and tariffs and retaliatory tariffs, could lead to a slow-down in certain segments of the global economy and affect customer behaviour and the amount of discretionary income spent by potential customers to purchase the Company's products. If global economic, financial market and geopolitical conditions persist or worsen, the Company's sales may decrease, and the Company's financial condition and results of operations may be adversely affected.

The Company continues to and expects to continue to operate through its senior secured credit facility and senior secured term loan. The Company depends on these facilities to continue to operate its business. These agreements are scheduled to mature in December 2026.

For fiscal 2025, the Company recorded a net loss of $12.8 million, $4.6 million in fiscal 2024, and $7.4 million in fiscal 2023. The Company used net cash flows from operations of $1.9 million in fiscal 2025, $0.2 million in fiscal 2024 and $6.9 million in fiscal 2023. The Company had a negative working capital (defined as current assets less current liabilities) of $23.1 million as at March 29, 2025 and $11.1 million as at March 30, 2024, which has deteriorated over the past several years. The Company has continued to increase its bank indebtedness each year over the past several years and related interest expense, and as of March 29, 2025, had a bank indebtedness balance of $73.6 million. There has been no equity infusion in the Company in many years resulting in a shareholders' deficiency of $18 million as of March 29, 2025.

On December 24, 2021, the Company entered into an amended and restated senior secured revolving credit facility ("Amended Credit Facility") with Wells Fargo Capital Finance Corporation Canada and an amended and restated senior secured term loan ("Amended Term Loan") with Crystal Financial LLC (dba SLR Credit Solutions) ("SLR"). The Amended Credit Facility and Amended Term Loan extended the maturity date of the Company's pre-existing loans from October 2022 to December 2026.

On August 24, 2021, the Company entered into a 10-year loan agreement with Investissement Québec, the sovereign fund of the province of Québec, for an amount of up to $4.3 million to be used specifically to finance the digital transformation of the Company through the implementation of an omni-channel e-commerce platform and enterprise resource planning system. As of March 29, 2025 and March 30, 2024, the Company has $4.3 million outstanding on the loan. On July 8, 2020, the Company secured a six-year term loan with Investissement Québec, in the amount of $10.0 million, as amended. The secured term loan was used to fund the working capital needs of the Company, of which $2.8 million is outstanding at March 29, 2025 ($4.9 million at March 30, 2024).

------

Both loans with Investissement Québec require the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. The working capital ratio of 1.01 may be lower in any given year if a tolerance letter accepting a lower working capital ratio is received from Investissement Québec. During fiscal 2024, the Company received a tolerance letter from Investissement Québec that allowed the Company, as at March 30, 2024, to tolerate a working capital ratio of 0.97. As at March 30, 2024, the working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) was 0.96. On July 3, 2024, the Company obtained a waiver from Investissement Québec with respect to the requirement to meet the working capital ratio at March 30, 2024. Furthermore, on July 12, 2024, the Company received a tolerance letter from Investissement Québec that allowed the Company, as at March 29, 2025, to tolerate a working capital ratio of 0.90. As at March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for the fiscal years ending March 29, 2025 and March 28, 2026 to 0.88. Starting in fiscal 2026 and for the duration of the loan, the interest rate will be adjusted depending on the current ratio calculated at year end.

There is no assurance the Company will meet its covenant at March 28, 2026 or for future years, or that if not met, waivers would be available. If a waiver is not obtained, cross defaults with our Amended Credit Facility and our Amended Term Loan would arise.

On July 15, 2024, the Company obtained a support letter (the "Shareholder Support Letter") from one if its controlling shareholders, Mangrove Holding S.A. ("Mangrove"), providing financial support in an amount of up to $3.75 million that was available until July 31, 2025, of which up to $2.75 million was available prior to January 1, 2025 and an additional amount of up to $1.0 million would be available after January 1, 2025. These amounts were available to be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2025, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in maintaining minimum excess availability levels at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under this support letter will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2025. On November 27, 2024, the support letter was extended until December 31, 2025.

On June 26, 2025, the Shareholder Support Letter was terminated and replaced with a loan agreement entered into between Mangrove and the Company whereby Mangrove advanced $3.75 million of additional indebtedness to fund the Company's working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026.

In conjunction with the closing of the European Acquisition, on July 8, 2025 (see Note 18), SLR provided the Company with an additional term loan of $13.5 million to fund the European Acquisition and to fund ordinary course working capital, at the same interest rate as the current term loan with SLR which is CORRA plus (i) a CORRA adjustment of 0.32% and (ii) 7.75%, and is repayable, in full, on December 24, 2026.

On July 21, 2025, the Company obtained support letters providing financial support to the Company for an aggregate total amount of up to $1.5 million from (i) Mangrove (one of its the Company's controlling shareholders) for up to $500,000, (ii) Davide Barberis Canonico (a member of the Company's Board of Directors) for up to $800,000, and (iii) Marco Pasteris (the Company's Vice-President, Finance) for $200,000. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2026, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in maintaining minimum excess availability levels at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under these support letters will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2026.

In addition, on July 21, 2025, the Company obtained from Mangrove a deferral of interest payments payable in relation to the cash advance outstanding of U.S. $1.5 million and the Mangrove Loan of $3.75 million, of up to a maximum of $813,227, effective immediately and through to July 31, 2026.

The Company's ability to meet its cash flow requirements in order to fund its operations is dependent upon its ability to attain profitable operations, adhere to the terms of its committed financings, successfully integrate the strategic acquisitions, obtain favorable payment terms from suppliers as well as to maintain minimum excess availability as defined under its Amended Credit Facility and its Amended Term Loan. In addition to maintaining minimum excess availability at all times as defined in the Amended Credit Facility and Amended Term Loan, other loans have a working capital covenant to adhere to at the end of each fiscal year. In the event that excess availability falls below the minimum requirement, this would be considered an event of default under the Amended Credit Facility and under the Amended Term Loan, that would result in the outstanding balances borrowed under the Company's Amended Credit facility and its Amended Term Loan becoming due immediately, which would also result in cross defaults on the Company's other borrowings. Similarly, both the Company's Amended Credit Facility and its Amended Term Loan are subject to cross default provisions with all other loans pursuant to which the Company is in default of any other loan, the Company will immediately be in default of both the Amended Credit Facility and the Amended Term Loan. The Company met its excess availability requirements as of and throughout the fiscal year ended March 29, 2025 and as of the date these financial statements were authorized for issuance, as well as for fiscal 2024 and fiscal 2023. In addition, the Company expects to have minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan for at least the next twelve months from the date of issuance of these financial statements.

The Company's lenders under its Amended Credit Facility and its Amended Term Loan may impose, at any time, discretionary reserves, which would lower the level of borrowing availability under the Company's Amended Credit Facility and its Amended Term Loan (customary for asset-based loans), at their reasonable discretion, to: (i) ensure that the Company maintains adequate liquidity for the operation of its business, (ii) cover any deterioration in the amount of value of the collateral, and (iii) reflect impediments to the lenders to realize upon the collateral. There is no limit to the amount of discretionary reserves that the Company's lenders may impose at their reasonable discretion. No discretionary reserves were imposed during fiscal 2025, fiscal 2024 and fiscal 2023 by the Company's lenders.

Should a substantial doubt exist in the Company's ability to continue as a going concern, this would trigger an event of default on both the Amended Credit Facility and the Amended Term Loan, and a cross-default on the Company's other loans.

The Amended Credit Facility and the Amended Term Loan are repayable in December 2026. The Company intends to renew or refinance these debts prior to maturity.

The Company's ability to make scheduled payments of principal, or to pay the interest, or to fund planned capital expenditures and store operations will also depend on its ability to maintain adequate levels of available borrowing, obtain favorable payment terms from suppliers and its future performance, as well as the successful integration of strategic acquisitions, which to a certain extent, is subject to general economic, financial, competitive, legislative and regulatory factors, as well as other events that are beyond the Company's control.

------

The Company continues to be actively engaged in identifying alternative sources of financing that may include raising additional funds through public or private equity, the disposal of assets, and debt financing, including funding from government sources. The incurrence of additional indebtedness would result in increased debt service obligations and could result in operating and financing covenants that could restrict the Company's operations. Financing may be unavailable in amounts or on terms acceptable to the Company if at all, which may have a material adverse impact on its business, including its ability to continue as a going concern.

Certain adverse conditions and events outlined above require consideration of management's plans, which management believes mitigate the effect of such conditions and events. Management plans include continuing to manage liquidity actively, as well as managing liquidity measures such as cost reductions, which include monitoring spend, reducing marketing and general operating expenses, postponement of certain capital expenditures obtaining favorable payment terms from suppliers, obtain moratorium of interest payments on loans from majority shareholders and obtain support letters, all of which allow for adherence to excess availability requirements (refer to note 18). Notwithstanding, the Company believes that it will be able to adequately fund its operations and meet its cash flow requirements for at least the next twelve months from the date of issuance of these financial statements.

2. Significant accounting policies:

(a) Revenue recognition:

Sales are recognized at the point of sale when merchandise is picked up by the customer or delivered to a customer. Sales to our wholesale customers are recognized when the Company has agreed to terms with its customers, the contractual rights and payment terms have been identified, the contract has commercial substance, it is probable that consideration will be collected by the Company and when control of the goods has been transferred to the customer. Shipping and handling fees billed to customers are included in net sales.

Revenues for gift certificate sales and store credits are recognized upon redemption. Prior to recognition as a sale, gift certificates are recorded as accounts payable on the balance sheet. Based on historical redemption rates, the Company estimates the portion of outstanding gift certificates (not subject to unclaimed property laws) that will ultimately not be redeemed and records this amount as breakage income. The Company recognizes such breakage income in proportion to redemption rates of the overall population of gift certificates and store credits. Gift certificates and store credits outstanding are subject to unclaimed property laws and are maintained as accounts payable until remitted in accordance with local ordinances.

Sales of consignment merchandise are recognized at such time as the merchandise is sold and are recorded on a gross basis because the Company is the primary obligor of the transaction, has general latitude on setting the price, has discretion as to the suppliers, is involved in the selection of the product and has inventory loss risk.

Sales are reported net of returns and sales taxes. The Company generally gives its customers the right to return merchandise purchased by them within 10 to 60 days, depending on the product sold and records a provision at the time of sale for the effect of the estimated returns which is determined based on historical experience.

Revenues for repair services are recognized when the service is delivered to and accepted by the customer.

(b) Cost of sales:

Cost of sales includes merchandise costs, direct inbound freight and duties, direct labor related to repair services, design and creative costs (labor and overhead) inventory shrink, inventory thefts, and boxes (jewelry, watch and giftware). Indirect freight including inter-store transfers, purchasing and receiving costs, distribution costs and warehousing costs are included in selling, general and administrative expenses. Mark down dollars received from vendors are recorded as a reduction of inventory costs to the specific items to which they apply and are recognized in cost of sales once the items are sold.

(c) Cash and cash equivalents:

The Company utilizes a cash management system under which a book cash overdraft may exist in its primary disbursement account. These overdrafts, when applicable, represent uncleared checks in excess of cash balances in the bank account at the end of a reporting period and have been reclassified to accounts payable on the consolidated balance sheets.

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Amounts receivable from credit card issuers are included in cash and cash equivalents and are typically converted to cash within 2 to 4 days of the original sales transaction. These amounts totaled $0.8 million at March 29, 2025 and $0.9 million at March 30, 2024.

(d) Accounts receivable:

Accounts receivable arise primarily from customers' use of our private label and proprietary credit cards and wholesale sales and are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less expected credit losses. Several installment sales plans are offered to our private label credit card holders and proprietary credit card holders which vary as to repayment terms and finance charges. Finance charges on the Company's consumer credit receivables, when applicable, accrue at rates ranging from 0% to 9.99% per annum for financing plans. The Company maintains allowances for expected credit losses associated with the accounts receivable recorded on the balance sheet for estimated losses resulting from the inability of its customers to make required payments. The allowance for credit losses is an estimate of expected credit losses, measured on a collective basis over the estimated life of the Company's customer in-house receivables and wholesale receivables. In determining expected credit losses, the Company considers historical level of credit losses, current economic trends and reasonable and supportable forecasts that affect the collectability of future cash flows. The Company also incorporates qualitative adjustments for certain factors such as Company specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the allowance for credit losses reflects the Company's best estimate of current expected credit losses. Other relevant factors include, but are not limited to, the length of time that the receivables are past due, the Company's knowledge of the customer, and historical write-off experiences. Management considered and applied qualitative factors such as the unfavorable macroeconomic conditions caused by the current uncertainty resulting from rising inflation and interest rates, and its potential effects.

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The Company classifies a receivable account as past due if a required payment amount has not been received within the allotted time frame (generally 30 days), after which internal collection efforts commence. Once all internal collection efforts have been exhausted and management has reviewed the account, the account is sent for external collection or legal action. Upon the suspension of the accrual of interest, interest income is recognized to the extent cash payments received exceed the balance of the principal amount owed on the account. After all collection efforts have been exhausted, including internal and external collection efforts, an account is written off.

The Company guarantees a portion of its private label credit card sales to its credit card vendor. The Company maintains a liability associated with these outstanding amounts. Similar to the allowance for expected credit losses, the liability related to these guaranteed sales amounts are based on a combination of factors including the length of time the receivables are past due to the Company's credit card vendor, the Company's knowledge of the customer, economic and market conditions and historical write-off experiences of similar credits. If the financial conditions of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

The allowance for credit losses includes an estimate for uncollectible principal as well as unpaid interest. Accrued interest is included within the same line item as the respective principal amount of the customer in-house receivables in the condensed consolidated balance sheets. The accrual of interest is discontinued at the time the receivable is determined to be uncollectible and written-off. Accrued interest during the fiscal years-ending March 29, 2025 and March 25, 2024 were immaterial.

(e) Inventories:

Finished goods inventories and inventories of raw materials are stated at the lower of average cost (which includes material, labor and overhead costs) and net realizable value, which is the estimated selling price in the ordinary course of business. The Company records inventory reserves for lower of cost or net realizable value, which includes slow-moving finished goods inventory, damaged goods, and shrink. The cost of inbound freight and duties are included in the carrying value of the inventories.

The reserve for slow-moving finished goods inventories is equal to the difference between the cost of inventories and the estimated selling prices, resulting in the expected gross margin. There is estimation uncertainty in relation to the identification of slow-moving finished goods inventories which are based on certain criteria established by the Company's management. The criteria includes consideration of operational decisions by management to discontinue ordering the inventories based on sales trends, market conditions, and the aging of the inventories. Estimation uncertainty also exists in determining the expected selling prices and associated gross margins through normal sales channels, which are based on assumptions about future demand and market conditions for those slow-moving inventories. If actual market conditions are less favorable than those projected by management, additional inventory reserves may be required.

The reserve for inventory shrink is estimated for the period from the last physical inventory date to the end of the reporting period on a store by store basis and at our distribution centers. The shrink rate from the most recent physical inventory, in combination with historical experience, is the basis for providing a shrink reserve.

(f) Property and equipment:

Property and equipment are recorded at cost, less accumulated depreciation and amortization, less any impairment charges. Maintenance and repair costs are charged to selling, general and administrative expenses as incurred, while expenditures for major renewals and improvements are capitalized. Depreciation and amortization are computed using the straight-line method based on the estimated useful lives of the assets as follows:

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| | |
|:---|:---|
| Asset | Period |
|  Leasehold improvements | Lesser of term of the lease or the economic life |
|  Software and electronic equipment | 1 - 6 years |
|  Furniture and fixtures | 5 - 8 years |
|  Equipment | 3 - 8 years |

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(g) Intangible assets and other assets:

Eligible costs incurred during the development stage of information systems projects are capitalized and amortized over the estimated useful life of the related project when ready for its intended use and presented as part of intangible assets and other assets on the Company's balance sheet. Eligible costs include those related to the purchase, development, and installation of the related software. The costs related to the implementation of the ERP system and the e-commerce platform are amortized over a period of 5 years.

Intangible assets and other assets also consist of trademarks and tradenames, which are amortized using the straight-line method over a period of 15 years.

The Company had $3.0 million and $7.9 million of net book value related to intangible assets and other assets at March 29, 2025 and March 30, 2024, respectively. The Company had $2.1 million and $1.2 million of accumulated amortization of intangibles at March 29, 2025 and March 30, 2024, respectively.

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(h) Leases:

The Company accounts for leases in accordance with Topic 842 and recognizes a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. We determine if an arrangement is a lease at inception. The amounts of the Company's operating lease right-of-use ("ROU") assets and current and long-term portion of operating lease liabilities are presented separately on the balance sheet. Finance leases are included in property and equipment and long-term debt on the balance sheet.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments in order to measure its lease liabilities at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

The Company leases office, distribution, and retail facilities. Certain retail store leases may require the payment of minimum rentals and contingent rent based on a percentage of sales exceeding a stipulated amount. The Company's lease agreements expire at various dates through 2034, are subject, in many cases, to renewal options and provide for the payment of taxes, insurance and maintenance. Certain leases contain escalation clauses resulting from the pass-through of increases in operating costs, property taxes and the effect on costs from changes in consumer price indices, which are considered as variable costs.

The Company determines its lease payments based on predetermined rent escalations, rent-free periods and other incentives. The Company recognizes lease expense on a straight-line basis over the related terms of such leases, including any rent-free period and beginning from when the Company takes possession of the leased facility. Variable operating lease expenses, including contingent rent based on a percentage of sales, CAM charges, rent related taxes, mall advertising and adjustments to consumer price indices, are recorded in the period such amounts and adjustments are determined. Lease expense is recorded within selling, general and administrative expenses in the statement of operations.

Lease arrangements occasionally include renewal options. The Company uses judgment when assessing the renewal options in the leases and assesses whether or not it is reasonably certain to exercise these renewal options if they are within the control of the Company. Any renewal options not reasonably certain to be exercised are excluded from the lease term.

The Company monitors for events or changes in circumstances that require a reassessment of one of its leases. ROU assets, as part of the group of assets, are periodically reviewed for impairment. The Company uses the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment, overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

(i) Deferred financing costs:

The Company amortizes deferred financing costs incurred in connection with its financing agreements using the effective interest method over the term of the related financing. Such deferred costs are presented as a reduction to bank indebtedness and long-term debt in the accompanying consolidated balance sheets.

(j) Warranty accrual:

The Company provides warranties on its Birks branded jewelry for periods extending up to five years. The Company accrues a liability based on its historical repair costs for such warranties.

(k) Income taxes:

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial statement reporting purposes and the bases for income tax purposes, and (b) operating losses and tax credit carryforwards. Deferred income tax assets are evaluated and, if realization is not considered to be more-likely-than-not, a valuation allowance is provided (see Note 11(a)).

(l) Foreign exchange:

Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange in effect at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rates prevailing at the respective transaction dates. Revenue and expenses denominated in foreign currencies are translated at average rates prevailing during the year. Foreign exchange gains (losses) of ($2.4) million, ($0.2) million, and ($1.4) million were recorded in cost of goods sold for the years ended March 29, 2025, March 30, 2024, and March 25, 2023, respectively and ($1.0) million, 0.2 million, and ($0.5) million of gains (losses) on foreign exchange were recorded in interest and other financial costs related to U.S. dollar denominated debts for the years ended March 29, 2025, March 30, 2024, and March 25, 2023, respectively.

(m) Impairment of long-lived assets:

The Company periodically reviews the estimated useful lives of its depreciable assets and changes in useful lives are made on a prospective basis unless factors indicate the carrying amounts of the assets may not be recoverable and an impairment write-down is necessary. However, the Company will review its long-lived assets for impairment once events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when the estimated undiscounted future cash flows expected to result from the use of an asset and its eventual disposition is less than its carrying value. Measurement of an impairment loss for such long-lived assets would be based on the difference between the carrying value and the fair value of the asset, with fair value being determined based upon discounted cash flows or appraised values, depending on the nature of the asset. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value less cost to sell. The Company recorded a non-cash impairment charge on long-lived assets of $4.6 million during fiscal 2025. These charges are related to certain software costs associated with the delay in completing the implementation of the Company's new ERP system. No impairment charges were recorded in fiscal 2024 and fiscal 2023.

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(n) Advertising and marketing costs:

Advertising and marketing costs are generally charged to expense as incurred and are included in selling, general and administrative expenses in the consolidated statements of operations. The Company and its vendors participate in cooperative advertising programs in which the vendors reimburse the Company for a portion of certain specific advertising costs which are netted against advertising expense in selling, general and administrative expenses, and amounted to $0.7 million, $0.6 million, and $1.1 million for each of the years ended March 29, 2025, March 30, 2024, and March 25, 2023, respectively. Advertising and marketing expense, net of vendor cooperative advertising allowances, amounted to $4.6 million, $6.8 million, and $8.1 million, in the years ended March 29, 2025, March 30, 2024, and March 25, 2023, respectively.

(o) Government grants:

The Company recognizes a government grant when there is reasonable assurance that it will comply with the conditions required to qualify for the grant, and that the grant will be received. The Company recognizes government grants as a reduction to the expense that the grant is intended to offset.

(p) Principles of consolidation and equity method of accounting:

The consolidated financial statements include the accounts of Birks Group and its subsidiaries. All intercompany transactions and balances have been eliminated.

The Company consolidates entities in which it has a controlling financial interest based on either the variable interest entity (VIE) or voting interest model. The Company is required to first apply the VIE model to determine whether it holds a variable interest in an entity, and if so, whether the entity is a VIE. If the Company determines it does not hold a variable interest in a VIE, it then applies the voting interest model. Under the voting interest model, the Company consolidates an entity when it holds a majority voting interest in an entity.

The Company accounts for investments in which it has significant influence but not a controlling financial interest using the equity method of accounting.

On April 16, 2021, the Company entered into a joint venture with FWI LLC ("FWI") to form RMBG Retail Vancouver ULC ("RMBG") to operate a retail location in Vancouver, British Columbia. The Company owns a 49% equity interest in RMBG. FWI owns a 51% equity interest in RMBG, and controls the joint venture from the date of its inception. The Company has significant influence but not control over RMBG and therefore has applied the equity method of accounting to account for its investment in RMBG. The Company has recorded an equity method investment on the consolidated balance sheet and an equity pick-up on the consolidated statement of operations. The Company expects profits will be distributed annually or as approved by the directors at their annual meetings in accordance with their respective shareholdings. Please refer to note 16 for additional details.

(q) Earnings per common share:

Basic earnings per share ("EPS") is computed as net earnings divided by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the dilutive effect of the assumed exercise of stock options and warrants except in years where the Company has a net loss. Stock options and warrants that have an anti-dilutive effect are not considered in the diluted EPS calculation.

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The following table sets forth the computation of basic and diluted earnings (loss) per common share for the years ended March 29, 2025, March 30, 2024, March 25, 2023:

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| | | | |
|:---|:---|:---|:---|
|  | Fiscal Year Ended | Fiscal Year Ended | Fiscal Year Ended |
|  | March 29, 2025 | March 30, 2024 | March 25, 2023 |
|  | (In thousands, except per share data) | (In thousands, except per share data) | (In thousands, except per share data) |
| Basic income (loss) per common share computation: |  |  |  |
| Numerator: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) | $(12819) | $(4631) | $(7432) |
| Denominator: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding | 19357 | 19058 | 18692 |
| Income (loss) per common share | $(0.66) | $(0.24) | $(0.40) |
| Diluted (loss) income per common share computation: |  |  |  |
| Numerator: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) | $(12819) | $(4631) | $(7432) |
| Denominator: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding | 19357 | 19058 | 18692 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dilutive effect of stock options and warrants |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Weighted-average common shares outstanding – diluted | 19357 | 19058 | 18692 |
| Diluted income (loss) per common share | $(0.66) | $(0.24) | $(0.40) |

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(r) For the years ended March 29, 2025, March 30, 2024 and March 25, 2023, 0.2, 0.8 and 0.8 million respectively, Class A voting shares underlying outstanding option awards were excluded from the computation of diluted earnings per share due to the Company reporting a net loss.

(s) Recent Accounting Pronouncements adopted during the year

On March 12, 2020, the FASB issued ASU 2020-04: Reference rate reform (Topic 848). On December 21, 2022, the FASB issued an amendment to this reform, ASU 2022-06 Reference rate reform (Topic 848): Facilitation of the effects of reference rate reform on financial reporting and related amendments. The ASU provides optional expedients and exceptions for applying generally accepted accounting principles to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and sale or transfer of debt securities classified as held-to-maturity. The ASU was effective starting on March 12, 2020, and is available to be adopted on a prospective basis no later than December 31, 2024, following the amendments of ASU 2022-06. The Canadian Dollar Offered Rate (CDOR) is a benchmark interest rate referenced in a variety of agreements. The publication of certain CDOR rates were discontinued in May 2021, and the remaining rates were discontinued on June 30, 2024. The Company adopted the standard on a prospective basis and elected to apply the optional expedient to account for contract modifications within this standard as it met the relevant criteria for a change in terms related to the replacement of a reference rate. On June 26 2024, the Amended Credit Facility and the Amended Term Loan were amended to replace CDOR by the Canadian Overnight Repo Rate Average ("CORRA"). Refer to Note 6. Bank Indebtedness. The adoption of this ASU did not have a material impact on the Company's consolidated financial results.

On November 27, 2023, the FASB issued ASU 2023-07: Segment Reporting (Topic 280): Improvements to reportable segment disclosures, which enhances segment disclosures and requires additional disclosures of segment expenses. The ASU was effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this pronouncement for 2025 and the related disclosures are included in Note 15. Segmented Information.

Recent Accounting Pronouncements not yet adopted:

On December 14, 2023, the FASB issued ASU 2023-09: Income Taxes (Topic 740): Improvements to income tax disclosures, which primarily enhances the annual income tax disclosures for the effective tax rate reconciliation and income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The ASU should be applied prospectively, however, retrospective application in all prior periods is permitted. Management continues to evaluate the impact of this ASU on the consolidated financial statements.

On November 4, 2024, the FASB issued ASU 2024-03, Income Statement -Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires new disclosures to disaggregate prescribed natural expenses underlying any income statement caption. This ASU is effective for all public business entities for annual periods in fiscal years beginning after December 15, 2026, and interim periods in fiscal years beginning after December 15, 2027. Early adoption is permitted. This ASU applies on a prospective basis for periods beginning after the effective date, however, retrospective application to any or all prior periods is permitted. Management continues to evaluate the impact of this ASU on the consolidated financial statements.

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3. Accounts receivable and other receivables:

Accounts receivable, net of allowance for credit losses, at March 29, 2025 and March 30, 2024 consist of the following:

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| | | |
|:---|:---|:---|
|  | As of | As of |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
|  Customer trade receivables | $3886 | $4992 |
|  Other receivables | 2722 | 3463 |
|  | $6608 | $8455 |

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Continuity of the allowance for doubtful accounts is as follows (in thousands):

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| | |
|:---|:---|
|  Balance March 26, 2022 | $1209 |
|  Provision for credit losses | 538 |
|  Net write offs | (493) |
|  Balance March 25, 2023 | $1254 |
|  Provision for credit losses | 555 |
|  Net write offs | (433) |
|  Balance March 30, 2024 | $1376 |
|  Provision for credit losses | 122 |
|  Net write offs | (501) |
|  Balance March 29, 2025 | $997 |

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Other receivables mainly relate to receivables from wholesale revenue and tenant allowances receivable from certain landlords.

Certain sales plans relating to customers' use of Birks credit cards provide for revolving lines of credit and/or installment plans under which the payment terms exceed one year. The receivables repayable within a timeframe exceeding one year included under such plans amounted to approximately $1.1 million and $1.6 million at March 29, 2025 and March 30, 2024, respectively, which are not included in customer trade receivables outlined above and are included in long-term receivables on the Company's balance sheet.

The following table disaggregates the Company's accounts receivables and other receivables and long-term receivables excluding the allowance for doubtful accounts as at March 29, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Current | 1 – 30 days<br> past due | 31 – 60<br>days<br> past due | 61 – 90<br>days<br> past due | Greater<br> than 90 days<br> past due | Total |
|  Customer in-house receivables | $4678 | $107 | $64 | $43 | $1076 | $5968 |
|  Other receivables | 1.401 | 218 | 38 | 31 | 1034 | 2722 |
|  | $6079 | $325 | $102 | $74 | $2110 | $8690 |

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The following table disaggregates the Company's accounts receivables and other receivables and long-term receivables excluding the allowance for doubtful accounts as at March 30, 2024:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Current | 1 – 30 days<br> past due | 31 – 60<br>days<br> past due | 61 – 90<br>days<br> past due | Greater<br> than 90 days<br> past due | Total |
|  Customer in-house receivables | $5555 | $486 | $83 | $101 | $1550 | $7775 |
|  Other receivables | 872 | 1369 | 363 | 226 | 797 | 3627 |
|  | $6427 | $1855 | $446 | $327 | $2347 | $11402 |

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4. Inventories:

Inventories, net of reserves, are summarized as follows:

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| | | |
|:---|:---|:---|
|  | As of | As of |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
|  Raw materials and work in progress | $3926 | $5151 |
|  Finished goods | 112351 | 93916 |
|  | $116277 | $99067 |

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Continuity of the inventory reserves excluding $0.1 million, $0.2 million, $0.3 million and $0.3 million for shrink and damage reserves as at March 29, 2025, March 30, 2024, March 25, 2023 and March 26, 2022, respectively, are as follows (in thousands):

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| | |
|:---|:---|
|  Balance March 26, 2022 | $1775 |
|  Additional charges | 330 |
|  Deductions | (230) |
|  Balance March 25, 2023 | 1875 |
|  Additional charges | 688 |
|  Deductions | (367) |
|  Balance March 30, 2024 | $2196 |
|  Additional charges | 565 |
|  Deductions | (325) |
|  Balance March 29, 2025 | $2436 |

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5. Property and equipment:

The components of property and equipment are as follows:

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| | | |
|:---|:---|:---|
|  | As of | As of |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
|  Leasehold improvements | 39719 | 36285 |
|  Furniture, fixtures and equipment | 16063 | 14853 |
|  Software and electronic equipment | 16643 | 16201 |
|  | 72425 | 67339 |
|  Accumulated depreciation and impairment charges | (47045) | (41622) |
|  | $25380 | $25717 |

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The Company wrote off $1.5 million of gross fixed assets that were fully depreciated during the year ended March 29, 2025 (March 30, 2024 - $2.8 million), mostly related to leasehold improvements. Property and equipment, having a cost of $9.1 million and net book value of $7.6 million at March 29, 2025, and a cost of $4.5 million and a net book value of $3.8 million at March 30, 2024, are under finance leasing arrangements.

6. Bank indebtedness:

As of March 29, 2025 and March 30, 2024 , bank indebtedness consisted solely of amounts owing under the Company's Amended Credit Facility (defined below), which had an outstanding balance of $73.6 million ($73.8 million net of $0.2 million of deferred financing costs) and $63.4 million ($63.7 million net of $0.3 million of deferred financing costs), respectively. The Company's Amended Credit Facility is collateralized by substantially all of the Company's assets. The Company's excess borrowing capacity was $15.5 million as of March 29, 2025 and $13.4 million as of March 30, 2024. The Company met its excess availability requirements throughout fiscal 2025, and as of the date of these financial statements.

The Company's ability to fund its operations and meet its cash flow requirements is dependent upon its ability to maintain positive excess availability under its $85.0 million Amended Credit Facility with Wells Fargo Capital Finance Corporation Canada. On October 23, 2017, the Company entered into a credit facility with Wells Fargo Capital Finance Corporation Canada ("Wells Fargo", successor to Wells Fargo Canada Corporation), for a maximum amount of $85.0 million and maturing in October 2022. On December 24, 2021, the Company entered into the Amended Credit Facility with Wells Fargo. The Amended Credit Facility extended the maturity date of the Company's pre-existing loan from October 2022 to December 2026 and provided the Company with an option to increase the total commitments thereunder by up to $5.0 million. The Company will only have the ability to exercise this accordion option if it has the required borrowing capacity at such time. On September 6, 2024, the Company exercised the option to increase the credit facility by $5 million, bringing the credit facility to a maximum of $90 million. The Amended Credit Facility bears interest at a rate of Canadian Overnight Repo Rate Average ("CORRA") plus a spread ranging from 1.5% - 2.0% depending on the Company's excess availability levels. The Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan. The Company was above the minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan throughout fiscal 2025.

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On June 26, 2024, the Company entered into an amendment to the Amended Credit Facility with Wells Fargo. The amendment replaced the interest rate of CDOR plus a spread ranging from 1.5% - 2% depending on the Company's excess availability levels for the interest rate of CORRA plus a CORRA adjustment ranging from 0.30% to 0.32% and a spread ranging from 1.5% - 2% depending on the Company's excess availability levels.

On June 29, 2018, the Company secured a $12.5 million term loan with Crystal Financial LLC (dba SLR Credit Solutions) ("SLR"). On December 24, 2021, the Company entered into an Amended Term Loan with SLR. The Amended Term Loan extended the maturity date of the Company's pre-existing loan from October 2022 to December 2026. The Amended Term Loan is subordinated in lien priority to the Amended Credit Facility and bears interest at a rate of CORRA plus 7.75%. The Amended Term Loan also allows for periodic revisions of the annual interest rate to CORRA plus 7.00% or CORRA plus 6.75% depending on the Company complying with certain financial covenants. The Company is required to maintain minimum excess availability at all times, as defined in the Amended Credit Facility and Amended Term Loan. The Amended Term Loan is required to be repaid upon maturity.

On June 26, 2024, the Company entered into an amendment to the Amended Term Loan with SLR. The amendment replaces the interest rate of CDOR plus 7.75% (or CDOR plus 7.00% or CDOR plus 6.75% depending on the Company complying with certain financial covenants) for the interest rate of CORRA plus a CORRA adjustment of 0.32% and 7.75% (or CORRA plus a CORRA adjustment of 0.32% plus 7.00% or CORRA plus a CORRA adjustment of 0.32% plus 6.75% depending on the Company complying with certain financial covenants).

The Company's borrowing capacity under both its Amended Credit Facility and its Amended Term Loan is based upon the value of the Company's inventory and accounts receivable, net of reserves and availability blocks, which is periodically assessed by its lenders and based upon these reviews the Company's borrowing capacity could be significantly increased or decreased.

Both the Company's Amended Credit Facility and its Amended Term Loan are subject to cross default provisions with all other loans pursuant to which if the Company is in default of any other loan, the Company will immediately be in default of both its Amended Credit Facility and its Amended Term Loan. In the event that minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan is not maintained for more than two consecutive business days once during any fiscal month, this would be considered an event of default under the Company's Amended Credit Facility and its Amended Term Loan, that provides the lenders the right to require the outstanding balances borrowed under the Company's Amended Credit Facility and its Amended Term Loan become due immediately, which would result in cross defaults on the Company's other borrowings. The Company expects to have minimum excess availability as defined in the Amended Credit Facility and Amended Term Loan for at least the next twelve months from the date of issuance of these financial statements.

The Company's Amended Credit Facility and its Amended Term Loan also contain limitations on the Company's ability to pay dividends, more specifically, among other limitations; the Company can pay dividends only at certain excess borrowing capacity thresholds. The Company is required to either i) maintain excess availability of at least 40% of the borrowing base in the month preceding payment or ii) maintain excess availably of at least 25% of the line cap and maintain a fixed charge coverage ratio of at least 1.10 to 1.00. Other than these financial covenants related to paying dividends, the terms of the Company's Amended Credit Facility and its Amended Term Loan provide that no financial covenants are required to be met other than already described.

The Company's lenders under its Amended Credit Facility and its Amended Term Loan may impose, at any time, discretionary reserves, which would lower the level of borrowing availability under its credit facilities (customary for asset-based loans), at their reasonable discretion, to: i) ensure that the Company maintains adequate liquidity for the operations of its business, ii) cover any deterioration in the value of the collateral, and iii) reflect impediments to the lenders to realize upon the collateral. There is no limit to the amount of discretionary reserves that the Company's lenders may impose at their reasonable discretion. No discretionary reserves were imposed during fiscal year 2025 by the Company's senior secured lenders.

------

The information concerning the Company's bank indebtedness is as follows:

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| | | |
|:---|:---|:---|
|  | Fiscal Year Ended | Fiscal Year Ended |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
|  Maximum borrowing outstanding during the year | $77286 | $69051 |
|  Average outstanding balance during the year | $69747 | $61507 |
|  Weighted average interest rate for the year | 7.3% | 7.8% |
|  Effective interest rate at year-end | 5.5% | 7.7% |

---

As security for the bank indebtedness, the Company has provided some of its lenders the following: (i) general assignment of all accounts receivable, other receivables and trademarks; (ii) general security agreements on all of the Company's assets; (iii) insurance on physical assets in a minimum amount equivalent to the indebtedness, assigned to the lenders; (iv) a mortgage on moveable property (general) under the Civil Code (Québec) of $200.0 million; (v) lien on machinery, equipment and molds and dies; and (vi) a pledge of trademarks and stock of the Company's subsidiaries.

7. Accrued Liabilities

The components of accrued liabilities are as follows:

---

| | | |
|:---|:---|:---|
|  | As of | As of |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
|  Compensation related accruals | $2641 | $2274 |
|  Interest and bank fees | 783 | 702 |
|  Accrued property and equipment additions | 657 | 902 |
|  Sales return provision | 226 | 363 |
|  Professional and other service fees | 1025 | 814 |
|  Other | 721 | 1057 |
|  Total accrued liabilities | $6053 | $6112 |

---

------

8. Long-term debt:

(a) Long-term debt consists of the following:

---

| | | |
|:---|:---|:---|
|  | As of | As of |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
|  Term loan from SLR Credit Solutions, bearing interest at an annual rate of CORRA plus a CORRA adjustment and 7.75%, repayable at maturity in December 2026, secured by the assets of the Company (net of deferred financing costs of $140 and $181, respectively). Refer to Note 6 for additional information. | $12360 | $12319 |
|  $10 million term loan from Investissement Québec, bearing interest at an annual rate of 3.14%, repayable in 60 equal payments beginning in July 2021 (net of deferred financing costs of $nil and $2, respectively) | 2833 | 4891 |
|  $0.4 million term loan from Business Development Bank of Canada, bearing interest at an annual rate of 8.3% repayable in 72 monthly payments beginning in July 2021. | 160 | 231 |
|  U.S. $1.5 million cash advance owing to the Company's controlling shareholder, Montel, bearing interest at an annual rate of 11%, net of withholding taxes (Note 16 (c)) | 2146 | 2033 |
|  Obligations under finance leases, at annual interest rates between 0.9% and 20%, secured by leasehold improvements, furniture, and equipment, maturing at various dates to November 2026 (net of deferred financing costs of $25 and $42, respectively) | 4510 | 3251 |
|  Eligible borrowing amount of up to $4.3 million loan from Investissement Québec, bearing interest at an annual rate of 1.41%, repayable in 60 equal payments beginning in June 2027 (net of deferred financing costs of $76 and $86, respectively) | 4225 | 4214 |
|  | 26234 | 26939 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current portion of long-term debt | 4860 | 4352 |
|  | $21374 | $22587 |

---

(b) On July 8, 2020, the Company secured a six-year term loan with Investissement Québec in the amount of $10.0 million, as amended. The secured term loan was used to fund the working capital needs of the Company. The loan bears interest at a rate of 3.14% per annum and is repayable in 60 equal payments beginning in July 2021. On January 4, 2023, the Company received a loan forgiveness in the amount of $0.2 million that is being recognized over the term of the loan. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01. During fiscal 2024, the Company received a tolerance letter from Investissement Québec that allowed the Company, as at March 30, 2025 to tolerate a working capital ratio of 0.97. As at March 30, 2024, the working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) was 0.96. On July 3, 2024, the Company obtained a waiver from Investissement Québec with respect to the requirement to meet the working capital ratio at March 30, 2024 and therefore the debt has been presented as long-term at year end. Furthermore, on July 12, 2024, the Company received a tolerance letter from Investissement Québec that allows the Company, as at March 29, 2025, to tolerate a working capital ratio of 0.90. As at March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88 . Starting in fiscal 2026 and for the duration of the loan, the interest rate will be adjusted depending on the current ratio calculated at year end.

(c) On March 26, 2020, the Company secured a 6-year term loan with Business Development Bank of Canada (BDC), as amended, for an amount of $0.4 million to be used specifically to finance the renovations of the Company's Brinkhaus store location in Calgary, Alberta. As of March 29, 2025, the Company has $0.2 million outstanding on the loan ($0.2 million as of March 30, 2024). The loan bears interest at a rate of 8.3% per annum and is repayable in 72 monthly payments from June 26, 2021, the date of the drawdown.

(d) On July 14, 2023, the Company entered into a financing agreement for a capital lease facility financing with Varilease Finance Inc. relating to certain equipment consisting of leasehold improvements, furniture, security equipment and related equipment for store construction and renovation. The maximum borrowing amount under this facility is U.S $3.6 million (CAD $4.7 million). By the end of fiscal 2024, the Company had borrowed a total amount of U.S. $2.4 million (CAD $3.3 million) against this facility. The capital lease financing bears interest at approximately 20% annually and is repayable over 24 months. As of March 29, 2025, the Company has U.S. $0.6 million (CAD $0.9 million) outstanding under this facility.

On February 1, 2024, the Company entered into a financing agreement for a capital lease facility financing with Varilease Finance Inc. relating to certain equipment consisting of leasehold improvements, furniture, security equipment and related equipment for the construction of a new store. The maximum borrowing amount under this facility is U.S. $2.5 million (CAD $3.4 million). During fiscal 2025, the Company had borrowed a total amount of U.S. $2.4 million (CAD $3.3 million) against this facility. The capital lease financing bears interest at approximately 14% annually and is repayable over 24 months. As of March 29, 2025, the Company has U.S. $1.9 million (CAD $2.8 million) outstanding under this facility.

On June 3, 2024, the Company entered into a financing agreement for a capital lease facility financing with Varilease Finance Inc. relating to certain equipment consisting of leasehold improvements, furniture, security equipment and related equipment for the partial renovation of a store. The maximum borrowing amount under this facility is U.S. $0.6 million (CAD $0.8 million). During fiscal 2025, the Company had borrowed a total amount of U.S. $0.6 million (CAD $0.8 million) against this facility. The capital lease financing bears interest at approximately 14% annually and is repayable over 24 months. As of March 29, 2025, the Company has U.S. $0.5 million (CAD $0.7 million) outstanding under this facility.

------

(e) On August 24, 2021, the Company entered into a 10-year loan agreement with Investissement Québec for an amount of up to $4.3 million to be used specifically to finance the digital transformation of the Company through the implementation of an omni-channel e-commerce platform and enterprise resource planning system. In order to obtain the financing, the Company has agreed to maintain a certain number of employees in Quebec. As of March 29, 2025, the Company has fully drawn on the loan ($4.3 million outstanding as of March 29, 2025 and $4.3 million outstanding as of March 30, 2024). The loan bears interest at a rate of 1.41 % per annum and is repayable in 60 equal payments beginning 60 months after the date of the first draw in July 2022. The term loan with Investissement Québec requires the Company on an annual basis to have a working capital ratio (defined as current assets divided by current liabilities excluding the current portion of operating lease liabilities) of at least 1.01 at the end of the Company's fiscal year. During fiscal 2024, the Company received a tolerance letter from Investissement Québec that allowed the Company, as at March 30, 2024, to tolerate a working capital ratio of 0.97. As at March 30, 2024, the working capital ratio was 0.96. On July 3, 2024, the Company obtained a waiver from Investissement Québec with respect to the requirement to meet the working capital ratio at March 30, 2024 and therefore the debt has been presented as long-term at year end. Furthermore, on July 12, 2024, the Company received a tolerance letter from Investissement Québec that allows the Company, as at March 29, 2025, to tolerate a working capital ratio of 0.90. As at March 29, 2025, the working capital ratio was 0.88. On July 14, 2025, Investissement Québec modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88 . Starting in fiscal 2026 and for the duration of the loan, the interest rate will be adjusted depending on the current ratio calculated at year end.

(f) Future minimum lease payments for finance leases required in the following five years are as follows (in thousands):

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| | |
|:---|:---|
| Year ending March: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2026 | $3234 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2027 | 1843 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2028 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2029 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2030 |  |
|  | 5077 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less imputed interest | (542) |
|  | $4535 |

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(g) Principal payments on long-term debt required in the following five years and thereafter, including obligations under finance leases, are as follows (in thousands):

---

| | |
|:---|:---|
| Year ending March: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2026 | $4860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2027 | 15150 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2028 | 734 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2029 | 860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2030 | 860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thereafter | 4011 |
|  | $26475 |

---

(h) As of March 29, 2025 and March 30, 2024, the Company had $0.2 million, and $0.2 million, respectively, of outstanding letters of credit.

9. Other long-term liabilities:

In fiscal 2025 and 2024, the Company entered into various inventory supplier agreements relating to inventory purchases. These agreements require an initial payment within 30 days upon receipt of inventory and the balances are repayable over monthly installments ranging from 24 to 34 months. Certain of these inventory agreements are interest-free or interest-bearing at a rate of 6%. As of March 29, 2025, the Company has U.S. $7.6 million (CAD $10.9 million) outstanding on these inventory supplier agreements of which U.S. $2.9 million (CAD $4.2 million) is presented in other long-term liabilities and the balance as accounts payable. As of March 30, 2024, the Company had U.S. $3.4 million (CAD $4.5 million) outstanding on these inventory supplier agreements of which U.S. $1.6 million (CAD $2.2 million) is presented in other long-term liabilities and the balance as accounts payable.

The cash flows related to inventory supplier agreements are presented in operating cash flows.

10. Benefit plans and stock-based compensation:

(a) Stock option plans and arrangements:

(i) The Company can issue stock options, stock appreciation rights, deferred share units and restricted stock units to executive management, key employees and directors under the stock-based compensation plans discussed below. The Company's stock trades on the NYSE American and is valued in U.S. dollars, as such all prices in Note 10 are denominated in U.S. dollars.

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The Company has a Long-Term Incentive Plan under which awards may be made in order to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and to promote the success of the Company. Any employee or consultant selected by the administrator is eligible for any type of award provided for under the Long-Term Incentive Plan, except that incentive stock options may not be granted to consultants. The Long-Term Incentive Plan provided for the grant of units and performance units or share awards. As of March 29, 2025, there were 10,000 cash-based stock appreciation rights that were exercisable under the Long-Term Incentive Plan. The stock appreciation rights outstanding under the Long-Term Incentive Plan have a weighted average exercise price of $1.16 as of March 29, 2025. The Company has not made any grants under this incentive plan in the past three years. As at March 29, 2025, the Company has recognized a liability of nil in relation to these stock appreciation rights ($0.1 million as at March 30, 2024).

As of March 29, 2025, there were no stock options to purchase Class A voting shares outstanding under the Long-Term Incentive Plan. On December 19, 2024, stock options to purchase 20,000 Class A voting shares were exercised. During fiscal 2025, 2024, and 2023, no stock options were granted under the Long-Term Incentive Plan. Total compensation cost for options recognized in expenses was nil in each of fiscal 2025, 2024, and 2023. This Long-Tern Incentive Plan expired in February 2016 and no further awards will be granted under this plan. However, the Long-Term Incentive Plan will remain in effect until the outstanding awards issued under the plan terminate or expire by their terms.

On August 15, 2016, the Board of Directors adopted the Company's Omnibus Long-Term Incentive Plan (the "Omnibus LTIP"), and same was approved by the Company's shareholders on September 21, 2016. Further to the Omnibus LTIP, the Company's directors, officers, senior executives and other employees of the Company or one of its subsidiaries, consultants and service providers providing ongoing services to the Company and its affiliates may from time-to-time be granted various types of compensation awards, as same are further described below. The Omnibus LTIP is meant to replace the Company's former equity awards plans. As of March 26, 2021, there were a total of 1,000,000 shares of the Company's Class A voting shares reserved for issuance under the Omnibus LTIP. On January 11, 2022, the Omnibus LTIP was amended to increase the number of the Company's Class A voting shares reserved for issuance under the Omnibus LTIP from 1,000,000 to 1,500,000. This increase was ratified by a majority of shareholders in September 2022. In no event shall the Company issue Class A voting shares, or awards requiring the Company to issue Class A voting shares, pursuant to the Omnibus LTIP if such issuance, when combined with the Class A voting shares issuable upon the exercise of awards granted under the Company's former plan or any other equity awards plan of the Company, would exceed 1,796,088 Class A voting shares, unless such issuance of Class A voting shares or awards is approved by the shareholders of the Company. This limit shall not restrict however, the Company's ability to issue awards under the Omnibus LTIP that are payable other than in shares. As of March 29, 2025, there were no stock options to purchase Class A voting shares outstanding under the Omnibus LTIP as 12,000 stock options expired during fiscal 2025, all of which were granted during fiscal 2017, with a three-year vesting period, an average exercise price of $1.43 and an expiration date of 10 years after the grant date. No additional stock options were granted under this plan since then. Total compensation cost for options recognized in expenses was nil in each of fiscal 2025, 2024, and 2023.

The following is a summary of the activity of Birks' stock option plans and arrangements.

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| | | |
|:---|:---|:---|
|  | Options | Weighted average<br> exercise price |
|  Outstanding March 26, 2022 | 257000 | $1.09 |
|  Exercised | (225000) | 1.10 |
|  Forfeited |  |  |
|  Outstanding March 25, 2023 and March 30, 2024 | 32000 | 1.02 |
|  Exercised | (20000) | 0.78 |
|  Forfeited | (12000) | 1.43 |
|  Outstanding March 29, 2025 |  | $— |

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(b) As of March 29, 2025, March 30, 2024 and March 25, 2023, the Company no longer has any outstanding warrants exercisable into shares of the Company's Class A voting shares and no additional compensation expense was recognized. These warrants expired on August 20, 2022, and all remaining warrants have been forfeited.

(c) Restricted stock units and deferred share unit plans:

On September 17, 2020, the Company issued 375,000 cash-settled restricted stock units ("RSUs") to members of senior management under the Omnibus LTIP. These units vest after three years and expire within two months following the vesting date. Compensation expense is based on the fair value of the RSU and the liability is re-measured at each reporting period. On December 20, 2021, the Company converted 325,000 of the outstanding cash-settled RSUs to equity-settled awards and as a result, the liability outstanding at that date of $0.9 million was reclassified to additional paid-in capital. At March 29, 2025 and March 30, 2024, there were nil outstanding cash-settled RSUs as all remaining cash-settled RSUs were exercised in fiscal 2024 (50,000 outstanding at March 25, 2023) and nil outstanding equity-settled RSUs as all remaining equity-settled RSUs were exercised in fiscal 2024 (325,000 outstanding at March 25, 2023).

The Company issued 143,829 cash-settled deferred share units ("DSUs") to members of the board of directors on October 1, 2024 (70,000 DSUs on October 1, 2023 and 35,584 DSUs on September 21, 2022). In the prior years, the Company issued cash-settled DSU's on September 16, 2021 (61,470 units), September 17, 2020 (223,878 units), October 7, 2019 (157,890 units) and June 20, 2019 (86,954 units). On December 20, 2021, the Company converted all of the 750,482 outstanding cash-settled DSUs to equity-settled awards and as a result, the liability outstanding at that date of $4.6 million was reclassified to additional paid-in capital. During fiscal 2025, 8,896 cash-settled and 408,718 equity-settled DSUs were exercised (8,896 cash-settled and 10,000 equity-settled DSUs exercised for fiscal 2024 and nil for fiscal 2023). At March 29, 2025, 231,621 cash-settled DSUs were outstanding (March 30, 2024 – 96,688 and March 25, 2023 – 35,584) and 331,764 equity-settled DSUs were outstanding (March 30, 2024 – 740,482 and March 25, 2023 – 750,482). These units are exercisable immediately upon the date the member ceases being a director and expire on December 31 of the following year.

A summary of the status of the Company's cash-settled DSUs and cash-settled RSUs at March 29, 2025 is presented below:

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| | |
|:---|:---|
|  | DSU |
|  Outstanding March 26, 2022 |  |
|  Grants of new units | 35584 |
|  Outstanding March 25, 2023 | 35584 |
|  Grants of new units | 70000 |
|  Exercised | (8896) |
|  Outstanding March 30, 2024 | 96688 |
|  Grants of new units | 143829 |
|  Exercised | (8896) |
|  Outstanding March 29, 2025 | 231621 |

---

The fair value of cash-settled DSUs is measured based on the Company's share price at each period end. As at March 29, 2025, the liability for all cash-settled DSU's was $0.4 million (March 30, 2024 – $0.4 million and March 25, 2023 – $0.4 million). The closing stock price used to determine the liability for fiscal 2025 was $1.16 ($3.34 as at March 30, 2024). Total compensation cost (gain) for DSUs recognized in expense was ($0.5) million, ($0.3) million, and $0.4 million in fiscal 2025, 2024, and 2023, respectively.

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| | |
|:---|:---|
|  | RSU |
|  Outstanding March 26, 2022 | 50000 |
|  Exercised |  |
|  Outstanding March 25, 2023 | 50000 |
|  Exercised | (50000) |
|  Outstanding March 30, 2024 and March 29, 2025 |  |

---

The fair value of cash-settled RSUs is measured based on the Company's share price at each period end. As at March 29, 2025, the liability for all vested cash-settled RSUs was nil (March 30, 2024 - nil and March 25, 2023 - $0.5 million). The closing stock price used to determine the liability was $8.18 for fiscal 2023. Total compensation cost (gain) for cash-settled RSU's recognized in expense was nil, ($0.2) million, and $0.3 million in fiscal 2025, 2024, and 2023, respectively. Total compensation cost for equity-settled RSU's recognized in expense was nil, $0.03 million and $0.5 million in fiscal 2025, 2024, and 2023, respectively.

A summary of the status of the Company's equity-settled DSUs at March 29, 2025 is presented below:

------

---

| | |
|:---|:---|
|  | DSU |
|  Outstanding March 25, 2023 | 750482 |
|  Exercised | (10000) |
|  Outstanding March 30, 2024 | 740482 |
|  Exercised | (408718) |
|  Outstanding March 29, 2025 | 331764 |

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A summary of the status of the Company's equity-settled RSUs at March 29, 2025 is presented below:

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| | |
|:---|:---|
|  | RSU |
|  Outstanding March 25, 2023 | 325000 |
|  Exercised | (325000) |
|  Outstanding March 30, 2024 and March 29, 2025 |  |

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The equity-settled RSUs and DSUs are recorded at fair value at grant or modification date and not subsequently re-measured.

11. Income taxes:

(a) The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of March 29, 2025, the Company did not have any accrued interest or penalties related to uncertain tax positions due to available tax loss carry forwards. The tax years 2018 through 2025 remain open to examination by the major taxing jurisdictions to which the Company is subject.

The Company evaluates its deferred tax assets to determine if any adjustments to its valuation allowances are required. As part of this analysis, the Company could not reach the required conclusion that it would be able to more likely than not realize the value of net deferred tax assets in the future. As a result, the Company has a non-cash valuation allowance of $29.2 million (March 30, 2024 - $26.1 million) against the majority of the Company's net deferred tax assets.

The significant items comprising the Company's net deferred tax assets at March 29, 2025 and March 30, 2024 are as follows:

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| | | |
|:---|:---|:---|
|  | Fiscal Year Ended | Fiscal Year Ended |
|  | March 29, 2025 | March 30, 2024 |
|  | (In thousands) | (In thousands) |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss and tax credit carry forwards | $15436 | $14481 |
| Difference between book and tax basis of property and equipment and intangible assets | 9164 | 7228 |
| Operating lease liabilities net of right-of-use assets | 2656 | 3536 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other reserves not currently deductible | 1296 | 1196 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest and financing expenses not currently deductible | 2076 |  |
| Investment in joint venture | (842) | (531) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | (561) | 239 |
|  Net deferred tax asset before valuation allowance | 29225 | 26149 |
|  Valuation allowance | (29225) | (26149) |
|  Net deferred tax asset | $— | $— |

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The Company's income tax expense (benefit) consists of the following components:

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| | | | |
|:---|:---|:---|:---|
|  | Fiscal Year Ended | Fiscal Year Ended | Fiscal Year Ended |
|  | March 29, 2025 | March 30, 2024 | March 25, 2023 |
|  | | (In thousands) | |
| Income tax expense (benefit): |  |  |  |

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| | | | |
|:---|:---|:---|:---|
|  Current | $— | $— | $— |
|  Deferred | (3076) | (1329) | (1860) |
|  Valuation allowance | 3076 | 1329 | 1860 |
|  Income tax expense | $— | $— | $— |

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The Company's current tax payable was nil at March 29, 2025, March 30, 2024 and March 25, 2023.

The Company's provision for income taxes varies from the amount computed by applying the statutory income tax rates for the reasons summarized below:

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| | | | |
|:---|:---|:---|:---|
| | Fiscal Year Ended | Fiscal Year Ended | Fiscal Year Ended |
| | March 29, 2025 | March 30, 2024 | March 25, 2023 |
|  Canadian statutory rate | 25.7% | 25.7% | 25.9% |
| Utilization of unrecognized losses and other tax attributes | (27.1%) | (28.6%) | (25.0%) |
| Non-deductible equity in earnings joint venture | 2.4% | 6.0% | 4.0% |
|  Permanent differences and other | (1.0%) | (3.1%) | (4.9%) |
|  Total | 0.0% | 0.0% | 0.0% |

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(b) At March 29, 2025, the Company had federal non-capital losses of $55.1 million available to reduce future Canadian federal taxable income, of which $3.4 million expire in 2030 and the balance after 2033. The Company also has capital losses of $1.6 million available to reduce future Canadian capital gains. These capital losses do not have an expiration date. In addition to losses, the Company has restricted interest and financing expenses of $8.1 million available to reduce future Canadian federal taxable income, which do not expire.

12. Capital stock:

Authorized capital stock of the Company consists of an unlimited number of no par value preferred shares and two classes of common stock outstanding: Class A and Class B. Class A voting shares receive one vote per share. The Class B multiple voting shares have substantially the same rights as the Class A voting shares except that each share of Class B multiple voting shares receives 10 votes per share. The issued and outstanding shares are as follows:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Class A common stock | Class A common stock | Class B common stock | Class B common stock | Total common stock | Total common stock |
|  | Number of<br>Shares | <br>Amount | Number of<br>Shares | <br>Amount | Number of<br>Shares | Amount |
|  Balance as of March 25, 2023 | 11112999 | $39019 | 7717970 | $57755 | 18830969 | $96774 |
|  Settlement of stock units | 335000 | 1706 |  |  | 335000 | 1706 |
|  Balance as of March 30, 2024 | 11447999 | $40725 | 7717970 | $57755 | 19165969 | $98480 |
|  Settlement of stock units and stock options | 428718 | 2129 |  |  | 428718 | 2129 |
|  Balance as of March 29, 2025 | 11876717 | $42854 | 7717970 | $57755 | 19594687 | $100609 |

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13. Leases:

Amounts recognized in the consolidated statement of operations were as follows:

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| | | | |
|:---|:---|:---|:---|
| | March 29, 2025 | March 30, 2024 | March 25, 2023 |
| | | (In thousands) | |
| Fixed operating lease expense | $9613 | $11874 | $12053 |
| Variable operating lease expense | 5109 | 5569 | 5007 |
| Total lease expense | $14722 | $17443 | $17060 |

---

Variable operating lease expense includes percentage rent, taxes, mall advertising and common area maintenance charges.

The weighted average remaining operating lease term was 6.6 years and the weighted average discount rate was 10.0% for all of the Company's operating leases as of March 29, 2025.

The following table provides supplemental cash flow information related to the Company's operating leases:

---

| | | | |
|:---|:---|:---|:---|
| | March 29, 2025 | March 30, 2024 | March 25, 2023 |
| | | (In thousands) | |
| Cash outflows from operating activities attributable to operating leases <sup>(1)</sup> | $13370 | $13422 | $14235 |
| Right-of-use assets obtained in exchange for Operating lease liabilities <sup>(2)</sup> | $4672 | $1503 | $2579 |

---

(1) There were no rent concessions associated to base rent for the period ended March 29, 2025. Net of nil and $0.2 million rent concessions associated to base rent for the periods ended March 30, 2024 and March 25, 2023, respectively.

(2) Right-of-use assets obtained are recognized net of leasehold inducements. For the period ending March 29, 2025, leasehold inducements totaled $1.9 million of which $0.3 million is included in Accounts Receivable and other receivables. For the period ending March 30, 2024, leasehold inducements totaled $1.7 million of which $0.8 million is included in Accounts Receivable and other receivables.

The following table reconciles the undiscounted cash flows expected to be paid in each of the next five fiscal years and thereafter to the operating lease liability recorded on the Consolidated Balance Sheet for operating leases and finance leases which is included in long-term debt as of March 29, 2025.

---

| | |
|:---|:---|
|  | Minimum Lease Payments<br>as of March 29, 2025 |
|  | (in thousands) |
| Year ending March: | Operating |
| 2026 | $11146 |
| 2027 | 9687 |
| 2028 | 8609 |
| 2029 | 7815 |
| 2030 | 7280 |
| Thereafter | 18788 |
| Total minimum lease payments | 63325 |
| Less: amount of total minimum lease payments representing interest | (17767) |
| Present value of future total minimum lease payments | 45558 |
| Less: current portion of lease liabilities | (6929) |
| Long-term lease liabilities | $38629 |

---

On June 20, 2024, the Company entered into a lease modification for one of its retail stores that modifies the lease term to January 31, 2025 and resulted in a write-off of $17.04 million of ROU assets as well as a write down to the lease liability by $18.4 million. The lease modification also resulted in a termination payment that is to be repaid over a period of time up to April 2026.

------

14. Contingencies:

The Company and its subsidiaries, in the normal course of business, become involved from time to time in litigation and are subject to claims. While the final outcome with respect to claims and legal proceedings pending at March 29, 2025 cannot be predicted with certainty, management believes that adequate provisions have been recorded in the accounts where required and that the financial impact, if any, from claims related to normal business activities will not be material.

15. Segmented information:

Birks' President and Chief Executive Officer is the Company's CODM. The CODM regularly reviews segment sales, segment cost of sales and segment unadjusted gross profit, after the elimination of any inter-segment transactions, to determine resource allocations and to assess profitability between segments. Birks' sales are primarily derived from the retailing of jewelry, timepieces, services and other products as generated through the management of its segments. Segment unadjusted gross profit is used by the CODM to monitor and assess segment results compared to prior periods, forecasted results, and our annual profit plan. The Company aggregates operating segments with similar economic, operating and other characteristics.

The Company has two reportable segments, Retail and Other. As of March 29, 2025, Retail operated 17 stores across Canada under the Maison Birks brand, one retail location in Montreal under the Birks brand, one retail location in Montreal under the TimeVallée brand, one retail location in Calgary under the Brinkhaus brand, two retail locations in Vancouver under the Graff and Patek Philippe brands, and three retail locations in Laval, Ottawa and Toronto under the Breitling brand. During fiscal 2025, the Company closed one store (three stores in fiscal 2024 and two stores in fiscal 2023) operating under the Maison Birks brand and opened five new retail stores (none in fiscal 2024 and 2023). Other consists primarily of our e-commerce business, wholesale business and gold exchange program. The two reportable segments are managed and evaluated by the CODM separately based on unadjusted gross profit. Sales and long-lived assets (other than financial instruments and deferred taxes) attributed to other foreign countries are not material and have not been disclosed separately. The significant segment expenses used by the CODM and disclosed retrospectively beginning fiscal 2025 are Cost of sales Jewelry and other and Cost of sales timepieces. The accounting policies used for each of the segments are the same as those used for the consolidated financial statements. Inter-segment sales are made at amounts of consideration agreed upon between the two segments and intercompany profit is eliminated if not yet earned on a consolidated basis. Inter-segment sales for fiscal 2025, 2024 and 2023 are not material and, therefore, such information is not presented. The Company does not evaluate the performance of the Company's assets on a segment basis for internal management reporting and, therefore, such information is not presented.

Certain information relating to the Company's segments for the years ended March 29, 2025, March 30, 2024, and March 25, 2023, respectively, is set forth below:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Retail | Retail | Retail | Other | Other | Other | Total | Total | Total |
|  | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 |
|  | (In thousands) | (In thousands) | (In thousands) | (In thousands) | (In thousands) | (In thousands) | (In thousands) | (In thousands) | (In thousands) |
| Sales by classes of similar products and by channel: |  |  |  |  |  |  |  |  |  |
| Jewelry and other | $59632 | $76405 | $78020 | $9295 | $9851 | $8505 | $68927 | $86256 | $86525 |
| Timepieces | 106932 | 97441 | 75090 | 1948 | 1578 | 1335 | 108880 | 99019 | 76425 |
| Sales to external customers | 166564 | 173846 | 153110 | 11243 | 11429 | 9840 | 177807 | 185275 | 162950 |
| Cost of sales: |  |  |  |  |  |  |  |  |  |
| Jewelry and other | 32955 | 41735 | 40926 | 4947 | 4985 | 4033 | 37902 | 46720 | 44959 |
| Timepieces | 67913 | 61150 | 45785 | 1173 | 936 | 780 | 69086 | 62086 | 46565 |
| Total cost of sales<sup>(1)</sup> | 100868 | 102885 | 86711 | 6120 | 5921 | 4813 | 106988 | 108806 | 91524 |
| Unadjusted gross profit<sup>(2)</sup> | 65697 | 70961 | 66399 | 5123 | 5508 | 5027 | 70819 | 76469 | 71426 |
| Inventory provisions |  |  |  |  |  |  | (753) | (1207) | (849) |
| Foreign exchange losses |  |  |  |  |  |  | (2428) | (224) | (1353) |
| Other unallocated costs |  |  |  |  |  |  | (1330) | (1506) | (1302) |
| Adjustment of intercompany profit |  |  |  |  |  |  |  | 23 | 38 |
| Gross profit |  |  |  |  |  |  | $66308 | $73555 | $67960 |

---

(1) See Note 2 for information about the nature of expenses included within the cost of sales.

------

(2) This is a reconciliation of the segment's gross profits and certain unallocated costs to the Company's consolidated gross profits.

Various amounts in the fiscal 2024 and 2023 Segmented information note were corrected for immaterial errors. The nature of the corrections were either between segments or between captions within the same segment. Total revenues and gross profit for the years ended March 30, 2024 and March 25, 2023 remained unchanged.

16. Related party transactions:

(a) The Company is party to certain related party transactions. Balances related to these related parties are disclosed in the consolidated financial statements except the following:

---

| | | | |
|:---|:---|:---|:---|
|  | Fiscal Year Ended | Fiscal Year Ended | Fiscal Year Ended |
|  | March 29, 2025 | March 30, 2024 | March 25, 2023 |
|  | | (In thousands) | |
| Expenses incurred: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Management fees to related parties (b) | 17 | 41 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Consultant fees to a related party (f) | 55 | 217 | 205 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expense reimbursement to a related party (d) | 26 | 25 | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest expense on cash advance received from controlling shareholder (c) | 229 | 226 | 218 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Compensation paid to a related party (e) | 374 | 366 | 344 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fees charged to RMBG in exchange for retail support and administrative services (g) | (521) | (613) |  |
|  Balances: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable to related parties | 39 | 117 | 117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest payable on cash advance received from controlling shareholder (c) | 19 | 18 | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Receivable from joint venture (g) | 161 | 214 | 1815 |

---

(b) Effective January 1, 2016, the Company entered into a management consulting services agreement with Gestofi S.A. ("Gestofi") all in accordance with the Company's Code of Conduct relating to related party transactions. Under the management consulting services agreement, Gestofi provides the Company with services related to the obtaining of financing, mergers and acquisitions, international expansion projects, and such other services as the Company may request. Under the agreement, the Company paid an annual retainer of €140,000 (approximately $202,000 in Canadian dollars). The original term of the agreement was until December 31, 2016 and the agreement was automatically extended for successive terms of one year as neither party gave a 60 days' notice of its intention not to renew. The yearly renewal of the agreement was subject to the review and approval of the Company's corporate governance and nominating committee and the Board of Directors in accordance with the Company's Code of Conduct relating to related party transactions. In November 2018, the agreement was renewed on the same terms and conditions except that the retainer was reduced to €40,000 (approximately $61,000 in Canadian dollars). In March 2019, the agreement was amended to (i) waive the yearly retainer and reimburse only the out-of-pocket expenses related to the services, and (ii) allow for a success fee to be mutually agreed upon between the Company and Gestofi in the event that financing or a capital raise is achieved. The agreement was renewed in November 2023 until December 31, 2024 and subsequently renewed again in November 2024 until December 31, 2025. In fiscal 2025, 2024, and 2023, the Company incurred expenses of €11,350 (approximately $17,000 in Canadian dollars), €28,000 (approximately $41,000 in Canadian dollars) and nil, respectively, under this agreement to Gestofi.

(c) The Company has a cash advance outstanding from one of its controlling shareholders, Montel S.à.r.l. ("Montel", formerly Montrovest), of U.S. $1.5 million (approximately $2.2 million in Canadian dollars) originally received in May 2009 from Montrovest. This cash advance was provided to the Company by Montrovest to finance working capital needs and for general corporate purposes. This advance and any interest thereon is subordinated to the indebtedness of the Company's Amended Credit Facility and Amended Term Loan. This cash advance bears an annual interest rate of 11%, net of withholding taxes, representing an effective interest rate of approximately 12%, and is repayable upon demand by Montel once conditions stipulated in the Company's Amended Credit Facility permit such a payment. At March 29, 2025 and March 30, 2024 advances payable to the Company's controlling shareholder amounted to U.S. $1.5 million (approximately $2.2 million and $2.0 million in Canadian dollars), respectively.

------

(d) In accordance with the Company's Code of Conduct related to related party transactions, in April 2011, the Company's corporate governance and nominating committee and Board of Directors approved the reimbursement to Regaluxe Srl of certain expenses, such as rent, communication, administrative support and analytical service costs, incurred in supporting the office of Dr. Lorenzo Rossi di Montelera, the Company's then Chairman, and of Mr. Niccolò Rossi di Montelera, the Company's Chairman of the Executive Committee and the Company's current Executive Chairman of the Board, for the work performed on behalf of the Company, up to a yearly maximum of U.S. $260,000 (approximately $340,000 in Canadian dollars). The yearly maximum was reduced to U.S. $130,000 (approximately $170,000 in Canadian dollars), and in fiscal 2019 the terms were amended so that only administrative support and analytical service costs can be reimbursed. This agreement was further renewed in March 2020 on the same terms and conditions except that the expenses would be invoiced in Euros. In April 2025, the agreement was renewed for an additional one-year term on the same terms and conditions. During fiscal 2025, 2024, and 2023, the Company incurred expenses of €17,000, €17,000, and €24,000 (approximately $26,000, $25,000, and $35,000 in Canadian dollars), respectively to Regaluxe Srl under this agreement.

(e) Effective January 1, 2017, the Company agreed to total annual compensation of €250,000 (approximately $388,000 in Canadian dollars), with Mr. Niccolò Rossi di Montelera in connection with his appointment as Executive Chairman of the Board and Chairman of the Executive Committee. In fiscal 2025, 2024, and 2023, the Company incurred costs of €250,000, €250,000 and €250,000 (approximately $374,000, $366,000, and $344,000 in Canadian dollars), respectively in connection with this agreement.

(f) On March 28, 2018, the Company's Board of Directors approved the Company's entry into a consulting services agreement with Carlo Coda Nunziante effective April 1, 2018. Under the agreement, Carlo Coda-Nunziante, the Company's former Vice President, Strategy, and brother-in-law to the Executive Chairman of the Board, is providing advice and assistance on the Company's strategic planning and business strategies for a total annual fee, including reimbursement of out-of-pocket expenses of €146,801 (approximately $222,000 in Canadian dollars), net of applicable taxes. In May 2024, the agreement was extended to September 30, 2024, and has not been renewed. In fiscal 2025, 2024 and 2023, the Company incurred charges of € 37,000, €149,000 and €149,000 (approximately $55,000, $217,000 and $205,000 in Canadian dollars), including applicable taxes, respectively.

(g) On April 16, 2021, the Company entered into a joint venture with FWI LLC (FWI) to form RMBG Retail Vancouver ULC (RMBG). The Company originally contributed nominal cash amounts as well as $1.6 million of certain assets in the form of a shareholder advance for 49% of the legal entity comprising the joint venture. This shareholder advance was fully reimbursed in fiscal 2024.

The Company provides RMBG with retail support and administrative services, and charges RMBG for these related services. During fiscal 2025, the Company charged $520,623 to RMBG ($612,500 and nil in fiscal years 2024 and 2023, respectively). These fees are reflected as a reduction of selling, general and administrative expenses in the consolidated statement of operations. As of March 29, 2025, the Company has $0.2 million ($0.2 million as at March 30, 2024) as a receivable related to these related services, and is presented in accounts receivable and other receivables on the consolidated balance sheet. In December 2024, the Company received a dividend from RMBG, in the amount of U.S. $960,784 (approximately $1.38 million in Canadian dollars), based on its respective joint venture shareholdings, which was recorded as a reduction of the equity investment on the balance sheet and an operating cash flow.

(h) On July 15, 2024, the Company obtained a support letter ("Shareholder Support Letter") from one if its controlling shareholders, , providing financial support in an amount of up to $3.75 million that is available until July 31, 2025, of which up to $2.75 million is available prior to January 1, 2025 and an additional amount of up to $1.0 million would be available after January 1, 2025. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2025, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in maintaining minimum excess availability levels at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under this support letter will bear interest at an annual rate of 15 %. However, there will be no interest or principal repayments prior to July 31, 2025. On November 27, 2024, the support letter was extended until December 31, 2025. On June 26, 2025, the Shareholder Support Letter was terminated and replaced with the Mangrove Loan whereby Mangrove entered into a loan agreement with the Company to advance $3.75 million of additional indebtedness to fund the Company's working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026.

(i) On July 21, 2025, the Company obtained support letters providing financial support to the Company for an aggregate total amount of up to $1.5 million from (i) Mangrove (one of its the Company's controlling shareholders) for up to $500,000, (ii) Davide Barberis Canonico (a member of the Company's Board of Directors) for up to $800,000, and (iii) Marco Pasteris (the Company's Vice-President, Finance) for $200,000. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2026, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in maintaining minimum excess availability at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under these support letters will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2026.

(j) In addition, on July 21, 2025, the Company obtained from Mangrove a deferral of interest payments payable in relation to the cash advance outstanding of U.S. $1.5 million and the Mangrove Loan of $3.75 million, of up to a maximum of $813,227, effective immediately and through to July 31, 2026.

------

17. Financial instruments:

Fair value of financial instruments:

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. U.S. GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. U.S. GAAP prescribes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 1 inputs are considered to carry the most weight within the fair value hierarchy due to the low levels of judgment required in determining fair values.

Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3 – Unobservable inputs reflecting the reporting entity's own assumptions. Level 3 inputs are considered to carry the least weight within the fair value hierarchy due to substantial levels of judgment required in determining fair values.

The Company has determined that the carrying value of its cash and cash equivalents, accounts receivable, long-term receivables, accounts payable and accrued liabilities approximates fair values as at the balance sheet date. As of March 29, 2025 and March 30, 2024, for the $73.6 million and $63.4 million, respectively, of bank indebtedness and the $12.4 million and $12.3 million, respectively, of long-term debt bearing interest at variable rates, the fair value is considered to approximate the carrying value.

As of March 29, 2025 and March 30, 2024, the fair value of the remaining $13.9 million and $14.6 million, respectively of fixed-rate long-term debt is estimated to be approximately equal to its carrying amount. The fair value was determined by discounting the future cash flows of each instrument at the current market interest rates for the same or similar debt instruments with the same remaining maturities adjusted for all necessary risks, including its own credit risk. In determining an appropriate spread to reflect its credit standing, the Company considered interest rates currently offered to the Company for similar debt instruments of comparable maturities by the Company's lenders. As a result, the Company has determined that the inputs used to value these long-term debts fall within Level 3 of the fair value hierarchy.

**18.** **Subsequent events** 

On June 6, 2025, the Company entered into a share purchase agreement (the "Share Purchase Agreement") with the shareholders of 1067830 Ontario Limited ("the Target"), a company incorporated under the laws of Ontario, to acquire the Target and its wholly-owned subsidiaries which operate four retail locations in Toronto, Ontario, under the European Boutique brand and are engaged primarily in luxury timepieces and jewelry retail activities. The purchase was completed on July 8, 2025, for a total consideration of $9.0 million, of which $7.0 million is payable at closing and $2.0 million is payable over two years from closing, subject to certain adjustments customary for and acquisition of this nature (the "European Acquisition"). The initial accounting for the business combination is incomplete at the time these financial statements are issued because of the proximity to the purchase date.

On June 26, 2025, Mangrove entered into a loan agreement with the Company to advance $3.75 million of additional indebtedness (the "Mangrove Loan") to fund the Company's working capital requirements, at an annual interest rate of 15%, which would be repayable, in full, on December 24, 2026. The Mangrove Loan terminated the Shareholder Support Letter.

In conjunction with the closing of the European Acquisition, on July 8, 2025, the Company entered into an amendment to the Amended Term Loan (defined below) with Crystal Financial LLC (D/B/A SLR Credit Solutions) ("SLR"), whereby SLR provided the Company with an additional term loan of $13.5 million to fund the European Acquisition and to fund ordinary course working capital (the "Incremental Loan"). The Incremental Loan bears interest at the same rate as the current term loan with SLR which is defined in Note 6. Under this amendment to the Amended Term Loan, the Company is required to ensure that the aggregate amount outstanding under this agreement and the Amended Credit Facility does not exceed the lesser of $116 million and the borrowing base contemplated in the Amended Term Loan.

In addition, contemporaneously with the Incremental Loan, on July 8, 2025, the Company entered into an amendment and waiver to the Amended Credit Facility (as defined below) with Wells Fargo Capital Canada Corporation ("Wells Fargo") whereby Wells Fargo waives certain provisions of the existing Amended Credit Facility to permit the European Acquisition, the Incremental Loan and the Mangrove Loan. Under this amendment and waiver to the Amended Credit Facility, the Company is entitled to borrow an amount not to exceed the lesser of $90 million and the most recent borrowing base delivered by Birks to its senior secured lenders.

On July 14, 2025, the Company entered into an amendment to its $4.3 million loan and its $10.0 million loan with Investissement Québec which modified the working capital covenant for fiscal years ending March 29, 2025 and March 28, 2026 to 0.88. Starting in fiscal 2026 and for the duration of the loans, respectively, the interest rate will be adjusted depending on the working capital ratio calculated at year end.

On July 21, 2025, the Company obtained support letters providing financial support to the Company for an aggregate total amount of up to $1.5 million from (i) Mangrove (one of its the Company's controlling shareholders) for up to $500,000, (ii) Davide Barberis Canonico (a member of the Company's Board of Directors) for up to $800,000, and (iii) Marco Pasteris (the Company's Vice-President, Finance) for $200,000. These amounts can be borrowed, if needed, when deemed necessary by the Company, upon approval by the Company's Board of Directors, until at least July 31, 2026, to assist the Company in satisfying its obligations and debt service requirements as they come due in the normal course of operations, or in maintaining minimum excess availability at all times as defined in the Amended Credit Facility and Amended Term Loan. Amounts drawn under these support letters will bear interest at an annual rate of 15%. However, there will be no interest or principal repayments prior to July 31, 2026.

In addition, on July 21, 2025, the Company obtained from Mangrove a deferral of interest payments payable in relation to the cash advance outstanding of U.S. $1.5 million and the Mangrove Loan of $3.75 million, of up to a maximum of $813,227, effective immediately and through to July 31, 2026.

## Exhibit 4.11

**Exhibit 4.11** 

**<u>[Investissement Québec Letterhead]</u>**

**<u>[UNOFFICIAL TRANSLATION]</u>**

<u>CONFIDENTIAL</u> 

July 14, 2025

Mrs. Katia Fontana, CPA

Vice-President and Chief Financial Officer

Groupe Birks Inc.

2020, Robert-Bourassa Boulevard, Suite 200

Montréal (Québec) H3A 2A5

---

| | |
|:---|:---|
| **Subject:** | **Amendment : 134068**  |

---

**Files D153921 and D158763** 

**Company: E021661** 

Madam,

We make reference to:

1) the loan offer of an amount up to $4,300,000 (**"Loan D153921"),** issued by Investment Québec ("**IQ**"), on February 23, 2021 and accepted on August 24, 2021 by Groupe Birks Inc. (the "**Corporation**"), as subsequently modified, if at all ("**Offer D153921**"); 

2) the loan offer of up to $10,000,000 (**"Loan D158763"**), issued by IQ on June 12, 2020 and accepted on July 2, 2020 by the Corporation, as subsequently modified, if at all ("**Offer D158763**"); 

Loan D153921 and Loan D158763 are hereby collectively referred to as the **"Loans"**, and Offer D153921 and Offer D158763 are hereby collectively referred to as the **"Offers"**, and we hereby inform you that the following amendments are being made:

1001 Robert-Bourassa Boulevard, Suite 1000, Montréal (Québec) H3B 4L4 CANADA

Without charge : 1 844 474-6367 Telecopier : 514 864-2444

www.investquebec.com

------

**Amendments:** 

Section 9.1.1 of each Offer is amended to read as follows:

*9.1.1* *9.1.1 Maintain the following ratio:* 

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| | | |
|:---|:---|:---|
| **Ratio** | **Required Ratio** | **Definition**<br> **(annex or specific definition)** |
| Minimum annual working<br> capital | 0.88 for the fiscal years<br> ending March 29, 2025<br> and March 28,<br> 2026<br>1.01 for subsequent fiscal<br> years | means, according to the annual financial statements, current assets divided by current liabilities, excluding commercial leases (ASC-842) included in the liabilities. |

---

A paragraph 9.1.1.1 is added to Offer D153921:

9.1.1.1 In the event that the Company fails to comply with the requirements set forth in the preceding paragraph, the
Fixed Rate applicable to the Loan shall be increased as follows, effective as of September 1 of the fiscal year concerned, and for the remaining term of the Loan:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fiscal year 2026:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ratio below 1.01 – increase of 0.25%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ratio below 0.93 – cumulative increase of 0.50%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ratio below 0.88 – cumulative increase of 1.00%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fiscal year 2027:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Ratio below 1.01 – additional increase of 0.50%

It is understood that all terms and conditions of the Offers remain unchanged.

Please note that a modification fee of $5,000 is required for the coming into force of this amendment, which fee will be directly debited from the bank account of the Corporation, as per the terms of the Offers, on the last day of the month following the receipt of the acceptance of this letter.

If all is in order, please confirm your acceptance of these terms by returning this document duly signed before August 8, 2025.

------

Best Regards,

---

| | | |
|:---|:---|:---|
| **INVESTISSEMENT QUÉBEC** | **INVESTISSEMENT QUÉBEC** | |
| By: | *(s) Philippe Marchand* | Date: 2025-07-14 13h53:40 EDT |
|  | Philippe Marchand |  |
|  | Director, International Specialized Financing |  |
|  | *Name of authorized signatory in block letters* |  |

---

---

| | | |
|:---|:---|:---|
| By: | *(s) Hugo T. Lacroix* | Date: 2025-07-14 16h25:11 EDT |
|  | Hugo T. Lacroix |  |
|  | Senior Director, Specialized Financing - International |  |
|  | *Name of authorized signatory in block letters* |  |

---

PM/HTL/nd

------

**COMPANY'S ACCEPTANCE** 

After having taken notice of the amendments contained herein, we accept.

---

| | | |
|:---|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** | |
| By: | *(s) Katia Fontana* | Date: 2025-07-14 19h04:45 EDT |
|  | *Signature* |  |
|  | Katia Fontana |  |
|  | *Name of authorized signatory in block letters* |  |

---

## Exhibit 4.19

**CERTAIN CONFIDENTIAL INFORMATION (INDICATED BY "[\*\*\*]") CONTAINED IN** 

**THIS AGREEMENT HAS BEEN REDACTED BECAUSE (I) THE COMPANY** 

**CUSTOMARILY AND ACTUALLY TREATS THE REDACTED INFORMATION AS** 

**PRIVATE OR CONFIDENTIAL AND (II) THE OMITTED INFORMATION IS NOT** 

**MATERIAL.** 

**Exhibit 4.19** 

[\*\*\*]

***<u>REVISED</u>***

May 30, 2024

Mr. Carlo Coda Nunziante

[\*\*\*]

Dear Carlo,

**<u>Re: Consulting Agreement</u>**

Following my letter dated May 21, 2024 and our subsequent discussions, this letter is to confirm in writing that the Consulting Agreement entered into between Birks Group Inc. and yourself on March 29, 2018 (the "Agreement") as amended, is extended until September 30, 2024 on the same terms and conditions, after which period the Agreement will terminate.

As discussed, the monthly payments for the months of July to September 2024, will be paid following the completion of [\*\*\*] and receipt of the monthly invoices as well as supporting documentation for that three-month period.

I understand that we have not yet received all of your monthly invoices for services rendered during the last few months. Please send those invoices to us as well.

Following the payment of the monthly invoices for the period from July to September 2024 and any other amount that may be outstanding for services provided in the last few months, there will be no other amount owed under the Consulting Agreement.

Kindly acknowledge receipt of this letter and confirm your agreement with the terms thereof by signing in the space provided below and return an executed copy to the attention of Miranda Melfi.

We appreciate the services you have rendered under the Consulting Agreement. Should we require your consulting services in the future, we will reach out to you as needed.

Yours truly,

**BIRKS GROUP INC.** 

---

| | |
|:---|:---|
| Per: | /s/ Jean-Christophe Bédos |
|  | Jean-Christophe Bédos |
|  | President and CEO |

---

GROUPE BIRKS INC. ◾ BIRKS GROUP INC.

2020, boul. Robert-Bourassa, bureau 200, Montréal (QC) CANADA H3A 2A5 ◾ T. +1.514.397.2501 ◾ birksgroup.com

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The undersigned agrees to the terms of this letter.

Date: <u>June 12</u> , 2024.

---

| |
|:---|
| /s/ Carlo Coda Nunziante |
| Carlo Coda Nunziante |

---

## Exhibit 4.27

**Exhibit 4.27** 

***Execution Version***

**AMENDMENT NO. 7 TO THE CREDIT AGREEMENT** 

**THIS AMENDMENT NO. 7 TO THE CREDIT AGREEMENT** is made as of July 8, 2025 (this "<u>Agreement</u>"), by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a "<u>Lender</u>"), **CRYSTAL FINANCIAL LLC** (D/B/A SLR Credit Solutions), as administrative agent for each member of the Lender Group (in such capacity, together with its successors and assigns in such capacity, "<u>Agent</u>") and **BIRKS GROUP INC.** and together with each other Person organized under the laws of Canada or a province thereof that joins under the Amended Credit Agreement as a "Borrower" in accordance with the terms of the Amended Credit Agreement after the date hereof (each, a "<u>Borrower</u>" and all references herein to "Borrower" shall include each such additional Borrower who so joins).

**WHEREAS**, the Borrower and the Agent are parties to a Credit Agreement dated as of June 29, 2018, Amendment No. 1 to the Credit Agreement dated as of April 18, 2019, Amendment No. 2 to the Credit Agreement dated as of July 2, 2020, Amendment No. 3 to the Credit Agreement dated as of August 31, 2021, Amendment No. 4 to the Credit Agreement dated as of December 15, 2021, Amendment No. 5 to the Credit Agreement dated as of December 24, 2021 and Amendment No. 6 to the Credit Agreement dated as of June 26, 2024 (as amended, supplemented, restated or otherwise modified from time to time immediately prior to this Agreement, the "<u>Existing Credit Agreement</u>"), and as further amended by this Agreement, the "<u>Amended Credit Agreement</u>";

**WHEREAS**, the Borrower has requested an amendment to the Existing Credit Agreement pursuant to Section 14 of the Existing Credit Agreement (i) to establish the Seventh Amendment Term Loan Commitment (as defined in the Amended Credit Agreement) which shall be in an aggregate principal amount of $13,500,000 as of the date hereof, and (ii) to make certain other modifications to the Existing Credit Agreement, as set forth in further detail in the Amended Credit Agreement attached hereto as <u>Exhibit A</u>;

**WHEREAS**, (i) the Lenders set forth as "Seventh Amendment Term Lenders" on the supplement to Schedule C-1 to the Amended Credit Agreement attached hereto as <u>Annex B</u> (collectively, the "<u>Seventh Amendment Term Loan Lenders</u>") have agreed to fund to the Borrower a Seventh Amendment Term Loan (as defined in the Amended Credit Agreement) in an amount equal to the Seventh Amendment Term Loan Commitment on the Seventh Amendment Effective Date (as defined below), except as otherwise set forth herein or in the Amended Credit Agreement or the Seventh Amendment Fee Letter, on the same terms as the Term Loan (as defined in the Existing Credit Agreement) and (ii) the Lenders party hereto, constituting all Lenders, have agreed to amend the Existing Credit Agreement as set forth herein, in each case, upon the terms and subject to the conditions set forth below;

**WHEREAS**, the Borrower has advised Agent that it has entered into that certain Share Purchase Agreement, dated as of June 6, 2025 by and among the Borrower, the Persons listed in Exhibit A thereto, as "Vendors", and Jordan Sutkiewicz, as "Vendors' Representative" (the "<u>Store Acquisition Agreement</u>"), pursuant to which the Borrower will acquire, directly and indirectly, several corporations (collectively, the "<u>Target</u>") which operate certain retail stores in the Toronto area as described therein (the "<u>Seventh Amendment Store Acquisitions</u>");

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**WHEREAS**, the proceeds of the Seventh Amendment Term Loans will be used to (i) fund ordinary course working capital, (ii) fund the Seventh Amendment Store Acquisitions and (iii) pay fees and expenses relating to this Agreement and transactions relating thereto;

**WHEREAS**, the Borrower, Agent and Lenders party hereto agree that certain conditions as required by the definition of Permitted Acquisition (together, the "<u>Specified Acquisition Requirements</u>") will not be satisfied with respect to the Seventh Amendment Store Acquisitions; and

**WHEREAS**, subject to the satisfaction of the conditions to effectiveness set forth in Section 3.1 hereof, the Agent and the Lenders hereby agree to waive the Specified Acquisition Requirements solely with respect to the Seventh Amendment Store Acquisitions.

**NOW THEREFORE THIS AGREEMENT WITNESSES** that, in consideration of the mutual covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed by the parties hereto as follows:

**ARTICLE 1** 

**DEFINITIONS AND INTERPRETATION** 

**1.1** Definitions. All capitalized terms used in this Agreement that are defined in the Amended Credit Agreement
shall have the meanings ascribed to them in the Amended Credit Agreement except to the extent that such terms are defined or modified in this Agreement, or the context otherwise requires.

**ARTICLE 2** 

**AMENDMENTS TO CREDIT AGREEMENT** 

**2.1** Effective as of the Seventh Amendment Effective Date (as defined below), the Existing Credit Agreement is
hereby amended to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) delete the red stricken text (indicated textually in the same manner as the following example: stricken red text), add the blue double-underlined text (indicated textually in the same manner as the following example: <u>**double-underlined blue text**</u>), and move the green stricken text (indicated textually in the same manner as the following example: stricken green text) where shown in the green double-underlined text (indicated textually in the same manner as the following example: <u>double underlined green text</u>) in
the conformed copy of the Amended Credit Agreement attached as <u>Exhibit A</u> hereto; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) supplement Schedule C-1 of the Existing Credit Agreement as set forth in <u>Exhibit B</u> attached hereto,
and restate Schedule 5.1 of the Existing Credit Agreement as set forth in <u>Exhibit B</u> attached hereto.

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**ARTICLE 3** 

**MISCELLANEOUS PROVISIONS** 

**3.1 Conditions Precedent to Effectiveness.** This Agreement shall become effective as of the date upon which all of the following conditions have been satisfied (the "<u>Seventh Amendment Effective Date</u>"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Agent shall have received this Agreement or counterparts hereof duly executed and delivered by the Borrower,
the Agent and the Lenders, all in accordance with Section 14.1 of the Amended Credit Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Mangrove or its affiliates shall have provided a gross amount of $3,750,000 of the Mangrove Debt, prior to
the netting of any related fees and expenses, to the Borrower on the Seventh Amendment Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Agent shall have received copies of the Mangrove Debt Documents and the Mangrove Subordination Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Agent shall have received a copy of the Store Acquisition Agreement, including all schedules and attachments
thereto, in form and substance satisfactory to Agent, and the Seventh Amendment Store Acquisitions shall have been consummated on the terms set forth therein as of June 6, 2025 (without any material amendment, waiver, modification or consent
under the Acquisition Agreement not consented to by the Agent other than amendments, waivers, modifications or consents under the Store Acquisition Agreement, which would not be (in the aggregate) materially adverse to the interests of the Lenders; <u>provided</u>, that any amendment, waiver, consent or other modifications to the definition of "Material Adverse Effect" or "Material Adverse Change" set forth in the Store Acquisition Agreement shall be deemed materially
adverse to the interests of the Lenders);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Section 2.7 of the Acquisition Agreement (as in effect on June 6, 2025) shall have been complied
with in all respects, and no Indebtedness of the Target shall be outstanding other than Indebtedness permitted by the Acquisition Agreement and the Amended Credit Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Agent shall have received executed copies of the Seventh Amendment Seller Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Agent shall have received a copy of the Second Amendment & Waiver to Amended and Restated Credit
Agreement duly executed and delivered by the Borrower, the Revolving Agent and the Revolving Lenders party thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Agent shall have received a copy of the Intercreditor Agreement duly executed and delivered by the Agent
and the Revolving Loan Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Agent shall have received a copy of the Seventh Amendment Fee Letter, duly executed and delivered by the
Borrower and the Agent;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Agent shall have received a certificate, in form and substance reasonably satisfactory to it, from a
Senior Officer of the Borrower (with such certification to be in such Person's capacity as a Senior Officer of the Borrower and not in such Person's individual capacity) certifying that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) after giving effect to this Agreement and the transactions contemplated hereby, (A) each Loan Party is
Solvent; (B) no Default or Event of Default exists, nor shall result from giving effect to the terms of this Agreement; and (C) the representations and warranties of the Loan Parties or their respective Subsidiaries contained in this
Agreement and in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any portion of any representation and warranty that is already qualified or modified by
materiality in the text thereof) on such date (except to the extent that such representations and warranties relate solely to an earlier date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) there is no action, suit, investigation or proceeding pending or, to the knowledge of the Loan Parties,
threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) no law or regulation to which any Loan Party is subject is applicable to the transactions contemplated
hereby which could reasonably be expected to have a Material Adverse Effect on any Loan Party or a Material Adverse Effect on the transactions contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) no Material Adverse Effect shall have occurred as of the Seventh Amendment Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the Revolving Loan Documents shall be in full force and effect and no Default or Event of Default (as those
terms are defined in the Revolving Credit Agreement) shall exist thereunder on the Seventh Amendment Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all (i) payments due under leases, other Indebtedness and Taxes are not past due (except to the extent
notified to and approved by Agent prior to the date hereof), excluding any good faith disputes and (ii) accounts payable are not past due (except to the extent (x) within historical norms or (y) notified to and approved by Agent prior
to the date hereof), excluding any good faith disputes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) there is no default in existence under any Material Contract by a Loan Party;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the Agent shall have received a certificate of a duly authorized officer of each Loan Party (with such
certification to be in such Person's capacity as an officer of such Loan Party and not in such Person's individual capacity), certifying (i) that the attached copy of such Loan Party's Organizational Documents (including, without
limitation, such Loan Party's charter documents) are true and complete and in full force and effect, and remain in full force and effect, (ii) that an attached copy of resolutions authorizing execution and delivery of this Agreement is
true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this Agreement, (iii) to the title, name and
signature of each Person authorized to sign the Loan Documents, and (iv) that either (a) the attached copies are all of the consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan
Party and the validity against such Loan Party of this Agreement and related documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (v) that no such consents, licenses or approvals are
so required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) the Agent shall have received good standing or subsistence certificates, as applicable, for each Loan Party,
issued by the appropriate official of such Loan Party's jurisdiction of organization, dated as of a recent date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) the Agent shall have received a favorable legal opinion addressed to the Lenders and the Agent, dated as of
the Seventh Amendment Effective Date, in form and substance reasonably satisfactory to the Agent, from Stikeman Elliott LLP, Canadian counsel to the Borrower and their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) the Agent shall have received an executed letter of direction, in form and substance satisfactory to the
Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) the Agent shall have received an executed counterpart of Canadian Security Agreement from each Loan Party
and the Target;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) the Agent shall have received an executed counterpart of that certain Canadian trademark security agreement
from each of European & Co. Inc. and 1170760 Ontario Limited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) the representations and warranties set forth in <u>Section 3.2</u> hereto are true and correct as of
the Seventh Amendment Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) all action on the part of the Loan Parties necessary for the valid execution, delivery and performance by
the Borrower of this Agreement shall have been duly and effectively taken; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) the Borrower shall have paid (i) all costs, fees, and expenses pursuant to the Seventh Amendment Fee
Letter and (ii) all reasonable and documented Lender Group Expenses incurred in connection with the transactions evidenced by this Agreement and the other Loan Documents.

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**3.2 Representations and Warranties**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower represents and warrants to the Lender Group and the Agent that, as of the date hereof, this
Agreement has been duly authorized, executed and delivered by the Borrower and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar laws affecting creditors' rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in
equity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrower and each of its Subsidiaries (i) is duly organized and existing and in good standing under
the laws of the jurisdiction of its organization, (ii) is qualified or registered to do business in any jurisdiction where the failure to be so qualified would reasonably be expected to result in a Material Adverse Effect, and (iii) has
all requisite corporate, limited liability or other organizational power and authority (as applicable) to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into this Agreement and the
other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) As to each Loan Party, the execution, delivery, and performance by such Loan Party of this Agreement and the
other Loan Documents to which it is a party have been duly authorized by all necessary organizational action on the part of such Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) As to each Loan Party, the execution, delivery, and performance by such Loan Party of this Agreement and the
other Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, provincial, state, foreign or local law or regulation applicable to any Loan Party or its Subsidiaries, or any order, judgment, or
decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries where any such violation would individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (ii) violate the
Governing Documents of any Loan Party or its Subsidiaries, (iii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material agreement of any Loan Party or its Subsidiaries where
any such conflict, breach or default would individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iv) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of
any Loan Party or its Subsidiaries, other than Permitted Liens, or (v) require any approval of any holder of Equity Interests of a Loan Party or its Subsidiaries or any approval or consent of any Person under any material agreement of any Loan
Party or its Subsidiaries, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of material agreements, for consents or approvals, the failure to obtain would not individually or in
the aggregate reasonably be expected to cause a Material Adverse Effect.

**3.3 Conditions Subsequent to Effectiveness.** The parties hereto hereby further agree that in addition to all other terms, conditions and provisions set forth in this Agreement, including, without limitation, those conditions to the Seventh Amendment Effective Date set forth herein, the Loan Parties shall satisfy the conditions subsequent set forth below:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Agent shall have received the stock certificates of the Target and corresponding undated stock transfer
powers executed in wet ink, within 5 days of the Seventh Amendment Effective Date (or such longer date as the Agent may agree in its reasonable discretion).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Agent shall have received evidence of filed discharged PPSAs within 10 Business Days of the Seventh
Amendment Effective Date (or such longer date as the Agent may agree in its reasonable discretion).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Agent shall have received evidence of closure of the existing Target deposit accounts (excluding, for
certainty, disbursement accounts), in form and substance reasonably satisfactory to the Agent, within 10 days of the Seventh Amendment Effective Date (or such longer date as the Agent may agree in its reasonable discretion).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Agent shall have received insurance certificates and endorsements of the Loan Parties and Target, in
form and substance reasonably satisfactory to the Agent, within 15 days of the Seventh Amendment Effective Date (or such longer date as the Agent may agree in its reasonable discretion).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Agent shall have received estoppel letters, in form and substance reasonably satisfactory to the Agent,
executed by each of Unique Designs, Inc., HLR Group Holdings Ltd., and M7D Corporation, within 45 days of the Seventh Amendment Effective Date (or such longer date as the Agent may agree in its reasonable discretion).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Agent shall have received evidence of closure of the existing Target disbursement deposit accounts, in
form and substance reasonably satisfactory to the Agent, within 75 days of the Seventh Amendment Effective Date (or such longer date as the Agent may agree in its reasonable discretion), and all funds from the operations of Target's business
shall be held only in deposit accounts that (a) the Loan Parties have granted a security interest in favour of the Agent in and (b) are subject to a Control Agreement.

**3.4 Continuance of the Loan Documents and the Existing Credit Agreement**. The Existing Credit Agreement and the other Loan Documents, as changed, altered, amended or modified by this Agreement, shall be and continue in full force and effect and is hereby confirmed and the rights and obligations of all parties thereunder shall not be affected or prejudiced in any manner except as specifically provided for in this Agreement.

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**3.5 Confirmation of Existing Security.** Each of the Borrower and the other Loan Parties acknowledges and confirms that notwithstanding the execution of this Agreement, each of the existing security documents that Borrower or any other Loan Party has executed in favour of Agent for each member of the Lender Group (i) remains in full force and effect and has not been terminated, discharged or released, (ii) constitutes the legal, valid and binding obligation of the Borrower and the other Loan Parties party thereto, enforceable against the Borrower and such other Loan Parties under the laws of the Province of Ontario (or other governing law specified therein) and the laws of Canada applicable therein in accordance with its terms, subject to applicable bankruptcy, insolvency and other laws of general application limiting the enforceability of creditors rights, and (iii) continues to stand as valid and enforceable security subject to the qualifications set forth above for the Obligations.

**3.6 Reservation of Rights.** Agent and Lender Group hereby expressly reserve all of their available rights, remedies and claims in their entirety, any of which may be exercised or otherwise pursued at any time, and from time to time, in the sole and absolute discretion of Agent or Lender Group in accordance with the Amended Credit Agreement, the other Loan Documents, or at law or in equity.

**3.7 Reference to and Effect on the Existing Credit Agreement**. On and after the Seventh Amendment Effective Date, each reference in the Existing Credit Agreement to "this Agreement", "hereunder", "hereof", "herein", "hereto", "hereby" and similar expressions, and each reference to "the Existing Credit Agreement" and "the Agreement" in any Schedule to the Existing Credit Agreement and, unless the context otherwise requires, any Loan Documents shall mean and refer to the Amended Credit Agreement.

**3.8 Cost and Expenses.** Borrower agrees to pay on demand all reasonable costs and expenses of the Agent or any Lender in connection with the preparation, negotiation, execution, delivery, and administration of this Agreement and related documents including, without limitation, the reasonable fees and out-of-pocket expenses of Proskauer Rose LLP, counsel for the Agent or any Lender with respect thereto and with respect to advising the Agent or any Lender as to its rights and responsibilities hereunder.

**3.9 Section Headings.** Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

**3.10 Interpretation.** To the fullest extent permitted by applicable law, neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Agent, the Lender Group or the Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

**3.11 Severability of Provisions.** Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

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**3.12 Counterparts;** Electronic Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile, e-mail or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile, e-mail or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document *mutatis mutandis*.

**3.13 Governing Law**.

THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE PROVINCE OF ONTARIO; <u>PROVIDED</u>, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 3.13.

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A "<u>CLAIM</u>"). BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN THE PROVINCE OF ONTARIO, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST AGENT, ANY SWING LENDER, ANY OTHER LENDER, ANY ISSUING LENDER, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

**3.14 Release**.

EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT, AS OF THE DATE HEREOF, IT HAS NO DEFENSE, RECOUPMENT, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL, OR ANY PART OF, ITS LIABILITY TO REPAY THE OBLIGATIONS ARISING UNDER THE EXISTING CREDIT AGREEMENT, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM THE AGENT, THE LENDERS AND THEIR RESPECTIVE AFFILIATES AND APPROVED FUNDS, IN EACH CASE IN WHATEVER CAPACITY (EACH, A "LENDER PARTY") (OR ANY LENDER PARTY) ARISING UNDER OR IN CONNECTION WITH THE EXISTING CREDIT AGREEMENT, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. EACH LOAN PARTY HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES EACH LENDER PARTY AND EACH OF THEIR RESPECTIVE RELATED PARTIES, IN EACH CASE IN WHATEVER CAPACITY (COLLECTIVELY, THE "RELEASED PARTIES"), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AGREEMENT IS ORIGINATED, TAKEN OR EXECUTED, WHICH SUCH LOAN PARTY MAY NOW OR HEREAFTER HAVE AGAINST ANY RELEASED PARTY, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR

------

REGULATIONS, OR OTHERWISE, AND ARISING FROM OR ARISING IN CONNECTION WITH OR RELATING TO ANY LOANS, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE EXISTING CREDIT AGREEMENT, THIS AGREEMENT OR OTHER LOAN DOCUMENTS, AND/OR NEGOTIATION OF, OR EXECUTION OF, THIS AGREEMENT. EACH LOAN PARTY HEREBY COVENANTS AND AGREES NEVER TO INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR IN ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF, ANY CLAIM, ACTION OR CAUSE OF ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST ANY OF THE RELEASED PARTIES ARISING OUT OF OR RELATED TO A RELEASED PARTY'S ACTIONS, OMISSIONS, STATEMENTS, REQUESTS OR DEMANDS AND OCCURRING PRIOR TO EFFECTIVENESS OF THIS AGREEMENT RELATING TO THIS AGREEMENT, THE EXISTING CREDIT AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH LOAN PARTY AGREES TO INDEMNIFY AND HOLD EACH LENDER PARTY AND EACH OTHER RELEASED PARTY HARMLESS FROM ANY AND ALL MATTERS RELEASED PURSUANT TO THIS SECTION. EACH LOAN PARTY REPRESENTS AND WARRANTS TO LENDER PARTIES THAT IT HAS NOT PURPORTED TO TRANSFER, ASSIGN OR OTHERWISE CONVEY ANY RIGHT, TITLE OR INTEREST OF SUCH LOAN PARTY IN ANY RELEASED MATTER TO ANY OTHER PERSON AND THAT THE FOREGOING CONSTITUTES A FULL AND COMPLETE RELEASE OF SUCH LOAN PARTY'S CLAIMS WITH RESPECT TO ALL SUCH MATTERS. THE PROVISIONS OF THIS RELEASE AND THE REPRESENTATIONS, WARRANTIES, RELEASES, WAIVERS, ACQUITTANCES, DISCHARGES, COVENANTS, AGREEMENTS AND INDEMNIFICATIONS CONTAINED HEREIN (A) CONSTITUTE A MATERIAL CONSIDERATION FOR AND INDUCEMENT TO LENDER PARTIES ENTERING INTO THIS AGREEMENT, (B) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY DUTY, OBLIGATION OR LIABILITY OF ANY LENDER PARTY TO ANY LOAN PARTY OR ANY OTHER PERSON, (C) DO NOT CONSTITUTE AN ADMISSION OF OR BASIS FOR ESTABLISHING ANY LIABILITY, WRONGDOING; OR VIOLATION OF ANY OBLIGATION, DUTY OR AGREEMENT OF ANY LENDER PARTY TO ANY LOAN PARTY OR ANY OTHER PERSON, AND (D) SHALL NOT BE USED AS EVIDENCE AGAINST ANY LENDER PARTY BY ANY LOAN PARTY OR ANY OTHER PERSON FOR ANY PURPOSE.

------

**IN WITNESS WHEREOF,** the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

---

| | |
|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| By:  | /s/ Katia Fontana |
|  | Name: Katia Fontana |
|  | Title: Vice President and Chief Financial Officer |
|  By: | /s/ Marco Pasteris |
|  | Name: Marco Pasteris |
|  | Title: Vice President, Finance |

---

[Signature Page to Amendment No. 7 to the Credit Agreement]

------

---

| | |
|:---|:---|
| **CRYSTAL FINANCIAL LLC (DBA SLR Credit Solutions),** as Agent | **CRYSTAL FINANCIAL LLC (DBA SLR Credit Solutions),** as Agent |
| By:  | /s/ Rebecca E. Tarby |
|  | Name: Rebecca E. Tarby |
|  | Title: Managing Director |

---

---

| | |
|:---|:---|
| **CRYSTAL FINANCIAL SPV LLC,** <br> as a Lender | **CRYSTAL FINANCIAL SPV LLC,** <br> as a Lender |
| By:  | /s/ Rebecca E. Tarby |
|  | Name: Rebecca E. Tarby |
|  | Title: Managing Director |

---

[Signature Page to Amendment No. 7 to the Credit Agreement]

------

**AGREED TO AND ACKNOWLEDGED** by the undersigned as of the date first indicated above.

---

| | |
|:---|:---|
| **CASH GOLD & SILVER, INC.,** as guarantor | **CASH GOLD & SILVER, INC.,** as guarantor |
| By: | /s/ Katia Fontana |
|  | Name: Katia Fontana |
|  | Title: Vice President |
| By: | /s/ Miranda Melfi |
|  | Name: Miranda Melfi |
|  | Title: Secretary |
| **BIRKS INVESTMENTS INC.**, as guarantor | **BIRKS INVESTMENTS INC.**, as guarantor |
| By: | /s/ Katia Fontana |
|  | Name: Katia Fontana |
|  | Title: Vice President |
| By: | /s/ Miranda Melfi |
|  | Name: Miranda Melfi |
|  | Title: Secretary |

---

------

Exhibit A to Sixth<u>Seventh</u> Amendment

**CREDIT AGREEMENT** 

**by and among** 

**CRYSTAL FINANCIAL LLC(d/b/a SLR Credit Solutions),** 

**as Agent,** 

**THE LENDERS THAT ARE PARTIES HERETO** 

**as the Lenders,** 

**and** 

**BIRKS GROUP INC.,** 

**as Borrower** 

**Dated as of June 29, 2018** 

------

**TABLE OF CONTENTS** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| 1. DEFINITIONS AND CONSTRUCTION | 1. DEFINITIONS AND CONSTRUCTION | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. | Definitions | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. | Accounting Terms | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. | PPSA | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4. | Construction | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5. | Time References | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6. | Schedules and Exhibits | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7. | Exchange Rates; Currency Equivalents | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8. | Quebec Interpretation | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9. | Rates | 4 |
| 2. TERM LOAN AND TERMS OF PAYMENT | 2. TERM LOAN AND TERMS OF PAYMENT | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. | Term Loan Facility | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. | Borrowing Base | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. | Payments; Apportionment and Application; Use of Proceeds; Repayments; Prepayments | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. | Interest Rates; Payment of Interest | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. | Fees and Expenses | 12<u>13</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. | Reimbursement Obligations | 14 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7. | Capital Adequacy; Increased Costs | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8. | Currencies | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9. | *Interest Act* (Canada); Criminal Rate of Interest; Nominal Rate of Interest | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10. | Tax Treatment | 17<u>18</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11. | Benchmark Replacement Setting | 17<u>18</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12. | Inability to Determine Rates | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13. | Illegality | 19 |
| 3. CONDITIONS; TERM OF AGREEMENT | 3. CONDITIONS; TERM OF AGREEMENT | 20<u>19</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. | Conditions Precedent to Effectiveness of Agreement | 20<u>19</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. | [Reserved] | 23<u>22</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. | Maturity | 23<u>22</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. | Effect of Maturity | 23<u>22</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. | Post-Closing Covenants | 22 |
| 4. REPRESENTATIONS AND WARRANTIES | 4. REPRESENTATIONS AND WARRANTIES | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. | Due Organization and Qualification; Subsidiaries | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. | Due Authorization; No Conflict | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. | Governmental Consents | 25<u>24</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4. | Binding Obligations; Perfected Liens | 25<u>24</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5. | Title to Assets; No Encumbrances | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6. | Litigation | 25 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7. | Compliance with Laws | 26<u>25</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8. | Financial Statements; No Material Adverse Effect | 25 |

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**TABLE OF CONTENTS** 

**(cont'd)** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9. | Solvency | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10. | Canadian Pension Plan | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11. | Environmental Condition | 26 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12. | Complete Disclosure | 27<u>26</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13. | *Patriot Act*; Canadian AML and Anti-Terrorism Laws | 27 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14. | Indebtedness | 28<u>27</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15. | Payment of Taxes | 28<u>27</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16. | Margin Stock | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.17. | Governmental Regulation | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.18. | OFAC | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.19. | Employee and Labor Matters | 29<u>28</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.20. | Intellectual Property | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.21. | Eligible Accounts | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.22. | Eligible Inventory | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.23. | Location of Inventory and Equipment | 30<u>29</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.24. | Inventory Records | 30<u>29</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.25. | Credit Card Arrangements | 30<u>29</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.26. | No Defaults; Material Contracts | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.27. | Operations of Certain Subsidiaries | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.28. | Trade Relations | 30 |
| 5. AFFIRMATIVE COVENANTS | 5. AFFIRMATIVE COVENANTS | 31<u>30</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. | Financial Statements, Reports, Certificates | 31<u>30</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. | Reporting | 31<u>30</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. | Existence | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. | Maintenance of Properties | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5. | Taxes | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6. | Insurance | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7. | [Reserved] | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8. | [Reserved] | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9. | [Reserved] | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10. | Inspection | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11. | Compliance with Laws and Material Contracts | 33<u>32</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.12. | Environmental | 33<u>32</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.13. | Disclosure Updates | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.14. | Formation of Subsidiaries | 34<u>33</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.15. | Further Assurances | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.16. | Location of Inventory; Chief Executive Office, Etc | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.17. | Canadian Compliance | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.18. | Credit Card Notifications | 36<u>35</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.19. | Sales Taxes | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.20. | [Reserved] | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.21. | Lenders' Meetings | 36 |

---

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------

**TABLE OF CONTENTS** 

**(cont'd)** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| 6. NEGATIVE COVENANTS | 6. NEGATIVE COVENANTS | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. | Indebtedness | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. | Liens | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. | Restrictions on Fundamental Changes | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. | Disposal of Assets | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. | Nature of Business | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. | Prepayments and Amendments | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. | Restricted Payments | 39<u>38</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8. | Accounting Methods | 40<u>39</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9. | Investments | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10. | Transactions with Affiliates | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11. | Use of Proceeds | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12. | Limitation on Issuance of Equity Interests | 41<u>40</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13. | Canadian Employee Benefits | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.14. | Sale and Leaseback Transactions | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.15. | Negative Pledges | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.16. | Restrictions on Subsidiary Distributions | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.17. | Business Activities; Permitted Store Closings | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.18. | Margin Regulations | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.19. | No Speculative Transactions | 44<u>43</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.20. | Amendment of Rolex Canada Documents | 44<u>43</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.21. | [Reserved] | 44<u>43</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.22. | Anti-layering | 43 |
| 7. [RESERVED] | 7. [RESERVED] | 44 |
| 8. EVENTS OF DEFAULT | 8. EVENTS OF DEFAULT | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. | Payments | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. | Covenants | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3. | Judgments | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4. | Voluntary Bankruptcy, etc | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5. | Involuntary Bankruptcy, etc | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6. | Default Under Other Agreements | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7. | Default under Revolving Loan Documents | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8. | Default Under Damiani Purchase Documents | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9. | Subordinated Debt Documents | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10. | Compliance Certificate; Borrowing Base Certificate | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.11. | Guarantee | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.12. | Security Documents | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.13. | Loan Documents | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.14. | Change of Control | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.15. | Material Damage or Loss | 47 |

---

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------

**TABLE OF CONTENTS** 

**(cont'd)** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| 9. RIGHTS AND REMEDIES | 9. RIGHTS AND REMEDIES | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. | Rights and Remedies | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. | Remedies Cumulative | 48 |
| 10. WAIVERS; INDEMNIFICATION | 10. WAIVERS; INDEMNIFICATION | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. | Demand; Protest; etc | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. | The Lender Group's Liability for Collateral | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. | Indemnification | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4. | Subordination; Subrogation | 49 |
| 11. NOTICES | 11. NOTICES | 50 |
| 12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION | 12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION | 51 |
| 13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS | 13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1. | Assignments and Participations | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2. | Successors | 56 |
| 14. AMENDMENTS; WAIVERS | 14. AMENDMENTS; WAIVERS | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1. | Amendments and Waivers | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2. | Replacement of Certain Lenders | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3. | No Waivers; Cumulative Remedies | 59<u>59</u> |
| 15. AGENT; THE LENDER GROUP | 15. AGENT; THE LENDER GROUP | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1. | Appointment and Authorization of Agent | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2. | Liability of Agent | 60<u>60</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3. | Reliance by Agent | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4. | Notice of Default or Event of Default | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5. | Credit Decision | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6. | Costs and Expenses; Indemnification | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7. | SLR Credit Solutions in Individual Capacity | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.8. | Successor Agent | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.9. | Lender in Individual Capacity | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.10. | Collateral Matters | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.11. | Restrictions on Actions by Lenders; Sharing of Payments | 65<u>65</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.12. | Agency for Perfection | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.13. | Payments by Agent to the Lenders | 66<u>66</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.14. | Concerning the Collateral and Related Loan Documents | 66<u>66</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.15. | Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.16. | Several Obligations; No Liability | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.17. | Quebec Security | 68 |

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------

**TABLE OF CONTENTS** 

**(cont'd)** 

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| 16. WITHHOLDING TAXES | 16. WITHHOLDING TAXES | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1. | Payments | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2. | Exemptions | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3. | Reductions | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4. | Refunds | 70 |
| 17. GENERAL PROVISIONS | 17. GENERAL PROVISIONS | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.1. | Effectiveness | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.2. | Section Headings | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.3. | Interpretation | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.4. | Severability of Provisions | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.5. | Debtor-Creditor Relationship | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.6. | Counterparts; Electronic Execution | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.7. | Revival and Reinstatement of Obligations; Certain Waivers | 71<u>71</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.8. | Confidentiality | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.9. | Survival | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.10. | *Patriot Act*; Canadian Anti-Money Laundering & Anti-Terrorism Legislation | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.11. | Integration | 74 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.12. | Birks Group Inc. as Agent for Borrower | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.13. | Judgment Currency | 75<u>75</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.14. | Intercreditor Agreement | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.15. | No Setoff | 76 |

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-v-

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**EXHIBITS AND SCHEDULES** 

---

| | |
|:---|:---|
| Exhibit A-1 | Form of Assignment and Acceptance |
| Exhibit B-1 | Form of Borrowing Base Certificate |
| Exhibit B-4 | [Reserved] |
| Exhibit C-1 | Form of Compliance Certificate |
| Exhibit C-2 | Form of Credit Card Notification |
| Exhibit I-1 | [Reserved] |
| Schedule A-1 | Agent's Loan Account |
| Schedule A-2 | [Reserved] |
| Schedule A-3 | Authorized Persons |
| Schedule C-1 | Commitments |
| Schedule D-1 | [Reserved] |
| Schedule D-2 | [Reserved] |
| Schedule E-1 | Eligible Inventory Locations |
| Schedule P-1 | Permitted Investments |
| Schedule P-2 | Permitted Liens |
| Schedule R-1 | Real Property Collateral |
| Schedule 1.1 | Definitions |
| Schedule 3.5 | Post-Closing Covenants |
| Schedule 4.1 | Capitalization of Borrower and its Subsidiaries |
| Schedule 4.6(b) | Litigation |
| Schedule 4.11 | Environmental Matters |
| Schedule 4.14 | Permitted Indebtedness |
| Schedule 4.19 | Employee and Labor Matters |
| Schedule 4.20 | Intellectual Property |
| Schedule 4.23 | Location of Inventory; Chief Executive Office |
| Schedule 4.25 | Credit Card Arrangements |
| Schedule 4.26 | Material Contracts |
| Schedule 5.1 | Financial Statements, Reports, Certificates |
| Schedule 5.2 | Collateral Reporting |
| Schedule 6.5 | Nature of Business |

---

-vi-

------

**CREDIT AGREEMENT** 

**THIS CREDIT AGREEMENT** (this "<u>Agreement</u>"), is entered into as of June 29, 2018, by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a "<u>Lender</u>", as that term is hereinafter further defined), CRYSTAL FINANCIAL LLC (d/b/a SLR Credit Solutions) as administrative agent for each member of the Lender Group (in such capacity, together with its successors and assigns in such capacity, "<u>Agent</u>"), **BIRKS GROUP INC.** and together with each other Person organized under the laws of Canada or a province thereof that joins hereunder as a "Borrower" after the Closing Date in accordance with the terms hereof (each, a "<u>Borrower</u>" and all references herein to "Borrower" shall include each such additional Borrower who so joins).

The parties agree as follows:

1. **DEFINITIONS AND CONSTRUCTION**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. **<u>Definitions</u>**. Capitalized terms used in this Agreement shall have the meanings specified therefor on <u>Schedule 1.1</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. **<u>Accounting Terms</u>**. All accounting terms not specifically defined herein shall be construed in accordance with GAAP; <u>provided</u>, that if Administrative Borrower notifies Agent that Borrower requests an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and Borrower agrees that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrower after such Accounting Change conform as nearly as possible to their respective positions before such Accounting Change and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred. When used herein, the term "financial statements" shall include the notes and schedules thereto. Whenever the term "Borrower" is used in respect of a financial covenant or a related definition, it shall be understood to mean Borrower and its Subsidiaries on a consolidated basis, unless the context clearly requires otherwise. Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the Statement of Financial Accounting Standards No. 159 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof and (b) the term "unqualified opinion" as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified, and (ii) does not include any qualification as to scope, going concern or similar items.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. <u>**PPSA**</u>. Any terms used in this Agreement that are defined in the PPSA shall be construed and defined as set forth in the PPSA unless otherwise defined herein. Notwithstanding the foregoing, and where the context so requires, (i) any term defined in this Agreement by reference to the PPSA shall also have any extended, alternative or analogous meaning given to such term in the Code, in all cases for the extension, preservation or betterment of the security granted by a Loan Party formed in the United States and rights of the Collateral located in the United States, (ii) all references to Canada or to any subdivision, department, agency or instrumentality thereof shall be deemed to refer also to the United States of America or to any subdivision, department, agency or instrumentality thereof, and (iii) all references to federal or state securities law of the United States shall be deemed to refer also to analogous applicable federal and provincial securities laws in Canada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4. <u>**Construction**</u>. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms "includes" and "including" are not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to "law" means all international, foreign, federal, provincial, state and local statutes, treaties, rules, guidelines, regulations, by-laws, ordinances, decrees, codes and administrative or judicial or arbitral or administrative or ministerial or departmental or regulatory precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of any Governmental Authority. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties. All references to "province" or like terms shall include "territory" and like terms. Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean (a) the payment or repayment in full in immediately available funds in Canadian Dollars of (i) the principal amount of, and interest accrued and unpaid with respect to, all outstanding Loans, together with the payment of any premium applicable to the repayment of the Loans, (ii) all Lender Group Expenses that have accrued and are unpaid regardless of whether demand has been made therefor, (iii) all fees or charges that have accrued hereunder or under any other Loan Document and are unpaid, (b) the receipt by Agent of cash collateral in Canadian Dollars in order to secure any other contingent Obligations for which a claim or demand for payment has been made on or prior to such time or in respect of matters or circumstances known to Agent or a Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense (including legal expenses to the extent payable pursuant to Section 10.3), such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Obligations, but in no event greater than 103% of the face amount of such claim or demand to the extent a specific amount has been claimed or demanded, and (c) the termination of all of the Commitments of the Lenders. Any reference herein to any Person shall be construed to include such Person's successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5. **<u>Time References</u>**. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, all references to time of day refer to Eastern standard time or Eastern daylight saving time, as in effect in Montreal, Quebec on such day. For purposes of the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to and including"; <u>provided</u> that, with respect to a computation of fees or interest payable to Agent or any Lender, such period shall in any event consist of at least one full day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6. **<u>Schedules and Exhibits</u>**. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7. **<u>Exchange Rates; Currency Equivalents</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All references to "Dollars" or "$" shall mean Canadian Dollars unless otherwise specified herein. For purposes of this Agreement and the other Loan Documents, the Canadian Dollar Equivalent of the Term Loan and other Obligations and other references to amounts denominated in a currency other than Canadian Dollars shall be determined in accordance with the terms of this Agreement. Except as otherwise expressly provided herein or in the applicable other Loan Document, the applicable amount of any currency for purposes of this Agreement and the other Loan Documents (including all calculations in connection with the covenants, including the financial covenants) shall be the Canadian Dollar Equivalent thereof, and for the purpose of such calculations, comparisons, measurements or determinations, amounts denominated in currencies other than Canadian Dollars shall be converted into the Canadian Dollar Equivalent of such amount on the date of calculation, comparison, measurement or determination. Notwithstanding the foregoing, for the purposes of financial statements prepared by Borrower, the Canadian Dollar Equivalent of each amount in a currency other than Canadian Dollars shall be determined in accordance with GAAP. Furthermore, the Agent shall determine the Canadian Dollar Equivalent of any foreign currency amount as required hereby, and a determination thereof by the Agent shall be conclusive absent manifest error. The Agent may, but shall not be obligated to, rely on any determination made by any Loan Party in any document delivered to the Agent. The Agent may determine or redetermine the Canadian Dollar Equivalent of any foreign currency amount on any date either in its own discretion or upon the request of any Lender. The Agent may set up appropriate rounding off mechanisms or otherwise round-off amounts hereunder to the nearest higher or lower amount in whole Canadian Dollars or cents to ensure amounts owing by any party hereunder or that otherwise need to be calculated or converted hereunder are expressed in whole Canadian Dollars or in whole cents, as may be necessary or appropriate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8. **<u>Quebec Interpretation</u>**. For all purposes of any assets, liabilities or entities located in the Province of Quebec and for all purposes pursuant to which the interpretation or construction of this Agreement may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) "personal property" shall include "movable property", (b) "real property" shall include "immovable property", (c) "tangible property" shall include "corporeal property", (d) "intangible property" shall include "incorporeal property", (e) "security interest", "mortgage" and "lien" shall include a "hypothec", "prior claim" and a "resolutory clause", (f) all references to filing, registering or recording under the PPSA shall include publication under the Civil Code of Quebec, (g) all references to "perfection" of or "perfected" liens or security interest shall include a reference to an "opposable" or "set up" lien or security interest as against third parties, (h) any "right of offset", "right of setoff' or similar expression shall include a "right of compensation", (i) "goods" shall include "corporeal movable property" other than chattel paper, documents of title, instruments, money and securities, (j) an "agent" shall include a "mandatary", (k) "construction liens" shall include "legal hypothecs", (l) "joint and several" shall include "solidary", (m) "gross negligence or willful misconduct" shall be deemed to be "intentional or gross fault", (n) "beneficial ownership" shall include "ownership on behalf of another as mandatary", (o) "easement" shall include "servitude", (p) "priority" shall include "prior claim", (q) "survey" shall include "certificate of location and plan", and (r) "fee simple title" shall include "absolute ownership".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9. **<u>Rates</u>**. Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to (a) the continuation of<u>,</u> administration of, submission of, calculation of or any other matter related to any rates in the definition of any Benchmark, including the Term CORRA Reference Rate, Term CORRA, Adjusted Term CORRA or any other Benchmark, or any component definition thereof or rates referenced in the definition thereof, or with respect to any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any then-current Benchmark or any Benchmark Replacement) as it may or may not be adjusted pursuant to <u>Section 2.11(c)</u>, will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Term CORRA Reference Rate, Term CORRA, Adjusted Term CORRA, such Benchmark or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. Agent and its affiliates or other related entities may engage in transactions that affect the calculation of any Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to the Borrower. Agent may select information sources or services in its reasonable discretion to ascertain any Benchmark, any component definition thereof or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service. Each determination of any Benchmark (or any Benchmark Replacement) shall be made by Agent and shall be conclusive in the absence of manifest error.

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2. **<u>TERM LOAN AND TERMS OF PAYMENT</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. **<u>Term Loan Facility</u>**. Subject to the terms and conditions set forth in this Agreement, on the Closing Date, each Lender shall make the Borrower a term loan in the principal amount equal to its Pro Rata Share of Twelve Million Five Hundred Thousand Dollars ($12,500,000) (the "**<u>Initial</u>** **<u>Term Loan</u>**"), <u>provided</u> that, in no event shall the <u>Initial</u> Term Loan made by any Lender exceed such Lender's Commitment. The <u>Initial</u> Term Loan is not a revolving credit facility and may not be repaid and redrawn and any repayments or prepayments of principal on a<u>an Initial</u> Term Loan shall permanently reduce such <u>Initial</u> Term Loan. The obligations of the Lenders hereunder are several and not joint, joint and several or solidary. The Borrower irrevocably authorizes the Agent and the Lenders to disburse the proceeds of the <u>Initial</u> Term Loan on the Closing Date in accordance with the terms of this Agreement. The entire unpaid principal balance of the <u>Initial</u> Term Loan shall be due and payable on the Termination Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b) Subject to the terms and conditions set forth in this Agreement and the Seventh Amendment, on the Seventh Amendment Effective Date, each Seventh Amendment Term Loan Lender shall make the Borrower a term loan in the principal amount equal to Thirteen Million Five Hundred Thousand Dollars ($13,500,000) (the "**Seventh Amendment Term Loan**", and together with the Initial Term Loan, the "**Term Loan**"), provided that, in no event shall the Seventh Amendment Term Loan made by any Lender exceed such Lender's Seventh Amendment Term Loan Commitment. The Seventh Amendment Term Loan is not a revolving credit facility and may not be repaid and redrawn and any repayments or prepayments of principal on the Seventh Amendment Term Loan shall permanently reduce the Seventh Amendment Term Loan. The obligations of the Seventh Amendment Term Loan Lenders hereunder are several and not joint, joint and several or solidary. The Borrower irrevocably authorizes the Agent and the Lenders to disburse the proceeds of the Seventh Amendment Term Loan on the Seventh Amendment Effective Date in accordance with the terms of this Agreement and the Seventh Amendment. The entire unpaid principal balance of the Seventh Amendment Term Loan shall be due and payable on the Termination Date.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(c)</u> (b) On the Termination Date, all Obligations shall be immediately due and payable. All undertakings of the Borrower contained in the Loan Documents shall survive any termination, and the Agent shall retain its Liens in the Collateral (subject to the Intercreditor Agreement) and all of its rights and remedies under the Loan Documents until payment in full of the Obligations (including all accrued and unpaid principal, interest and fees, and any other Obligations then due and owing, and any appropriate collateral deposits in connection therewith).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. **<u>Borrowing Base</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Combined Total Outstandings shall not exceed the lesser of the Borrowing Base or the Combined Loan Cap. Until the payment in full of the Revolving Loan Debt and the termination of the "Commitments" (as defined in the Revolving Credit Agreement), the Borrowing Base shall be determined by reference to the most recent Borrowing Base Certificate delivered by the Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Anything to the contrary in this <u>Section 2.2</u> notwithstanding, Agent shall have the right (but not the obligation), in the exercise of its Permitted Discretion, to establish and increase or decrease Receivable Reserves, Bank Product Reserves (as defined in the Revolving Credit Agreement), Loan to Value Reserves, Inventory Reserves, Canadian Priority Payable Reserves and other Reserves against the Borrowing Base; <u>provided</u>, that Agent shall notify Borrower at least 5 Business Days prior to the date on which any such reserve is to be established or increased; <u>provided further</u>, that (A) no such prior notice shall be required for changes to any reserves established under this Agreement resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation set forth in this Agreement or previously utilized; (B) no such prior notice shall be required during the continuance of any Event of Default and (C) no such prior notice shall be required with respect to any Reserve established in respect of any consensual Lien that has priority over Agent's Liens on the Collateral. The amount of any Receivable Reserve, Loan to Value Reserves, Inventory Reserve, Canadian Priority Payables Reserve or other Reserve shall be established by Agent in its Permitted Discretion and shall have a reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such reserve and shall not be duplicative of any other Reserve established and currently maintained. No reserve shall be implemented with respect to matters which are already specifically reflected as ineligible Accounts or Inventory or Credit Card Receivables.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **<u>Protective Advances</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any contrary provision of this Agreement or any other Loan Document notwithstanding, but subject to <u>Section 2.2(c)(iii)</u>, at any time after the occurrence and during the continuance of a Default or an Event of Default, Agent hereby is authorized by Borrower and the Lenders, from time to time, in Agent's sole discretion, to make advances to, or for the benefit of, Borrower, in each case, on behalf of the Lenders, that Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (the advances described in this <u>Section 2.2(c)(i)</u> shall be referred to as "<u>Protective Advances</u>". The Protective Advances shall be made in Canadian Dollars or US Dollars, as determined by the Agent. Notwithstanding the foregoing, the aggregate Canadian Dollar Equivalent amount of all Protective Advances outstanding at any one time shall not exceed 10% of the Commitment (unless Required Lenders otherwise agree to a higher amount).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each Protective Advance shall be deemed to form part of the Obligations hereunder. All payments on the Protective Advances, including interest thereon, shall be payable to Agent solely for its own account. The Protective Advances shall be repayable on demand, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to the Term Loan hereunder. The provisions of this <u>Section 2.2(c)</u> are for the exclusive benefit of Agent and the Lenders, and are not intended to benefit Borrower (or any other Loan Party) in any way.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, no Protective Advances may be made by Agent if such Protective Advances would cause the aggregate Canadian Dollar Equivalent principal amount of Protective Advances outstanding to exceed an amount equal to 10% of the Commitments (unless Required Lenders otherwise agree to a higher amount). For the avoidance of doubt, nothing in this <u>Section 2.2(c)</u> shall require any Lender to advance amounts in excess of such Lender's Commitment. Each Lender shall reimburse the Agent, on demand, its Pro Rata Share of any Protective Advances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Notation</u>**. Agent, as a non-fiduciary agent for Borrower, shall maintain a register showing the principal amount of the Term Loan, owing to each Lender and Protective Advances owing to Agent, and the interests therein of each Lender, from time to time and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **<u>Defaulting Lenders</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Notwithstanding any provision to the contrary in this Agreement, Agent shall not be obligated to transfer to a Defaulting Lender any payments made by or on behalf of any Loan Party to Agent for the Defaulting Lender's benefit or any proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such proceeds of Collateral or payments pertaining to or securing Obligations, (i) first, to Agent, to the extent of any Protective Advances that were made by Agent and that were required to be, but were not, paid by the Defaulting Lender, (ii) second, to each Non-Defaulting Lender ratably in accordance with its Commitment (but, in each case, only to the extent that such Defaulting Lender's portion of a Term Loan (or other funding obligation) was funded by such other Non-Defaulting Lender), (iii) third, at Borrower's request (so long as no Event of Default exists and the conditions set forth on <u>Section 3.1</u> are satisfied), the funding of the Term Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, or reasonably determined by the Agent, (iv) fourth, from and after the date on which all other Obligations have been paid in full, to such Defaulting Lender. Subject to the foregoing, Agent may hold for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the fees payable under <u>Section 2.5</u>, such Defaulting Lender shall be deemed not to be a "Lender" and such Lender's Commitment shall be deemed to be zero; <u>provided</u>, that the foregoing shall not apply to any of the matters governed by <u>Section 14.1(a)(i)</u> through (iii). The provisions of this <u>Section 2.2(e)</u> shall remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which all of the Non-Defaulting Lenders, Agent and Borrower shall have waived, in writing, the application of this <u>Section 2.2(e)</u> to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform its future obligations hereunder (on which earlier date, so long as no Event of Default has occurred and is continuing, any remaining cash collateral held by Agent pursuant to this <u>Section 2.2(e)</u> shall be released to Borrower). The operation of this <u>Section 2.2(e)</u> shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by Borrower of its duties and obligations hereunder to Agent, or to the Lenders other than such Defaulting Lender. Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrower, at their option, upon written notice by Administrative Borrower to Agent, to arrange for a substitute Lender to assume the Commitments and Loans of such Defaulting Lender and the Commitments and Loans of any Affiliate of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lenders shall have no right to refuse to be replaced hereunder, and agree to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agree that they shall be deemed to have executed and delivered such document if they fail to do so) subject only to being paid its share of the outstanding Obligations (including all interest, fees, and other amounts that may be due and payable in respect thereof; <u>provided</u>, that any such assumption of the Commitments and Loans of such Defaulting Lenders shall not be deemed to constitute a waiver of any of the Lender Groups' or Borrower's rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund. In the event of a direct conflict between the priority provisions of this <u>Section 2.2(e)</u> and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this <u>Section 2.2(e)</u> shall control and govern.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>**Replacement of Lenders**</u>. In the event that any Lender is a Defaulting Lender (each an "<u>Affected Lender</u>"), then the Borrower may, at its option, notify the Agent and such Affected Lender of its intention to replace the Affected Lender. So long as no Default or Event of Default shall have occurred and be continuing, the Borrower, with the consent of the Agent, may obtain, at the Borrower's expense, a replacement Lender ("<u>Replacement Lender</u>") for the Affected Lender, which Replacement Lender must be (i) an Eligible Transferee and (ii) satisfactory to the Agent. If the Borrower obtains a Replacement Lender within ninety (90) days following notice of their intention to do so, the Affected Lender must sell and assign its Pro Rata Share of the Term Loan to such Replacement Lender for an amount equal to the principal balance of its Pro Rata Share of the Term Loan held by the Affected Lender and all accrued interest and fees with respect thereto through the date of such sale; <u>provided</u> that the Borrower shall have reimbursed such Affected Lender for the additional amounts or increased costs that it is entitled to receive under this Agreement through the date of such sale and assignment. Furthermore, if the Borrower gives a notice of intention to replace and does not so replace such Affected Lender within ninety (90) days thereafter, the Borrower's rights under this paragraph as to such noticed replacement and in connection with such Affected Lender shall terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>**Independent Obligations**</u>. The Term Loan shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make its Pro Rata Share of the Term Loan (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. <u>**Payments; Apportionment and Application; Use of Proceeds; Repayments; Prepayments.**</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **<u>Payments by Borrower</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Except as otherwise expressly provided herein, all payments by Borrower shall be made to Agent's Loan Account for the account of the Lender Group and shall be made in immediately available funds in Canadian Dollars, no later than 1:30 p.m. on the date specified herein. Any payment received by Agent later than 1:30 p.m. shall be deemed to have been received (unless Agent, in its sole discretion, elects to credit it on the date received) on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Unless Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrower will not make such payment in full as and when required, Agent may assume that Borrower has made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrower does not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the interest rate applicable to the Term Loan for each day from the date such amount is distributed to such Lender until the date repaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **<u>Apportionment and Application</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Notwithstanding anything herein to the contrary (but subject to the Intercreditor Agreement), at any time after the occurrence and continuance of an Event of Default, all funds received by the Agent or any Lender and for which the Borrower has received credit for such payment, together with all payments to be initially applied to the Obligations, whether arising from payments by the Loan Parties, realization on Collateral, setoff or otherwise, shall be applied to the Obligations as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <u>first</u>, to all costs and expenses, including Lender Group Expenses, owing to the Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>second</u>, to all Obligations constituting fees (other than the Early Termination Fee) and Lender Group Expenses owing to the Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) <u>third</u>, to all Obligations constituting interest on the Term Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) <u>fourth</u>, to all Obligations constituting the Early Termination Fee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) <u>fifth</u>, to all other Obligations owing to the Lenders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) <u>sixth</u>, to the Borrower or such other person entitled thereto under the applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Amounts shall be applied to each category of Obligations set forth above until payment in full thereof and then to the next category. If amounts are insufficient to satisfy a category, they shall be applied on a pro rata basis among the Obligations in the category. The allocations set forth in this Section 2.3(b)(ii) are solely to determine the rights and priorities of the Agent and the Lenders as among themselves, and may be changed by agreement among them without the consent of any Loan Party. Any amounts applied to the categories described in clauses 2.3(b)(i)(B), (C), (D) and (E) shall be so applied in accordance with each Lender's Pro Rata Share of the Term Loan.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Agent shall promptly distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) In each instance, so long as no Application Event has occurred and is continuing, <u>Section 2.3(b)(i)(A)</u> shall not apply to any payment made by Borrower to Agent and specified by Administrative Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) For purposes of <u>Section 2.3(b)(i)(A)</u>, "paid in full" of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) In the event of a direct conflict between the priority provisions of this <u>Section 2.3</u> and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, if the conflict relates to the provisions of <u>Section 2.2(e)</u> and this <u>Section 2.3</u>, then the provisions of <u>Section 2.2(e)</u> shall control and govern, and if otherwise, then the terms and provisions of this <u>Section 2.3</u> shall control and govern. The Agent shall not be liable for any application of amounts made by it in error (unless it has been determined in a final, non-appealable judgment by a court of competent jurisdiction that such error was a result of the gross negligence or willful misconduct of the Agent) and if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been made (unless it has been determined in a final, non-appealable judgment by a court of competent jurisdiction that such error was a result of the gross negligence or willful misconduct of the Agent) shall be to recover the amount from the Person that actually received it (and, if such amount was received by any Lender, such Lender hereby agrees to return it).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Use of Proceeds**</u>. The proceeds of the Term Loan shall be used by the Borrower solely (a) to pay fees and transaction expenses associated with the closing of this credit facility; and (b) to reduce the Revolving Loan Debt to create availability under the Revolving Borrowing Capacity for use by the Borrower for working capital, Capital Expenditures and other lawful corporate purposes of the Borrower and its Subsidiaries in accordance with this Agreement and the Revolving Credit Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **<u>Repayment of the Term Loan</u>**. The <u>Initial</u> Term <u>Loan, Seventh Amendment Term</u> Loan and all other Obligations shall be due and payable in full on the Maturity Date, unless payment is sooner required hereunder pursuant to Section 9. The Borrower promises to pay on the Maturity Date, or on such earlier date as payment is required hereunder pursuant to Section 9, and there shall become absolutely due and payable on such date, the Total Outstandings, together with any and all accrued and unpaid interest thereon and all other fees and other amounts then accrued and outstanding with respect thereto. The <u>Initial Term Loan and the Seventh Amendment</u> Term Loan may be prepaid in accordance with Section 2.3(h).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>**Payment of Other Obligations**</u>. Obligations other than the Term Loan, including Lender Group Expenses, shall be paid by the Borrower as provided in the Loan Documents or, if no payment date is specified, promptly upon receipt by the Borrower of notice of the amounts due in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>**Marshaling; Payments Set Aside**</u>. Neither of the Agent nor the Lenders shall be under any obligation to marshal any assets in favor of any Loan Party or against any Obligations. If any Loan Party makes a payment to the Agent or the Lenders, or if the Agent or any Lender receives payment from the proceeds of Collateral, exercise of setoff or otherwise, and such payment is subsequently invalidated or required to be repaid to a trustee, receiver or any other Person, then the Obligations originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been received and any enforcement or setoff had not occurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>**Mandatory Prepayments**</u>. If at any time the Combined Total Outstandings exceed the Borrowing Base then in effect, then (i) until the payment in full of the Revolving Loan Debt, the Borrower shall immediately prepay the Revolving Loan Debt, and (ii) thereafter, the Borrower shall immediately prepay (subject to Section 2.3(b)) the Obligations, for the respective accounts of the Lenders in accordance with their Pro Rata Share thereof, in each case in an amount necessary to eliminate such excess. Each prepayment of the Obligations made pursuant to this Section shall be accompanied by the payment of (i) accrued interest to the date of such payment on the amount prepaid and (ii) whether before or after an Event of Default or acceleration, the Early Termination Fee, if any, payable pursuant to Section 2.5(d) in connection with such prepayment of the Term Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>**Optional Prepayments**</u>. The Borrower may prepay the principal of the Term Loan at any time in whole or in part. Each such prepayment shall be irrevocable and be accompanied by a notice specifying the proposed date of such prepayment and the principal amount of the Term Loan or portion thereof to be prepaid. Each prepayment made pursuant to this Section shall be accompanied by the payment of (i) accrued interest to the date of such payment on the amount prepaid and (ii) whether before or after an Event of Default or acceleration, the Early Termination Fee, if any, payable pursuant to Section 2.5(d) in connection with such prepayment of the Term Loan. Each such prepayment shall be applied (subject to Section 2.3(b)) to the Obligations, for the respective accounts of the Lenders in accordance with their Pro Rata Share thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>**Crediting Payments**</u>. The receipt of any payment item by Agent shall not be required to be considered a payment on account unless such payment item is a wire transfer of immediately available funds in Canadian Dollars made to Agent's Loan Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrower shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent's Loan Account on a Business Day on or before 1:30 p.m. If any payment item is received

into Agent's Loan Account on a non-Business Day or after 1:30 p.m. on a Business Day (unless Agent, in its sole discretion, elects to credit it on the date received), it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>**Maintenance of Loan Account; Statements of Obligations**</u>. Agent shall maintain accounts on its books in the name of Borrower, the "<u>Loan Account</u>" on which Borrower will be charged with the Term Loan (including Protective Advances) made by Agent or the Lenders to Borrower or for Borrower's account and all other payment Obligations hereunder or under the other Loan Documents, including accrued interest, fees and expenses, and Lender Group Expenses of Borrower with respect thereto. Upon request, Agent shall make available to Administrative Borrower monthly statements regarding the Loan Account, including the principal amount of the Term Loan, interest accrued hereunder, fees accrued or charged hereunder or under the other Loan Documents, and a summary itemization of all charges and expenses constituting Lender Group Expenses accrued hereunder or under the other Loan Documents, and each such statement, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrower and the Lender Group unless, within 60 days after Agent first makes such a statement available to Administrative Borrower, Administrative Borrower shall deliver to Agent written objection thereto describing the error or errors contained in such statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. **<u>Interest Rates; Payment of Interest</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Interest Rate**</u>. Subject to Section 2.4(b) and Section 2.12, the Obligations under the Term Loan shall bear interest at a rate equal to Adjusted Term CORRA plus the Applicable Margin.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Default Rate**</u>. Upon the occurrence and during the continuation of an Event of Default and at the option of the Agent (or upon the direction of the Required Lenders), all Loans, and all Obligations that have been charged to the Loan Account pursuant to the terms hereof, shall bear interest, from the original date of the occurrence of such Event of Default, at a per annum rate equal to two percentage points (2.0%) above the per annum rate otherwise applicable thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Payment of Interest**</u>. Interest accrued on the Obligations shall be due and payable in arrears, and the Borrower promises to pay interest to the Lenders (i) on each Interest Payment Date, (ii) on any date of prepayment, with respect to the principal amount of the Term Loan being prepaid, and (iii) on the Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable on demand. Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>**Computation of Interest**</u>. All computation of interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 365/366 days. Each determination by the Agent of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate or refund, nor subject to proration except as specifically provided herein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>**Intent to Limit Charges to Maximum Lawful Rate**</u>. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Subject to <u>Section 2.1,</u> Borrower and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; <u>provided</u>, that, anything contained herein to the contrary notwithstanding, if such rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrower is and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the applicable Obligations to the extent of such excess.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. **<u>Fees and Expenses</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>**Agent's Fee**</u>. Borrower shall pay to Agent, for the account of Agent, unless otherwise indicated, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>**Field Examination and Other Fees**</u>. Borrower shall pay to Agent, field examination, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows (i) reasonable and documented out-of-pocket expenses (including travel, meals, and lodging)) if it elects to employ the services of one or more third Persons to perform field examinations of Borrower or its Subsidiaries, to establish electronic collateral reporting systems, to appraise the Collateral (including Eligible Accounts), or any portion thereof, or to assess Borrower's or its Subsidiaries' business valuation; <u>provided</u>, that so long as no Event of Default shall have occurred and be continuing, Borrower shall not be obligated to reimburse Agent for more than 2 field examinations of each Loan Party during any calendar year, or more than 2 appraisals of Inventory of each Loan Party during any 12-month period; <u>provided further</u>, <u>however</u>, that if Excess Availability is less than 15% of the Combined Loan Cap for a period of 5 consecutive Business Days at any time during any 12-month period, then Borrower shall be obligated to reimburse Agent for an additional field examination of each Loan Party during such 12-month period and for an additional appraisal of Inventory of each Loan Party during such 12-month period. Notwithstanding the foregoing or anything to the contrary contained herein, unless an Event of Default has occurred and is continuing, Agent shall not require that any such field examinations be conducted at Borrower's expense so long as the Revolving Agent has conducted two (2) such field examinations (and a third (3<sup>rd</sup>) field exam if Excess Availability is less than 15% of the Combined Loan Cap for a period of 5 consecutive Business Days at any time during any 12-month period) in each calendar year and has shared the Reports (as defined in the Revolving Credit Agreement) prepared in connection therewith Agent pursuant to the terms of the Intercreditor Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>**Early Termination Fee**</u>. Upon the occurrence of an Applicable Premium Trigger Event, the Borrower shall pay to the Agent, for the ratable benefit of the Lenders, the Early Termination Fee. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, it is understood and agreed that if the Obligations are accelerated as a result of the occurrence and continuance of any Event of Default (including by operation of law or otherwise), the Early Termination Fee, if any, determined as of the date of acceleration, will also be due and payable and will be treated and deemed as though the Term Loan was prepaid as of such date and shall constitute part of the Obligations for all purposes herein. Any Early Termination Fee payable in accordance with this Section 2.5(d) shall be presumed to be equal to the liquidated damages sustained by the Lenders as the result of the occurrence of the Applicable Premium Trigger Event, and the Loan Parties agree that it is reasonable under the circumstances currently existing. The Early Termination Fee, if any, shall also be payable in the event the Obligations (and/or this Agreement) are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means. THE LOAN PARTIES EXPRESSLY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING EARLY TERMINATION FEE IN CONNECTION WITH ANY SUCH ACCELERATION. The Loan Parties expressly agree that (A) the Early Termination Fee is reasonable and is the product of an arm's length transaction between sophisticated business people, ably represented by counsel, (B) the Early Termination Fee shall be payable notwithstanding the then prevailing market rates at the time payment is made, (C) there has been a course of conduct between Lenders and the Loan Parties giving specific consideration in this transaction for such agreement to pay the Early Termination Fee, (D) the Loan Parties shall be estopped hereafter from claiming differently than as agreed to in this Section 2.5(d), (E) their agreement to pay the Early Termination Fee is a material inducement to the Lenders to make the Term Loan, and (F) the Early Termination Fee represents a good faith, reasonable estimate and calculation of the lost profits or damages of the Lenders and that it would be impractical and extremely difficult to ascertain the actual amount of damages to the Lenders or profits lost by the Lenders as a result of such Applicable Premium Trigger Event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. <u>**Reimbursement Obligations**</u>**.** The Borrower shall reimburse the Agent and the Lenders for all Lender Group Expenses. Without duplication, the Borrower shall also reimburse the Agent and the Lenders for all reasonable and documented legal, accounting, appraisal, consulting, and other out-of-pocket fees, costs and expenses incurred by it in connection with (a) negotiation, preparation, execution and delivery of any Loan Documents, including any amendment or other modification thereof (whether or not the transactions contemplated hereby or thereby shall be consummated); (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of the Agent's Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section 2.5(c) each inspection, audit or appraisal with respect to any Loan Party or Collateral, whether prepared by the Agent's or any Lender's personnel or a third party. The Borrower shall also reimburse the Agent and the Lenders for all reasonable and documented out-of-pocket costs and expenses incurred by them (whether during an Event of Default or otherwise) in connection with the enforcement or preservation of any rights under this Agreement or any of the other Loan Documents (including during any workout, restructuring or negotiations in respect of the Term Loan, Loan Documents or the transactions contemplated thereby). All amounts reimbursable by the Borrower under this Section 2.6 shall constitute Obligations secured by the Collateral and shall be payable within twenty Business Days after presentation by the Agent or the applicable Lender to the Borrower of a reasonably detailed itemization of such amounts.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7. **<u>Capital Adequacy; Increased Costs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If a Lender determines that any introduction of or any change in a Capital Adequacy Regulation, any change in the interpretation or administration of a Capital Adequacy Regulation by a Governmental Authority charged with interpretation or administration thereof, or any compliance by such Lender or any Person controlling such Lender with a Capital Adequacy Regulation, in each case made after the date hereof, increases the amount of capital or liquidity required or expected to be maintained by such Lender or Person (taking into consideration its capital adequacy and liquidity policies and desired return on capital) as a consequence of such Lender's Pro Rata Share of the Term Loan or other obligations under the Loan Documents, then the Borrower shall, within thirty days following demand therefor, pay such Lender an amount sufficient to compensate for such increase. A Lender's demand for payment shall set forth the nature of the occurrence giving rise to such compensation and a calculation of the amount to be paid. In determining such amount, the Lender may use any reasonable averaging and attribution method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any Change in Law shall subject the Agent or any Lender to any Taxes (other than Excluded Taxes and Indemnified Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto and the result of any of the foregoing shall be to increase the cost to such Lender or the Agent of making, converting to, continuing or maintaining any loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or the Agent of participating in, or to reduce the amount of any sum received or receivable by such Lender or the Agent hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Agent, the Borrower will, no later than 30 days following such request, pay to such Lender or the Agent, as the case may be, such additional amount or amounts as will compensate such Lender or the Agent, as the case may be, for such additional costs incurred or reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If any Lender requests additional or increased costs referred to in this <u>Section 2.7</u> (such Lender, an "<u>Affected Lender</u>"), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to this <u>Section 2.7</u>, or would eliminate the illegality or impracticality of funding or maintaining the Term Loan and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it. Borrower agrees to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment. If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrower's obligation to pay any future amounts to such Affected Lender pursuant to this <u>Section 2.7</u>, as applicable, or to enable Borrower to continue to obtain the Term Loan, then Administrative Borrower (without prejudice to any amounts then due to such Affected Lender hereunder) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under this <u>Section 2.7</u>, or indicates that it is no longer unlawful or impractical to continue to fund or maintain the Term Loan, may designate a substitute a Lender, in each case, reasonably acceptable to Agent, to purchase the Obligations owed to such Affected Lender (and its Affiliates) and such Affected Lender's (and its Affiliates') commitments hereunder (a "<u>Replacement Lender</u>"), and if such Replacement Lender agrees to such purchase, such Affected Lender (and its Affiliates) shall assign to the Replacement Lender its Obligations and commitments and upon such purchase by the Replacement Lender, such Replacement Lender shall be deemed to be "a "Lender" for purposes of this Agreement and such Affected Lender shall cease to be a "Lender" (as the case may be) for purposes of this Agreement (in which circumstances the Affected Lender shall not receive any Early Termination Fee).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything herein to the contrary, the protection of this <u>Section 2.7</u> shall be available to each Lender regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, judicial ruling, judgment, guideline, treaty or other change or condition which shall have occurred or been imposed, so long as it shall be customary for Lenders affected thereby to comply therewith. Notwithstanding any other provision herein, Lender shall demand compensation pursuant to this <u>Section 2.7</u> if it shall not at the time be the general policy or practice of such to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>**Dodd-Frank Act**</u>. Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act, and all regulations, rules, guidelines and directives promulgated thereunder and (y) all rules, guidelines or directives promulgated by the Bank for International settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall, in each case, be deemed to have been adopted after the date hereof, regardless of the date enacted, adopted or issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8. **<u>Currencies</u>**. The Term Loan and other Obligations (unless such other Obligations expressly provide otherwise) shall be made and repaid in Canadian Dollars. The Term Loan shall be denominated in Canadian Dollars except that Protective Advances made by Agent shall be denominated in Canadian Dollars or US Dollars (as selected by Agent). All Obligations denominated in Canadian Dollars shall be repaid in Canadian Dollars and all Obligations denominated in US Dollars shall be repaid in Canadian Dollars. Payments made in a currency other than the currency in which the applicable Obligations are denominated may be accepted by the Agent in its sole discretion and, if so accepted, Borrower agrees that the Agent may convert the payment made to the currency of the applicable Obligations at the applicable Spot Rate in accordance with its normal practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9. ***<u>Interest Act</u>* (Canada); Criminal Rate of Interest; Nominal Rate of Interest**. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) whenever interest payable by Borrower is calculated on the basis of a period which is less than the actual number of days in a calendar year, each rate of interest determined pursuant to such calculation is, for the purposes of the *Interest Act* (Canada), equivalent to such rate multiplied by the actual number of days in the calendar year in which such rate is to be ascertained and divided by the number of days used as the basis of such calculation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Borrower confirms that it fully understands and is able to calculate the rate of interest applicable to the Loans based on the methodology for calculating annual rates provided for in this Agreement. The Borrower hereby irrevocably agrees not to plead or assert, whether by way of defense or otherwise, in any proceeding relating to this Agreement or any other Loan Documents, that the interest payable under this Agreement and the calculation thereof has not been adequately disclosed to the Borrower as required pursuant to Section 4 of the *Interest Act* (Canada).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in no event shall the aggregate "interest" (as defined in Section 347 of the *Criminal Code* (Canada), as the same shall be amended, replaced or re-enacted from time to time (the "<u>Criminal Code Section</u>")) payable (whether by way of payment, collection or demand) by Borrower to Agent or any Lender under this Agreement or any other Loan Document exceed the effective annual rate of interest on the "credit advanced" (as defined in that section) under this Agreement or such other Loan Document lawfully permitted under that section and, if any payment, collection or demand pursuant to this Agreement or any other Loan Document in respect of "interest" (as defined in that section) is determined to be contrary to the provisions of that section and the amount of such payment or collection shall be refunded by Agent and Lenders to Borrower with such "interest" deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the Criminal Code Section to result in a receipt by Agent or such Lender of interest at a rate not in contravention of the Criminal Code Section, such adjustment to be effected, to the extent necessary, as follows: firstly, by reducing the amounts or rates of interest required to be paid to Agent or that Lender; and then, by reducing any fees, charges, expenses and other amounts required to be paid to the affected Agent or Lender which would constitute "interest". Notwithstanding the foregoing, and after giving effect to all such adjustments, if Agent or any Lender shall have received an amount in excess of the maximum permitted by the Criminal Code Section, then Borrower shall be entitled, by notice in writing to the Agent or affected Lender, to obtain reimbursement from Agent or that Lender in an amount equal to such excess. For the purposes of this Agreement and each other Loan Document to which Borrower is a party, the effective annual rate of interest payable by Borrower shall be determined in accordance with generally accepted actuarial practices and principles over the term of the loans on the basis of annual compounding for the lawfully permitted rate of interest and, in the event of dispute, a certificate of a Fellow of the Institute of Actuaries appointed by Agent for the account of Borrower will be conclusive for the purpose of such determination in the absence of evidence to the contrary,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) all calculations of interest payable by Borrower under this Agreement or any other Loan Document are to be made on the basis of the nominal interest rate described herein and therein and not on the basis of effective yearly rates or on any other basis which gives effect to the principle of deemed reinvestment of interest. The parties acknowledge that there is a material difference between the stated nominal interest rates and the effective yearly rates of interest and that they are capable of making the calculations required to determine such effective yearly rates of interest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any provision of this Agreement that would oblige Borrower to pay any fine, penalty or rate of interest on any arrears of principal or interest secured by a mortgage on real property or hypothec on immovables that has the effect of increasing the charge on arrears beyond the rate of interest payable on principal money not in arrears shall not apply to Borrower, which shall be required to pay interest on money in arrears at the same rate of interest payable on principal money not in arrears, and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) if there is a conflict, inconsistency, ambiguity or difference between any provision of this <u>Section 2.9</u> and any other Section of this Agreement or any other Loan Document with respect to Borrower then the provisions of this <u>Section 2.9</u> shall prevail and be paramount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10. <u>**Tax Treatment**</u>. The Borrower and the Lenders agree (i) that the Term Loan is debt for federal income tax purposes, (ii) that the "issue price" of the Term Loan is 100% and that the Term Loan is not governed by the rules set out in Treasury Regulations Section 1.1275-4, and (iii) to adhere to this Agreement for federal income tax purposes and not to file any tax return, report or declaration inconsistent herewith unless otherwise required due to a Change in Law. The inclusion of this Section 2.10 is not an admission by any Lender that it is subject to United States taxation.

2.11. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>**Benchmark Replacement Setting**</u> .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Benchmark Replacement*. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event, with respect to any Benchmark, Agent and Administrative Borrower may amend this Agreement to replace such Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th) Business Day after Agent has posted such proposed amendment to all Lenders and Administrative Borrower so long as Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this <u>Section 2.11</u> will occur prior to the applicable Benchmark Transition Start Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Benchmark Replacement Conforming Changes*. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Notices; Standards for Decisions and Determinations*. Agent will promptly notify Administrative Borrower and the Lenders of (1) the implementation of any Benchmark Replacement and (2) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. Agent will promptly notify the Administrative Borrower of the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Agent or, if applicable any Lender (or group of Lenders) pursuant to this <u>Section 2.11(c)</u> including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto or any other Loan Document, except, in each case, as expressly required pursuant to this <u>Section 2.11(c)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Benchmark Unavailability Period*. Upon the Administrative Borrower's receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a given Benchmark, the obligations under the Term Loan shall, as of the next Interest Payment Date, bear interest at a rate equal to the Adjusted Canadian Prime Rate plus the Applicable Margin.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12. **<u>Inability to Determine Rates</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to Section 2.11, if, on or prior to each Interest Payment Date, the Agent determines (which determination shall be conclusive and binding absent manifest error) that "Adjusted Term CORRA" cannot be determined pursuant to the definition thereof, for reasons other than a Benchmark Transition Event, the Administrative Agent will promptly so notify the Administrative Borrower and each Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Upon delivery of such notice by Agent to the Administrative Borrower under Section 2.11(a), the obligations under the Term Loan shall, as of the next Interest Payment Date, bear interest at a rate equal to the Adjusted Canadian Prime Rate Plus the Applicable Margin until such time as the Agent revokes such notice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13. <u>**Illegality**</u>. If any Lender determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender to make, maintain or fund loans whose interest is determined by reference to Adjusted Term CORRA or to determine or charge interest rates based upon Adjusted Term CORRA, then, on notice thereof by such Lender to the Administrative Borrower through the Agent, the obligations under the Term Loan to such Lender shall, as of the next Interest Payment Date if it would not be unlawful for such Lender to do so to such day, and otherwise immediately, bear interest at a rate equal to the Adjusted Canadian Prime Rate Plus the Applicable Margin until such time as the Agent revokes such notice unless

**3. CONDITIONS; TERM OF AGREEMENT.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. <u>**Conditions Precedent to Effectiveness of Agreement**</u>**.** This Agreement shall not be effective and the Lenders shall not be required to fund their respective portions of the Term Loan hereunder until the date that each of the following conditions has been satisfied (in each case, in form and substance satisfactory to the Agent and each of the Lenders):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement and each other Loan Document shall have been duly executed and delivered to the Agent by each of the signatories thereto, and each Loan Party shall be in compliance with all terms thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notes shall have been executed by the Borrower and delivered to each Lender that requests issuance of a Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Agent shall be satisfied that the Security Documents shall be effective to create in favor of the Agent a legal, valid and enforceable security interest in and Lien upon the Collateral (subject only to the first priority security interest and Lien in favor of the Revolving Agent and other Permitted Liens) and shall have received (i) to the extent not previously delivered to the Agent prior to the date hereof, evidence that all filings, recordings, deliveries of instruments and other actions necessary or desirable in the commercially reasonable opinion of the Agent to protect and preserve such security interests shall have been duly effected, (ii) RPMRR, UCC, PPSA and Lien searches (and the equivalent thereof in all applicable foreign jurisdictions) and other evidence reasonably satisfactory to the Agent that such Liens are the only Liens upon the Collateral, except Permitted Liens, (iii) to the extent not previously delivered to the Agent prior to the date hereof, evidence that the payment (or evidence of provision for payment) of all filing and recording fees and taxes due and payable in respect thereof has been made in form and substance reasonably satisfactory to the Agent and (iv) to the extent not previously delivered to the Agent prior to the date hereof, all Lien Waivers and Lien Priority Agreements necessary or desirable in the reasonable opinion of the Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) To the extent not previously delivered to the Agent prior to the date hereof, the Agent shall have received (i) duly executed copies of the Revolving Credit Agreement, the Montrovest Debt Documents, the Management Agreement and the Rolex Canada Documents, certified by a Senior Officer of the Borrower as complete and correct (with such certification to be in such Person's capacity as a Senior Officer of the Borrower and not in such Person's individual capacity), and the Agent shall be satisfied with the terms and conditions and provisions thereof, which documents shall be in full force and effect and without amendment except attached thereto; and (ii) duly executed estoppel letters with respect to consignment filings on record in any province in Canada to the extent that the collateral description in such consignment filings is not sufficiently limited as determined by the Agent in its commercially reasonable discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Agent shall have received a certificate, in form and substance reasonably satisfactory to it, from a Senior Officer of the Borrower (with such certification to be in such Person's capacity as a Senior Officer of the Borrower and not in such Person's individual capacity) certifying that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) after giving effect to the Term Loan and transactions hereunder, (A) each Loan Party is Solvent; (B) no Default or Event of Default exists; (C) the representations and warranties set forth in Section 4 are true and correct in all material respects; and (D) each Loan Party has complied in all material respects with all agreements and conditions to be satisfied by it under the Loan Documents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) there is no action, suit, investigation or proceeding pending or, to the knowledge of the Loan Parties, threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) no law or regulation to which any Loan Party is subject is applicable to the transactions contemplated hereby which could reasonably be expected to have a Material Adverse Effect on any Loan Party or a Material Adverse Effect on the transactions contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) no Material Adverse Effect shall have occurred since October 23, 2017;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the Revolving Loan Documents shall be in full force and effect and no default or event of default shall exist thereunder on the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) all accounts payable, leases, payments due under other Indebtedness and Taxes are not past due, excluding any good faith disputes; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) there is no default in existence under any Material Contract by a Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Agent shall have received a certificate of a duly authorized officer of each Loan Party (with such certification to be in such Person's capacity as an officer of such Loan Party and not in such Person's individual capacity), certifying (i) that the attached copy of such Loan Party's Organizational Documents (including, without limitation, such Loan Party's charter documents) are true and complete and in full force and effect, and remain in full force and effect, (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility, (iii) to the title, name and signature of each Person authorized to sign the Loan Documents, and (iv) that either (a) the attached copies are all of the consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (v) that no such consents, licenses or approvals are so required. The Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Loan Party in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Each of the Lenders and the Agent shall have received favorable legal opinions addressed to the Lenders and the Agents<u>Agent</u> , dated as of the Closing Date, in form and substance reasonably satisfactory to the Lenders and the Agents<u>Agent</u> , from (i) Stikeman Elliott LLP, Canadian counsel to the Borrower and their Subsidiaries; and (ii) local Canadian counsel to the Borrower and their Subsidiaries with respect to filing and perfection matters in the applicable provinces and territories of Canada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The Agent shall have received good standing or subsistence certificates, as applicable, for each Loan Party, issued by the appropriate official of such Loan Party's jurisdiction of organization, dated as of a recent date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Agent shall (i) be reasonably satisfied with the amount, types and terms and conditions of all insurance maintained by the Loan Parties and their Subsidiaries, and (ii) have received certificates of insurance identifying insurers, types of insurance, insurance limits and policy terms and with endorsements naming the Agent, for the benefit of the Lenders, as lender's loss payee or additional insured, as applicable, with respect to each insurance policy required to be maintained with respect to the Collateral and otherwise in form and substance reasonably satisfactory to the Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) The Borrower shall have paid to the Agent those fees due on the Closing Date in the amounts set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) To the extent not previously delivered to the Agent prior to the date hereof, the Agent shall have received duly executed copies of the Management Subordination Agreement and the Montrovest Subordination Agreement, each of which shall be in form and substance satisfactory to the Agent and which shall be in full force and effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) The Agent shall have entered into (i) the Intercreditor Agreement with the Revolving Loan Agent, and (ii) the Quebec Subordination Agreement with Investissement Québec, each of which agreement shall be in form and substance satisfactory to the Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) The Agent shall have received a Borrowing Base Certificate indicating that Excess Availability as of the Closing Date, after giving effect to the transactions contemplated hereby (including the making of the Term Loan on the Closing Date) and by the Revolving Loan Documents, is not less than 14% of the Combined Loan Cap.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) The Agent shall have received (i) the audited financial statements of the Borrower for the Fiscal Year ended on March 25, 2017, (ii) the unaudited financial statements of the Borrower for the period ending September 30, 2017, and (iii) forecasts prepared by management of the Borrower of balance sheets, income statements and cash flow statements of the Borrower on a monthly basis for the current Fiscal Year and next twelve months, and there shall have been no material misstatements in or omissions from the materials previously furnished to the Agent for its review.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) There have occurred no material changes in governmental regulations or policies adversely affecting the Loan Parties, the Agent or the Lenders party to this transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) The Agent shall have received an executed letter of direction, in form and substance satisfactory to the Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) The Agent shall have received an Information Certificate dated as of the date hereof, executed by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. **<u>[Reserved]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. **<u>Maturity</u>**. This Agreement shall continue in full force and effect for a term ending on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. <u>**Effect of Maturity**</u>. On the Maturity Date, all commitments of the Lender Group to provide additional credit hereunder shall automatically be terminated and all of the Obligations shall become due and payable immediately without notice or demand and Borrower shall be required to repay all of the Obligations in full. No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Commitments) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Agent's Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations have been paid in full and the Commitments have been terminated. When all of the Obligations have been paid in full and the Lender Group's obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at Borrower's sole expense, execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent's Liens and all notices of security interests and liens previously filed by Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. <u>**Post-Closing Covenants**</u>. Borrower covenants and agrees to satisfy each item on <u>Schedule 3.5</u> on or before the date set forth on <u>Schedule 3.5</u> for such item.

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4. **REPRESENTATIONS AND WARRANTIES**.

In order to induce the Lender Group to enter into this Agreement, Borrower makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date on which the Borrower delivers a Compliance Certificate, as though made on and as of the date of such Compliance Certificate (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. **<u>Due Organization and Qualification; Subsidiaries</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower and, subject to the completion of any transaction permitted by <u>Section 6.3</u>, each of its Subsidiaries (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified or registered to do business in any jurisdiction where the failure to be so qualified would reasonably be expected to result in a Material Adverse Effect, and (iii) has all requisite corporate, limited liability or other organizational power and authority (as applicable) to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Set forth on <u>Schedule 4.1</u> is a complete and accurate description as of the Closing Date of the authorized Equity Interests of Borrower and each of its Subsidiaries, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding. Neither Borrower nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security convertible into or exchangeable for any of its Equity Interests except for any Equity Interests (other than Disqualified Equity Interests) that are permitted by the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Set forth on <u>Schedule 4.1</u> (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of the Loan Parties' direct and indirect Subsidiaries, showing: (i) the number of shares of each class of common and preferred Equity Interests authorized for each of such Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding Equity Interests of each such Subsidiary has been validly issued and is fully paid and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as set forth on <u>Schedule 4.1,</u> there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's or any of its Subsidiaries' Equity Interests as of the Closing Date, including any right of conversion or exchange under any outstanding security or other instrument.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. **<u>Due Authorization; No Conflict</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary organizational action on the part of such Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, provincial, state, foreign or local law or regulation applicable to any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries where any such violation would individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (ii) violate the Governing Documents of any Loan Party or its Subsidiaries, (iii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material agreement of any Loan Party or its Subsidiaries where any such conflict, breach or default would individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iv) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party or its Subsidiaries, other than Permitted Liens, or (v) require any approval of any holder of Equity Interests of a Loan Party or its Subsidiaries or any approval or consent of any Person under any material agreement of any Loan Party or its Subsidiaries, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of material agreements, for consents or approvals, the failure to obtain would not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. **<u>Governmental Consents</u>**. The execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date or where any such failure to do the foregoing would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4. **<u>Binding Obligations; Perfected Liens</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors' rights generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Agent's Liens are validly created, perfected (other than (i) any Excluded Deposit Accounts (as defined in the Canadian Security Documents)), and first priority Liens, subject only to Permitted Liens, Purchase Money Liens securing Permitted Purchase Money Indebtedness and Liens securing the interests of lessors under Capital Leases.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5. **<u>Title to Assets; No Encumbrances</u>**. Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property), all of their respective assets reflected in the most recent financial statements delivered pursuant to <u>Section 5.1</u>, in each case except for (i) assets disposed of since the date of such financial statements to the extent permitted hereby, and (ii) minor defects in title that do not interfere with any sale, transfer, or other disposition of such property, or its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes. All of such assets are free and clear of Liens except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6. **<u>Litigation</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) There are no actions, suits, or proceedings pending or, to the knowledge of Borrower, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Schedule 4.6(b)</u> sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities of a Loan Party in excess of, $1,000,000 that, as of the Closing Date, is pending or, to the knowledge of Borrower, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the procedural status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Loan Parties' and their Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7. **<u>Compliance with Laws</u>**. No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect, or is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, in each case that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8. **<u>Financial Statements; No Material Adverse Effect</u>**. All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrower to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and, present fairly in all material respects, the Loan Parties' and their Subsidiaries' consolidated financial condition as of the date thereof and results of operations for the period then ended. Since October 23, 2017, no event, circumstance, or change has occurred that has or would reasonably be expected to result in a Material Adverse Effect with respect to the Loan Parties and their Subsidiaries.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9. **<u>Solvency</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Loan Parties, taken as a whole, are Solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10. **<u>Canadian Pension Plan</u>**. As of the Closing Date, no Loan Party, nor any of its Subsidiaries, maintains or contributes to any Canadian Pension Plans nor have any liabilities or obligations in respect of a Canadian Defined Benefit Plan that has been terminated or wound up.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11. **<u>Environmental Condition</u>**. Except as set forth on <u>Schedule 4.11</u> or except as, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, (a) no Loan Party's nor any of its Subsidiaries' properties or assets has ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any respect, of or has given rise to liability of a Loan Party or any of its Subsidiaries, or to the knowledge of Borrower, liability of previous owners or operators, under any applicable Environmental Law, (b) no Loan Party's nor any of its Subsidiaries' properties or assets has ever been designated or identified in any manner pursuant to any Environmental Law as a Hazardous Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has received written notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding Environmental Action or other written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12. **<u>Complete Disclosure</u>**. All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrower's industry) furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrower's industry) hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The Projections delivered to Agent on or about April 17, 2018 represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrower's good faith estimate, on the date such Projections are delivered, of the Loan Parties' and their Subsidiaries' future performance for the periods covered thereby based upon assumptions believed by Borrower to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, and no assurances can be given that such Projections will be realized, and although reflecting Borrower's good faith estimate, projections or forecasts based on methods and assumptions which Borrower believed to be reasonable at the time such Projections were prepared, are not to be viewed as facts, and that actual results during the period or periods covered by the Projections may differ materially from projected or estimated results).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13. ***<u>Patriot Act;</u>* <u>Canadian AML and Anti-Terrorism Laws</u>**. To the extent applicable, each Loan Party and each of its Subsidiaries is in compliance in all material respects with the (a) *Trading with the Enemy Act*, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (*USA Patriot Act* of 2001) (the "*<u>Patriot Act</u>*") and all applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation. No part of the proceeds of the Loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the *United States Foreign Corrupt Practices Act* of 1977, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14. **<u>Indebtedness</u>**. Set forth on Schedule 4.14 is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding as of the Amendment No. 2 Effective Date that is to remain outstanding immediately after giving effect to the closing hereunder on the Amendment No. 2 Effective Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Amendment No. 2 Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15. **<u>Payment of Taxes</u>**. All Federal, provincial and state income Tax returns and all other material Tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed, and all Federal, provincial and state income Taxes and all other material Taxes shown on such Tax returns to be due and payable and all material assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable, except (a) where failure to do so could not reasonably be expected to have a Material Adverse Effect; or (b) the validity of such Tax is the subject of a Permitted Protest as contemplated by <u>Section 5.5</u> Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all Taxes not yet due and payable. Borrower does not know of any material proposed Tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate proceedings; <u>provided</u> such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16. **<u>Margin Stock</u>**. No Loan Party nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the loans made to Borrower will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.17. **<u>Governmental Regulation</u>**. No Loan Party nor any of its Subsidiaries is subject to regulation under the *Federal Power Act* or the *Investment Company Act* of 1940 or under any other federal, provincial or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable. No Loan Party nor any of its Subsidiaries is a "registered investment company" or a company "controlled" by a "registered investment company" or a "principal underwriter" of a "registered investment company" as such terms are defined in the *Investment Company Act* of 1940.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.18. **<u>OFAC</u>**. No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC or any Canadian Governmental Authority. No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) to its knowledge derives revenues directly or indirectly, from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.19. **<u>Employee and Labor Matters</u>**. Except as set forth on <u>Schedule 4.19</u>, no Loan Party nor any of its Subsidiaries is a party to or otherwise bound by any collective bargaining or similar agreement with any union or other labor organization. Except to the extent would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, there is (i) no unfair labor practice charge or complaint pending or, to the knowledge of Borrower, threatened against Borrower or any of its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against Borrower or any of its Subsidiaries which arises out of or under any collective bargaining agreement and that would reasonably be expected to result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against Borrower or its Subsidiaries that could reasonably be expected to result in a material liability, or (iii) to the knowledge of Borrower, after due inquiry, no union representation question existing with respect to the employees of Borrower or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of Borrower or its Subsidiaries. None of Borrower or its Subsidiaries has incurred any liability or obligation under the *Worker Adjustment and Retraining Notification Act* or similar state or foreign law, which remains unpaid or unsatisfied which could reasonably be expected to result in a Material Adverse Effect. The hours worked and payments made to, classification of, employees of Borrower and its Subsidiaries have not been in violation of the *Fair Labor Standards Act* or any other applicable legal requirements, except to the extent such violations would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All material payments due from Borrower or its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of Borrower and all remittances and withholdings on account of Taxes and employer or employee contribution to benefit plans have been remitted to the applicable Governmental Authority when due, except where the failure to do so would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.20. **<u>Intellectual Property</u>**. Each Loan Party and Subsidiary owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without conflict with any rights of others. There is no pending or, to any Loan Party's knowledge, threatened material Intellectual Property Claim with respect to any Loan Party, any Subsidiary or any of their Property (including any Intellectual Property). All Intellectual Property owned by any Loan Party or any Subsidiary and registered with the U.S. Patent and Trademark Office, the Canadian Intellectual Property Office or any other applicable Governmental Authority is identified on <u>Schedule 4.20</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.22. **<u>Eligible Inventory</u>**. As to each item of Inventory that is identified by Borrower as Eligible Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.23. **<u>Location of Inventory and Equipment</u>**. Except for the third-party warehouse locations identified on <u>Schedule 4.23</u>, the Inventory and Equipment of Borrower is not stored with a bailee, warehouseman, or similar party and is located only at, or in-transit between, the locations identified on <u>Schedule 4.23</u> (as such Schedule may be updated pursuant to <u>Section 5.16</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.24. **<u>Inventory Records</u>**. Each Loan Party keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries' Inventory and the book value thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.25. **<u>Credit Card Arrangements</u>**. <u>Schedule 4.25</u> is a list describing all arrangements as of the Closing Date to which any Loan Party is a party with respect to the processing and/or payment to such Loan Party of the proceeds of any credit card charges and debit card charges for sales made by such Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.26. **<u>No Defaults; Material Contracts</u>**. No event or circumstance has occurred or exists as of the date of this Agreement that constitutes a Default or Event of Default. <u>Schedule 4.26</u> contains a true, correct and complete list of all Material Contracts, and except as described thereon, all such Material Contracts are in full force and effect. No Loan Party or Subsidiary is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute a default, under any Material Contract which would enable the other contracting party to terminate such Material Contract. There is no basis upon which any party (other than a Loan Party or the Subsidiary) could terminate a Material Contract prior to its scheduled termination date.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.27. **<u>Operations of Certain Subsidiaries</u>**. As of the Closing Date, CGS is inactive and does not engage in any trade or business, own any assets or owe any Indebtedness or any other obligation or liability except as expressly permitted hereunder in its capacity as a Loan Party and the ownership of all of the outstanding shares of CGS USA. Each of CGS USA and Birks Jewellers Limited, is inactive and does not engage in any trade or business, own any assets or owe any Indebtedness or any other obligation or liability other than, in the case of CGS USA, (a) the provision of limited support services to Borrower and (b) the payment by Borrower to CGS USA of up to US$500,000 in the aggregate in each Fiscal Year in the form of Permitted Intercompany Advances and reimbursements of reasonable and documented expenses incurred by CGS USA for and on behalf of Borrower, provided that no Default or Event of Default has occurred and is continuing at the time of any such payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.28. **<u>Trade Relations</u>**. There exists no actual or threatened termination, limitation or modification of any business relationship between any Loan Party or any Subsidiary and any customer or supplier, or any group of customers or suppliers, individually or in the aggregate the consequence of which could reasonably be expected to result in a Material Adverse Effect.

5. **AFFIRMATIVE COVENANTS**.

Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. <u>**Financial Statements, Reports, Certificates**</u>. Borrower (a) will deliver to Agent each of the financial statements, reports, and other items set forth on <u>Schedule 5.1</u> no later than the times specified therein, (b) agree that no Subsidiary of a Loan Party will have a Fiscal Year different from that of Borrower, (c) agree to maintain a system of accounting that enables Borrower to produce financial statements in accordance with GAAP, and (d) agree that they will, and will cause each other Loan Party to, (i) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to their Subsidiaries' sales (for avoidance of doubt, Agent and Lenders hereby acknowledge that the reporting system maintained by the Loan Parties on the Closing Date satisfies this clause (i)), and (ii) agree that they will, and will cause each other Loan Party to maintain their billing and reporting system materially consistent with that in effect as of the Closing Date, and shall only make material modifications thereto with notice to, and with the consent of, the Agent (such consent not to be unreasonably withheld or delayed).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. **<u>Reporting</u>**. Borrower (a) will deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the reports set forth on <u>Schedule 5.2</u> at the times specified therein, and (b) agree to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. <u>**Existence**</u>. Except as otherwise permitted under <u>Section 6.3</u> or <u>Section 6.4</u>, Borrower will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect such Person's valid existence and good standing in its jurisdiction of organization and, except as would not reasonably be expected to result in a Material Adverse Effect, good standing with respect to all other jurisdictions in which it is qualified or required to be qualified to do business and any rights, franchises, permits, licenses, accreditations, authorizations, or other approvals material to their businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. <u>**Maintenance of Properties**</u>. Borrower will, and will cause each of its Subsidiaries to, maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, casualty, and condemnation and Permitted Dispositions excepted (and except where the failure to so maintain and preserve assets would not reasonably be expected to result in a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5. <u>**Taxes**</u>. Borrower will, and will cause each of its Subsidiaries to, pay in full before delinquency or before the expiration of any extension period all Federal, provincial and state income and capital Taxes and all other material Taxes imposed, levied, or assessed against it, or any of its assets or in respect of any of its income, capital, businesses, or franchises, except to the extent that the validity of such Tax is the subject of a Permitted Protest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6. **<u>Insurance</u>**. Borrower will, and will cause each of its Subsidiaries to, at Borrower's expense, maintain insurance respecting each of each Loan Party's and its Subsidiaries' assets wherever located, covering liabilities, losses or damages as are customarily are insured against by other Persons engaged in same or similar businesses and similarly situated and located and flood insurance coverage acceptable to Agent with respect to all Real Property Collateral (to the extent flood insurance is required). All such policies of insurance shall be with financially sound and reputable insurance companies that are reasonably acceptable to Agent (it being agreed that any insurance providers which have a policy in effect with Borrower or any of its Subsidiaries as of the Closing Date are acceptable to Agent) and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and, in any event, in amount, adequacy, and scope reasonably satisfactory to Agent (it being agreed that the amount, adequacy, and scope of the policies of insurance of Borrower in effect as of the Closing Date are acceptable to Agent). All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard lenders' loss payable endorsement with a standard non-contributory "lender" or "secured party" clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders' interest in the Collateral and to any payments to be made under such policies. All certificates of property and general liability insurance are to be delivered to Agent, with lenders' loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and shall provide for not less than 30 days (10 days in the case of non-payment), or such shorter period as Agent may agree, prior written notice to Agent of the exercise of any right of cancellation. If any Loan Party or its Subsidiaries fails to maintain such insurance, Agent may arrange for such insurance, but at Borrower's expense and without any responsibility on Agent's part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Borrower shall give Agent prompt notice of any loss exceeding $1,000,000 covered by Borrower or its Subsidiaries' casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7. **<u>[Reserved]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8. **<u>[Reserved]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9. **<u>[Reserved]</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10. **<u>Inspection</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower will, and will cause each of its Subsidiaries to, permit Agent, any Lender and each of their respective duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees (provided an authorized representative of a Borrower shall be allowed to be present) at such reasonable times and intervals as Agent or any Lender, as applicable, may designate and, so long as no Default or Event of Default has occurred and is continuing, with reasonable prior notice to Administrative Borrower and during regular business hours.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower will, and will cause each of its Subsidiaries to, permit Agent and each of its duly authorized representatives or agents to conduct appraisals and valuations at such reasonable times and intervals as Agent may designate; <u>provided</u> that the expenses required to be paid by the Loan Parties in connection therewith shall be subject to any applicable limitation set forth in <u>Section 2.5(c)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11. **<u>Compliance with Laws and Material Contracts</u>**. Borrower will, and will cause each of its Subsidiaries to, comply with (a) the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority, and (b) all of its Material Contracts, except in each case where non-compliance with which, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.12. **<u>Environmental</u>**. Borrower will, and will cause each of its Subsidiaries to,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Keep any property either owned or operated by any Loan Party or its Subsidiaries free of any Environmental Liens (other than Permitted Liens) or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens (other than Permitted Liens),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Comply with applicable Environmental Laws, except where a failure to comply would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, and provide to Agent documentation of such compliance which Agent reasonably requests,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly notify Agent of any release of which Borrower has knowledge of a Hazardous Material in any reportable quantity or which could reasonably be expected to result in material liabilities of any Loan Party or its Subsidiaries from or onto property owned or operated by any Loan Party or its Subsidiaries and take any Remedial Actions required to abate said release or otherwise to come into compliance, in all material respects, with applicable Environmental Law, except where a failure to comply would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, and provide to Agent documentation of such compliance which Agent reasonably requests, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Promptly, but in any event within 5 Business Days of its receipt thereof, provide Agent with written notice of any of the following: (i) notice that an Environmental Lien has been filed against any of the real or personal property of a Loan Party or its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against a Loan Party or its Subsidiaries that individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority that would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.13. <u>**Disclosure Updates**</u>. Each Loan Party will, promptly and in no event later than fifteen Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.14. **<u>Formation of Subsidiaries</u>**. Borrower will, at the time that any Loan Party forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, (x) within 30 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) (a) cause such new Subsidiary to provide to Agent a joinder to the Canadian Security Documents and other applicable Loan Documents (including this Agreement to the extent that such Subsidiary is to be joined as a Borrower hereunder), as applicable, which joinder shall include such provisions as Agent shall consider necessary or desirable for the inclusion of such Subsidiary as a Borrower or other Loan Party including such provisions as are necessary or desirable to reflect the formation of such Subsidiary under the laws of a jurisdiction other than Canada or the location of Collateral outside of Canada) and a guarantee of the Obligations, if required, together with such other security agreements, as well as appropriate financing statements (and with respect to all Real Property Collateral subject (or required hereunder to be subject) to a Mortgage, fixture filings) all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary (other than Excluded Property, as defined in the Canadian Security Documents); to the applicable Canadian Security Documents, the guarantee and such other security agreements shall not be required to be provided to Agent with respect to Obligations, if the costs to the Loan Parties of providing such guarantee or such security agreements are unreasonably excessive (as determined by Agent in consultation with Administrative Borrower) in relation to the benefit to Agent and the Lenders of the security or guarantee afforded thereby and (b) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which, in its reasonable judgment, is necessary with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance, or other documentation with respect to all Real Property Collateral owned in fee simple (for the avoidance of doubt excluding any leasehold properties) and required to be subject to a Mortgage), and (y) within 60 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion), (a) cause such new Subsidiary to provide to Agent Mortgages with respect to any Real Property owned in fee simple (for the avoidance of doubt excluding any leasehold properties) of such new Subsidiary with a fair market value greater than $500,000, as well as appropriate fixture filings, all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the Real Property assets of such newly formed or acquired Subsidiary); and (b) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance, evidence of flood certification documentation (to the extent required) or other documentation with respect to all Real Property owned in fee and subject to (or required hereunder to be subject to) a Mortgage). Any document, agreement, or instrument executed or issued pursuant to this <u>Section 5.14</u> shall constitute a Loan Document.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.15. **<u>Further Assurances</u>**. Borrower will, and will cause each of the other Loan Parties to, at any time upon the reasonable request of Agent, execute or deliver, or cause to be executed or delivered to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, mortgages, deeds of trust, opinions of counsel, and all other documents (the "<u>Additional Documents</u>") that Agent may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better perfect Agent's Liens in all of the assets of Loan Parties (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), to create and perfect Liens in favor of Agent in any Real Property acquired by any Loan Party with a fair market value in excess of $500,000, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents. To the maximum extent permitted by applicable law, if any Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, Borrower, each Borrower and each other Loan Party hereby authorizes Agent to execute any such Additional Documents in the applicable Loan Party's name and authorizes Agent to file such executed Additional Documents in any appropriate filing office. In furtherance of, and not in limitation of, the foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the assets of each Loan Party, including all of the outstanding Equity Interests of Borrower and its Subsidiaries. Without limiting the generality of the foregoing, the Borrower shall ensure that promptly, and in no event more than 15 days, following the Montrovest Merger, Montel Sàrl shall sign an acknowledgment and confirmation in respect of the Montrovest Subordination Agreement in form and substance satisfactory to the Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.16. **<u>Location of Inventory; Chief Executive Office, Etc</u>**.. Borrower will, and will cause each other Loan Party to, keep its Inventory only at (or in-transit between or to) its locations identified on <u>Schedule 4.23</u> and its chief executive office (and registered office) only at the locations identified on <u>Schedule 4.23</u>; <u>provided</u>, that Administrative Borrower may amend <u>Schedule 4.23</u> so long as such amendment occurs by written notice to Agent not less than 10 days, or such later date as Agent agrees in its sole discretion, prior to the date on which such Inventory is moved to such new location or such chief executive office or registered office is relocated and so long as such new location is within continental Canada in the case of the chief executive office and the registered office of a Loan Party. Furthermore, upon request, Borrower will provide the Agent with copies of all existing agreements, and promptly after execution thereof provide the Agent upon request with copies of all future agreements, between a Loan Party and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral having an aggregate value of more than the Dollar Equivalent of $500,000 may be kept or that otherwise may possess or handle any Collateral.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.17. <u>**Canadian Compliance**</u>. In addition to and without limiting the generality of <u>Section 5.11</u>, with respect to any Canadian Pension Plan established after the Closing Date, Borrower will, and will cause each of its Subsidiaries to, (a) comply with applicable provisions and funding requirements of the *Income Tax Act* (Canada) and applicable federal or provincial pension benefits legislation and other applicable laws with respect to all Canadian Pension Plans except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect and (b) furnish to Agent upon Agent's written request such additional information about any Canadian Pension Plan for which Borrower or its Subsidiaries would reasonably expect to incur any material liability. All employer or employee payments, contributions or premiums required to be remitted, paid to or in respect of Canadian statutory benefit plans that Borrower or any of its Subsidiaries is required to participate in or comply with, including the Canada Pension Plan or Quebec Pension Plan as maintained by the Government of Canada or Province of Quebec, respectively, and plans administered pursuant to applicable workplace safety insurance and employment insurance legislation will be paid or remitted by each such Person in accordance with the terms thereof, any agreements relating thereto and all applicable laws except (i) to the extent that any amount so payable is subject to a Permitted Protest and a Canadian Priority Payable Reserve for such amount has been established (ii) for failures resulting from administrative oversight which are promptly remedied once Borrower or its Subsidiary becomes aware thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.18. <u>**Credit Card Notifications**</u>. Within 30 days of the Closing Date (or such later date as Agent may agree), deliver to the Agent copies of notifications (each, a "<u>Credit Card Notification</u>") substantially in the form attached hereto as <u>Exhibit C-2</u>, or otherwise in form and substance reasonably acceptable to Agent, which have been executed on behalf of such Loan Party and delivered to such Loan Party's Credit Card Issuers and Credit Card Processors listed on <u>Schedule 4.25</u>. No Loan Party shall enter into any agreements with Credit Card Issuers or Credit Card Processors other than the ones expressly contemplated herein or in <u>Section 4.25</u> unless Agent has received a copy of the Credit Card Notification sent to such new or additional Credit Card Issuer or Credit Card Processor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.19. <u>**Sales Taxes**</u>. If requested by the Agent, the Borrower shall provide cash collateral in Canadian Dollars in order to secure the Borrower's obligations for sales, harmonized sales, or goods and services Tax which are past due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.20. **<u>[Reserved]</u>**.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.21. <u>**Lenders' Meetings**</u>. Upon the request of any Agent or the Required Lenders, participate in a meeting of the Agent and the Lenders once during each Fiscal Year to be held at the Borrower's corporate offices (or at such other location as may be agreed to by the Borrower and the Agent) at such time as may be agreed to by the Borrower and the Agent.

6. **NEGATIVE COVENANTS**.

Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. **<u>Indebtedness</u>**. Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>**Liens**</u>. Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. **<u>Restrictions on Fundamental Changes</u>**. Borrower will not, and will not permit any of its Subsidiaries to,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) other than in order to consummate a Permitted Acquisition, enter into any merger, amalgamation, consolidation, reorganization, or recapitalization, or reclassify its Equity Interests, except for (i) any merger or amalgamation between Loan Parties; <u>provided</u> that Borrower must be the survivor of any merger or amalgamation to which it is a party (or, in the case of an amalgamation, the continuing corporation resulting therefrom must be liable for the Obligations of Borrower under the Loan Documents), (ii) any merger or amalgamation between a Loan Party (other than Borrower) and a Subsidiary of such Loan Party that is not a Loan Party so long as such Loan Party is the surviving entity of any such merger or amalgamation (or, in the case of an amalgamation, the continuing corporation resulting therefrom) must be liable for the Obligations of such Loan Party under the Loan Documents and the priority of the Agent's Liens on the Collateral is not affected thereby, and (iii) any merger or amalgamation between Subsidiaries of Borrower that are not Loan Parties,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Subsidiaries of Borrower with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of a Loan Party (other than Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets (including any interest in any Equity Interests) of such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Borrower that is not a Loan Party (other than any such Subsidiary the Equity Interests of which (or any portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of Borrower that is not liquidating or dissolving, or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) suspend or cease operating a substantial portion of its or their business, except as permitted pursuant to clauses (a) or (b) above or in connection with a transaction permitted under <u>Section 6.4</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. **<u>Disposal of Assets</u>**. Borrower will not, and will not permit any of its Subsidiaries to, convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any of its or their assets other than (a) Permitted Dispositions; (b) transactions expressly permitted by <u>Sections 6.3 or 6.9</u>; and (c) sales of equipment, furniture and fixtures in the ordinary course of business to a Person other than a Subsidiary that is not a Loan Party and subject to compliance with <u>Section 6.10</u>, if applicable, provided the proceeds of such sales of equipment shall be applied to repay, subject to the Intercreditor Agreement, the Term Loan hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>**Nature of Business**</u>. Borrower will not, and will not permit any of its Subsidiaries to, make any change in the nature of its or their business as described in <u>Section 4.28</u> or <u>Schedule 6.5</u> or acquire any properties or assets that are not reasonably related to the conduct of such business activities; <u>provided</u>, that the foregoing shall not prevent Borrower and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. **<u>Prepayments and Amendments</u>**. Borrower will not, and will not permit any of its Subsidiaries to,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except in connection with Refinancing Indebtedness permitted by <u>Section 6.1</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) make any payments in respect of the Montrovest Debt other than, so long as no Default or Event of Default then exists or would (after taking into consideration the payment to be made) result therefrom and subject to the Montrovest Subordination Agreement, (x) regularly scheduled payments of interest in respect of the Montrovest Debt as and when due pursuant to the Montrovest Debt Documents (y) the principal payments of US$1,250,000 on or about July 20, 2018 and US$1,250,000 on or about July 20, 2019 pursuant to the Montrovest Debt 2017 and (z) the fee payment in an aggregate amount not to exceed $10,000 annually pursuant to the Montrovest Debt 2017. No other prepayment of, or payment of principal on, the Montrovest Debt may be made without the prior written consent of Agent in its sole discretion, unless the Restricted Payment Conditions are satisfied with respect to such prepayment or payment.<u>;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) make any payment on account of Indebtedness (other than as permitted under paragraph<u>paragraphs</u> (a)(i) above <u>as well as (a)(iv) and (a)(v) below</u>) that has been contractually subordinated in right of payment to the Obligations if (A) such payment is not permitted at such time under the subordination terms and conditions applicable to such Indebtedness and,<u>or</u> (B) where applicable, the Restricted Payment Conditions have not been satisfied,<u>;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) make any payment on account of the Damiani Subordinated Indebtedness other than payments in the amounts and on the due dates therefor set out in the Damiani Inventory Purchase Agreement provided that any such payment is permitted to be made at such time under the Damiani Subordination Agreement.<u>;</u>

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(iv) make any payment on account of the Mangrove Debt, except, to the extent there is no Event of Default existing on such payment date, (A) any payment of fees or interest in an aggregate amount not to exceed $750,000 (the "Mangrove Payment Cap") and (B) any payment of fees or interest in excess of the Mangrove Payment Cap, to the extent the Restricted Payment Conditions have been satisfied with respect to such payment; or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(v) make any payment on account of the Seventh Amendment Seller Notes, except, to the extent there is no Event of Default existing on such payment date, any payment of principal or interest when due and payable on the maturity date of the applicable Seventh Amendment Seller Note.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Directly or indirectly, amend, modify, or change any of the terms or provisions of, or, in the case of (b)(i) only, waive any of its material rights under:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The<u>the</u> Revolving Loan Documents (except to the extent expressly permitted by the Intercreditor Agreement), the Management Agreement (except to the extent expressly permitted by the Management Subordination Agreement), the Quebec Subordinated Debt Documents, the Damiani Purchase Documents, the RM JV Agreement to the extent that, in the case of the RM JV Agreement, such amendment, modification or change would be reasonably expected to be adverse to the interests of the Lenders, the Montrovest Debt Documents (except to the extent expressly permitted by the Montrovest Subordination Agreement) or any Additional Subordinated Debt Documents or any other agreement, instrument, document, indenture, or other writing evidencing or concerning Indebtedness that is contractually subordinated in right of payment to the Obligations; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders.

Each Loan Party shall deliver to Agent complete and correct copies of any amendment, restatement, supplement or other modification to or waiver of the Management Agreement, the Quebec Subordinated Debt Documents, the Damiani Purchase Documents, the RM JV Agreement, the Montrovest Debt Documents, any Additional Subordinated Debt Documents or Governing Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. <u>**Restricted Payments**</u>. Borrower will not, and will not permit any of its Subsidiaries to, make any Restricted Payment; <u>provided</u>, that, so long as it is permitted by law, and, so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower may declare and pay distributions to the holders of its Equity Interests so long as the Restricted Payment Conditions are satisfied and Administrative Borrower has delivered a certificate to Agent prior to the payment of any such distribution certifying satisfaction of the Restricted Payment Conditions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Loan Parties shall be permitted to make payments of principal and interest on Permitted Intercompany Advances,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Borrower shall be permitted to pay Gestofi S.A. fees and expenses in an aggregate amount not greater than US$300,000 for each calendar year for services provided to Borrower by employees of Gestofi S.A., as well as the amounts permitted to be paid pursuant to the Management Subordination Agreement, provided that no Default or Event of Default shall have occurred and be continuing at the time of such payment or would result therefrom,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower shall be permitted to, without duplication, (i) pay to any of Regaluxe S.r.L., Montrovest or Gestofi S.A., an aggregate amount not to exceed US$300,000 in any Fiscal Year (or such greater amount to the extent consented to in writing by the Agent in its sole discretion) for expenses incurred by any of Regaluxe S.r.L., Montrovest or Gestofi S.A. on behalf of (a) the Chairman of the Board of Directors of the Borrower in connection with carrying out his duties as Chairman of the Board of Directors of the Borrower in the ordinary course of business and (b) the Chairman of the Executive Committee of the Borrower in connection with carrying out his duties as Chairman of the Executive Committee of the Borrower in the ordinary course of business, (ii) pay to Niccolo Rossi, an aggregate amount not to exceed €225,000 in any calendar year for carrying out his duties as Chairman of the Board of Directors of the Borrower plus, an aggregate amount not to exceed EUR€60,000 in any calendar year for carrying out his duties as Chairman of the Executive Committee of the Borrower and (iii) (x) pay Regaluxe S.r.L. a fee of not more than 3.5% of the total price of the goods sold to Regaluxe S.r.L. in the form of a discount (which fee shall be payable to cover import duties and the carrying costs of value-added Taxes financing), and (y) reimburse Regaluxe S.r.L. for other reasonable costs and expenses incurred by Regaluxe S.r.L. in connection with the importation by Regaluxe S.r.L. of goods of the Borrower and the subsequent sale of such goods by Regaluxe S.r.L. to certain Italian jewelry stores (so long as, to the extent requested by the Agent, the Agent is provided with satisfactory documentation supporting such fees, costs and expenses), provided that in each case, no Default or Event of Default shall have occurred and be continuing at the time of such payment or would result therefrom, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Borrower shall be permitted to pay Carlo Coda Nunziante (i) up to an amount not greater than EUR€150,000 in the aggregate per annum on account of consulting services provided to the Borrower, (ii) reimbursement of expenses in connection therewith and (iii) applicable taxes payable by Borrower in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8. **<u>Accounting Methods</u>**. Borrower will not, and will not permit any of its Subsidiaries to, modify or change its Fiscal Year or its method of accounting (other than as may be required to conform to GAAP, subject to Section 1.2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9. <u>**Investments**</u>. Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment except for Permitted Investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10. **<u>Transactions with Affiliates</u>**. Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any Affiliate of Borrower or any of its Subsidiaries except for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) transactions (other than the payment of management, consulting, monitoring, or advisory fees) between Borrower or its Subsidiaries, on the one hand, and any Affiliate of Borrower or its Subsidiaries, on the other hand, so long as such transactions are no less favorable, taken as a whole, to Borrower or its Subsidiaries, as applicable, than would be obtained in an arm's length transaction with a non-Affiliate, provided, however the foregoing restrictions shall not apply to transactions between any Loan Party and any other Loan Party,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) so long as it has been approved by Borrower's or its applicable Subsidiary's Board of Directors (or comparable governing body) in accordance with applicable law, any indemnity provided for the benefit of directors (or comparable managers), officers and employees of Borrower or its applicable Subsidiary,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) so long as it has been approved by Borrower's or its applicable Subsidiary's Board of Directors (or comparable governing body) in accordance with applicable law, reasonable and customary fees, compensation, benefits and incentive arrangements paid or provided to, and indemnities provided on behalf of or to, officers, directors or employees of Borrower (or any direct or indirect Borrower thereof) or any of Borrower's Subsidiaries,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) transactions permitted by <u>Section 6.3</u> or <u>Section 6.7</u>, or any Permitted Intercompany Advance,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any transaction with an Affiliate otherwise permitted hereunder where the only consideration paid by Borrower or any Subsidiary is Borrower's Qualified Equity Interests, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) loans or advances to directors, officers and employees permitted under <u>Section 6.9</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11. **<u>Use of Proceeds</u>**. Borrower will not, and will not permit any of its Subsidiaries to, use the proceeds of any Loan made hereunder for any purpose other than as contemplated in Section 2.3(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12. **<u>Limitation on Issuance of Equity Interests</u>**. Borrower will not, and will not permit any of its Subsidiaries to issue or sell or enter into any agreement or arrangement for the issuance or sale of any of its Equity Interests, other than (a) the issuance or sale of Qualified Equity Interests by Borrower, (b) the issuance and sale of Qualified Equity Interests by any Loan Party or any Subsidiary of a Loan Party to a Loan Party to which such Loan Party is a direct Subsidiary, (c) the issuance and sale of Qualified Equity Interests by any Subsidiary that is not a Loan Party to another Subsidiary, (d) transfers and replacements of then-outstanding Equity Interests, provided that any such transfer or replacements do not (i) give rise to a Change of Control, (ii) include any transfer of Equity Interests held by a Loan Party to a Person that is not a Loan Party (other than a Permitted Disposition) or (ii) include any transfer of Equity Interests from a Loan Party to a Person that is not a Loan Party (other than a Permitted Disposition), (e) the issuance or sale of Qualified Equity Interests by any Person that is not a Loan Party, and (f) issuances of Qualified Equity Interests by a newly created Subsidiary to such Subsidiary's direct parent in accordance with the terms of the Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13. **<u>Canadian Employee Benefits</u>**. Borrower will not, and will not permit any of its Subsidiaries to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) establish, maintain, sponsor, administer, contribute to, participate in or assume or incur any liability in respect of any Canadian Defined Benefit Plan or amalgamate with any Person if such Person, sponsors, administers, contributes to, participates in or has any liability in respect of, any Canadian Defined Benefit Plan other than a Canadian Multi-Employer Plan, unless a Canadian Priority Payables Reserve for unremitted and due pension plan contributions or wind-up deficiency amounts has been established.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) terminate any Canadian Pension Plan in a manner, or take any other action with respect to any Canadian Pension Plan, which would reasonably be expected to result in a Material Adverse Effect, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) fail to make full payment when due of any amounts, under the provisions of any Canadian Pension Plan, any agreement relating thereto or applicable law if such failure would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.14. **<u>Sale and Leaseback Transactions</u>**. Borrower will not, and will not permit any of its Subsidiaries to, become or remain liable as lessee or as a guarantor or other surety, directly or indirectly, with respect to any lease whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred; provided that a Borrower and its Subsidiaries may become and remain liable as lessee, guarantor or other surety with respect to any such lease if and to the extent that Borrower or any of its Subsidiaries would be permitted to enter into, and remain liable under, such lease to the extent that the transaction would constitute a Permitted Sale Leaseback Transaction, assuming the sale and leaseback transaction constituted Indebtedness in a principal amount not to exceed the gross proceeds of the sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.15. <u>**Negative Pledges**</u>. Borrower will not, and will not permit any of its Subsidiaries to, enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, other than (a) this Agreement and the other Loan Documents, (b) any agreements governing any Permitted Liens securing, Capitalized Lease Obligations or Permitted Purchase Money Indebtedness otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (c) the Revolving Loan Documents, (d) restrictions set forth in the RM JV Agreement (applicable only to the assets that are the subject of such agreement and the equity interests in RM JV) and any other provision limiting the disposition or distribution of assets or property in joint venture agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements to the extent such joint venture or similar agreement is permitted under this Agreement, (e) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the disposition of all or substantially all of the Equity Interests or assets of such Subsidiary that applies only to the Equity Interests or assets of such Subsidiary, (f) customary provisions in leases, licenses and other contracts restricting the assignment thereof, (g) any other agreement that does not restrict in any manner (directly or indirectly) Liens which may now or hereafter be created pursuant to any of the Loan Documents to secure any Obligations, and (h) any prohibition that (i) exists pursuant to the requirements of applicable law, (ii) consists of customary restrictions and conditions contained in any agreement relating to any transaction permitted under <u>Section 6.3</u> or <u>6.4</u>, (iii) restricts subletting or assignment of leasehold interests contained in any lease governing a leasehold interest of a Borrower or its Subsidiaries, (iv) exists in any agreement in effect at the time such Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary, (v) exists in any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired or (vi) is imposed by any renewal, extension, refinancing, refund or replacement (or successive extensions, renewals, refinancings, refunds or replacements) that are otherwise permitted by the Loan Documents or the contracts, instruments or obligations referred to in clause (b), (c), (d), (e), (f), (g), (h)(iv) or (h)(v) above; provided that such renewals, extensions, refinancings, refunds or replacements (or successive extensions, renewals, refinancings, refunds or replacements), taken as a whole, are not more materially restrictive with respect to such prohibitions than those contained in the original agreement, as determined in good faith by the Board of Directors of Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.16. **<u>Restrictions on Subsidiary Distributions</u>**. Borrower will not, and will not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction of any kind on the ability of any such Subsidiary to (i) pay dividends or make any other distributions on any of such Subsidiary's Equity Interests owned by Borrower or any other Subsidiary Borrower, (ii) repay or prepay any Indebtedness owed by such Subsidiary to Borrower or any other Subsidiary of Borrower, (iii) make loans or advances to Borrower or any other Subsidiary of Borrower, or (iv) transfer any of its property or assets to Borrower or any other Subsidiary of Borrower, except in each case, encumbrances or restrictions (a) imposed by this Agreement and the other Loan Documents, (b) contained in an agreement with respect to a Permitted Disposition, (c) contained in any agreements governing any Permitted Liens securing Capitalized Lease Obligations or Permitted Purchase Money Indebtedness otherwise permitted hereby (in which case, any encumbrance or restriction shall only be effective against the assets financed thereby), (d) constituting customary restrictions in joint venture agreements and other similar agreements applicable to joint ventures permitted hereunder and applicable solely to such joint venture, (e) contained in any agreement of a Subsidiary that is not a Loan Party governing Permitted Indebtedness, (f) contained in any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired, or (g) contained in, or existing by reasons of, any agreement or instrument (i) existing on the Closing Date, (ii) relating to property existing at the time of the acquisition thereof, so long as the encumbrance or restriction relates only to the property so acquired, (iii) relating to any Indebtedness of, or otherwise to, any Subsidiary at the time such Subsidiary was merged, amalgamated or consolidated with or into, or acquired by, a Borrower or a Subsidiary or became a Subsidiary and not created in contemplation thereof, (iv) effecting a renewal, extension, refinancing, refund or replacement (or successive extensions, renewals, refinancings, refunds or replacements) of Indebtedness issued under an agreement referred to in clauses (c), (e), (f) and (g)(i) through (g)(iii) above, so long as the encumbrances and restrictions contained in any such renewal, extension, refinancing, refund or replacement agreement, taken as a whole, are not materially more restrictive than the encumbrances and restrictions contained in the original agreement, as determined in good faith by the Board of Directors of Borrower, (v) constituting customary provisions restricting subletting or assignment of any leases of a Borrower or any Subsidiary or provisions in agreements that restrict the assignment of such agreement or any rights thereunder, (vi) constituting restrictions on the sale or other disposition of any property securing Indebtedness as a result of a Lien on such property permitted hereunder, (vii) constituting restrictions on net worth or on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business, (viii) constituting provisions contained in agreements or instruments relating to Indebtedness permitted hereunder that prohibit the transfer of all or substantially all of the assets of the obligor under that agreement or instrument unless the transferee assumes the obligations of the obligor under such agreement or instrument, or (ix) constituting any encumbrance or restriction with respect to property under a lease or other agreement that has been entered into for the employment or use of such property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.17. **<u>Business Activities; Permitted Store Closings</u>**. Borrower will not, and will not permit any of its Subsidiaries to (a) engage directly or indirectly (whether through the Subsidiaries or otherwise) in any type of business other than the businesses conducted by the Loan Parties on the Closing Date and in related businesses, (b) execute, alter, modify, or amend any lease; <u>provided</u>, <u>however</u>, that the Loan Parties may (i) alter, modify or amend any lease in a manner which is not detrimental to the Loan Parties so long as any such alteration, modification or amendment does not adversely affect any rights of the Agents<u>Agent</u> or the Lenders hereunder and (ii) the Loan Parties may terminate the leases on the retail locations which constitute a Permitted Store Closing, or (c) except as provided in clause (b) hereof, commit to close any location at which a Loan Party maintains, offers for sales, or stores any of the Collateral.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.18. **<u>Margin Regulations</u>**. Borrower will not, and will not permit any of its Subsidiaries to, use all or any portion of the proceeds of the Term Loan to purchase or carry margin stock (within the meaning of Regulation U of the Federal Reserve Board) in contravention of Regulation U of the Federal Reserve Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.19. **<u>No Speculative Transactions</u>**. Borrower will not, and will not permit any of its Subsidiaries to, engage in any transaction involving commodity options, futures contracts or similar transactions other than Secured Hedging Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.20. **<u>Amendment of Rolex Canada Documents</u>**. Borrower will not, and will not permit any of its Subsidiaries to, amend any provision of any Rolex Canada Document in a manner adverse to the Agent and the other Secured Parties without the prior written consent of the Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.21. **<u>[Reserved]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.22. **<u>Anti-layering</u>**. Notwithstanding the foregoing, neither a Loan Party nor any Subsidiary of a Loan Party will create or incur any Indebtedness which is contractually subordinated or junior in right of payment to any other Indebtedness of the Loan Parties, unless such Indebtedness is also subordinated or junior in right of payment, in the same manner and to the same extent, to the Obligations.

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7. **[RESERVED]**.

8. **EVENTS OF DEFAULT**.

Any one or more of the following events shall constitute an event of default (each, an "<u>Event of Default</u>") under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. **<u>Payments</u>**<u>.</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u>. If Borrower fails to pay when due and payable, or when declared due and payable, (a<u>i</u>) all or any portion of the Obligations consisting of interest, fees, or charges due to the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of (x) 1 Business Day for failure to pay interest and (y) 3 Business Days for failure to pay any other amounts due under clause (a<u>i</u>) hereof, and (b<u>ii</u>) all or any portion of the principal of the Term Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(b)</u> <u>If the Combined Total Outstandings exceeds the lesser of the Borrowing Base or the Combined Loan Cap pursuant to Section 2.2(a), and Borrower fails to cure such exceedance within 2 Business Days.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. **<u>Covenants</u>**. If any Loan Party or any of its Subsidiaries:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) fails to perform or observe any covenant or other agreement contained in any of (i) <u>Sections 3.5</u>, <u>5.1</u>, <u>5.2</u>, <u>5.3</u> (solely to the extent that the Borrower is not in good standing in its jurisdiction of organization), <u>5.6</u>, and <u>5.10</u> (solely if Borrower refuses to allow Agent or its representatives or agents to visit Borrower's properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss Borrower's affairs, finances, and accounts with officers and employees of Borrower), (ii) <u>Section 6</u>, (iii) <u>Section 7</u>, or (iv) <u>Section 7</u> of the Canadian Security Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) fails to perform or observe any covenant or other agreement contained in any of <u>Sections 5.3</u> (other than if Borrower is not in good standing in its jurisdiction of organization), <u>5.4, 5.5</u>, <u>5.11</u>, <u>5.14</u>, <u>5.15</u>, <u>5.16</u> and such failure continues for a period of 15 days after the earlier of (i) the date on which such failure shall first become known to any officer of Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this <u>Section 8</u> (in which event such other provision of this <u>Section 8</u> shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to any officer of Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3. **<u>J</u><u>udgments</u>.** If one or more judgments, requirements to pay, orders, or awards for the payment of money, or requirements to pay money, involving an aggregate amount of $1,000,000<sup>,</sup> or more (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 45 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4. **<u>Voluntary Bankruptcy, etc</u>.** If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5. **<u>Involuntary Bankruptcy, etc</u>.** If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6. **<u>Default Under Other Agreements</u>.** If there is (a) a breach or default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party's or any of its Subsidiaries' Indebtedness involving an aggregate amount of $1,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party's or its Subsidiary's obligations thereunder, or (b) a default in or an involuntary early termination of one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party involving an aggregate Hedge Termination Value of $1,000,000 or more, beyond any grace period provided therefor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7. **<u>Default under Revolving Loan Documents</u>.** If there is (i) any breach or default of a Loan Party or any of its Subsidiaries occurs under any of the Revolving Loan Documents (or any documents relating to renewals, refinancings and extensions of the Debt incurred thereunder) or any Secured Hedging Agreement or (ii) any such Debt shall become or be declared to be due and payable, or be required to be prepaid or repurchased (other than by a regularly scheduled or required prepayment), prior to the stated maturity thereof; <u>provided</u> that such breach or default shall be deemed continuing hereunder until the Agents<u>Agent</u> or the Required Lenders have expressly waived such breach or default in writing, notwithstanding the fact that such breach or default may have been waived under the terms of the Revolving Loan Documents or any Secured Hedging Agreement;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8. **<u>Default Under Damiani Purchase Documents</u>.** If (i) the Borrower fails to make any payment when due and payable under the Damiani Inventory Purchase Agreement or if there is a material breach or default by a Loan Party or any of its Subsidiaries under any of the Damiani Purchase Documents and, in each case, such failure, breach or default continues for a period of at least thirty (30) days, (ii) any Damiani Subordinated Indebtedness shall become or be declared to be due and payable, or be required to be prepaid (other than by a scheduled or required payment in accordance with the terms of the Damiani Inventory Purchase Agreement), prior to the stated due date thereof (iii) any action is taken by Damiani to initiate the commencement of a Standstill Period (as defined in the Damiani Subordination Agreement) or (iv) the validity or enforceability of the Damiani Subordination Agreement shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or Damiani or any of its Affiliates or agents shall be permitted (by judicial order or otherwise) to take enforcement actions or institute any proceeding (including for the return of Inventory) against any Obligor or any Assets in violation of the Damiani Subordination Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9. **<u>Subordinated Debt Documents</u>.** (i) the earlier of (A) receipt by a Loan Party or any of its Subsidiaries of notice from any applicable party under any of the Rolex Canada Documents, the Quebec Subordinated Debt Documents, the Montrovest Debt Documents or the Additional Subordinated Debt Documents of the occurrence and continuance of a payment default or the occurrence of a payment default under any of such agreements which has continued for fifteen (15) days or (B) any other material breach or default of a Loan Party or any of its Subsidiaries occurs under any of the Rolex Canada Documents, the Quebec Subordinated Debt Documents, the Montrovest Debt Documents or the Additional Subordinated Debt Documents (or any documents relating to renewals, refinancings and extensions of the Debt incurred thereunder) or (ii) any such Debt shall become or be declared to be due and payable, or be required to be prepaid or repurchased (other than by a regularly scheduled or required prepayment), prior to the stated maturity thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10. **<u>Compliance Certificate; Borrowing Base Certificate; Representations</u>.** If (i) any information contained in any Compliance Certificate or Borrowing Base Certificate was untrue or incorrect in any material respect when made or (ii) any representation or warranty made or delivered to the Agent or any Lender by any Loan Party herein, in connection with any Loan Document or transaction contemplated thereby, or in any written statement, report, financial statement or certificate (other than a Borrowing Base Certificate or Compliance Certificate) is untrue, incorrect or misleading in any material respect when given or confirmed (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.11. **<u>Guarantee</u>.** If the obligation of any Guarantor under the guarantee of any of the Obligations (including any guarantee contained in any Loan Document) is limited in any material respect or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.12. **<u>Security Documents</u>.** If any Canadian Security Document or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected (to the extent required thereby) and, except to the extent of Permitted Liens which are non-consensual Permitted Liens, permitted Purchase Money Liens, the interests of lessors under Capital Leases, subject to the Intercreditor Agreement, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, or (b) as the result of an action or failure to act on the part of Agent;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.13. **<u>Loan Documents</u>.** The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.14. **<u>Change of Control</u>.** A Change of Control shall occur, whether directly or indirectly; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.15. **<u>Material Damage or Loss</u>.** There shall occur any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty, which in any such case causes, for more than 5 consecutive days, the cessation or substantial curtailment of revenue producing activities at more than 5 retail locations not covered by business interruption insurance.

9. **RIGHTS AND REMEDIES.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. Rights and Remedies. Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall (in each case under clauses (a) or (b) by written notice to Administrative Borrower), in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) declare the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations, whether evidenced by this Agreement or by any of the other Loan Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrower shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by Borrower; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents, under applicable law, or in equity.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in <u>Section 8.4</u> or <u>Section 8.5</u>, in addition to the remedies set forth above, without any notice to Borrower or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations, inclusive of the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations, whether evidenced by this Agreement or by any of the other Loan Documents, shall automatically become and be immediately due and payable and Borrower shall automatically be obligated to repay all of such Obligations in full, without presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived by Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. **<u>Remedies Cumulative</u>.** The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the PPSA, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

10. **WAIVERS; INDEMNIFICATION.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. **<u>Demand; Protest; etc</u>.** Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group pursuant to the Loan Documents on which Borrower may in any way be liable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. **<u>The Lender Group's Liability for Collateral</u>.** Borrower hereby agrees that: (a) so long as Agent complies with its obligations, if any, under the PPSA, the Lender Group shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. **<u>Indemnification</u>.** Borrower shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an "<u>Indemnified Person</u>") harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable and documented out-of-pocket fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought but without duplication of any losses, costs and expenses as to which a Borrower is liable to such Indemnified Person pursuant to <u>Section 2.7</u> or <u>Article 16</u>), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided that Borrower shall not be liable for costs and expenses (including lawyers' fees) of any Lender (other than SLR Credit Solutions) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Borrower's and its Subsidiaries' compliance with the terms of the Loan Documents (<u>provided</u>, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders that do not involve any acts or omissions of any Loan Party, or (ii) disputes solely between or among the Lenders and their respective Affiliates that do not involve any acts or omissions of any Loan Party; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to Taxes, which shall be governed by <u>Section 16</u> except to the extent arising from primarily a non-Tax claim), (b) with respect to any actual or prospective investigation, litigation, or proceeding

related to this Agreement, any other Loan Document, the making of any Loans hereunder, or the use of the proceeds of the Loans or the Letters of Credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, and (c) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by Borrower or any of its Subsidiaries or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of Borrower or any of its Subsidiaries (each and all of the foregoing, the "<u>Indemnified Liabilities</u>"). The foregoing to the contrary notwithstanding, Borrower shall not have any obligation to any Indemnified Person under this <u>Section 10.3</u> with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, lawyers, or agents. This provision shall survive the termination of this Agreement and the repayment in full of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrower were required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrower with respect thereto. **WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4. **<u>Subordination; Subrogation</u>.** Until the payment in full of all of the Obligations, the Borrower agrees not to exercise, and the Borrower hereby waives, any rights against any other Loan Party as a result of payment by such Borrower hereunder by way of subrogation, reimbursement, restitution, contribution or otherwise, and the Borrower will not prove any claim in competition with any Agent or any Lender in respect of any payment hereunder in any proceedings of any nature in any Insolvency Proceeding; the Borrower will not claim any set-off, recoupment or counterclaim against any other Loan Party in respect of any liability of a Loan Party to any other Loan Party; and the Borrower waives any benefit of and any right to participate in any Collateral which may be held by the Agent or any Lender. The Borrower agrees that, after the occurrence and during the continuance of any Default or Event of Default, the Borrower will not demand, sue for or otherwise attempt to collect any Debt of any other Loan Party to the Borrower until payment in full of all of the Obligations. If, notwithstanding the foregoing sentence, the Borrower shall collect, enforce or receive any amounts in respect of the Debt of any other Loan Party in violation of the foregoing sentence while any Obligations of such other Loan Party are still outstanding or while any Commitments are outstanding, such amounts shall be collected, enforced and received by such Borrower as trustee for the Agent and the Lenders and be paid over to the Agent, for the benefit of the Agent and the Lenders on account of the Obligations of the Borrower without affecting in any manner the liability of the Borrower under the other provisions hereof. The provisions of this section shall survive the expiration or termination of this Agreement and the other Loan Documents.

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11. **NOTICES.** 

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements

and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile. In the case of notices or demands to Borrower or Borrower or Agent, as the case may be, they shall be sent to the respective address set forth below:

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If to Borrower or<br> Administrative Borrower: | Birks Group Inc.<br> 2020 Robert-Bourassa Blvd.<br> Suite 200<br> Montreal, Quebec<br> H3A 2A5<br> Attn: Chief Financial Officer<br> Fax No.: 514-397-2537<br> Email: kfontana@birksgroup.com |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; with copies to: | Birks Group Inc.<br> 2020 Robert-Bourassa Blvd.<br> Suite 200<br> Montreal, Quebec<br> H3A 2A5<br> Attn: General Counsel<br> Fax No.: 514-397-2537<br> Email: mmelfi@birksgroup.com |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If to Agent: | SLR Credit Solutions<br> Two International Place, 17<sup>th</sup> Floor<br> Boston, MA 02110 USA<br> Attn: Rebecca E. Tarby<br> Fax No.: 617-428-8701<br> Email: rtarby@slrcreditsolutions.com<br>And a copy (which shall not constitute notice) to:<br>Proskauer Rose LLP<br> One International Place<br> Boston, MA 02110 USA<br> Attn: Peter J. Antoszyk, Esq.<br> Fax No.: 617-526-9899<br> Email:pantoszyk@proskauer.com |

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Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party. All notices or demands sent in accordance with this <u>Section 11</u>, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; <u>provided</u>, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall

be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the "return receipt requested" function, as available, return email or other written acknowledgment).

Each Loan Party hereby authorizes the Agent and the Lenders (but they shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Loan Party or any Subsidiary.

12. **CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE PROVINCE OF ONTARIO; <u>PROVIDED</u>, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS <u>SECTION 12(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A "<u>CLAIM</u>"). BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN THE PROVINCE OF ONTARIO, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST AGENT, ANY SWING LENDER, ANY OTHER LENDER, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

13. **ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  **<u>Assignments and Participations</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) Subject to the conditions set forth in clause (a)(ii) below, any Lender may assign and delegate all or any portion of its rights and duties under the Loan Documents (including the Obligations owed to it and its Commitment) to one or more assignees so long as such prospective assignee is an Eligible Transferee (each, an "<u>Assignee</u>"), with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Administrative Borrower; <u>provided</u>, that no consent of Administrative Borrower shall be required (1) if an Event of Default has occurred and is continuing, or (2) in connection with an assignment to a Person that is a Lender or an Affiliate (other than natural persons) of a Lender or a Related Fund; <u>provided further</u>, that Administrative Borrower shall be deemed to have consented to a proposed assignment unless it objects thereto by written notice to Agent within 10 Business Days after having received notice thereof; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Agent; provided that no such consent shall be required in connection with an assignment to a Person that is a Lender or an Affiliate of a Lender (other than a natural person).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Assignments shall be subject to the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) no assignment may be made to a natural person,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) no assignment may be made to a Loan Party or an Affiliate of a Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the amount of the Commitments and the other rights and obligations of the assigning Lender hereunder and under the other Loan Documents subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to Agent) shall be in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply to (I) an assignment or delegation by any Lender to any other Lender, an Affiliate of any Lender, or a Related Fund of such Lender or (II) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) the parties to each assignment shall execute and deliver to Agent an Assignment and Acceptance; <u>provided</u>, that Borrower and Agent may continue to deal solely and directly with the assigning Lender in connection with the interest so assigned to an Assignee until written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) unless waived by Agent, the assigning Lender or Assignee has paid to Agent, for Agent's separate account, a processing fee in the amount of $3,500, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G) the Assignee, if it is not a Lender, shall deliver to Agent an Administrative Questionnaire in a form approved by Agent (the "<u>Administrative Questionnaire</u>"), and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) From and after the date that Agent receives the executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall be a "Lender" and shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to <u>Section 10.3</u>) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); <u>provided</u>, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender's obligations under <u>Section 15</u> and <u>Section 17.8(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Immediately upon Agent's receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to <u>Section 13.1(b)</u>, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender *pro tanto*.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a "<u>Participant</u>") participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the "<u>Originating Lender</u>") hereunder and under the other Loan Documents; <u>provided</u>, that (i) the Originating Lender shall remain a "Lender" for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a "Lender" hereunder or under the other Loan Documents and the Originating Lender's obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrower, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender's rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) decreases the amount or postpones the due dates of scheduled principal repayments or prepayments or premiums payable to such Participant through such Lender, (v) no participation shall be sold to a natural person, (vi) no participation shall be sold to a Loan Party or an Affiliate of a Loan Party, and (vii) all amounts payable by Borrower hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Borrower, the Collateral, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of <u>Section 17.8</u>, disclose all documents and information which it now or hereafter may have relating to Borrower and its Subsidiaries and their respective businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of the Bank of Canada and the Bank of Canada may enforce such pledge or security interest in any manner permitted under applicable law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Agent (acting solely for this purpose as a non-fiduciary agent on behalf of Borrower) shall maintain, or cause to be maintained, a register (the "<u>Register</u>") on which it enters the name and address of each Lender as the registered owner of the Commitments (and the principal amount thereof and stated interest thereon) held by such Lender (each, a "<u>Registered Loan</u>"). Other than in connection with an assignment by a Lender of all or any portion of its portion of the Commitments to an Affiliate of such Lender or a Related Fund of such Lender (i) a Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any evidencing the same), Borrower shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the case of any assignment by a Lender of all or any portion of its Commitments to an Affiliate of such Lender or a Related Fund of such Lender, and which assignment is not recorded in the Register, the assigning Lender, on behalf of Borrower, shall maintain a register comparable to the Register.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the event that a Lender sells participations in the Registered Loan, such Lender, acting solely for this purpose as a non-fiduciary agent on behalf of Borrower, shall maintain (or cause to be maintained) a register on which it enters the name of all participants in the Registered Loans held by it (and the principal amount (and stated interest thereon) of the portion of such Registered Loans that is subject to such participations) (the "<u>Participant Register</u>"). A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Agent shall make a copy of the Register (and each Lender shall make a copy of its Participant Register to the extent it has one) available for review by Borrower from time to time as Borrower may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2. **<u>Successors</u>**. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; <u>provided</u>, that Borrower may not assign this Agreement or any rights or duties hereunder without the Lenders' prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by the Lenders shall release Borrower from its Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to <u>Section 13.1</u> and, except as expressly required pursuant to <u>Section 13.1</u>, no consent or approval by Borrower is required in connection with any such assignment.

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14. **AMENDMENTS; WAIVERS.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1. **<u>Amendments and Waivers</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by Borrower or any other Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are party thereto and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; <u>provided</u>, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly and adversely affected thereby and in the case of an amendment, all of the Loan Parties that are party thereto, do any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) increase the amount of or extend the expiration date of any Commitment of any Lender,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document, <u>provided</u>, <u>however</u>, that, notwithstanding anything to the contrary in this Agreement, any waiver (or amendment to the terms) of any mandatory prepayment of the Term Loan pursuant to <u>Section 2.3</u> shall be effective when signed or consented to by the Required Lenders and Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) reduce the principal of, or the rate of interest on, any Loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except in connection with the waiver of applicability of <u>Section 2.3</u> (which waiver shall be effective with the written consent of the Required Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) amend, modify, or eliminate this Section or any provision of this Agreement providing for consent or other action by all Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) amend, modify, or eliminate <u>Section 3.1</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) amend, modify, or eliminate <u>Section 15.10</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) other than as permitted by <u>Section 15.10</u>, release Agent's Lien in and to any of the Collateral,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) amend, modify, or eliminate the definitions of "Required Lenders", "Supermajority Lenders" or "Pro Rata Share",

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) contractually subordinate any of Agent's Liens (other than in respect of Permitted Liens securing the Revolving Loan Debt, Capital Leases or Permitted Purchase Money Indebtedness permitted hereunder),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) other than in connection with a merger, amalgamation, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) amend, modify, or eliminate any of the provisions of <u>Section 13.1</u> with respect to assignments to, or participations with, Persons who are Loan Parties or Affiliates of Loan Parties;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No amendment, waiver, modification, or consent shall amend, modify, waive, or eliminate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of Agent and Borrower (and shall not require the written consent of any of the Lenders), or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any provision of <u>Section 15</u> pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrower, and the Required Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No amendment, waiver, modification, elimination, or consent shall amend, without written consent of Agent, Borrower and the Supermajority Lenders, modify, or eliminate the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory that are used in such definition to the extent that any such change results in more credit being made available to Borrower based upon the Borrowing Base, but not otherwise, or the definition of Maximum Credit Amount; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Anything in this <u>Section 14.1</u> to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of Borrower, shall not require consent by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any other Loan Document may be entered into without the consent of, or over the objection of, any Defaulting Lender other than any of the matters governed by <u>Section 14.1(a)(i) through (iii)</u> that affect such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2. **<u>Replacement of Certain Lenders</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent, authorization, or agreement of the Required Lenders, the Supermajority Lenders or all Lenders directly and adversely affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not of all Lenders, the Supermajority Lenders but not of all Lenders or all Lenders affected thereby, or (ii) any Lender makes a claim for compensation under <u>Section 16</u>, then Borrower or Agent, upon at least 5 Business Days prior irrevocable notice, may permanently replace any Lender that failed to give its consent, authorization, or agreement (a "<u>Non-Consenting Lender</u>"), together with its Affiliates, or any Lender that made a claim for compensation (a "<u>Tax Lender</u>"), together with its Affiliates, with one or more Replacement Lenders, and the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall have no right to refuse to be replaced hereunder. Such notice to replace the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall specify a closing date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the closing date of such replacement, the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, being repaid in full its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including (i) all interest, fees and other amounts that may be due in payable in respect thereof, and (ii) an assumption of its Pro Rata Share of participations in the Letters of Credit). If the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the closing date of such replacement, Agent may, but shall not be required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, and irrespective of whether Agent executes and delivers such Assignment and Acceptance, the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall be made in accordance with the terms of <u>Section 14.2</u>. Until such time as one or more Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, hereunder and under the other Loan Documents, the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall remain obligated to make the Non-Consenting Lender's (and its Affiliates') or Tax Lender's (and its Affiliates'), as applicable, Pro Rata Share of the Term Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3. <u>**No Waivers; Cumulative Remedies**</u>. No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Agent or any Lender on any occasion shall affect or diminish Agent's and each Lender's rights thereafter to require strict performance by Borrower of any provision of this Agreement. Agent's and each Lender's rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

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15. **AGENT; THE LENDER GROUP.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1. **<u>Appointment and Authorization of Agent</u>**. Each Lender hereby designates and appoints Crystal Financial LLC (d/b/a SLR Credit Solutions) as its agent under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, the Lenders hereby irrevocably authorize the Agent to enter into the Intercreditor Agreement and agree to be bound by the provisions thereof. Agent agrees to act as agent for and on behalf of the Lenders on the conditions contained in this <u>Section 15</u>. Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent. Without limiting the generality of the foregoing, the use of the term "agent" in this Agreement or the other Loan Documents with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only a representative relationship between independent contracting parties. Each Lender hereby further authorizes Agent to act as the secured party under each of the Loan Documents that create a Lien on any item of Collateral. Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, payments and proceeds of Collateral, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (c) exclusively receive, apply, and distribute payments and proceeds of the Collateral as provided in the Loan Documents, (d) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to Borrower or its Subsidiaries, the Obligations, the Collateral, or otherwise related to any of same as provided in the Loan Documents, and (e) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2. **<u>Liability of Agent</u>**. None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by Borrower or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of Borrower or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lenders to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of Borrower or its Subsidiaries.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3. <u>**Reliance by Agent**</u>. Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrower or counsel to any Lender), independent accountants and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable. If Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4. **<u>Notice of Default or Event of Default</u>**. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a "notice of default." Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge. If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to its Participants, if any. Subject to <u>Section 15.3</u>, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with <u>Section 9</u>; <u>provided</u>, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5. **<u>Credit Decision</u>**. Each Lender acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of Borrower and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender. Each Lender represents to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, documents and information as it has deemed appropriate, made its own appraisal of an investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrower. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrower or any other Person party to a Loan Document. Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of Borrower or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons. Each Lender acknowledges that Agent does not have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is expressly specified herein) to provide such Lender with any credit or other information with respect to Borrower, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent's or its Affiliates' or representatives' possession before or after the date on which such Lender became a party to this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6. **<u>Costs and Expenses; Indemnification</u>**. Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, legal fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrower is obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient amounts from payments or proceeds of the Collateral received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders. In the event Agent is not reimbursed for such costs and expenses by Borrower or its Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender's ratable thereof. Whether or not the transactions contemplated hereby are consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrower and without limiting the obligation of Borrower to do so) from and against any and all Indemnified Liabilities; <u>provided</u>, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person's gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make an extension of credit hereunder. Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender's ratable share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Loan Document to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrower. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7. **<u>SLR Credit Solutions in Individual Capacity</u>**. SLR Credit Solutions and its Affiliates may make loans to, issue letters of credit for the account of, acquire Equity Interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Borrower and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though Crystal Financial LLC (d/b/a SLR Credit Solutions) were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, SLR Credit Solutions or its Affiliates may receive information regarding Borrower or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Borrower or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them. The terms "Lender" and "Lenders" include SLR Credit Solutions in its individual capacity.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.8. **<u>Successor Agent</u>**. Agent may resign as Agent upon 30 days prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Borrower (unless such notice is waived by Borrower). If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Borrower (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a successor Agent for the Lenders. If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders and Borrower, a successor Agent. If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of Borrower (such consent not to be unreasonably withheld, delayed, or conditioned). In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term "Agent" shall mean such successor Agent and the retiring Agent's appointment, powers, and duties as Agent shall be terminated. After any retiring Agent's resignation hereunder as Agent, the provisions of this <u>Section 15</u> shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.9. **<u>Lender in Individual Capacity</u>**. Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Borrower and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding Borrower or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Borrower or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.10. **<u>Collateral Matters</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Lenders hereby irrevocably authorize Agent to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by Borrower of all of the Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrower certify to Agent that the sale or disposition is permitted under <u>Section 6.4</u> (and Agent may rely conclusively on any such

certificate, without further inquiry), (iii) constituting property in which neither Borrower nor any of its Subsidiaries owned any interest at the time Agent's Lien was granted nor at any time thereafter, (iv) constituting property leased or licensed to Borrower or its Subsidiaries under a lease or license that has expired or is terminated in a transaction permitted under this Agreement, or (v) in connection with a credit bid or purchase authorized under this <u>Section 15.10</u>. The Loan Parties and the Lenders hereby irrevocably authorize Agent, based upon the instruction of the Required Lenders, to (a) consent to the sale of, credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, or similar Insolvency Laws in any other relevant jurisdiction, including Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the PPSA, including pursuant to Sections 9-610 or 9-620 of the PPSA or similar Insolvency Laws in any other relevant jurisdiction or any similar provision of the PPSA, or (c) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any other sale or foreclosure conducted or consented to by Agent in accordance with applicable law in any judicial action or proceeding or by the exercise of any legal or equitable remedy. In connection with any such credit bid or purchase, (i) the Obligations owed to the Lenders shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not impair or unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of the Collateral and, if such contingent or unliquidated claims cannot be estimated without impairing or unduly delaying the ability of Agent to credit bid at such sale or other disposition, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the Collateral that is the subject of such credit bid or purchase) and the Lenders whose Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the Collateral that is the subject of such credit bid or purchase (or in the Equity Interests of the any entities that are used to consummate such credit bid or purchase), and (ii) Agent, based upon the instruction of the Required Lenders, may accept non-cash consideration, including debt and equity securities issued by any entities used to consummate such credit bid or purchase and in connection therewith Agent may reduce the Obligations owed to the Lenders (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) based upon the value of such non-cash consideration. Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or Borrower at any time, the Lenders will confirm in writing Agent's authority to release any such Liens on particular types or items of Collateral pursuant to this <u>Section 15.10</u>; <u>provided</u>, that (1) anything to the contrary contained in any of the Loan Documents notwithstanding, Agent shall not be required to execute any document or take any action necessary to evidence such release on terms that, in Agent's opinion, could expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly released) upon (or obligations of Borrower in respect of) any and all interests retained by Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Each Lender further hereby irrevocably authorizes Agent, at its option and in its sole discretion, to subordinate any Lien granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property if such Permitted Lien secures, a Capital Lease or a Permitted Purchase Money Indebtedness permitted hereunder or the Revolving Loan Documents.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Agent shall have no obligation whatsoever to any of the Lenders (i) to verify or assure that the Collateral exists or is owned by Borrower or its Subsidiaries or is cared for, protected, or insured or has been encumbered, (ii) to verify or assure that Agent's Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, (iii) to verify or assure that any particular items of Collateral meet the eligibility criteria applicable in respect thereof, (iv) to impose, maintain, increase, reduce, implement, or eliminate any particular Reserve hereunder or to determine whether the amount of any Reserve is appropriate or not, or (v) to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent's own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing, except as otherwise expressly provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.11. **<u>Restrictions on Actions by Lenders; Sharing of Payments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the Lenders agrees that it shall not, without the express written consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set off against the Obligations, any amounts owing by such Lender to Borrower or its Subsidiaries or any deposit accounts of Borrower or its Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender's Pro Rata Share of all such distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; <u>provided</u>, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.12. **<u>Agency for Perfection</u>**. Agent hereby appoints each other Lender as its agent (and each Lender hereby accepts such appointment) for the purpose of perfecting Agent's Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the PPSA or the applicable provisions of any STA, can be perfected by possession or control. Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's request therefor shall deliver possession or control of such Collateral to Agent or in accordance with Agent's instructions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.13. **<u>Payments by Agent to the Lenders</u>**. All payments to be made by Agent to the Lenders shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent. Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.14. **<u>Concerning the Collateral and Related Loan Documents</u>**. Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents. Each member of the Lender Group agrees that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.15. **<u>Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information</u>**. By becoming a party to this Agreement, each Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field examination report respecting Borrower or its Subsidiaries (each, a "<u>Report</u>") prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any field examination will inspect only specific information regarding Borrower and its Subsidiaries and will rely significantly upon Borrower's and its Subsidiaries' books and records, as well as on representations of Borrower's personnel,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) agrees to keep all Reports and other material, non-public information regarding Borrower and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with <u>Section 17.8</u>, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrower, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a loan or loans of Borrower, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys' fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In addition to the foregoing, (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by Borrower or its Subsidiaries to Agent that has not been contemporaneously provided by Borrower or such Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from Borrower or its Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender's notice to Agent, whereupon Agent promptly shall request of Borrower the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from Borrower or such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Borrower a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.16. **<u>Several Obligations; No Liability</u>**. Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender. Except as provided in <u>Section 15.6</u>, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group. No Lender shall be responsible to Borrower or any other Person for any failure by any other Lender to fulfill its obligations to make credit available hereunder, nor to advance for such Lender or on its behalf, nor to take any other action on behalf of such Lender hereunder or in connection with the financing contemplated herein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.17. <u>**Quebec Security**</u>. In its capacity as Agent, for the purposes of holding any hypothec granted to Agent, Crystal Financial LLC (d/b/a SLR Credit Solutions) is hereby appointed and shall serve as the hypothecary representative for all present and future Lenders as contemplated by Article 2692 of the Civil Code of Québec. Any person who becomes a Lender shall, by its execution of an Assignment and Acceptance be deemed to have consented to and confirmed Agent as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by Agent in such capacity. The substitution of Agent pursuant to the provisions of this <u>Section 15</u> also constitute the substitution of the hypothecary representative.

16. **WITHHOLDING TAXES**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1. **<u>Payments</u>**. All payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes except as required by applicable law, and in the event any deduction or withholding of Indemnified Taxes is required by applicable law, Borrower shall comply with the next sentence of this <u>Section 16.1</u>. If any Indemnified Taxes are required to be deducted or withheld on a payment made by any Loan Party, such Loan Party agrees that the amount payable by it shall be increased as necessary so that after such deduction or withholding is made every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this <u>Section 16.1</u> after withholding or deduction for or on account of any Indemnified Taxes, will not be less than the amount the Agent or the Lender would have received had no such deduction or withholding been made. Borrower will furnish to Agent as promptly as possible after the date the payment of any Tax is due pursuant to applicable law, certified copies of Tax receipts or other documentation reasonably requested by Agent evidencing such payment by Borrower to a Governmental Authority. In addition, Borrower agrees to pay any present or future stamp, value added, intangible transfer or documentary Taxes or any other excise or property Taxes, charges, or similar levies ("<u>Other Taxes</u>") that arise from any payment made hereunder or from the execution, delivery, performance, recordation, enforcement or filing of, or otherwise with respect to this Agreement or any other Loan Document to the relevant Government Authority in accordance with applicable law. Loan Parties shall indemnify each Indemnified Person (as defined in <u>Section 10.3</u>) (collectively a "<u>Tax Indemnitee</u>") for the full amount of Indemnified Taxes or Other Taxes arising in connection with this Agreement or any other Loan Document or breach thereof by any Loan Party (including, without limitation, any Indemnified Taxes or Other Taxes imposed or asserted on, or attributable to, amounts payable under this <u>Section 16</u>) imposed on, or paid by, such Tax Indemnitee and any penalties, interest and reasonable costs and expenses related thereto (including fees and disbursements of attorneys and other Tax professionals), as and when they are incurred and irrespective of whether suit is brought, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority (other than Indemnified Taxes or Other Taxes and additional amounts that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Tax Indemnitee). The obligations of Loan Parties under this <u>Section 16</u> shall survive the termination of this Agreement, the resignation and replacement of the Agent, and the repayment of the Obligations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2. **<u>Exemptions</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If a Lender or Participant claims an exemption or reduction from withholding Tax in a jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) any such form or forms, as may be reasonably requested by Agent or required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding Tax before receiving its first payment under this Agreement (including, for the avoidance of doubt, if requested, Canada Revenue Agency Forms NR-301, NR-302 or NR-303, as applicable), but only if such Lender or such Participant is legally able to deliver such forms and the completion, execution, or submission of such forms or other documentation in the reasonable judgment of such Lender would not subject such Lender to any material unreimbursed cost or expense or materially prejudice the legal or commercial position of such Lender or its Affiliates, <u>provided</u>, that nothing in this <u>Section 16.2(a)</u> shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its Tax returns). Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If a Lender or Participant claims exemption from, or reduction of, withholding Tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrower to such Lender or Participant, such Lender or Participant agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender granting the participation only) of the percentage amount in which it is no longer the beneficial owner of Obligations of Borrower to such Lender or Participant. To the extent of such percentage amount, Agent will treat such Lender's or such Participant's documentation provided pursuant to <u>Section 16.2(a)</u> as no longer valid. With respect to such percentage amount, such Participant or Assignee may provide new documentation, pursuant to <u>Section 16.2(a)</u>, if applicable. Borrower agrees that each Participant shall be entitled to the benefits of this <u>Section 16</u> with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this <u>Section 16</u> with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3. **<u>Reductions</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Canada Revenue Agency or any other Governmental Authority of Canada or other jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the participation) did not properly withhold Tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify Agent (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding Tax ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of a Participant, to the Lender granting the participation), as Tax or otherwise, including penalties and interest, and including any Taxes imposed by any jurisdiction on the amounts payable to Agent (or, in the case of a Participant, to the Lender granting the participation only) under this <u>Section 16</u>, together with all costs and expenses (including attorneys' fees and expenses). The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4. <u>**Refunds**</u>. If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes to which Borrower has paid additional amounts pursuant to this <u>Section 16</u>, so long as no Event of Default has occurred and is continuing, it shall pay over such refund to Borrower (but only to the extent of payments made, or additional amounts paid, by Borrower under this <u>Section 16</u> with respect to Indemnified Taxes or Other Taxes giving rise to such a refund and only to the extent that the Agent or the Lender, as applicable, is satisfied that it may do so without prejudice to its right, as against the relevant Governmental Authority, to retain such refund), net of all out-of-pocket expenses (including Taxes) of Agent or such Lender and without interest (other than any interest paid by the applicable Governmental Authority with respect to such a refund); <u>provided</u>, that Borrower, upon the request of Agent or such Lender, agrees to repay the amount paid over to Borrower (plus any penalties, interest or other charges, imposed by the applicable Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross fault of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything in this Agreement to the contrary, this <u>Section 16.4</u> shall not be construed to (a) interfere with the right of the Agent or any Lender to arrange its affairs in whatever manner it thinks fit and, or (b) require Agent or any Lender to make available its Tax returns (or any other information which it deems confidential) to Borrower or any other Person. Further notwithstanding anything to the contrary in this <u>Section 16.4</u>, in no event will an Agent or Lender be required to pay any amount to Borrower pursuant to this <u>Section 16.4</u>, the payment of which would place such Agent or Lender in a less favorable net after-Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.

17. **GENERAL PROVISIONS**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.1. <u>**Effectiveness**</u>. This Agreement shall be binding and deemed effective when executed by Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.2. **<u>Section Headings</u>**. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.3. **<u>Interpretation</u>**. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.4. **<u>Severability of Provisions</u>**. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.5. <u>**Debtor-Creditor Relationship**</u>. The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor. No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.6. **<u>Counterparts; Electronic Execution</u>**. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.7. **<u>Revival and Reinstatement of Obligations; Certain Waivers</u>**. If any member of the Lender Group repays, refunds, restores, or returns in whole or in part, any payment or property (including any proceeds of Collateral) previously paid or transferred to such member of the Lender Group in full or partial satisfaction of any Obligation or on account of any other obligation of any Loan Party under any Loan Document, because the payment, transfer, or the incurrence of the obligation so satisfied is asserted or declared to be void, voidable, or otherwise recoverable under any law relating to creditors' rights, including provisions of the Bankruptcy Code or other Insolvency Laws relating to fraudulent transfers, preferences, or other voidable or recoverable obligations or transfers (each, a "<u>Voidable Transfer</u>"), or because such member of the Lender Group elects to do so on the reasonable advice of its counsel in connection with a claim that the payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to any such Voidable Transfer, or the amount thereof that such member of the Lender Group elects to repay, restore, or return (including pursuant to a settlement of any claim in respect thereof), and as to all reasonable costs, expenses, and attorneys' fees of such member of the Lender Group related thereto, (i) the liability of the Loan Parties with respect to the amount or property paid, refunded, restored, or returned will automatically and immediately be revived, reinstated, and restored and will exist and (ii) Agent's Liens securing such liability shall be effective, revived, and remain in full force and effect, in each case, as fully as if such Voidable Transfer had never been made. If, prior to any of the foregoing, (A) Agent's Liens shall have been released or terminated or (B) any provision of this Agreement shall have been terminated or cancelled, Agent's Liens, or such provision of this Agreement, shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligation of any Loan Party in respect of such liability or any Collateral securing such liability.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.8. **<u>Confidentiality</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Agent and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding Borrower and its Subsidiaries, their operations, assets, and existing and contemplated business plans ("<u>Confidential Information</u>") shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement, except: (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group and to employees, directors and officers of any member of the Lender Group (the Persons in this clause (i), "<u>Lender Group Representatives</u>") on a "need to know" basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group, <u>provided</u> that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this <u>Section 17.8</u>, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; <u>provided</u> that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrower pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrower, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, <u>provided</u>, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Borrower with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Borrower pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives), (viii) in connection with any assignment, participation or pledge of any Lender's interest under this Agreement, <u>provided</u> that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information either subject to the terms of this <u>Section 17.8</u> or pursuant to confidentiality requirements substantially similar to those contained in this <u>Section 17.8</u> (and such Person may disclose such Confidential Information to Persons employed or engaged by them as described in clause (i) above), (ix) in connection with any litigation or other adversary proceeding involving parties hereto to the extent such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; <u>provided</u>, that, prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation involving any Person (other than Borrower, Agent, any Lender, any of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Borrower with prior written notice thereof, and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Anything in this Agreement to the contrary notwithstanding, Agent may disclose information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services or in its marketing or promotional materials, with such information to consist of deal terms and other information customarily found in such publications or marketing or promotional materials and may otherwise use the name, logos, and other insignia of Borrower or the other Loan Parties and the Commitments provided hereunder in any "tombstone" or other advertisements, on its website or in other marketing materials of the Agent; <u>provided</u> that, in the case of this clause, Agent will submit its proposed form of "tombstone" or comparable advertising to the Administrative Borrower for approval prior to Agent's initial external use thereof, which approval of the Administrative Borrower shall not be unreasonably withheld, conditioned or delayed, and, following receipt of such approval from the Administrative Borrower, Agent shall not be required to see further approval for any Loan Party to use such "tombstone" or other comparable advertising on its website or in its other marketing materials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Loan Parties hereby acknowledge that Agent or its Affiliates may make available to the Lenders materials or information provided by or on behalf of Borrower hereunder (collectively, "<u>Borrower Materials</u>") by posting Borrower Materials on IntraLinks, SyndTrak or another similar electronic system (the "<u>Platform</u>") and certain of the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Loan Parties or their securities) (each, a "<u>Public Lender</u>"). The Loan Parties shall be deemed to have authorized Agent and its Affiliates and the Lenders to treat Borrower Materials marked "PUBLIC" or otherwise at any time filed with the SEC as not containing any material non-public information with respect to the Loan Parties or their securities for purposes of United States federal and state securities laws. All Borrower Materials marked "PUBLIC" are permitted to be made available through a portion of the Platform designated as "Public Investor" (or another similar term). Agent and its Affiliates and the Lenders shall be entitled to treat Borrower Materials that are not marked "PUBLIC" or that are not at any time filed with the SEC as being suitable only for posting on a portion of the Platform not marked as "Public Investor" (or such other similar term).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.9. <u>**Survival**</u>. All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent, or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any Loan or any fee or any other amount payable under this Agreement is outstanding or unpaid and so long as the Commitments have not expired or been terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.10. <u>***Patriot Act***; **Canadian Anti-Money Laundering & Anti-Terrorism Legislation**.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender that is subject to the requirements of the Patriot Act hereby notifies Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow such Lender to identify Borrower in accordance with the Patriot Act. In addition, if Agent is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) Patriot Act searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties and (b) OFAC/PEP searches and customary individual background checks for the Loan Parties' senior management and key principals, and Borrower agrees to cooperate in respect of the conduct of such searches and further agrees that the reasonable costs and charges for such searches shall constitute Lender Group Expenses hereunder and be for the account of Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Loan Party acknowledges that, pursuant to the provisions of Canadian Anti-Money Laundering & Anti-Terrorism Legislation, Agent and Lenders may be required to obtain, verify and record information regarding each Loan Party, its respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of such Loan Party, and the transactions contemplated hereby. The Loan Parties shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Lender or Agent, or any prospective assign or participant of a Lender or Agent, necessary in order to comply with any applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation, whether now or hereafter in existence. If Agent has ascertained the identity of any Loan Party or any authorized signatories of any Loan Party for the purposes of applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation, then the Agent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a "written agreement" in such regard between each Lender and the Agent within the meaning of applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.

Notwithstanding the provisions of this Section and except as may otherwise be agreed in writing, each Lender agrees that Agent has no obligation to ascertain the identity of the Loan Parties or any authorized signatories of the Loan Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from the Loan Parties or any such authorized signatory in doing so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.11. <u>**Integration**</u>. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.12. **<u>Birks Group Inc. as Agent for Borrower</u>**. To the extent a Person other than Birks Group Inc. is a borrower hereunder, Borrower hereby irrevocably appoints Birks Group Inc. as the borrowing agent and attorney-in-fact for all Borrower (the "<u>Administrative Borrower</u>") which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (a) to provide Agent with all notices with respect to Term Loan obtained for the benefit of Borrower and all other notices and instructions under this Agreement and the other Loan Documents (and any notice or instruction provided by Administrative Borrower shall be deemed to be given by Borrower hereunder and shall bind Borrower), (b) to receive notices and instructions from members of the Lender Group (and any notice or instruction provided by any member of the Lender Group to the Administrative Borrower in accordance with the terms hereof shall be deemed to have been given to Borrower), and (c) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain the Term Loan and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Loan Account and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrower in order to utilize the collective borrowing powers of Borrower in the most efficient and economical manner and at their request, and that Lender Group shall not incur liability to Borrower as a result hereof. Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of Borrower is dependent on the continued successful performance of the integrated group. To induce the Lender Group to do so, and in consideration thereof, Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group by Borrower or by any third party whosoever, arising from or incurred by reason of (i) the handling of the Loan Account and Collateral of Borrower as herein provided, or (ii) the Lender Group's relying on any instructions of the Administrative Borrower, except that Borrower will have no liability to the relevant Agent-Related Person or Lender-Related Person under this <u>Section 17.12</u> with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.13. **<u>Judgment Currency</u>**. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of Borrower in respect of any such sum due from it to Agent or any Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the "<u>Judgment Currency</u>") other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the "<u>Agreement Currency</u>"), be discharged only to the extent that on the Business Day following receipt by Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to Agent or any Lender from Borrower in the Agreement Currency, Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Agent or such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to Agent or any Lender in such currency, Agent or such Lender, as the case may be, agrees to return the amount of any excess to Borrower (or to any other Person who may be entitled thereto under applicable law).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.14. **<u>Intercreditor Agreement</u>**. The parties hereto acknowledge that the exercise of certain of the Agent's rights and remedies hereunder may be subject to, and restricted by, the provisions of the Intercreditor Agreement regarding intercreditor arrangements among the Agent and the Revolving Agent. Notwithstanding the foregoing, each Loan Party expressly acknowledges and agrees that the Intercreditor Agreement is solely for the benefit of the parties thereto, and that notwithstanding the fact that the exercise of certain of the Agent's and Lenders' rights under the Loan Documents may be subject to the Intercreditor Agreement, no action taken or not taken by the Agent or any Lender in accordance with the terms of the Intercreditor Agreement shall constitute, or be deemed to constitute, a waiver by the Agent or any Lender of any rights such Person has with respect to any Loan Party under any Loan Document and except as specified therein, nothing contained in the Intercreditor Agreement shall be deemed to modify any of the provisions of this Agreement and the other Loan Documents, which, as among the Loan Parties, the Agent and the Lenders, shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.15. **<u>No Setoff</u>**. All payments made by Borrower hereunder or under any note or other Loan Document will be made without setoff, counterclaim, or other defense.

[Signature pages to follow]

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

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| | |
|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| By: |  |
|  | Name: |
|  | Title: |
| By: |  |
|  | Name: |
|  | Title: |

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| | |
|:---|:---|
| **CRYSTAL FINANCIAL LLC**, as Agent, | **CRYSTAL FINANCIAL LLC**, as Agent, |
| By: |  |
|  | Name: Rebecca E. Tarby |
|  | Title: Managing Director |
| **CRYSTAL FINANCIAL SPV LLC**, as a Lender, | **CRYSTAL FINANCIAL SPV LLC**, as a Lender, |
| By: |  |
|  | Name: Rebecca E. Tarby |
|  | Title: Managing Director |

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**<u>Schedule 1</u>**<u>.**1**</u>

**Definitions** 

As used in the Agreement, the following terms shall have the following definitions:

"<u>Account</u>" means an account (as that term is defined in the PPSA).

"<u>Account Debtor</u>" means any Person who is obligated on an Account, chattel paper, or an intangible.

"<u>Accounting Changes</u>" means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions, including, to the extent applicable, the Chartered Professional Accountants Canada).

"<u>Acquired Indebtedness</u>" means Indebtedness of a Person whose assets or Equity Interests are acquired by Borrower or any of its Subsidiaries in a Permitted Acquisition; <u>provided</u>, that such Indebtedness (a) is either purchase money Indebtedness or a Capital Lease with respect to Equipment or mortgage financing with respect to Real Property, (b) was in existence prior to the date of such Permitted Acquisition, and (c) was not incurred in connection with, or in contemplation of, such Permitted Acquisition.

"<u>Acquisition</u>" means (a) the purchase or other acquisition by a Person or its Subsidiaries of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, amalgamation, consolidation, or otherwise) by a Person or its Subsidiaries of all or substantially all of the Equity Interests of any other Person.

"<u>Additional Documents</u>" has the meaning specified therefor in <u>Section 5.15</u> of the Agreement.

"<u>Additional Subordinated Debt</u>" means such unsecured Indebtedness incurred by any Loan Party after the date of this Agreement to the extent that such Indebtedness is Permitted Indebtedness and is expressly subordinated to the payment in full of the Obligations on terms and conditions and pursuant to a Subordination Agreement in form, scope and substance satisfactory to Agent and the Required Lenders.

"<u>Additional Subordinated Debt Documents</u>" means all documents, instruments and agreements executed in connection with any Additional Subordinated Debt, any such documents, instruments and agreements being in form, scope and substance satisfactory to Agent and the Required Lenders.

"<u>Adjusted Canadian Prime Rate</u>" means, for any day, a rate per annum equal to the "prime rate" for Canadian Dollar commercial loans made in Canada as reported by Thomson Reuters under Reuters Instrument Code on the "CA Prime Rate (Domestic Interest Rate) – Composite Display" page to the extent such page is available (or any successor page or such other commercially available service or source (including the Canadian Dollar "prime rate" announced by a Schedule I bank under the *Bank Act* (Canada)) as Agent may designate from time to time) (and, if any such reported rate is below one percent, then Adjusted Canadian Prime Rate shall be deemed to be one percent), in each case, less one hundred twenty five (125) basis points. Each determination of the Adjusted Canadian Prime Rate shall be made by Agent and shall be conclusive in the absence of manifest error.

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"<u>Adjusted Term CORRA</u>" means, for purposes of any calculation, the rate per annum equal to (a) Term CORRA for such calculation plus (b) the Term CORRA Adjustment; provided that if Adjusted Term CORRA as so determined shall ever be less than the Floor, then Adjusted Term CORRA shall be deemed to be the Floor.

"<u>Administrative Borrower</u>" has the meaning specified therefor in <u>Section 17.12</u> of the Agreement.

"<u>Administrative Questionnaire</u>" has the meaning specified therefor in <u>Section 13.1(a)(ii)(G)</u> of the Agreement.

"<u>Affected Lender</u>" has the meaning specified therefor in <u>Section 2.2(f)</u> of the Agreement.

"<u>Affiliate</u>" means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Equity Interests, by contract, or otherwise; <u>provided</u>, that, for purposes of the definition of Eligible Accounts and <u>Section 6.10</u> of the Agreement: (a) any Person which owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person.

"<u>Agent</u>" has the meaning specified therefor in the preamble to the Agreement.

"<u>Agent-Related Persons</u>" means Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

"<u>Agent's Loan Account</u>" means the Deposit Account identified on <u>Schedule A-1</u> as Agent's Loan Account (or such other Deposit Account that has been designated as such, in writing, by Agent to Administrative Borrower and the Lenders).

"<u>Agent's Liens</u>" means the Liens granted by Borrower or any of its Subsidiaries to Agent under the Loan Documents and securing all or a portion of the Obligations.

"<u>Agreement</u>" means the Credit Agreement to which this <u>Schedule 1.1</u> is attached.

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"<u>Amendment No. 2 Effective Date</u>" means July 2, 2020.

"<u>Amendment No. 3 Effective Date</u>" means August 31, 2021.

"<u>Amendment No. 4 Effective Date</u>" means December 15, 2021.

"<u>Amendment No. 5 Effective Date</u>" means December 24, 2021.

"<u>Applicable Inventory Percentage</u>" means (i) 103.5% from the Fifth Amendment Effective Date to and including December 31, 2022, (ii) 103.25% from January 1, 2023 until March 25, 2023, and (iii) thereafter reducing as of the first day of each subsequent Fiscal Quarter by 0.25% until the Applicable Inventory Percentage reaches 102.5% where it shall remain until the Maturity Date;

"<u>Applicable Margin</u>" means, as of the Amendment No. 5 Effective Date until the first Pricing Date thereafter and from one Pricing Date to the next, the percentage determined in accordance with the pricing grid set forth below (the "<u>Pricing Grid</u>"):

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp; Level  | Modified Fixed Charge Coverage Ratio | Applicable Margin |
| &nbsp;&nbsp; I | Less than 1.00:1.00 | 7.75% |
| &nbsp;&nbsp; II | Greater than or equal to 1.00:1.00 but less than 1.25:1.00 | 7.00% |
| &nbsp;&nbsp; III | Greater than or equal to 1.25:1.00 | 6.75% |

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The Applicable Margin under the Pricing Grid may be adjusted from time to time on any Pricing Date following the delivery to the Agent of the financial statements of Borrower for the most recently ended Fiscal Quarter required to be delivered pursuant to <u>Section 5.1</u> accompanied by a written calculation of the Modified Fixed Charge Coverage Ratio as set forth in the Compliance Certificate delivered in connection with such financial statements. If such calculation indicates that the Applicable Margin under the Pricing Grid shall increase or decrease based on the calculation of the Modified Fixed Charge Coverage Ratio set forth in such Compliance Certificate, then on the Pricing Date immediately following the date on which such Compliance Certificate is delivered to Agent, the Applicable Margin under the Pricing Grid shall be adjusted in accordance therewith and will remain in effect until the next Pricing Date; *provided*, *however*, that if the Borrower shall fail to deliver any such financial statements or Compliance Certificate for any such Fiscal Quarter by the date required pursuant to <u>Section 5.1</u>, then, effective as of the first Business Day following the date such financial statements or Compliance Certificate, as applicable, were required to be delivered and continuing until the date that is five (5) Business Days immediately following the date on which such financial statements and Compliance Certificate have both been delivered to Agent, the Applicable Margin under the Pricing Grid shall be conclusively presumed to equal the percentage shown opposite of Level I in the Pricing Grid. In the event that the Agent determines that (a) the calculation of the Modified Fixed Charge Coverage Ratio on which the Applicable Margin under the Pricing Grid as of any Pricing Date was determined is inaccurate and (b) a proper calculation of the Modified Fixed Charge Coverage Ratio would have resulted in a higher Applicable Margin as of such Pricing Date, then (i) the Borrower shall as soon as practicable deliver to Agent a corrected Compliance Certificate for such period (and if such Compliance Certificate is not accurately restated and delivered within ten (10) Business Days after the first discovery of such inaccuracy or upon written notice by the Agent of such determination, then the Applicable Margin shown opposite of Level I in the Pricing Grid shall apply retroactively for such period notwithstanding any subsequent restatement thereof after such ten (10) Business Day period) and (ii) the Borrower will automatically and retroactively be obligated to pay to the Agent for the benefit of the Lenders, promptly on demand by the Agent, an amount equal to the excess of the amount of interest that should have been paid for such period over the amount of interest actually paid for such period.

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Notwithstanding the foregoing, during the existence of an Event of Default, the Applicable Margin (A) shall not decrease in accordance with the Pricing Grid and (B) shall equal the percentage shown opposite of Level I in the Pricing Grid and, in each case, shall be subject to adjustment in accordance with <u>Section 2.4(b)</u>.

"<u>Applicable Premium Trigger Event</u>" means (i) any prepayment by any Loan Party of all, or any part, of the principal balance of the Term Loan for any reason (including, but not limited to, any optional prepayment or mandatory prepayment, and distribution in respect thereof, and any refinancing thereof), whether in whole or in part, and whether before or after (x) the occurrence of an Event of Default, or (y) the commencement of any Insolvency Proceeding, and notwithstanding any acceleration (for any reason) of the Obligations; (ii) the acceleration of the Obligations for any reason, including, but not limited to, acceleration in accordance with Section 9, including as a result of the commencement of an Insolvency Proceeding; (iii) the satisfaction, release, payment, restructuring, reorganization, replacement, reinstatement, defeasance or compromise of any of the Obligations in any Insolvency Proceeding, foreclosure (whether by power of judicial proceeding or otherwise) or deed in lieu of foreclosure or the making of a distribution of any kind in any Insolvency Proceeding to the Agent, for the account of the Lenders in full or partial satisfaction of the Obligations; or (iv) the termination of this Agreement for any reason. For purposes of the definition of the term Early Termination Fee, if an Applicable Premium Trigger Event occurs under clause (ii), (iii) or (iv) above, the entire outstanding principal amount of the Term Loan shall be deemed to have been prepaid on the date on which such Applicable Premium Trigger Event occurs.

"<u>Application Event</u>" means the (a) occurrence of a failure by Borrower to repay all of the Obligations in full on the Maturity Date, or (b) the occurrence and continuance of an Event of Default and the election by the Agent (or at the direction of the Required Lenders) during such continuance to require that payments and proceeds of Collateral be applied pursuant to <u>Section 2.3(b)(i)(A)</u>.

"<u>Approved Fund</u>" means any Person (other than a natural person) that is engaged in making, holding or investing in extensions of credit in its ordinary course of business and is administered or managed by a Lender, an entity that administers or manages a Lender, or an Affiliate of either.

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"<u>Assignee</u>" has the meaning specified therefor in <u>Section 13.1</u> of the Agreement.

"<u>Assignee Group</u>" means two or more Eligible Transferee that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

"<u>Assignment and Acceptance</u>" means an Assignment and Acceptance Agreement substantially in the form of <u>Exhibit A-1</u> to the Agreement.

"<u>Authorized Person</u>" means any one of the individuals identified on <u>Schedule A-3</u> to the Agreement, as such schedule is updated from time to time by written notice from Administrative Borrower to Agent.

"<u>Availability Block</u>" means, as of any date of determination, the greater of (i) ten percent (10%) multiplied by the Borrowing Base (calculated without giving effect to the Availability Block), and (ii) $8,500,000 plus (A) from December 20 to and including January 20 of any given Fiscal Year, $5,000,000, or (B) from January 21 to and including January 31 of any given Fiscal Year, $2,000,000.

"<u>Bankruptcy Code</u>" means title 11 of the United States Code, as in effect from time to time.

"<u>Benchmark</u>" means, initially, the Term CORRA Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term CORRA Reference Rate, or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.11(a).

"<u>Benchmark Rate Business Day</u>" means any day (other than a Saturday or Sunday) on which banks are open for business in Toronto, Ontario, Canada.

"<u>Benchmark Replacement</u>" means with respect to any Benchmark Transition Event for any then-current Benchmark, the sum of: (a) the alternate benchmark rate that has been selected by Agent and Administrative Borrower as the replacement for such Benchmark giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for such Benchmark for syndicated credit facilities denominated Canadian Dollars at such time and (b) the related Benchmark Replacement Adjustment; provided that, in each case, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement shall be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

"<u>Benchmark Replacement Adjustments</u>" means, with respect to the replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Agent and the Administrative Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in Canadian Dollars at such time.

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"<u>Benchmark Replacement Date</u>" means, the earliest to occur of the following events with respect to the then-current Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of clause (a) or (b) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of clause (c) of the definition of "Benchmark Transition Event", the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; <u>provided</u> that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, the "Benchmark Replacement Date" will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Transition Event</u>" means the occurrence of one or more of the following events with respect to the then-current Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide such Benchmark (or such component thereof), permanently or indefinitely; <u>provided</u> that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Bank of Canada, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide such Benchmark (or such component thereof) permanently or indefinitely; <u>provided</u> that, at the time of such statement or publication, there is no successor administrator that will continue to provide such Benchmark (or such component thereof); or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such Benchmark (or such component thereof) is not, or as of a specified future date will not be, representative.

For the avoidance of doubt, a "Benchmark Transition Event" will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to the then-current Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Unavailability Period</u>" means, with respect to any then-current Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Loan Document in accordance with <u>Section 2.11</u> and (y) ending at the time that a Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Loan Document in accordance with <u>Section 2.11</u>.

"<u>Board of Directors</u>" means, as to any Person, the Board of Directors (or comparable managers) of such Person, or any committee thereof duly authorized to act on behalf of the Board of Directors (or comparable managers).

"<u>Board of Governors</u>" means the Board of Governors of the Federal Reserve System of the United States (or any successor).

"<u>Borrower</u>" has the meaning specified therefor in the preamble to the Agreement.

"<u>Borrower Materials</u>" has the meaning specified therefor in <u>Section 17.8(c)</u> of the Agreement.

"<u>Borrowing</u>" means the borrowing under<u>of</u> the <u>Initial</u> Term Loan made on or about the date hereof<u>, the Seventh Amendment Term Loan,</u> or a loan by Agent in the case of a Protective Advance.

"<u>Borrowing Availability</u>" means the lesser of (i) the sum of the "Commitments" (as defined in the Revolving Credit Agreement) <u>plus</u> the Commitments, and (ii) the Borrowing Base.

"<u>Borrowing Base</u>" means, as of any date of determination, the Canadian Dollar Equivalent amount of the result of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 102.5% of the amount of Eligible Credit Card Receivables of Borrower, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) 102.5% of the amount of Eligible Accounts of Borrower, provided that the amount thereof included in the Borrowing Base shall not exceed 20% of the aggregate amount of the Borrowing Base, plus

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Applicable Inventory Percentage of the amount calculated by multiplying the Inventory Net Recovery Percentage of the relevant Eligible Inventory Category identified in the most recent Inventory appraisal ordered and obtained by either the Revolving Agent pursuant to the Revolving Credit Agreement or Agent by the cost (based on GAAP) of such Eligible Inventory, provided that the amount of Eligible Non-Possessory Inventory included in Eligible Inventory for the purpose of calculating the Borrowing Base shall not exceed 5% of the aggregate amount of the Eligible Inventory, minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the aggregate amount of Receivables Reserves, Loan to Value Reserves, Inventory Reserves, Canadian Priority Payables Reserves and other Reserves, if any, established by Agent in accordance with <u>Section 2.2(a)</u> of the Agreement with respect to the Borrowing Base, minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Availability Block.

"<u>Borrowing Base Certificate</u>" means a certificate in the form of <u>Exhibit B-1</u>, containing the calculation of the Borrowing Base with the initial Borrowing Base Certificate being attached thereto in order to demonstrate the calculation of the Borrowing Base for illustration purposes.

"<u>Business Day</u>" means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the State of New York or the Provinces of Ontario or Quebec.

"<u>Canadian Anti-Money Laundering & Anti-Terrorism Legislation</u>" means Part II.1 of the Criminal Code (Canada), The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and the United Nations Act (Canada), together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the United Nations Act (Canada) and any similar Canadian legislation in effect from time to time.

"<u>Canadian Defined Benefit Plan</u>" means any Canadian Pension Plan which contains a "defined benefit provision" as defined in subsection 147.1(1) of the Income Tax Act (Canada) but does not include a Canadian Multi-Employer Plan.

"<u>Canadian Dollar Equivalent</u>" means, at any time, (a) with respect to any amount denominated in Canadian Dollars, such amount, and (b) with respect to any amount denominated in another currency, the equivalent amount thereof in Canadian Dollars as determined by Agent, at such time, on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date or such other date determined by Agent) for the purchase of Canadian Dollars with such currency. Calculations of the Borrowing Base with respect to items included therein that are not denominated in Canadian Dollars may be adjusted by Agent pursuant to this definition from time and references herein to the Borrowing Base (including references based upon the most recent applicable Borrowing Base Certificate delivered by Borrower to Agent) may reflect such adjustments.

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"<u>Canadian Dollars</u>", "<u>Dollars</u>", "<u>Cdn $</u>" or "<u>$</u>" means the lawful currency of Canada, as in effect from time to time.

"<u>Canadian Multi-Employer Plan</u>" means a "multi-employer pension plan", as such term is defined under the *Pension Benefits Act* (Ontario), under which a Loan Party is required to contribute pursuant to a collective bargaining agreement and under which (i) the sole obligation of the Loan Party is to make the contributions specified in the applicable collective bargaining agreement, and (ii) the Loan Party has no liability relating to any past or future withdrawals from the plan.

"<u>Canadian Patent Security Agreement</u>" has the meaning specified therefor in the Canadian Security Agreement.

"<u>Canadian Pension Plans</u>" means each pension plan required to be registered under Canadian federal or provincial law that is maintained or contributed to, or to which there is or may be an obligation to contribute by a Loan Party or a Subsidiary thereof, for its employees or former employees, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively.

"<u>Canadian Priority Payables Reserves</u>" means reserves (determined from time to time by Agent in its Permitted Discretion) for: (a) the amount past due and owing by any Loan Party, or the accrued amount for which such Loan Party has an obligation to remit, to a Governmental Authority or other Person pursuant to any applicable law, rule or regulation, in respect of (i) goods and services Taxes, harmonized sales Taxes, other sales Taxes, employee income Taxes, municipal Taxes and other Taxes payable or to be remitted or withheld; (ii) workers' compensation or employment insurance; (iii) federal Canada Pension Plan, Quebec Pension Plan and other statutory pension plan contributions; (iv) vacation or holiday pay; and (v) other like charges and demands, in each case, to the extent that any Governmental Authority or other Person may claim a Lien, trust, deemed trust or other claim ranking or capable of ranking in priority to or *pari passu* with one or more of the Liens granted in the Loan Documents; and (b) the aggregate amount of any other liabilities of any Loan Party (i) in respect of which a trust or deemed trust has been or may be imposed on any Collateral to provide for payment, or (ii) in respect of unremitted and due pension plan contributions in respect of Canadian Pension Plans including normal cost contributions and special payments (iii) without duplication for any amounts referred to in paragraph (b)(ii) amounts representing any unfunded wind-up deficiency whether or not due with respect to a Canadian Defined Benefit Plan, or (iv) which are secured by a Lien, charge, right or claim on any Collateral (other than Permitted Liens that do not have priority over Agent's Liens); in each case, pursuant to any applicable law, rule or regulation and provided such lien, trust, deemed trust, pledge, charge, right or claim ranks or in the Permitted Discretion of Agent, is capable of ranking in priority to or *pari passu* with one or more of the Liens granted in the Loan Documents (such as certain claims by employees for unpaid wages and other amounts payable under the Wage Earner Protection Program Act (Canada));

"<u>Canadian Security Agreement</u>" means a Canadian Guarantee and Security Agreement dated as of even date with the Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by each Loan Party to Agent.

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"<u>Canadian Security Documents</u>" means, collectively, the Canadian Security Agreement, Canadian Patent Security Agreement, the Canadian Trademark Security Agreement, the Quebec Security Documents and any other Loan Document that grants or purports to grant a Lien on any of the assets or interests, and the proceeds thereof, of any Loan Party.

"<u>Canadian Trademark Security Agreement</u>" has the meaning specified therefor in the Canadian Security Agreement.

"<u>Capital Adequacy Regulation</u>" means any law, rule, regulation, guideline, request or directive of any central bank or other Governmental Authority, whether or not having the force of law, regarding capital adequacy of a bank or any Person controlling a bank.

"<u>Capital Assets</u>" means fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and goodwill); <u>provided</u> that Capital Assets shall not include any item customarily charged directly to expense or depreciated over a useful life of 12 months or less in accordance with GAAP.

"<u>Capital Expenditures</u>" means, with respect to any Person for any period, (a) the amount of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed; and (b) the lease of any assets by Borrower or any of its Subsidiaries as lessee under any synthetic lease to the extent that such assets would have been Capital Assets had the synthetic lease been treated for accounting purposes as a Capital Lease.

"<u>Capitalized Lease Obligation</u>" means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

"<u>Capital Lease</u>" means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP but excluding leases which would have been characterized as operating leases according to GAAP as in effect on the Closing Date.

"<u>Cash Equivalents</u>" means obligations that are denominated in Canadian Dollars or United States Dollars (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States or by, or unconditionally guaranteed by, the government of Canada or issued by any agency thereof and backed by the full faith and credit of Canada, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or province of Canada or any political subdivision of any such state or province or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Rating Group ("<u>S&P</u>") or Moody's Investors Service, Inc. ("<u>Moody's</u>"), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit, time deposits, overnight bank deposits or bankers' acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or a bank organized under the laws of Canada, or any United States or Canadian branch of a foreign bank, in each case having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof or the laws of Canada so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation or the Canadian Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition of recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.

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"<u>CGS</u>" means Cash, Gold & Silver Inc., a corporation formed under the laws of Canada.

"<u>CGS USA</u>" means Cash, Gold & Silver<u>Birks</u> USA, Inc., a corporation formed under the laws of Delaware.

"<u>Change of Control</u>" means that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Montrovest and Mangrove Holding S.A. collectively fail to own and control, directly or indirectly, a majority of the Equity Interests of Borrower entitled (without regard to the occurrence of any contingency) to vote for the election of members of the Board of Directors of Borrower, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower fails to own and control, directly or indirectly, 100% of the Equity Interests of each Loan Party (other than Borrower).

"<u>Change in Law</u>" means the occurrence after the date of the Agreement of: (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; <u>provided</u> that notwithstanding anything in the Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or Canada or foreign regulatory authorities shall, in each case, be deemed to be a "Change in Law," regardless of the date enacted, adopted or issued.

"<u>Closing Date</u>" means the date of the making of the <u>Initial</u> Term Loan (or other extension of credit) under the Agreement.

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"<u>Code</u>" means the New York Uniform Commercial Code, as in effect from time to time.

"<u>Collateral</u>" means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by Borrower or any other Loan Party in or upon which a Lien is granted by such Person in favor of Agent or any of the Lenders under any of the Loan Documents.

"<u>Collateral Access Agreement</u>" means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee or other Person in possession of, having a Lien upon, or having rights or interests in Borrower's or any of its Subsidiaries' books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.

"<u>Combined Loan Cap</u>" means, as at the date of determination, the sum of the "Commitments" (as defined in the Revolving Credit Agreement) <u>plus</u> the Commitment.

"<u>Combined Total Outstandings</u>" means the sum of (i) the Revolver Usage <u>plus</u> (ii) the Total Outstandings.

"<u>Commitment</u>" means, with respect to each Lender, its Commitment, and, with respect to all Lenders, the aggregate of all Commitments<u>, including the Seventh Amendment Term Loan Commitment,</u> of all of the Lenders, in each case in such Canadian Dollar amounts as are set forth beside such Lender's name under the applicable heading on <u>Schedule C-1</u> to the Agreement or in the Assignment and Acceptance or Increase Joinder pursuant to which such Lender became a Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of <u>Section 9.1</u> of the Agreement or otherwise reduced in accordance with the terms of this Agreement.

"<u>Commodity Exchange Act</u>" means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

"<u>Compliance Certificate</u>" means a certificate substantially in the form of <u>Exhibit C-1</u> to the Agreement delivered by a Financial Officer of Borrower to Agent.

"<u>Confidential Information</u>" has the meaning specified therefor in <u>Section 17.8(a)</u> of the Agreement.

"<u>Conforming Changes</u>" means, means, with respect to the use or administration of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of "Business Day," the definition of "Benchmark Rate Business Day," timing and frequency of determining rates and making payments of interest, length of lookback periods, the applicability of <u>Section 2.13</u> and other technical, administrative or operational matters) that Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent decides that adoption of any portion of such market practice is not administratively feasible or if Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

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"<u>Consolidated EBITDA</u>" means, for any period, the sum, without duplication, of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provision for federal, provincial, local and foreign income Taxes, franchise Taxes and other Taxes in lieu of income Taxes payable, (iv) total depreciation expense, (v) total amortization expense, (vi) transaction expenses incurred by Borrower or any of its Subsidiaries in such period in connection with Permitted Acquisitions to the extent included in the calculation of Excess Availability for purposes of determining whether the applicable Acquisition constitutes a Permitted Acquisition, (vii) fees, costs and expenses incurred on or prior to the Closing Date in connection with this Agreement, the other Loan Documents, and the other transactions contemplated hereby, (viii) financial advisory fees, accounting fees, legal fees and any other similar third party reasonable out-of-pocket fees and out-of-pocket expenses incurred in connection any amendment or modification of the Revolving Loan Documents or Loan Documents, (ix) management and other fees and reimbursement of expenses permitted pursuant to <u>Section 6.7(d)</u>, (x) impairment of goodwill and other non-cash items (other than any such non-cash item to the extent it represents an accrual of or reserve for cash expenditures in any future period), <u>and</u> (xi) to the extent actually reimbursed, expenses incurred to the extent covered by indemnification provisions in any agreement in connection with a Permitted Acquisition, and (xii) other unusual or non-recurring cash charges approved by the Lender in its Permitted Discretion, including Restructuring and Integration Costs not to exceed $5,000,000 in the case of the Closing Date US Divestiture (as defined in the Revolving Credit Agreement as in effect on the Closing Date) incurred in the Fiscal Year ended on March 31, 2018 and not to exceed $2,000,000 in the aggregate for all such charges for the Fiscal Years ending on March 30, 2019 and March 27, 2020, but only, in the case of each of the foregoing clauses (ii) through (xii<u>xi</u>), to the extent deducted in the calculation of Consolidated Net Income, less non-cash items added in the calculation of Consolidated Net Income (other than any such non-cash item to the extent it will result in the receipt of cash payments in any future period), all of the foregoing as determined on a consolidated basis for Borrower and its Subsidiaries in conformity with GAAP. Notwithstanding the foregoing, Consolidated EBITDA for the fiscal months ending prior to the date of this Agreement and used in calculating the Fixed Charge Coverage Ratio for the applicable twelve fiscal month period after such date shall be in amounts agreed by the Agent and Borrower.

"<u>Consolidated Fixed Charges</u>" means, with respect to any fiscal period and with respect to Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Consolidated Interest Expense paid (other than interest paid-in-kind, amortization of financing fees, and other non-cash Consolidated Interest Expense) during such period, (b) scheduled principal payments in respect of Indebtedness that are required to be paid during such period (excluding (i) Revolving Loan Debt to the extent such payments do not permanently reduce the "Commitments" (as defined in the Revolving Credit Agreement), and (ii) Management Debt to the extent such payments constitute an expense in the calculation of Consolidated Net Income), (c) Restricted Payments made or required to be made in cash during such period; and (d) all management, consulting, monitoring and advisory fees paid in cash to Borrower and its Affiliates during such period. Notwithstanding the foregoing, Consolidated Fixed Charges for the fiscal months ending prior to the date of this Agreement and used in calculating the Fixed Charge Coverage Ratio for the applicable twelve fiscal month period after such date shall be in amounts agreed by the Agent and Borrower.

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"<u>Consolidated Interest Expense</u>" means, for any period, the aggregate of the interest expense of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

"<u>Consolidated Net Income</u>" means, for any period, the net income (or loss) of Borrower and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP after deduction for any non-controlling interest in such Subsidiaries; provided that there shall be excluded (i) the income (or loss) of any Person (other than a Loan Party) in which any other Person (other than a Loan Party) has a joint interest, or a Subsidiary located outside US and Canada, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its Subsidiaries by such Person during such period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or amalgamated or consolidated with Borrower or any of its Subsidiaries or that Person's assets are acquired by Borrower or any of its Subsidiaries, (iii) the income of any Subsidiary of Borrower that is not a Loan Party to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (iv) (to the extent not included in clauses (i) through (iii) above) any non-cash extraordinary gains or non-cash extraordinary losses, (v) the impact of non-cash currency translation gains and losses and mark to market gains and losses on any Hedge Agreement, (vi) the cumulative effect of a change in accounting principles during such period, and (vii) gains and losses from the early extinguishment of Indebtedness or other derivative instruments.

"<u>Control Agreement</u>" means a control agreement, or blocked account agreement, as applicable, in form and substance reasonably satisfactory to Agent, executed and delivered by Borrower or another Loan Party, Agent, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account).

"<u>CORRA</u>" means the Canadian Overnight Repo Rate Average administered and published by the Bank of Canada (or any successor administrator of the Canadian Overnight Repo Rate Average).

"<u>Credit Card Issuer</u>" shall mean any person (other than a Borrower or any of its Subsidiaries) who issues or whose members issue credit cards, including MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc., Visa International, American Express, Discover, Diners Club, Union Pay, VFI, Inc. (a subsidiary of The Toronto-Dominion Bank Finance Group) and other bank and non-bank credit or debit cards, and other issuers approved by the Agent, after the conduct of such due diligence with respect to such issuers as the Agent considers necessary or appropriate, such approval not to be unreasonably withheld, conditioned or delayed.

"<u>Credit Card Notifications</u>" has the meaning provided in <u>Section 5.18</u>.

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"<u>Credit Card Processor</u>" shall mean any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to Borrower's sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.

"<u>Credit Card Receivables</u>" shall mean each "intangible" (as defined in the PPSA) together with all income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to Borrower resulting from charges by a customer of Borrower on credit or debit cards issued by such Credit Card Issuer in connection with the sale of goods by a Borrower, or services performed by a Credit Card Processor or Credit Card Issuer, in each case in the ordinary course of its business.

"<u>Damiani</u>" means, collectively, Damiani International S.A., a corporation incorporated under the laws of Switzerland, and Damiani S.p.A., a corporation incorporated under the laws of Italy.

"<u>Damiani Inventory Purchase Agreement</u>" means the inventory purchase agreement between the Borrower and Damiani dated as of April 18, 2019, as the same may be modified, amended, supplemented or restated in accordance with the prior written consent of the Agent.

"<u>Damiani Purchase Documents</u>" means the Damiani Inventory Purchase Agreement, the Damiani Security, the Damiani Subordination Agreement and all documents, instruments and agreements executed from time to time in connection with the Damiani Inventory Purchase Agreement, including the purchase orders arising thereunder and the documents and agreements giving effect to the Damiani Security, in each case as the same may be modified, amended, supplemented or restated with the prior written consent of the Agent.

"<u>Damiani Security</u>" means (a) the General Security Agreement and Hypothec dated as of April 18, 2019 between the Borrower and Damiani; and (b) any other present and future security, security interests, hypothecs, mortgages, prior claims, liens or charges affecting the Obligors' assets, or any part thereof, now or hereafter held by or for the account of Damiani as security for the Damiani Subordinated Indebtedness created after the date hereof with the consent of the Agent.

"<u>Damiani Subordinated Indebtedness</u>" means all present and future indebtedness and other liabilities and obligations, contingent or absolute, matured or unmatured, at any time due or accruing due, owing by the Obligors, or any of them, whether alone or with another or others and whether as principal or surety, to Damiani under the Damiani Purchase Documents including in respect of all transactions made pursuant thereto.

"<u>Damiani Subordination Agreement</u>" means that certain Subordination Agreement, dated as of April 18, 2019, among the Borrower, Damiani, the Agent, the Term Loan Agent and Cash, Gold & Silver Inc., as the same may hereafter be amended, restated, supplemented or otherwise modified with the prior written consent of Agent.

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"<u>Default</u>" means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

"<u>Defaulting Lender</u>" means any Lender that (a) has failed to fund any amounts required to be funded by it under the Agreement within 1 Business Day of the date that it is required to do so under the Agreement, (b) notified Borrower, Agent, or any Lender in writing that it does not intend to comply with all or any portion of its funding obligations under the Agreement, (c) has made a public statement to the effect that it does not intend to comply with its funding obligations under the Agreement or under other agreements generally (as reasonably determined by Agent) under which it has committed to extend credit, (d) failed, within 1 Business Day after written request by Agent, to confirm that it will comply with the terms of the Agreement relating to its obligations to fund any amounts required to be funded by it under the Agreement, (e) otherwise failed to pay over to Agent or any other Lender any other amount required to be paid by it under the Agreement within 1 Business Day of the date that it is required to do so under the Agreement, or (f) (i) becomes or is insolvent or has a Borrower company that has become or is insolvent or (ii) becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian or appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a Borrower company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

"<u>Deposit Account</u>" means any deposit account maintained in Canada for the deposit of funds with a Canadian Bank reasonably acceptable to Agent.

"<u>Disqualified Equity Interests</u>" means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provide for the scheduled payments of dividends in cash, or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Maturity Date.

"<u>Early Termination Fee</u>" means

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(a)</u> (i) during the period of time from and after the Fifth<u>Seventh</u> Amendment Effective Date up to (but not including) the date that is the first anniversary of the Fifth<u>Seventh</u> Amendment Effective Date, an amount equal to three (3.0<u>one quarter of one percent (0.25</u>%) of the principal amount of the <u>Initial</u> Term Loan prepaid (or in the case of an Applicable Premium Trigger Event occurring under clauses (ii), (iii) or (iv) of the definition thereof, deemed to be prepaid) on such date in cash to the Agent for the ratable account of the Lenders; <u>and</u> (ii) during the period of time from and after the first anniversary of the Fifth Amendment Effective Date up to (but not including) the date that is the second anniversary of the Fifth<u>Seventh</u> Amendment Effective Date, an amount equal to one<u>zero;</u> and one half percent

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (1.5<u>i</u><u>) during the period of time from and after the</u> <u>Seventh</u> <u>Amendment Effective Date up to (but not including) the date that is the</u> <u>first anniversary of the Seventh</u> <u>Amendment Effective Date, an amount equal to</u> <u>three percent (3.00</u>%) of the principal amount of the <u>Seventh Amendment</u> Term Loan prepaid (or in the case of an Applicable Premium Trigger Event occurring under clauses (ii), (iii) or (iv) of the definition thereof, deemed to be prepaid) on such date in cash to the Agent for the ratable account of the Lenders; (iii) during the period of time from and after the second anniversary of the Fifth Amendment Effective Date up to (but not including) the date that is the third anniversary of the Fifth Amendment Effective Date, an amount equal to one half of one percent (0.5%) of the principal amount of the Term Loan prepaid (or in the case of an Applicable Premium Trigger Event occurring under clauses (ii), (iii) or (iv) of the definition thereof, deemed to be prepaid) on such date in cash to the Agent for the ratable account of the Lenders, and (iv<u>Seventh Amendment Term Loan Lenders and (ii</u>) from and after the third<u>first</u> anniversary of the Fifth<u>Seventh</u> Amendment Effective Date, zero.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date (except that this period shall be extended to 150 days after the original invoice date with respect to Accounts arising from initial orders made by an Account Debtor that becomes a customer of the Borrower after the Closing Date) or within 60 days of due date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Accounts with respect to which the Account Debtor is an Affiliate of any Loan Party or an employee or agent of any Loan Party or any Affiliate of any Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Accounts that are not payable in US Dollars or Canadian Dollars,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in Canada or the United States, or is not organized under the laws of the United States or any state thereof, or the laws of Canada or any province thereof, (ii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which Borrower has complied, to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), (ii) any state of the United States, or (iii) a Governmental Authority of Canada or any province thereof (exclusive, however, of Accounts with respect to which Borrower has complied, to the reasonable satisfaction of Agent, with any applicable assignment of claims statute, including the Financial Administration Act (Canada)),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Accounts with respect to which the Account Debtor is a creditor of a Loan Party, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of recoupment or setoff, or dispute,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which any Loan Party has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor, unless the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Account Debtor's financial condition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Accounts that are not subject to a valid and perfected first priority Agent's Lien (subject to Permitted Liens having priority under applicable law for which reserves have been established pursuant to <u>Section 2.2(b)</u>),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by Borrower of the subject contract for goods or services.

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"<u>Eligible Credit Card Receivables</u>" shall mean on any date of determination of the Borrowing Base, each Credit Card Receivable that satisfies the following criteria at the time of creation and continues to meet the same at the time of such determination, as determined by the Agent in its Permitted Discretion: such Credit Card Receivable (i) has been earned by performance and represents the bona fide amounts due to Borrower from a Credit Card Issuer or Credit Card Processor, and in each case originated in the ordinary course of business of such Borrower, and (ii) is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of <u>clauses (a)</u> through <u>(h)</u> below; <u>provided</u>, that such criteria may be revised from time to time by Agent in Agent's Permitted Discretion to address the results of any field examination performed by (or on behalf of) Agent from time to time after the Closing Date. Without limiting the foregoing, to qualify as an Eligible Credit Card Receivable, such Credit Card Receivable shall indicate no Person other than Borrower as payee or remittance party. In determining the amount to be so included, the face amount of a Credit Card Receivable shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that Borrower may be obligated to rebate to a customer, a Credit Card Issuer or Credit Card Processor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Credit Card Receivable but not yet applied by the Credit Parties to reduce the amount of such Credit Card Receivable. Any Credit Card Receivable included within any of the following categories shall not constitute an Eligible Credit Card Receivable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Credit Card Receivables which do not constitute an "intangible" (as defined in the PPSA), as applicable or an Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Credit Card Receivables that have been outstanding for more than five Business Days from the date of sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Credit Card Receivables that are not subject to a valid and perfected first priority Agent's Lien (subject to Permitted Liens having priority under applicable law for which Reserves have been established pursuant to <u>Section 2.2(b)</u>);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Credit Card Receivables which are disputed, are with recourse, or with respect to which a claim, counterclaim, offset or chargeback has been asserted (to the extent of such dispute, claim, counterclaim, offset or chargeback);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Credit Card Receivables as to which the Credit Card Issuer or Credit Card Processor has the right under certain circumstances to require a Credit Party to repurchase the Credit Card Receivables from such Credit Card Issuer or Credit Card Processor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Credit Card Receivables due from a Credit Card Issuer or Credit Card Processor which is the subject of any bankruptcy or insolvency proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Credit Card Receivables which are not a valid, legally enforceable obligation of the applicable Credit Card Issuer or Credit Card Processor with respect thereto; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Credit Card Receivables which do not conform to all representations, warranties or other provisions in the Credit Documents relating to Credit Card Receivables in all material respects.

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"<u>Eligible Inventory</u>" means Inventory of Borrower that consists of finished goods held for sale in the ordinary course of Borrower's business and complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; <u>provided</u>, that such criteria may be revised from time to time by Agent in Agent's Permitted Discretion to address the results of any field examination or appraisal performed by Agent from time to time after the Closing Date. In determining the amount to be so included, Inventory shall be valued at cost on a basis consistent with Borrower's historical accounting practices. An item of Inventory shall not be included in Eligible Inventory if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower does not have good, valid, and marketable title thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower does not have actual and exclusive possession thereof unless such Inventory is Eligible Non-Possessory Inventory,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) it is not located at one of the locations in Canada or in the continental United States set forth on <u>Schedule E-1</u> (as such <u>Schedule E-1</u> may be amended from time to time with the prior written consent of Agent) to the Agreement (or in-transit from one such location to another such location),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) it is in-transit to or from a location of Borrower (other than in-transit from one location set forth on <u>Schedule E-1</u> to the Agreement to another location set forth on <u>Schedule E-1</u> to the Agreement),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) commencing 90 days after the date hereof, it is located on real property leased by Borrower (other than store locations) or in a contract warehouse, in each case, unless either (1) it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises or (2) Agent has established a Landlord Reserve with respect to such location,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) it is the subject of a bill of lading or other document of title,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) it is not subject to a valid and perfected first priority Agent's Lien (subject to Permitted Liens having priority under applicable law for which Reserves have been established pursuant to <u>Section 2.2(b))</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) it consists of personalized items or custom items which cannot be readily re-sold to other customers, damaged or defective goods or "seconds";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) it consists of goods that are obsolete, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Borrower's business, bill and hold goods, or Inventory acquired on consignment, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) it is subject to third party trademark, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights.

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"<u>Eligible Inventory Category</u>" means the categories of Eligible Inventory set forth below or such other categories as may be determined by Agent from time to time in its Permitted Discretion (including, without limiting the generality of Agent's Permitted Discretion, it being understood that Agent shall have received an Inventory appraisal (and such other Collateral reporting) satisfactory to Agent prior to the inclusion of any other categories or any adjustments to such categories in the calculations set forth on the Borrowing Base Certificate in connection with such implementation):

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| |
|:---|
| **Eligible Inventory Category** |
| Watches and Clocks |
| Fine Jewelry |
| Bridal |
| Giftware |
| Loose Stones |
| Silver |
| Gold |
| Service |
| Rolex Watches |
| Patek Philippe |
| Graff |

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"<u>Eligible Non-Possessory Inventory</u>" means Inventory of Borrower that is otherwise Eligible Inventory and that satisfies the following criteria as determined in the Agent's Permitted Discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Person in possession of such Inventory is a bailee or processor or agent of Borrower that is acceptable to Agent and is held pursuant to bailment, processor or agency arrangements acceptable to the Agent and such Person maintains exclusive possession of such Inventory until delivered to Borrower or placed in transit to a location of Borrower identified on <u>Schedule E-1</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) title in such Inventory has passed to Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) such Inventory is subject to a Collateral Access Agreement, processor agreement or bailee agreement as required by the Agent, in each case in form and content satisfactory to the Agent and executed by the bailee, processor, agent or other Person in possession of such Inventory, as the case may be, and such Inventory is segregated or otherwise separately identifiable from goods of others, if any, held by the Person in possession of such Inventory, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Agent in its Permitted Discretion (i) has established such Reserves (including Reserves for processing and bailee charges and applicable customs charges and duties) as it considers necessary or appropriate with respect to such Inventory), and (ii) is satisfied that such Inventory is not subject to any Person's right or claim (other than those for which appropriate Reserves have been established) which is senior to, or pari passu with, the Agent's Lien on such Inventory or may otherwise adversely impact the ability of the Agent to realize upon such Inventory.

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"<u>Eligible Transferee</u>" means (a) any Lender (other than a Defaulting Lender), any Affiliate of any Lender (other than a Defaulting Lender) and any Related Fund of any Lender; (b) (i) a commercial bank organized under the laws of Canada or the United States or any state thereof, and having total assets in excess of $250,000,000; (ii) a commercial bank organized under the laws of any other country or a political subdivision thereof; <u>provided</u> that (A) (x) such bank is acting through a branch or agency located in the United States or Canada or (y) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country, and (B) such bank has total assets in excess of $250,000,000; (c) any other entity (other than a natural person) that is an "accredited investor" (as defined under the *Securities Act* (Quebec)) that extends credit or buys loans as one of its businesses including insurance companies, investment or mutual funds and lease financing companies, and having total assets in excess of $250,000,000; and (d) during the continuation of an Event of Default, any other Person approved by Agent, provided that notwithstanding the foregoing, "Eligible Transferee" shall not include (i) any Loan Party or any Affiliate or Subsidiary of any Loan Party, or (ii) a natural person.

"<u>Environmental Action</u>" means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials in violation of Environmental laws (a) from any assets, properties, or businesses of Borrower, or any Subsidiary of Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by Borrower, or any Subsidiary of Borrower, or any of their predecessors in interest.

"<u>Environmental Law</u>" means any applicable federal, provincial, state, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on Borrower or any of its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

"<u>Environmental Liabilities</u>" means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.

"<u>Environmental Lien</u>" means any Lien in favor of any Governmental Authority for Environmental Liabilities.

"<u>Equipment</u>" means equipment (as that term is defined in the PPSA).

"<u>Equity Interests</u>" means, with respect to a Person, all of the shares, options, warrants, interests, participations, or other equivalents (regardless of how designated, whether voting or non-voting) of or in such Person, whether voting or nonvoting, including capital stock (or other ownership or profit interests or units) or preferred stock.

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"<u>Event of Default</u>" has the meaning specified therefor in <u>Section 8</u> of the Agreement.

"<u>Excess Availability</u>" means, as of any date of determination, the Borrowing Availability <u>less</u> the then Combined Total Outstandings.

"<u>Excluded Taxes</u>" means (i) any Tax imposed on the net income or net profits of any Lender or any Participant (including any branch profits Taxes), in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender or such Participant is organized or the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender's or such Participant's principal office is located in each case as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the Tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under the Agreement or any other Loan Document); (ii) Canadian federal withholding Taxes that would not have been imposed but for the Lender's or a Participant's failure to comply with the requirements of <u>Section 16.2</u> of the Agreement, (iii) any Canadian federal withholding Taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), except that Excluded Taxes shall not include (A) any amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive pursuant to <u>Section 16.1</u> of the Agreement, if any, with respect to such withholding Tax at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), and (B) additional Canadian federal withholding Taxes that may be imposed after the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), as a result of a Change in Law, rule, regulation, order or other decision with respect to any of the foregoing by any Governmental Authority, and (iv) any Canadian federal withholding Taxes imposed as a result of any Lender or any Participant (A) not dealing at arm's length (within the meaning of the Income Tax Act (Canada)) with a Loan Party (other than where the non-arm's length relationship arises on account of the Person having become a party to, received or perfected a security interest under or enforced any rights or in respect of any Loan Documents), or (B) being a "specified shareholder" (within the meaning of Subsection 18(5) of the Income Tax Act (Canada)) of a Loan Party, or not dealing at arm's length with such "specified shareholder" of a Loan Party.

"<u>Fee Letter</u>" means that certain amended and restated fee letter, dated as of the Fifth Amendment Effective Date, between Borrower and Agent, in form and substance reasonably satisfactory to Agent, as amended, restated or supplemented from time to time.

"<u>Fifth Amendment Effective Date</u>" means December 24, 2021.

"<u>Financial Officer</u>" means the (i) chairman of the board, (ii) president, (iii) chief executive officer, (iv) treasurer, (v) chief financial officer, (vi) director of financial planning and reporting or (vii) director, financial controller, in each case, of Borrower or, if the context requires, a Loan Party.

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"<u>Fiscal Month</u>" means each month ending on the last Saturday of each month other than in the case of a 53 week year, in which case two of the Fiscal Months in such Fiscal Year may end on a different day).

"<u>Fiscal Quarter</u>" means each of the three month periods ending on the last Saturday of each of March, June, September and December of any year (other than in the case of a 53 week year, in which case one of the Fiscal Quarters in such Fiscal Year may end on a different day).

"<u>Fiscal Year</u>" means the twelve month period ending on the last Saturday of March of any year.

"<u>Fixed Charge Condition</u>" means, (a) with respect to any proposed Restricted Payment, and, where applicable, any prepayment of Indebtedness, Borrower and its Subsidiaries would have a Fixed Charge Coverage Ratio on a pro forma basis after giving effect to such Restricted Payment or prepayment (with such prepayment being treated as a component of Consolidated Fixed Charges for purposes of this definition) of equal to or greater than 1.1 to 1.0 for the most recently ended 12-month period immediately prior to the proposed date of consummation of such proposed Restricted Payment, or prepayment of Indebtedness for which Agent has received financial statements required to be delivered under Section 5.1; and (b) with respect to any proposed Acquisition, the Fixed Charge Acquisition Condition has been satisfied.

"<u>Fixed Charge Coverage Ratio</u>" means, with respect to any fiscal period and with respect to Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, the ratio of (a) Consolidated EBITDA for such period minus (i) Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period (to the extent such Capital Expenditures are not financed with proceeds of Indebtedness (other than Revolving Loans) or Equity Interests), (ii) all federal, provincial, state and local income and capital Taxes paid in cash during such period and (iii) all Restricted Payments paid in cash or Cash Equivalents during such period to (b) Consolidated Fixed Charges for such period. Notwithstanding the foregoing, the amount of Capital Expenditures and Taxes for the fiscal months ending prior to the date of this Agreement and used in calculating the Fixed Charge Coverage Ratio for the applicable twelve fiscal month period after such date shall be in amounts agreed by the Agent and Borrower.

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"<u>Foreign Lender</u>" means any Lender or Participant that is not resident in Canada (within the meaning of the *Income Tax Act* (Canada) for the purposes of Part XIII of the *Income Tax Act* (Canada).

"<u>Floor</u>" means a rate of interest equal to 1.00%.

"<u>GAAP</u>" means generally accepted accounting principles as in effect from time to time in the United States, consistently applied, provided that Borrower shall be entitled to elect by notice to Agent and subject to Section 1.2 and such amendments to this Agreement as the Agent may reasonably require to reflect the implementation of such election, Canadian accounting standards for private enterprises or International Financial Reporting Standards, in each case, as set out in the Chartered Professional Accountants Canada Handbook – Accounting.

"<u>Governing Documents</u>" means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.

"<u>Governmental Authority</u>" means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government (including any supra-national bodies such as the European Union or the European Central Bank).

"<u>Guarantor</u>" means (a) as of the Closing Date, CGS and (b) thereafter, each Subsidiary of Borrower that is or becomes a guarantor of all or any part of the Obligations. For certainty, CGS USA and Birks Jewellers Limited, Borrower's Hong Kong Subsidiary, shall not be required to be a Guarantor.

"<u>Hazardous Materials</u>" means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as "hazardous substances," "hazardous materials," "hazardous wastes," "toxic substances," or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

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"<u>Hedge Agreement</u>" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement.

"<u>Hedge Provider</u>" means any Revolving Lender or any of its Affiliates which is a party to a Hedge Agreement in accordance with the Revolving Credit Agreement.

"<u>Hedge Termination Value</u>" means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include a Revolving Lender or any Affiliate or branch of a Revolving Lender).

"<u>Indebtedness</u>" as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and payable in accordance with customary trade practices to the extent not overdue by more than 90 days from the date of the original invoice therefor and, for the avoidance of doubt, other than royalty payments payable in the ordinary course of business in respect of non-exclusive licenses, but including, for the avoidance of doubt, obligations in respect of credit cards, credit card processing services, debit cards, stored value cards and commercial cards (including so-called "commercial cards", "procurement cards" or "p-cards"), and any earn-out or similar obligations to the extent required to be recognized as a liability on the balance sheet of such Person under GAAP, (f) all monetary obligations of such Person owing under Hedge Agreements (which amount shall be calculated based on the Hedge Termination Value as of the date of determination), (g) any Disqualified Equity Interests of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above. For purposes of this definition, (i) the amount of any Indebtedness represented by a guarantee or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness which is limited or is non-recourse to a Person or for which recourse is limited to an identified asset shall be valued at the lesser of (A) if applicable, the limited amount of such obligations, and (B) if applicable, the fair market value of such assets securing such obligation.

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"<u>Indemnified Liabilities</u>" has the meaning specified therefor in <u>Section 10.3</u> of the Agreement.

"<u>Indemnified Person</u>" has the meaning specified therefor in <u>Section 10.3</u> of the Agreement.

"<u>Indemnified Taxes</u>" means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of or with respect to any obligation of, any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

"<u>Information Certificate</u>" means a certificate in the form of <u>Exhibit I-1</u> to the Agreement.

"<u>Insolvency Laws</u>" means, collectively, (i) the Bankruptcy Code, (ii) the *Bankruptcy and Insolvency Act* (Canada), (iii) the *Companies' Creditors Arrangement Act* (Canada), (iv) the *Winding-Up and Restructuring Act* (Canada), (v) corporate statutes to the extent such statute is used by a Person to propose an arrangement involving the compromise of the claims of creditors; and (vi) any similar legislation in a relevant jurisdiction, in each case as applicable and as in effect from time to time.

"<u>Insolvency Proceeding</u>" means any proceeding commenced by or against any Person under any Insolvency Law or under any other provincial, state or federal bankruptcy or insolvency law, each as now and hereafter in effect, any successors to such statutes, and any similar laws in any jurisdiction including, without limitation, any laws relating to assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief and any law permitting a debtor to obtain a stay or a compromise of the claims of its creditors.

"<u>Intellectual Property</u>" means all intellectual and similar Property of a Person, including inventions, designs, patents, patent applications, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, registrations and franchises; all books and records describing or used in connection with the foregoing; and all licenses or other rights to use any of the foregoing.

"<u>Intellectual Property Claim</u>" means any claim or assertion (whether in writing, by suit or otherwise) that any Loan Party's or any Subsidiary's ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person's Intellectual Property.

"<u>Intercompany Subordination Agreement</u>" means an intercompany subordination agreement executed and delivered by Borrower, each other Loan Party, certain other Subsidiaries of Borrower and Agent, the form and substance of which is reasonably satisfactory to Agent concurrently with the making of the first intercompany advance to, or other Investment in, Borrower or another Loan Party by a Loan Party or other Subsidiary of Borrower.

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"<u>Intercreditor Agreement</u>" means the <u>Amended and Restated</u> Intercreditor Agreement dated June 29, 2018<u>as of the Seventh Amendment Effective Date</u>, by and among the Agent and the Revolving Loan Agent, and acknowledged by each Loan Party, as it may be amended, supplemented or otherwise modified from time to time.

"<u>Interest Payment Date</u>" means the first (1st) day of each month commencing on the first day of the month immediately following the Closing Date and continuing thereafter until the Maturity Date.

"<u>Inventory</u>" means inventory (as that term is defined in the PPSA).

"<u>Inventory Net Recovery Percentage</u>" means, as of any date of determination for each Eligible Inventory Category, the percentage of the cost of Borrower's Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of all associated costs and expenses of such liquidation, such percentage to be determined as to each category of Inventory and to be as specified in the most recent appraisal received by Agent from an appraisal company selected by Agent.

"<u>Inventory Reserves</u>" means, as of any date of determination, (a) Landlord Reserves, and (b) those Reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.2(b), to establish and maintain (including Reserves for slow moving Inventory and Inventory shrinkage) with respect to Eligible Inventory.

"<u>Investment</u>" means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide accounts receivable arising in the ordinary course of business), or assumption, purchase or other acquisitions of Indebtedness, Equity Interests (including any partnership or joint venture interest), the acquisition of all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto (net of all returns on such Investments except with respect to Permitted Acquisitions; <u>provided</u> that the amount of such returns shall be disregarded for purposes of calculating capacity under any cap or basket with respect to Investments to the extent in excess of such cap or basket), without any adjustment for increases or decreases in value, or write-ups, write-downs, or write-offs with respect to such Investment.

"<u>IRC</u>" means the Internal Revenue Code of 1986, as in effect from time to time.

"<u>JV Holdco</u>" means Birks Investments Inc., a Canadian corporation wholly-owned by Birks Group Inc.

"<u>JV Partner</u>" means FWI LLC, a California corporation.

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"<u>Landlord Reserve</u>" means, as to each location at which Borrower has Inventory (other than store locations) or books and records located and as to which a Collateral Access Agreement has not been received by Agent, a reserve in an amount equal to the greater of (a) the number of months' rent for which the landlord will have, under applicable law, a Lien in the Inventory of Borrower to secure the payment of rent or other amounts under the lease relative to such location, or (b) 3 months' rent under the lease relative to such location.

"<u>Lender</u>" has the meaning set forth in the preamble to the Agreement, and shall also include <u>the Seventh Amendment Term Loan Lenders and</u> any other Person made a party to the Agreement pursuant to the provisions of Section 13.1 of the Agreement and "Lenders" means each of the Lenders or any one or more of them.

"<u>Lender Group</u>" means each of the Lenders and Agent, or any one or more of them.

"<u>Lender Group Expenses</u>" means all (a) costs or expenses (including Taxes and insurance premiums) required to be paid by Borrower or any of its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) reasonable and documented out-of-pocket fees or charges paid or incurred by Agent in connection with the Lender Group's transactions with Borrower and its Subsidiaries under any of the Loan Documents, including, photocopying, notarization, couriers and messengers, telecommunication, public record searches, filing fees, recording fees, publication, real estate surveys, real estate title policies and endorsements, and environmental audits, (c) Agent's reasonable and customary fees and charges imposed or incurred in connection with any background checks or OFAC/PEP searches related to Borrower or its Subsidiaries, (d) Agent's reasonable and customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of Borrower (whether by wire transfer or otherwise), together with any reasonable and documented out-of-pocket costs and expenses incurred in connection therewith, (e) reasonable and customary charges imposed or incurred by Agent resulting from the dishonor of cheques payable by or to any Loan Party, (f) reasonable and documented out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (g) field examination, appraisal, and valuation fees and expenses of Agent related to any field examinations, appraisals, or valuation to the extent of the fees and charges (and up to the amount of any limitation provided in Section 2.5(c) of the Agreement, (h) Agent's reasonable and documented out-of-pocket costs and expenses (including reasonable and documented legal fees and expenses) relative to third party claims or any other lawsuit or adverse proceeding paid or incurred, whether in enforcing or defending the Loan Documents or otherwise in connection with the transactions contemplated by the Loan Documents, Agent's Liens in and to the Collateral, or the Lender Group's relationship with Borrower or any of its Subsidiaries, (i) Agent's reasonable and documented out-of-pocket costs and expenses (including reasonable and documented out-of-pocket legal fees and due diligence expenses) incurred in advising, structuring, drafting, reviewing, administering (including travel, meals, and lodging), syndicating (including reasonable and documented out-of-pocket costs and expenses relative to the rating of the Term Loan, CUSIP, DXSyndicate™, SyndTrak or other communication costs incurred in connection with a syndication of the loan facilities), or amending, waiving, or modifying the Loan Documents, and (j) Agent's and each Lender's reasonable and documented out-of-pocket costs and expenses (including lawyers, accountants, consultants, and other advisors fees and expenses (limited in the case of lawyers to one law firm for Agent (and such other specialty counsel or local counsel as Agent reasonably elects to employ) and (absent any additional counsel as may be needed based on conflicts of interest) one law firm for the Lenders (in the aggregate) other than the Agent)) incurred in terminating, enforcing (including lawyers, accountants, consultants, and other advisors fees and expenses (limited in the case of lawyers to one law firm for Agent (and such other specialty counsel or local counsel as Agent reasonably elects to employ) and (absent any additional counsel as may be needed based on conflicts of interest) one law firm for the Lenders (in the aggregate) other than the Agent) incurred in connection with a "workout," a "restructuring," or an Insolvency Proceeding concerning Borrower or any of its Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether a lawsuit or other adverse proceeding is brought, or in taking any enforcement action or any Remedial Action with respect to the Collateral.

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"<u>Lender Group Representatives</u>" has the meaning specified therefor in <u>Section 17.8</u> of the Agreement.

"<u>Lender-Related Person</u>" means, with respect to any Lender, such Lender, together with such Lender's Affiliates, officers, directors, employees, lawyers, and agents.

"<u>Letter of Credit Usage</u>" has the meaning specified therefor in the Revolving Credit Agreement.

"<u>Lien</u>" means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, hypothec or other security arrangement and any other preference, priority, or preferential arrangement in the nature of a security interest of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

"<u>Loan</u> " means the <u>Initial Term Loan and Seventh Amendment</u> Term Loan, made (or to be made) hereunder.

"<u>Loan Documents</u>" means the Agreement, the Control Agreements, any Borrowing Base Certificate, the Fee Letter, the <u>Seventh Amendment Fee Letter, the</u> Intercreditor Agreement, the Quebec Intercreditor Agreement, the <u>and any amendments thereto, the Subordination Agreements, the</u> Credit Card Notifications, the Intercompany Subordination Agreements, the Mortgages, the Canadian Security Documents, any guaranties executed by any Loan Party, any note or notes executed by Borrower in connection with the Agreement and payable to any member of the Lender Group, and any other instrument or agreement entered into, now or in the future, by any Loan Party or any of its Subsidiaries and any member of the Lender Group in connection with the Agreement<u>, including the Seventh Amendment</u>.

"<u>Loan Party</u>" means Borrower or any Guarantor.

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"<u>Loan to Value Reserves</u>" - as of the date of determination by the Agent, from time to time an amount equal to the greater of (a) $0; and (b) the amount, if any, by which the outstanding amount of the Term Loan at such time exceeds the difference between (1) clauses (a), (b), (c) and (d) (excluding the Loan to Value Reserve) set forth in the definition of Borrowing Base and (2) clauses (a), (b), (c) and (d) (excluding the Loan to Value Reserve) set forth in the definition of "Borrowing Base" as defined in the Revolving Credit Agreement.

"<u>Management Agreement</u>" means that certain Management Consulting Services Agreement, dated as of November 20, 2015, between Borrower and Gestofi S.A., in each case, as such agreement may be amended from time to time in accordance with the terms hereof and the Management Subordination Agreement.

"<u>Management Debt</u>" means collectively, all obligations (including, without limitation, retainer fees and indemnification expenses) of Borrower to Gestofi S.A. pursuant to the Management Agreement.

"<u>Management Subordination Agreement</u>" means that certain Management Subordination Agreement, dated as of the Closing Date, among<u>, *inter alios*, the</u> Borrower, Gestofi S.A. and Agent, in each case, as the same may hereafter be amended, restated, supplemented or otherwise modified with the consent of Agent.

<u>"Mangrove" means Mangrove Holding S.A.</u>

<u>"Mangrove Debt" means all Indebtedness owing to Mangrove under the Mangrove Debt Documents that constitutes Permitted Indebtedness.</u>

<u>"Mangrove Debt Documents" means, collectively, (i) that certain Loan Agreement dated on or about the Seventh Amendment Effective Date by and between Borrower and Mangrove (original principal amount of $3,750,000) and (ii) any other loan agreement entered into by and between Borrower and Mangrove; *provided* that any such other loan agreement shall be in form, scope and substance and on terms satisfactory to Agent and the Required Lenders and shall be subject to the Mangrove Subordination Agreement.</u>

<u>"Mangrove Payment Cap" has the meaning specified therefor in Section 6.6(a)(iv) of this Agreement.</u>

<u>"Mangrove Subordination Agreement" means that certain Subordination Agreement, dated as of the Seventh Amendment Effective Date, dated as of the Seventh Amendment Effective Date, among the Borrower, Mangrove and the Agent, as hereafter amended, restated, supplemented or otherwise modified with the consent of Agent and the Required Lenders.</u>

"<u>Margin Stock</u>" as defined in Regulation U of the Board of Governors of the Federal Reserve System of the United States as in effect from time to time.

"<u>Material Adverse Effect</u>" means (a) a material adverse effect in the business, operations, assets, liabilities or financial condition of Loan Parties, taken as a whole, (b) a material impairment of Loan Parties' ability to perform their payment or other material obligations under the Loan Documents to which they are parties or of the Lender Group's ability to enforce the Obligations or realize upon a material portion of the Collateral (other than as a result of an action taken or not taken that is solely in the control of Agent), or (c) a material impairment of the enforceability or priority of Agent's Liens with respect to all or a material portion of the Collateral.

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"<u>Material Contract</u>" means any agreement or arrangement to which any Loan Party or any of its Subsidiaries is party (other than the Loan Documents) (a) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect or (b) that relates to Indebtedness in an aggregate amount of the Canadian Dollar Equivalent of $2,500,000 or more. Notwithstanding anything to the contrary contained in this Agreement, the term "Material Contract" shall include, for all purposes, each of the following: (i) the Revolving Loan Documents (and any refinancings, renewals or extensions thereof); (ii) the Quebec Subordinated Debt Documents, (iii) the Rolex Canada Documents, (iv) the Montrovest Debt Documents, (v) the Management Agreement; (vi) any Additional Subordinated Debt Documents; (vii) the US Divestiture Agreements; (viii) the Franchise Agreement dated as of October 18, 2017 between Borrower and GD Overseas SA, (ix) the Concession Agreement dated as of November 30, 2015 between Borrower and Patek Philippe SA Geneve, and (x) the Damiani Debt Documents.

"<u>Maturity Date</u>" means the earlier of (x) December 24, 2026 and (y) the "Commitment Termination Date" as defined in the Revolving Credit Agreement.

"<u>Maximum Credit Amount</u>" has the meaning specified in the Revolving Credit Agreement.

"<u>Modified Fixed Charge Coverage Ratio</u>" means, with respect to any fiscal period and with respect to Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, the ratio of (a) Consolidated EBITDA for such period to (b) the sum of (i) Consolidated Interest Expense, and (ii) Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period (to the extent such Capital Expenditures are not financed with proceeds of Indebtedness (other than Revolving Loans) or Equity Interests), for such period.

"<u>Montrovest</u>" means Montrovest B.V. and following the Montrovest Merger, Montel Sàrl.

"<u>Montrovest Debt</u>" means all Indebtedness owing to Montrovest under the Montrovest Debt Documents that constitutes Permitted Indebtedness.

"<u>Montrovest Debt 2017</u>" means Montrovest Debt incurred by the Borrower to Montrovest as of July 28, 2017 to the extent such Indebtedness constitutes Permitted Indebtedness in an aggregate principal amount equal to US$2,500,000.

"<u>Montrovest Debt Documents</u>" means, collectively, (i) the Amended and Restated Cash Advance Agreement dated as of June 8, 2011 by and between Borrower and Montrovest, (original principal amount of US$2,000,000), (ii) the Amended and Restated Cash Advance Agreement dated as of June 8, 2011 by and between Borrower and Montrovest, (original principal amount of US$3,000,100), (iii) the Loan Agreement executed on July 28, 2017, with effect as of July 20, 2017 by and between Borrower and Montrovest and (iv) any other loan agreement entered into by and between Borrower and Montrovest; provided that any such other loan agreement shall be in form, scope and substance and on terms satisfactory to Agent and the Required Lenders and shall be subject to the Montrovest Subordination Agreement.

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"<u>Montrovest Merger</u>" means the merger, pursuant to the laws of Netherlands, of Montrovest B.V. into Montel Sàrl.

"<u>Montrovest Subordination Agreement</u>" means collectively, (i) Section 5.6 of the Montrovest Debt Documents referred to in clauses (i) and (ii) of the definition of "Montrovest Debt Documents", and (ii) the Amended and Restated Postponement and Subordination Agreement, dated as of the Closing Date, among the Borrower, Montrovest, in each case as hereafter amended, restated, supplemented or otherwise modified with the consent of Agent and the Required Lenders.

"<u>Moody's</u>" has the meaning specified therefor in the definition of Cash Equivalents.

"<u>Mortgages</u>" means, individually and collectively, one or more mortgages, deeds of trust, or deeds to secure debt, executed and delivered by Borrower or one of its Subsidiaries in favor of Agent, in form and substance reasonably satisfactory to Agent, that encumber the Real Property Collateral, if any.

"<u>Non-Consenting Lender</u>" has the meaning specified therefor in <u>Section 14.2(a)</u> of the Agreement.

"<u>Non-Defaulting Lender</u>" means each Lender other than a Defaulting Lender.

"<u>Obligations</u>" means all loans (including the Term Loan and any Protective Advances)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), premiums, liabilities (including all amounts charged to the Loan Account pursuant to the Agreement), obligations (including indemnification obligations) of any Loan Party, fees (including the fees provided for in the Fee Letter) of any Loan Party, Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding) of any Loan Party, guaranties of any Loan Party, and all covenants and duties of any other kind and description owing by any Loan Party arising out of, under, pursuant to, in connection with, or evidenced by the Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any Loan Party is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents. Without limiting the generality of the foregoing, the Obligations under the Loan Documents include the obligation to pay (i) the principal of the Term Loan, (ii) the interest accrued on the Term Loan, (iii) Lender Group Expenses of any Loan Party, (iv) fees payable by any Loan Party under the Agreement or any of the other Loan Documents, and (v) indemnities and other amounts payable by any Loan Party under any Loan Document. Any reference in the Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

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"<u>OFAC</u>" means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

"<u>Organizational Documents</u>" means with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation, organization or operation of such Person. "<u>Originating Lender</u>" has the meaning specified therefor in Section 13.1(e).

"<u>Other Taxes</u>" has the meaning specified therefor in <u>Section 16.1</u> of the Agreement.

"<u>Participant</u>" has the meaning specified therefor in <u>Section 13.1(e)</u> of the Agreement.

"<u>Participant Register</u>" has the meaning set forth in <u>Section 13.1(i)</u> of the Agreement.

"<u>Patriot Act</u>" has the meaning specified therefor in <u>Section 4.13</u> of the Agreement.

"<u>Permitted Acquisition</u>" means any Acquisition after the Closing Date by a Borrower or another Loan Party so long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition and the proposed Acquisition is consensual,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the purchase consideration payable in respect of all Permitted Acquisitions (including the proposal acquisition and deferred payment obligations) shall not exceed $10,000,000 in the aggregate during the term of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Borrower has provided Agent with its due diligence package relative to the proposed Acquisition, including forecasted balance sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all prepared on a basis consistent with such Person's (or assets') historical audited financial statements (or if audited financial statements are not available, a quality of earnings report acceptable to the Agent acting reasonably), together with appropriate supporting details and a statement of underlying assumptions for the 1 year period following the date of the proposed Acquisition, on a quarter by quarter basis), in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower shall have demonstrated, after giving effect to the consummation of such proposed Acquisition, satisfaction of the applicable Restricted Payment Conditions,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Borrower has provided Agent with written notice of the proposed Acquisition at least 5 Business Days prior to the anticipated closing date of the proposed Acquisition and, not later than 5 Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and other material documents relative to the proposed Acquisition, which agreement and documents must be reasonably acceptable to Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the assets being acquired (other than a de minimis amount of assets in relation to Borrower's and its Subsidiaries' total assets), or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of Borrower and its Subsidiaries or a business reasonably related thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the assets being acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or Canada, or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States or Canada,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the subject assets or Equity Interests, as applicable, are being acquired directly by a Borrower or one of its Subsidiaries that is a Loan Party, and, in connection therewith, the applicable Loan Party shall have complied with <u>Section 5.11</u> or <u>5.12</u> of the Agreement, as applicable, of the Agreement and, in the case of an acquisition of Equity Interests, the applicable Loan Party shall have demonstrated to Agent that the new Loan Parties have received consideration sufficient to make the joinder documents binding and enforceable against such new Loan Parties, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Agent shall have received prior to or concurrent with the proposed Acquisition, a certificate signed by an officer of Administrative Borrower certifying compliance with the foregoing conditions.

"<u>Permitted Discretion</u>" means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment and made in good faith.

"<u>Permitted Dispositions</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete or no longer used or useful in the ordinary course of business and leases or subleases of Real Property not useful in the conduct of the business of Borrower and its Subsidiaries,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) sales of Inventory (x) to buyers in the ordinary course of business (for the avoidance of doubt, including sales by a Loan Party to another Loan Party), and (y) so long as no Event of Default has occurred and is continuing or would result therefrom, by JV Holdco to RM JV (for resale by RM JV) in accordance with the terms of the RM JV Agreement in an aggregate amount not to exceed US$2,500,000 (the "<u>Permitted JV Inventory Sale</u>");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of the Agreement or the other Loan Documents,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the granting of Permitted Liens,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any involuntary loss, damage or destruction of property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) (i) the sale or issuance of Qualified Equity Interests of Borrower, (ii) the sale or issuance of any Qualified Equity Interests of Loan Party to another Loan Party, and (iii) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of any Subsidiary of a Loan Party that is not a Loan Party to a Loan Party or any other Subsidiary of a Loan Party, in each case subject to the terms set forth herein,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (i) the lapse (other than at the end of their respective terms) of registered patents, trademarks, copyrights and other intellectual property of Borrower or any of its Subsidiaries that are, in the reasonable business judgment of such Loan Party, no longer material or no longer used in the business of Borrower or Subsidiary to the extent not economically desirable in the conduct of its business or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lender Group,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the making of Restricted Payments that are expressly permitted to be made pursuant to the Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) to the extent constituting dispositions, the making of Permitted Investments that are expressly permitted to be made pursuant to the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, transfers of assets (i) from any Loan Party (other than transfer of Inventory, Accounts and Credit Card Receivables by Borrower) to another Loan Party, (ii) from a Loan Party to Borrower; provided, that the consideration received for such assets to be so disposed is at least equal to the fair market value thereof and (iii) from any Subsidiary of Borrower that is not a Loan Party to any other Subsidiary of Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) cancellations, terminations or surrenders of any lease,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) the termination or unwinding of any Hedge Agreement in accordance with its terms,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) dispositions by any Subsidiary of its own Equity Interests to qualify directors where required by applicable law,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) dispositions permitted by <u>Section 6.4</u>,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) dispositions or sales of assets, or sell all of the assets of any division or line of business of Borrower or any of its Subsidiaries, in each case, having a fair market value not in excess of $1,000,000 per Fiscal Year; <u>provided</u> that, in each case, (i) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof; and (ii) at least 75% of the consideration received shall be cash or Cash Equivalents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) grants of licenses with respect to intellectual property, or leases or subleases of other property, in the ordinary course of business which licenses, leases and subleases do not materially interfere with the ordinary conduct of the business of Borrower and its Subsidiaries, taken as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) dispositions of Permitted Factoring Facility Accounts to the extent related to a Permitted Factoring Facility; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Permitted Sale Leaseback Transactions.

"<u>Permitted Factoring Facility</u>" means an unsecured factoring facility established by the Borrower which provides for the sale of Permitted Factoring Facility Accounts on a non- recourse basis.

"<u>Permitted Factoring Facility Accounts</u>" shall mean Accounts (whether now existing or arising in the future) which are due to Borrower from Account Debtors located outside of Canada and the United States and which are not otherwise Eligible Accounts.

"<u>Permitted Indebtedness</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Indebtedness evidenced by the Agreement or the other Loan Documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Revolving Loan Debt in an amount not to exceed the amount permitted under the Intercreditor Agreement, <u>provided</u> that, for the avoidance of doubt, the aggregate Hedge Termination Value of Secured Hedging Agreement Obligations that constitute Bank Product Debt (as such term is defined in the Revolving Credit Agreement) shall not exceed $1,500,000 at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Indebtedness (including Capital Leases) set forth on <u>Schedule 4.14</u> to this Agreement and any Refinancing Indebtedness in respect of such Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) endorsement for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Quebec Subordinated Debt in an aggregate outstanding amount not to exceed $14,300,000 (as reduced by principal payments from time to time under the applicable Quebec Subordinated Debt Documents) and solely to the extent that such Indebtedness is subject to the Quebec Subordination Agreement; provided that the Quebec Subordinated Debt Documents shall be in form and substance reasonably satisfactory to the Agent and the Required Lenders,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the incurrence by Borrower or its Subsidiaries of Indebtedness under Hedge Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or

foreign currency risks associated with Borrower's and its Subsidiaries' operations and not for speculative purposes; provided that the aggregate Hedge Termination Value of Secured Hedging Obligations shall not exceed $5,000,000 at any one time,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Permitted Intercompany Advances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Indebtedness incurred after the Closing Date in connection with the acquisition, lease or leasing after the Closing Date of any equipment or fixtures by a Loan Party or under any Capital Lease or Permitted Sale Leaseback Transaction, as well as Permitted Purchase Money Indebtedness secured by Purchase Money Liens, <u>provided</u> that the aggregate principal amount of such Indebtedness of the Loan Parties shall not exceed the Canadian Dollar Equivalent of $5,000,000 at any one time,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) unsecured Indebtedness constituting the Management Debt to the extent subject to the Management Subordination Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) secured Indebtedness in an aggregate amount not to exceed $7,500,000 at any time, provided that that (a) such Indebtedness is subordinated in right and time of payment to the Obligations and in Lien priority to the Agent's Liens on terms and conditions satisfactory to the Agent and Required Lenders; and (b) the Restricted Payment Conditions are satisfied at the time of the incurrence of such Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(k)</u> <u>Seventh Amendment Seller Notes;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(l)</u> (k) Additional Subordinated Debt incurred by Borrower or any of its Subsidiaries in an aggregate outstanding amount not to exceed $15,000,000 at any one time, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(m)</u> (l) Indebtedness under any Permitted Factoring Facility.

"<u>Permitted Intercompany Advances</u>" means loans and other Investments made by (a) a Loan Party to another Loan Party, (b) a Subsidiary of Borrower that is not a Loan Party to another Subsidiary of Borrower that is not a Loan Party, (c) a Subsidiary of Borrower that is not a Loan Party to a Loan Party, so long as the parties thereto are party to the Intercompany Subordination Agreement, (d) to the extent permitted by <u>Section 4.27</u>, advances made by Borrower to CGS US for the purposes permitted thereunder and (e) except as otherwise permitted under paragraph (d) hereof, Loan Parties to Subsidiaries of Borrower that are not Loan Parties in an aggregate outstanding amount not to exceed $50,000.

"<u>Permitted Investments</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in cash and Cash Equivalents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) advances or extensions of credit made in connection with purchases of goods or services in the ordinary course of business,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or any of its Subsidiaries,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set forth on <u>Schedule P-1</u> to the Agreement and any modification, replacement, renewal or extension thereof; provided that the amount of the original Investment under this clause (e) is not increased except by the terms of such Investment or as otherwise permitted pursuant to the definition of Permitted Investments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) (i) guarantees permitted under the definition of Permitted Indebtedness, and (ii) other guarantees entered into in the ordinary course of business in respect of real property leases so long as such guarantees under this clause (ii), if made by a Loan Party, are in respect of obligations of another Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Permitted Intercompany Advances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or any of its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) deposits of cash made to secure performance of operating leases, utilities, and other similar deposits in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Permitted Acquisitions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Investments resulting from entering into agreements relative to Indebtedness that is permitted under clause (e) of the definition of Permitted Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) equity Investments by any Loan Party in any Subsidiary of such Loan Party which is required by law to maintain a minimum net capital requirement or as may be otherwise required by applicable law,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Investments consisting of non-cash consideration received in connection with Permitted Dispositions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) non-cash loans and advances to employees, officers, and directors of Borrower or any of its Subsidiaries for the purpose of purchasing Equity Interests in Borrower so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in Borrower, and (ii) loans and advances to employees and officers of Borrower or any of its Subsidiaries in the ordinary course of business for any other business purpose and in an aggregate amount not to exceed $200,000 at any one time,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $1,000,000 during the term of the Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Investments (other than Acquisitions) made by a Borrower or a Subsidiary thereof made solely with cash proceeds received by Borrower and contributed to Borrower or Subsidiary substantially concurrently with the making of such Investments in connection with the issuance of Equity Interests (other than Disqualified Equity Interests) of Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Investments by a Borrower or its Subsidiaries held by a Person that becomes a Subsidiary (or is merged, amalgamated or consolidated with or into a Borrower or a Subsidiary) pursuant to <u>Section 6.9</u> after the Closing Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Investments made by JV Holdco in the form of cash and/or Cash Equivalents in RM JV in order to fund the formation and capitalization of RM JV in an amount not to exceed US$1,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Investments made by JV Holdco by way of the Permitted JV Inventory Sale; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) Investments in the form of cash and/or Cash Equivalents made by JV Holdco in the RM JV to finance retail store renovations and improvements and product inventories in accordance with the terms of the RM JV Agreement, in an amount not to exceed US$750,000.

"<u>Permitted Liens</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Liens securing the Revolving Loan Debt, subject to the provisions of the Intercreditor Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Liens or claims for unpaid Taxes that either (i) are not yet delinquent, or (ii) do not have priority over Agent's Liens and the underlying Taxes are the subject of Permitted Protests,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) judgment Liens arising solely as a result of the existence of judgments, orders, requirements to pay or awards that do not constitute an Event of Default under <u>Section 8.3</u> of the Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Liens set forth on <u>Schedule P-2</u> to the Agreement; <u>provided</u>, that to qualify as a Permitted Lien, any such Lien described on <u>Schedule P-2</u> to the Agreement shall only secure the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the interests of lessors under operating leases and non-exclusive licensors under license agreements,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Capital Leases and other Permitted Purchase Money Indebtedness described in paragraph (g) of the definition of Permitted Indebtedness so long as (i) such Lien qualifies as a Purchase Money Lien under the terms of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Liens on amounts deposited to secure a Borrower's or any of its Subsidiaries' obligations in connection with workers' compensation or other unemployment insurance,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Liens on amounts deposited to secure a Borrower's or any of its Subsidiaries' obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Liens on amounts deposited to secure a Borrower's or any of its Subsidiaries' reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) rights of setoff or bankers' liens upon deposits of funds in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such Deposit Accounts in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Liens solely on any cash earnest money deposits made by Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Liens assumed by Borrower or any of its Subsidiaries in connection with a Permitted Acquisition that secure Acquired Indebtedness,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Liens arising from precautionary PPSA financing statements or similar filings made in respect of operating leases entered into by any Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) Leases or subleases granted to others not interfering in any material respect with the business of Borrower and its Subsidiaries, taken as a whole,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) security deposits to public utilities or to any municipalities or Governmental Authorities or other public authorities when required by the utilities, municipalities or Governmental Authorities or other public authorities in connection with the supply of services or utilities,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) Liens arising out of any conditional sale, title retention, consignment or other similar arrangement for the sale of goods in the ordinary course of business entered into by Borrower or its Subsidiaries in the ordinary course of business to the extent such Liens secure only the unpaid purchase price for such goods and related expenses do not attach to any assets other than the goods subject to such arrangements and not otherwise prohibited by this Agreement so long as any Inventory or Accounts of Borrower subject to such Liens are reported as ineligible on the relevant Borrowing Base Certificate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the Rolex Canada Liens and any Liens in favor of Rolex Canada Ltd. to the extent constituting valid and Purchase Money Liens in accordance with Applicable Law and subject to the Rolex Canada Subordination Agreement, to the extent applicable,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) Liens securing the Quebec Subordinated Debt permitted pursuant to paragraph (d) of the definition of Permitted Indebtedness, provided that such Liens shall, at all times be, subordinate and junior in priority to the Liens securing the Obligations pursuant to the Quebec Subordination Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(z)</u> <u>[reserved],</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(aa)</u> (z) Liens securing the Permitted Indebtedness described in paragraph (i) of the definition thereof provided that such Liens shall, at all times, be subordinate and junior in priority to the Liens securing the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(bb)</u> (aa) Liens on Permitted Factoring Facility Accounts securing a Permitted Factoring Facility; and

"<u>Permitted Protest</u>" means the right of Borrower or any of its Subsidiaries to protest any Lien (other than any Lien that secures some or all of the Obligations), Taxes (other than payroll Taxes or remittances or Taxes that are the subject of a requirement to pay issued by a Canadian Governmental Authority), or rental payment, <u>provided</u> that (a) a reserve with respect to such obligation is established on Borrower's or the applicable Subsidiary's books and records in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by Borrower or the applicable Subsidiary, as applicable, in good faith, and (c) Agent is reasonably satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent's Liens.

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"<u>Permitted Purchase Money Indebtedness</u>" means, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred after the Closing Date and at the time of, or within 30 days after, the acquisition of any personal property (other than Inventory) for the purpose of financing all or any part of the acquisition cost thereof, in an aggregate principal amount outstanding at any one time not in excess of the amount permitted under paragraph (g) of the definition of Permitted Indebtedness.

"<u>Permitted Sale Leaseback Transactions</u>" means Sale Leaseback Transactions that constitute Permitted Indebtedness pursuant to paragraph (g) of the definition of Permitted Indebtedness.

"<u>Permitted Store Closings</u>" means the closing of (i) four (4) retail locations, net of any locations opened, of the Loan Parties in the aggregate in any calendar year, and (ii) four (4) temporary retail locations, to the extent opened by the Loan Parties and closed within six (6) months of such opening, in the aggregate in any calendar year.

"<u>Person</u>" means natural persons, corporations, limited liability companies, unlimited liability corporations, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

"<u>Platform</u>" has the meaning specified therefor in <u>Section 17.8(c)</u> of the Agreement.

"<u>PLCW Accounts</u>" means Accounts due on the private label credit card programs and all Accounts due from corporate sales receivables and wholesale receivables, in each case, of Borrower, which (a) are from an Account Debtor acceptable to Agent in its Permitted Discretion and (b) are determined by Agent in its Permitted Discretion to be eligible for inclusion in Eligible Accounts in an amount reflecting Agent's estimate of the net recovery on such Accounts on a forced liquidation basis, based upon the most recent appraisal of such Accounts undertaken at the request of Agent.

"<u>PPSA</u>" means the Personal Property Security Act (Ontario) and the regulations thereunder, as from time to time in effect; <u>provided</u>, <u>however</u>, if attachment, perfection or priority of Agent's Lien on any Collateral are governed by the personal property security laws of any jurisdiction in Canada other than the laws of the Province of Ontario, "PPSA" means those personal property security laws in such other jurisdiction in Canada (including the Civil Code of Quebec) for the purposes of the provisions hereof relating to such attachment, perfection or priority and for the definitions related to such provisions.

"<u>Pricing Date</u>" means, for any Fiscal Quarter of the Borrower ending on or after December 31, 2021, the first day of the next calendar month following the date that is five (5) Business Days after the date on which the Agent is in receipt of the Borrower's most recently delivered Compliance Certificate delivered pursuant to Section 5.1 for such Fiscal Quarter.

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"<u>Projections</u>" means Borrower's forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a basis consistent with Borrower's historical financial statements, together with appropriate supporting details and a statement of underlying assumptions, together with projections of monthly Excess Availability for the relevant period.

"<u>Pro Rata Share</u>" means, as of any date of determination:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to a Lender's obligation to make all or a portion of the Term Loan, with respect to such Lender's right to receive payments of interest, fees, and principal with respect to the Term Loan, and with respect to all other computations and other matters related to the Commitments or the Term Loan, the percentage obtained by dividing (i) the Term Loan Exposure of such Lender by (ii) the aggregate Term Loan Exposure of all Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to all other matters and for all other matters as to a particular Lender (including the indemnification obligations arising under <u>Section 15.6</u> of the Agreement), the Canadian Dollar Equivalent of the percentage obtained by dividing (i) the sum of the Term Loan Exposure of such Lender by (ii) the sum of the aggregate Term Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to Section 13.1; <u>provided</u>, that if the term<u>Term</u> Loan has been repaid in full, and the Commitments have been terminated, Pro Rata Share under this clause shall be determined as if the Term Loan Exposures had not been repaid, collateralized, or terminated and shall be based upon the Term Loan Exposures as they existed immediately prior to their repayment, collateralization, or termination.

"<u>Protective Advances</u>" has the meaning specified therefor in Section 2.2(c) of the Agreement.

"<u>Public Lender</u>" has the meaning specified therefor in <u>Section 17.8(c)</u> of the Agreement.

"<u>Purchase Money Lien</u>" means a Lien taken or reserved in personal property to secure payment of related Permitted Purchase Money Indebtedness, provided that such Lien (i) secures an amount not exceeding the lesser of the purchase price of such personal property and the fair market value of such personal property at the time such Lien is taken or reserved, (ii) extends only to such personal property and its proceeds, and (iii) is granted prior to or within 30 days after the purchase of such personal property.

"<u>Qualified Equity Interests</u>" means and refers to any Equity Interests issued by Borrower (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

"<u>Quebec Security Documents</u>" means, any hypothecs and all other security documents governed by the laws of the Province of Quebec, each in form and substance reasonably satisfactory to Agent, executed and delivered by a Loan Party to the Agent to secure the Obligations, and each as amended, restated, supplemented or modified from time to time.

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"<u>Quebec Subordinated Debt</u>" means collectively, (i) all Indebtedness owing to Investissement Québec under the Quebec Subordinated Debt Documents in the original aggregate maximum principal amounts of $10,000,000 and $4,300,000, respectively, which Indebtedness shall be subject to the Quebec Subordination Agreement, and (ii) all other Indebtedness owing to Investissement Québec under the Quebec Subordinated Debt Documents or otherwise, in each case, which Indebtedness shall be expressly subordinate to payment in full of the Obligations pursuant to the Quebec Subordination Agreement.

"<u>Quebec Subordinated Debt Documents</u>" means, collectively, (i) (A) that certain Offre de Prêt (Loan Offer) from Investissement Québec to Borrower dated June 11, 2020, in respect of a term loan in the original maximum principal amount of $10,000,000 as amended by a letter dated February 18, 2021 from Investissement Québec to Borrower and (B) that certain Offre de Prêt (Loan Offer) from Investissement Québec to Borrower dated February 23, 2021, in respect of a term loan in the original maximum principal amount of $4,300,000, and, in each case, all security and other accessory documents or instruments thereto at any time, and subject at all times to the Quebec Subordination Agreement, (ii) the Quebec Subordinated Security; and (iii) all other agreements, documents and instruments evidencing all or any portion of the Quebec Subordinated Debt, and subject at all times to the Quebec Subordination Agreement, in each case as the same may be modified, amended, supplemented or restated with the prior written consent of the Agent.

"<u>Quebec Subordinated Security</u>" means (a) the hypothecs dated on or about July 2, 2020 and June 18, 2021, respectively, granted by the Borrower in favour of Investissement Québec; and (b) any other present and future security, security interests, hypothecs, mortgages, prior claims, liens or charges affecting any of the Loan Parties' assets, or any part thereof, now or hereafter held by or for the account of Investissement Québec as security for the Quebec Subordinated Debt created after the date hereof with the consent of the Agent, which security shall at all times be subordinated to the security granted by the Loan Parties under the Canadian Security Documents.

"<u>Quebec Subordination Agreement</u>" means the amended and restated subordination agreement dated as of August 31, 2021 between the Borrower, Investissement Québec, the Revolving Agent and the Agent, as the same may hereafter be amended, restated, supplemented or otherwise modified with the consent of Agent.

"<u>Real Property</u>" means any estates or interests in real property now owned or hereafter acquired by Borrower or one of its Subsidiaries and the improvements thereto.

"<u>Real Property Collateral</u>" means (a) the Real Property identified on <u>Schedule R-1</u> to the Agreement and (b) any Real Property hereafter acquired by any Loan Party with a fair market value in excess of $500,000.

"<u>Receivable Reserves</u>" means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.2(b), to establish and maintain (including reserves for Taxes, rebates, discounts, warranty claims, and returns) with respect to the Eligible Accounts.

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"<u>Record</u>" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

"<u>Refinancing Indebtedness</u>" means refinancings, renewals, or extensions of Indebtedness so long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.

"<u>Register</u>" has the meaning set forth in Section 13.1(h) of the Agreement.

"<u>Registered Loan</u>" has the meaning set forth in Section 13.1(h) of the Agreement.

"<u>Related Fund</u>" means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

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"<u>Related Real Property Documents</u>" means with respect to any Real Property subject to a Mortgage entered into by any Loan Party, the following, in form and substance reasonably satisfactory to the Agent and, in the case of a Mortgage entered into by any Loan Party after the date hereof, received by the Agent for review at least 15 days prior to the effective date of the Mortgage (or such shorter length of time acceptable to the Agent in its reasonable discretion): (a) a mortgagee title policy (or binder therefor) covering the Agent's interest under the Mortgage, in a form and amount and by an insurer reasonably acceptable to the Agents<u>Agent</u>, which must be fully paid on such effective date; (b) such assignments of leases, rents, estoppel letters, attornment agreements, consents, waivers and releases as any Agent may require with respect to other Persons having an interest in the Real Property; (c) if otherwise in the possession of a Loan Party, a current, as-built survey of the Real Property, containing a metes-and-bounds property description and if the Real Property is located in the United States, flood plain certification, and certified by a licensed surveyor reasonably acceptable to the Agents<u>Agent</u> ; (d) flood insurance in an amount, with endorsements and by an insurer reasonably acceptable to the Agents<u>Agent</u> , if the Real Property is within a flood plain; (e) a current appraisal of the Real Property, prepared by an appraiser reasonably acceptable to the Agents<u>Agent</u>; (f) a Phase I (and to the extent appropriate, Phase II) environmental assessment report, prepared by an environmental consulting firm reasonably satisfactory to the Agents<u>Agent</u>, and accompanied by such reports, certificates, studies or data as the Agents<u>Agent</u> may reasonably require, which shall all be in form and substance reasonably satisfactory to the Agents<u>Agent</u> ; and (g) an Environmental Agreement and such other documents, instruments or agreements as the Agents<u>Agent</u> may reasonably require with respect to any environmental risks regarding the Real Property. "<u>Remedial Action</u>" means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.

"<u>Relevant Governmental Body</u>" means the Bank of Canada, or a committee officially endorsed or convened by the Bank of Canada, or any successor thereto

"<u>Replacement Lender</u>" has the meaning specified therefor in <u>Section 2.2(f)</u> of the Agreement.

"<u>Report</u>" has the meaning specified therefor in <u>Section 15.15</u> of the Agreement.

"<u>Required Lenders</u>" means, at any time, Lenders having or holding more than 50% of the Term Loan Exposure of all Lenders; <u>provided</u>, that the Term Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Required Lenders; provided further that, at any time there are two (2) or more non-Affiliate Lenders, the Required Lenders shall be comprised of at least two (2) non-Affiliate Lenders.

"<u>Reserves</u>" means, as of any date of determination, those reserves (other than Receivable Reserves, Loan to Value Reserves, Bank Product Reserves (as defined in the Revolving Credit Agreement), Inventory Reserves and Canadian Priority Payable Reserves) that Agent deems necessary or appropriate, in its Permitted Discretion and subject to <u>Section</u> 2.1<u>2.2</u><u>(</u>c<u>b</u> <u>)</u>, to establish and maintain (including reserves with respect to (a) sums that Borrower or any of its Subsidiaries are required to pay under any Section of the Agreement or any other Loan Document (such as Taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (b) currency fluctuations, (c) gift cards, gift certificates and customer deposits, and (d) amounts owing by Borrower or any of its Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien, trust or deemed trust, in the Permitted Discretion of Agent likely would have a priority superior to the Agent's Liens (such as Liens, trusts or deemed trust in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other Taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the Borrowing Base.

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"<u>Restricted Payment</u>" means to (a) declare or pay any dividend or make any other payment or distribution, directly or indirectly, on account of Equity Interests issued by Borrower or any Subsidiary thereof (including any payment in connection with any merger, amalgamation or consolidation involving Borrower or such Subsidiary) or to the direct or indirect holders of Equity Interests issued by Borrower in its capacity as such (other than dividends or distributions payable in Qualified Equity Interests issued by Borrower) now or hereafter outstanding, except a dividend payable solely in shares of that class of Equity Interests to the holders of that class, or (b) purchase, redeem, make any sinking fund or similar payment, or otherwise acquire or retire for value (including any payment in connection with any merger, amalgamation or consolidation involving Borrower), directly or indirectly, any Equity Interests issued by Borrower now or hereafter outstanding, (c) make any payment to retire, or to obtain the surrender of, any outstanding warrants, options, or other rights to acquire Equity Interests of Borrower now or hereafter outstanding, (d) any payment or prepayment of Indebtedness by the Loan Parties or their Subsidiaries to the Loan Parties' or any Subsidiary's shareholders (or other equity holders) unless such shareholder is a Loan Party, (e) derivatives or other transactions with any financial institution, commodities or stock exchange or clearinghouse (a "<u>Derivatives Counterparty</u>") obligating the Borrower or any Subsidiary to make payments to such Derivatives Counterparty as a result of any change in market value of any Equity Interests of the Borrowers or such Subsidiary now or hereafter outstanding, (f) any payments on account of management, consulting or similar fees or any success fees (including, without limitation, the Management Debt).

"<u>Restricted Payment Conditions</u>" means (a) Excess Availability at all times during the 30 day period ending on the date of such Restricted Payment is greater than 40% of the Credit Cap (or, if the Fixed Charge Condition is satisfied, 25% of the Credit Cap), (b) after giving effect to a Restricted Payment, incurrence of Permitted Indebtedness described in paragraph (i) of the definition thereof or a Permitted Acquisition (each, a "Payment Event"), Excess Availability is greater than 40% of the Credit Cap (or, if the Fixed Charge Condition is satisfied, greater than 25% of the Credit Cap), (c) projected Excess Availability at all times during the 6-month period following the date of such Payment Event is greater than 40% of the Credit Cap (or, if the Fixed Charge Condition is satisfied, greater than 25% of the Credit Cap) (in each case after giving effect to such Payment Event and as set forth in Excess Availability projections delivered by Borrower to, and satisfactory to, Agent), (d) no Default or Event of Default then exists or would (after taking into consideration the payment to be made) result therefrom, and (e) not less than five (5) days prior to such payment, the Borrower shall have delivered to the Agent a certificate certifying, and providing appropriate calculations, as to the matters set forth in clauses (a) through (d) above.

"<u>Restructuring and Integration Costs</u>" means business optimization expenses and other restructuring and integration charges (including, without limitation, the costs associated with business optimization programs, including costs of consultants, relocation and recruiting expenses, back office closures, retention costs, severance costs and system establishment costs) in connection with any Permitted Acquisition after the closing date of such Permitted Acquisition through the first anniversary of the closing date of such Permitted Acquisition.

"<u>Revolver Usage</u>" means, as of any date of determination, the sum of (a) the amount of outstanding Revolving Loans (inclusive of Swing Loans (as such term is defined in the Revolving Credit Agreement)) and Protective Advances (as such term is defined in the Revolving Credit Agreement), plus (b) the amount of the Letter of Credit Usage.

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"<u>Revolving Agent</u>" means the "Administrative Agent", as defined in the Revolving Credit Agreement.

"<u>Revolving Borrowing Capacity</u>" means the "Excess Availability", as defined in the Revolving Credit Agreement.

"<u>Revolving Credit Agreement</u>" means the Amended and Restated Credit Agreement dated as of December 23, 2021, by and between, among others, Wells Fargo Capital Finance Corporation Canada, as administrative agent, the Revolving Lenders party thereto from time to time, as lenders, and the Borrower, as borrower, as same may be amended on the date hereof and as further amended from time to time hereafter to the extent permitted hereunder and in accordance with the Intercreditor Agreement.

"<u>Revolving Lenders</u>" means the agents and the lenders under the Revolving Credit Agreement and the other Revolving Loan Documents.

"<u>Revolving Loans</u>" means the credit extensions (including, without limitation, the "Loans" (as defined in the Revolving Credit Agreement) provided to the Borrower by the Revolving Lenders under the Revolving Loan Documents.

"<u>Revolving Loan Debt</u>" means all "Obligations" (as defined in the Revolving Credit Agreement) owing to the Revolving Secured Parties under the Revolving Loan Documents.

"<u>Revolving Loan Documents</u>" means the "Loan Documents" under and as defined in the Revolving Credit Agreement.

"<u>Revolving Secured Parties</u>" means the "Secured Parties", as defined in the Revolving Credit Agreement.

"<u>RM JV</u>" means RMBG Retail Vancouver ULC, an unlimited liability company incorporated under the laws of British Columbia.

"<u>RM JV Agreement</u>" means that certain Shareholders Agreement, dated as of April 16, 2021, by and among JV Partner, JV Holdco and the RM JV, as the same may be modified, amended, supplemented or restated in accordance with Section 6.6(b)(i) or with the prior written consent of the Agent.

"<u>Rolex Canada Collateral</u>" means Collateral of Borrower consisting of Rolex, Tudor and Cellini watches, watchbands, parts and other accessories now or hereafter sold by Rolex Canada Ltd. to Borrower, and all other new Rolex, Tudor and Cellini watches, watch bands, parts and other accessories hereinafter held by Borrower and all cash proceeds of any of the foregoing, including insurance proceeds (but specifically excluding accounts receivable), together with all rights and property of every kind at any time in the possession or control of Rolex Canada Ltd., or any of its agents, or in transit to it, belonging to, for the account of, or subject to the order of such Borrower.

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"<u>Rolex Canada Documents</u>" means collectively, (i) the Official Rolex Retailer Agreement dated as of June 6, 2017 between Rolex Canada Ltd. and Borrower, (ii) the Official Rolex Retailer Agreement dated as of June 6, 2017 between Rolex Canada Ltd. and Borrower (carrying on business as Brinkhaus), (iii) the Official Tudor Reseller Agreement dated as of June 6, 2017 between Rolex Canada Ltd. and Borrower, and (iv) the Rolex Canada Security Agreement.

"<u>Rolex Canada Liens</u>" means Liens on the Rolex Canada Collateral granted in favor of Rolex Canada Ltd. pursuant to the Rolex Canada Security Agreement provided that such Liens are subject to the Rolex Canada Subordination Agreement.

"<u>Rolex Canada Security Agreement</u>" means collectively, all security agreements, if any, entered into between the Canadian Borrower and Rolex Canada Ltd. pursuant to Section 3.04 of the Rolex Canada Document described in clause (i) of the definition thereof, which security agreements shall be on terms and conditions satisfactory to Agent and the Required Lenders.

"<u>Rolex Canada Subordination Agreement</u>" means the subordination provisions of the Rolex Canada Security Agreement, which shall be on terms and conditions satisfactory to Agent and the Required Lenders, and affirmed by Rolex Canada Ltd. pursuant to an acknowledgement letter in form and substance satisfactory to Agent and the Required Lenders, and addressed to the Agent from Rolex Canada Ltd. and acknowledged by Borrower.

"<u>Sale Leaseback Transactions</u>" means sales of any fixed or capital assets acquired after the Closing Date by any Loan Party or any Subsidiary: (w) that are made for cash consideration in an amount not less than the fair value of such fixed or capital assets and are consummated within 180 days after such Loan Party or such Subsidiary completes the capital expenditure project for the relevant store or corporate initiative which involved the acquisition or construction of such fixed or capital assets, (x) in respect of which such fixed or capital assets are not assets included in the computation of Borrowing Base, (y) in respect of which the proceeds shall be applied (i) until payment in full of the Revolving Loan Debt, to the Revolving Loan Debt as the case may be, and (ii) thereafter, if requested by the Agent, the Term Loan and (z) in respect of which such fixed or capital assets are immediately thereafter leased back to the applicable Loan Party or Subsidiary through a Capital Lease, provided that for certainty, the fixed or capital assets subject to such sales shall not include Inventory or Accounts and shall be limited to the furniture, fixtures and equipment (as such term is defined in the PPSA), including information technology equipment, of any Loan Party or any Subsidiary which are located at a retail location or the chief executive office of any Loan Party or any Subsidiary.

"<u>Sanctioned Entity</u>" means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, or (d) a Person resident in or determined to be resident in a country, in each case of clauses (a) through (d) that is itself a target of Sanctions.

"<u>Sanctioned Person</u>" means, at any time (a) any Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC's consolidated Non-SDN list or any other Sanctions-related list maintained by any relevant Sanctions authority, (b) a Person or legal entity that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Country, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf of any such Person or Persons described in clauses (a) through (c) above.

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"<u>Sanctions</u>" means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury, the U.S. Department of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) the United Nations Security Council, (c) the European Union or any European Union member state, (d) Her Majesty's Treasury of the United Kingdom, or (e) any other Governmental Authority with jurisdiction over any member of Lender Group or any Loan Party or any of their respective Subsidiaries or Affiliates.

"<u>S&P</u>" has the meaning specified therefor in the definition of Cash Equivalents.

"<u>SEC</u>" means the United States Securities and Exchange Commission and any successor thereto.

"<u>Secured Hedging Agreement</u>" means any Hedge Agreement that is entered into by and between Borrower and any Hedge Provider that constitutes Permitted Indebtedness hereunder and is secured by the Revolving Agent's Liens.

"<u>Secured Hedging Obligations</u>" means all Indebtedness and other obligations of Borrower arising under, or otherwise with respect to, any Secured Hedging Agreement.

"<u>Securities Account</u>" means a securities account (as that term is defined in the PPSA).

"<u>Securities Act</u>" means the *Securities Act* of 1933, as amended from time to time, and any successor statute.

"<u>Senior Officer</u>" means the chairman of the board, president, chief executive officer, treasurer or chief financial officer, Senior Director, Finance or Director, Financial Planning and Reporting of a Borrower or, if the context requires, a Loan Party.

<u>"Seventh Amendment" means that certain Amendment No. 7 to the Credit Agreement, dated as of the Seventh Amendment Effective Date, by and among Borrower, Agent, and the Lenders party thereto.</u> 

<u>"Seventh Amendment Effective Date" has the meaning specified therefor in the Seventh Amendment.</u>

<u>"Seventh Amendment Fee Letter" means that certain fee letter, dated as of the Seventh Amendment Effective Date, between Borrower and Agent, in form and substance reasonably satisfactory to Agent, as amended, restated or supplemented from time to time.</u>

<u>"Seventh Amendment Seller Notes" means, collectively, (i) that certain Promissory Note dated as of the Seventh Amendment Effective Date, made by Borrower in favor of Jordan Sutkiewicz, as agent for and on behalf of Lynn Sutkiewicz, Eric Sutkiewicz, Sutkiewicz Children's Trust, Jordan Sutkiewicz and Michelle Ceresney, in a principal amount of $1,000,000 payable on</u> <u>July 8, 2026 and (ii) that certain Promissory Note dated as of the Seventh Amendment Effective Date, made by Borrower in favor of Jordan Sutkiewicz, as agent for and on behalf of Lynn Sutkiewicz, Eric Sutkiewicz, Sutkiewicz Children's Trust, Jordan Sutkiewicz and Michelle Ceresney, in a principal amount of $95,779 payable on July 8, 2027, each in respect of the Seventh Amendment Store Acquisitions and on terms (including subordination terms) acceptable to the Agent.</u>

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<u>"Seventh Amendment Store Acquisitions" has the meaning specified therefor in the Seventh Amendment.</u>

<u>"Seventh Amendment Term Loan Commitment" means, as to each Term Lender, its obligation to make a Seventh Amendment Term Loan to the Borrower pursuant to Section 2.1(b) in an aggregate amount of $13,500,000.</u>

<u>"Seventh Amendment Term Loan Lender" means each Lender that has a Seventh Amendment Term Loan Commitment or that holds a Seventh Amendment Term Loan.</u>

<u>"Seventh Amendment Term Loan" has the meaning specified therefor in Section 2.1(b) of this Agreement.</u>

"<u>Sixth Amendment Effective Date</u>" means June 26, 2024.

"<u>SLR Credit Solutions</u>" means Crystal Financial LLC d/b/a SLR Credit Solutions.

"<u>Solvent</u>" means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Person's debts (including contingent liabilities) is less than all of such Person's assets, (b) such Person is not engaged or about to engage in a business or transaction for which the remaining assets of such Person are unreasonably small in relation to the business or transaction or for which the property remaining with such Person is an unreasonably small capital, and (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is "solvent" or not "insolvent", as applicable within the meaning given those terms and similar terms under applicable Insolvency Law or other laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

"<u>Spot Rate</u>" means, for a currency, the rate determined by Agent to be the rate quoted by the Revolving Agent as the spot rate for the purchase by the Revolving Agent of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. (New York time) on the date two Business Days prior to the date as of which the foreign exchange computation is made; <u>provided</u>, that Agent may obtain such spot rate from another financial institution designated by Agent if the Revolving Agent does not have as of the date of determination a spot buying rate for any such currency.

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"<u>STA</u>" means an Act Respecting the Transfer of Securities and the Establishment of Security Entitlements (Quebec) or to the extent applicable, comparable legislation in other Canadian provinces.

"<u>Subject Permitted Acquisition</u>" has the meaning specified therefor in the definition of "Permitted Dispositions".

"Subordinated Debt" means collectively, the Management Debt, the Quebec Subordinated Debt, the Montrovest Debt and any Additional Subordinated Debt.

"<u>Subordination Agreements</u>" means collectively, the Management Subordination Agreement, the Quebec Subordination Agreement, the Rolex Canada Subordination Agreements, the Montrovest Subordination Agreement<u>, the Mangrove Subordination Agreement,</u> and any other subordination agreement entered into by or among any Loan Party, any subordinated creditor and Agent, in form, scope and substance satisfactory to the Agent and the Required Lenders.

"<u>Subsidiary</u>" of a Person means a corporation, partnership, limited liability company, unlimited liability corporation, or other entity in which that Person directly or indirectly owns or controls the Equity Interests having ordinary voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability company, or other entity.

"<u>Supermajority Lenders</u>" means, at any time, Lenders having or holding more than 66 2/3% of the sum of the aggregate Canadian Dollar Equivalent of the Term Loan Exposure of all Lenders; <u>provided</u>, that the Term Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Lenders.

"<u>Taxes</u>" means any Taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.

"<u>Tax Lender</u>" has the meaning specified therefor in <u>Section 14.2(a)</u> of the Agreement.

"<u>Term CORRA</u>" means, for any applicable month, with respect to any portion of the Term Loan, the rate per annum quoted as the 90-day "CORRA" published by the Term CORRA Administrator as of 10:00 a.m. Eastern (Toronto) time, two (2) Business Days prior to the Sixth Amendment Effective Date and each Interest Payment Date thereafter for any subsequent month. Each determination of Term CORRA shall be made by the Agent and shall be conclusive in the absence of manifest error.

"<u>Term CORRA Adjustment</u>" means a percentage equal to 0.32138% per annum.

"<u>Term CORRA Administrator</u>" means the Bank of Canada, CanDeal Benchmark Administration Services Inc. or, in the reasonable discretion of Agent, TSX Inc. or an affiliate of TSX Inc. as the publication source of the Term CORRA benchmark, or any other commercially available service selected by Agent in its reasonable discretion.

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"<u>Term CORRA Reference Rate</u>" means the forward-looking term rate based on CORRA.

"<u>Termination Date</u>" means, the earliest to occur of (i) the Maturity Date, (ii) the date on which the maturity of the Term Loan is accelerated in accordance with <u>Article 9</u>, and (iii) the date of the occurrence of an Event of Default pursuant to <u>Sections 8.4</u> or <u>8.5</u>.

"<u>Term Loan Exposure</u>" means, with respect to any Lender, as of any date of determination (a) prior to the termination of the Commitments, the amount of such Lender's Commitment, and (b) after the termination of the Commitments, the aggregate outstanding principal amount of the Term Loan of such Lender.

"<u>Term Loan</u>" has the meaning specified therefor in Section 2.1<u>(b)</u> of the Agreement.

"<u>Total Outstandings</u>" means the aggregate principal balance of the Term Loan owing to all Lenders.

"<u>Unadjusted Benchmark Replacement</u>" means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

"<u>United States</u>" means the United States of America.

"<u>US Divestiture</u>" means the sale of all of the shares of Mayor's Jewelers, Inc., by Borrower pursuant to the US Divestiture Agreements.

"<u>US Divestiture Agreements</u>" means, collectively, the US Stock Purchase Agreement, the Transition Services Agreement (as defined in the US Stock Purchase Agreement) and the other agreements, instruments and documents relating thereto and evidencing the US Divestiture.

"<u>US Dollars</u>" or "<u>US$</u>" means United States dollars.

"<u>US Stock Purchase Agreement</u>" means that certain Stock Purchase Agreement entered into as of August 11, 2017 by and between Aurum Holdings Ltd. and Birks Group Inc. for the purchase of all shares of capital stock of Mayor's Jewelers, Inc.

"<u>Voidable Transfer</u>" has the meaning specified therefor in <u>Section 17.7</u> of the Agreement.

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<u>Exhibit B</u> 

<u>Supplemental Schedule C-1 and Restated Schedule 5.1 to the Existing Credit Agreement</u> 

[Attached]

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**<u>Schedule C-1</u>**

**<u>COMMITMENTS</u>** 

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;**<u>LENDER</u>** | **<u>SEVENTH AMENDMENT TERM<br>TERM LOAN COMMITMENT</u>** | **<u>PRO RATA SHARE</u>** |
| &nbsp;&nbsp;&nbsp;CRYSTAL FINANCIAL SPV LLC | CDN $13,500,000.00 | 100% |
| &nbsp;&nbsp;&nbsp;**ALL LENDERS** | **CDN $13,500,000.00** | **100%** |

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**<u>Schedule 5.1</u>**

**<u>FINANCIAL STATEMENTS, REPORTS, CERTIFICATES</u>**

Deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the financial statements, reports, or other items set forth below at the following times in form satisfactory to Agent:<sup>1</sup>

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| | |
|:---|:---|
| &nbsp;&nbsp; as soon as available, but in any event within 30 days after the end of each Fiscal Month during Borrower's Fiscal Year, | (a) an unaudited consolidated balance sheet, income statement, statement of cash flow, covering Borrower's and its Subsidiaries' operations during such period and compared to the prior period (including monthly and year-to-date comparisons for such period) and plan, together with a corresponding discussion and analysis of results from management for its semi-annual and annual reports, and<br> (b) a Compliance Certificate along with the underlying calculations, including the calculations to arrive at Excess Availability, Fixed Charge Coverage Ratio and Modified Fixed Charge Coverage Ratio. |
| &nbsp;&nbsp; as soon as available but in any event 45 days after the end of each Fiscal Quarter during Borrower's Fiscal Year, | (c) a high level summary of drivers of performance during such Fiscal Quarter. |
| &nbsp;&nbsp; as soon as available, but in any event within 120 days after the end of Borrower's Fiscal Year, | (d) consolidated financial statements of Borrower and its Subsidiaries for each such Fiscal Year, audited by independent certified public accountants reasonably acceptable to Agent and certified, without any qualifications (including any (i) "going concern" or like qualification or exception, (ii) qualification or exception as to the scope of such audit, or (iii) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 7 of the Agreement), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, statement of cash flow, and statement of shareholder's equity, and, if prepared, such accountants' letter to management), and<br>|
|  | (e) a Compliance Certificate along with the underlying calculations, including the calculations to arrive at Excess Availability, Fixed Charge Coverage Ratio and Modified Fixed Charge Coverage Ratio. |

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1 Note: Financial statements to be presented in CAD and for so long as Borrower is publicly listed in the United States, USD for the semi-annual and annual financial statements.

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| | |
|:---|:---|
| &nbsp;&nbsp; as soon as available, but in any event within 30 days after the start of Borrower's Fiscal Year, | (f) copies of Borrower's Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to Agent, in its Permitted Discretion[, for the forthcoming three years, year by year, and for the forthcoming Fiscal Year, month by month, certified by a Financial Officer of Borrower as being such officer's good faith estimate of the financial performance of Borrower and its Subsidiaries during the period covered thereby, including projected Excess Availability for the relevant period, together with a corresponding discussion and analysis of results from management (including assumptions used in the Projections). |
| &nbsp;&nbsp; promptly, but in any event within 5 Business Days after a Financial Officer or the Borrower's General Counsel has knowledge of any event or condition that constitutes a Default or an Event of Default, | (g) notice of such event or condition and a statement of the curative action that Borrower proposes to take with respect thereto (including, without limitation, in respect of any default under a Seventh Amendment Seller Note). |
| &nbsp;&nbsp; promptly after the commencement thereof, but in any event within 5 Business Days after the service of process with respect thereto on Borrower or any of its Subsidiaries, | (h) notice of all actions, suits, or proceedings brought by or against Borrower or any of its Subsidiaries before any Governmental Authority which reasonably could be expected to result in a Material Adverse Effect. |
| &nbsp;&nbsp; within 30 days after the end of each Fiscal Month during Borrower's Fiscal Year, | (i) a certification by a senior officer of Borrower, in form and substance reasonably satisfactory to Agent (i) that all rent payments of Borrower and its Subsidiaries have been made, (ii) that no lease defaults exist for such period, (iii) as to the amount of outstanding consignment accounts payable for such calendar month and the book value determined in accordance with GAAP of Inventory held on a consignment basis and (iv) describing the long-term debt of Borrower and its Subsidiaries as of the end of such calendar month. |

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| | |
|:---|:---|
| &nbsp;&nbsp; promptly upon receipt or dispatch thereof, or entry into, | (j) any consignment arrangement (whether such consignment arrangement is documented or otherwise) in which Borrower or any of its Subsidiaries acts as a consignee, notify Agent in writing of such consignment arrangement, specifying the consignor, the consignee and true, complete and accurate copies of such consignment agreement and any amendments, modifications, supplements, waivers or other modifications thereto as well as at the request of Agent, all related documents. |
| &nbsp;&nbsp; promptly upon the request of Agent, | (k) a calculation of the aggregate Hedge Termination Value of all Secured Hedging Obligations, and<br> (k) any other information reasonably requested relating to the financial condition of Borrower or its Subsidiaries. |

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## Exhibit 4.33

**Exhibit 4.33** 

**SECOND AMENDMENT & WAIVER TO** 

**AMENDED AND RESTATED CREDIT AGREEMENT** 

SECOND AMENDMENT & WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 8, 2025 (this "***Amendment***"), by and among BIRKS GROUP INC., a federal Canadian corporation (the "***Borrower***"), CASH, GOLD & SILVER INC., as guarantor, BIRKS INVESTMENTS INC., as guarantor (collectively, the "***Guarantors***") and WELLS FARGO CAPITAL FINANCE CORPORATION CANADA., as administrative agent (in such capacity, the "***Agent***") for the Lenders and the Lenders that are parties thereto.

W I T N E S S E T H:

WHEREAS, the Borrower, each lender from time to time party thereto (the "***Lenders***") and the Agent have entered into that certain Amended and Restated Credit Agreement dated as of December 24, 2021, as amended June 26, 2024 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the "***Credit Agreement***", and as amended by this Amendment on the Effective Date (as defined below), the "***Amended Credit Agreement***") (capitalized terms not otherwise defined in this Amendment have the same meanings assigned thereto in the Amended Credit Agreement);

WHEREAS, the Borrower has advised Agent that it has entered into that certain Share Purchase Agreement dated as of June 6, 2025 by and among the Borrower, the Persons listed in Exhibit A thereto, as "Vendors" and Jordan Sutkiewicz, as "Vendors' Representative" (the "***SPA***"), pursuant to which the Borrower will acquire, directly and indirectly, several corporations (collectively, the "***Target Entities***") which operate certain retail stores in the Toronto area as described therein (the "***Store Acquisitions***");

WHEREAS, the Borrower, Agent and Lenders party hereto agree that certain conditions required by the definition of "Permitted Acquisition" will not be satisfied with respect to the Store Acquisitions;

WHEREAS, the Borrower and the other Loan Parties have requested certain amendments and waivers to the Credit Agreement as set forth in this Amendment and the Agent, and the Lenders, have agreed to such amendments and waivers, subject to the terms and conditions of this Amendment.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. <u>Amendments</u> <u>& Waivers to the Credit Agreement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Credit Agreement (including, for certainty, Schedule 1.1 of the Credit Agreement) is hereby amended by deleting the stricken text (indicated textually in the same manner as the following example: stricken text) and by adding the double-underlined text (indicated textually in the same manner as the following example: <u>double-underlined text</u>) as set forth in the pages of <u>Exhibit A</u> attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Credit Agreement is hereby amended by replacing Exhibit B-1 of the Credit Agreement with the Borrowing Base Certificate attached hereto as <u>Exhibit B</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Credit Agreement is hereby amended by replacing Schedule 5.1 of the Credit Agreement with the new Schedule 5.1 attached hereto as <u>Exhibit C</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Agent, at the request of the Required Lenders, hereby waives the provisions of Section 6.9 of the Credit Agreement to the extent necessary, and only to such extent, to permit the Borrower to complete the transactions contemplated by the SPA and the Store Acquisitions. The foregoing waiver shall be effective only in this instance and shall not be deemed to be a waiver of compliance in the future or a waiver of any preceding or succeeding breach of the same or any other covenants or other provisions of the Amended Credit Agreement.

SECTION 2. Representations and Warranties. By its execution of this Amendment, each of the Borrower and other Loan Parties hereby represents and warrants to the Agent and the Lenders that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the execution, delivery and performance of this Amendment are within such Borrower's and other Loan Parties' corporate or other organizational powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (i) contravene the terms of any of such Person's organizational documents; (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than any Lien to secure the Obligations pursuant to the Loan Documents), or require any payment to be made under (A) any Permitted Indebtedness, (B) any other contractual obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (C) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (iii) violate any law; except with respect to any conflict, breach, contravention or payment referred to in <u>clause</u><u>s</u> <u>(</u><u>ii</u><u>)(</u><u>B</u><u>)</u> and <u>(</u><u>ii</u><u>)(</u><u>C</u><u>)</u>, to the extent that such conflict, breach, contravention or payment could not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) this Amendment has been duly executed and delivered by the Borrower and each of the other Loan Parties and constitutes a legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, except as such enforceability may be limited by bankruptcy insolvency, reorganization, receivership, moratorium or other laws affecting creditors' rights generally and by general principles of equity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (i) the execution, delivery or performance by, or enforcement against, any Loan Party of this Amendment, (ii) the grant by any Loan Party of the Liens granted by it pursuant to the Loan Documents, (iii) the perfection or maintenance of the Liens created under the Loan Documents (including the priority thereof) or (iv) the exercise by the Agent or any Lender of its rights under the Loan Documents or the remedies in respect of the Collateral pursuant to the Loan Documents, except for the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect and those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not reasonably be expected to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the representations and warranties of the Borrower and each other Loan Party contained in Article 4 of the Amended Credit Agreement or any other Loan Document are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date, and except that for purposes of this clause (d), the representations and warranties contained in Section 4.8 of the Amended Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Section 5.1 of the Credit Agreement; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) no Default or Event of Default exists or would result from this Amendment.

SECTION 3. Conditions of Effectiveness of this Amendment. This Amendment shall become effective on the date (the "***Effective Date***") when:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Agent shall have received each of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by an officer or director of the signing Loan Party, each dated as of the Effective Date and each in form and substance reasonably satisfactory to the Agent and its counsel:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. an executed counterpart of this Amendment from the Borrower and each Guarantor, and each Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. an executed counterpart of the Guarantor Acknowledgement attached hereto, from each Guarantor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. an executed counterpart of Canadian Security Agreement from each Loan Party and Target Entity

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. an executed counterpart of the Intercompany Subordination Agreement from each Loan Party, each Target Entity, Birks USA, Inc. and Birks Jewellers Limited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. an executed counterpart of that certain Canadian trademark security agreement from the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. an executed counterpart of that certain Canadian trademark security agreement from each of European & Co. Inc. and 1170760 Ontario Limited; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. an executed counterpart of that certain post-closing undertaking from each Loan Party and Target Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Agent shall have received each of the following in form and substance satisfactory to the Agent and its counsel with respect to the SPA, the transactions contemplated thereby and the Store Acquisitions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. satisfactory evidence that Mangrove has provided a gross amount of $3,750,000 of the Mangrove Debt, prior to
the netting of any related fees and expenses, to the Borrower on the date hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. certified copies of the Mangrove Debt Documents and the Mangrove Subordination Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. a certified copy of the SPA, including all schedules and attachments thereto, in form and substance
satisfactory to Agent, and the Store Acquisitions shall have been consummated on the terms set forth therein as of June 6, 2025 (without any material amendment, waiver, modification or consent under the SPA not consented to by the Agent other
than amendments, waivers, modifications or consents under the SPA, which would not be (in the aggregate) materially adverse to the interests of the Lenders; provided, that any amendment, waiver, consent or other modifications to the definition of
"Material Adverse Effect" or "Material Adverse Change" set forth in the SPA shall be deemed materially adverse to the interests of the Lenders);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. certified executed copies of the Seller Notes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. a certified copy of Amendment No. 7 to the Term Loan Agreement, duly executed and delivered by
Borrower, Term Loan Agent, the Term Loan Lenders and the other parties thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. a fully executed copy of the Intercreditor Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. a fully executed copy of the Second Amendment Fee Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;viii. confirmation of/satisfactory evidence that Section 2.7 of the SPA (as in effect on June 6, 2025)
has been complied with in all respects, and that no Indebtedness of the Target Entities shall be outstanding other than Indebtedness permitted by the SPA and the Amended Credit Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ix. the Agent shall have received a certificate, in form and substance reasonably satisfactory to it, from a
senior officer of the Borrower (with such certification to be in such Person's capacity as a senior officer of the Borrower and not in such Person's individual capacity) certifying that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. after giving effect to this Agreement and the transactions contemplated hereby, (A) each Loan Party is
Solvent; (B) no Default or Event of Default shall have occurred and be continuing on the Effective Date exists, nor shall result from giving effect to the terms of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. the representations and warranties of the Loan Parties or their respective Subsidiaries contained in this
Agreement and in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any portion of any representation and warranty that is already qualified or modified by
materiality in the text thereof) on such date (except to the extent that such representations and warranties relate solely to an earlier date);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. there is no action, suit, investigation or proceeding pending or, to the knowledge of the Loan Parties,
threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. no law or regulation to which any Loan Party is subject is applicable to the transactions contemplated
hereby which could reasonably be expected to have a Material Adverse Effect on any Loan Party or a Material Adverse Effect on the transactions contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e. no Material Adverse Effect shall have occurred as of the Effective Date;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f. the Term Loan Documents shall be in full force and effect and no Default or Event of Default (as therein
defined) shall exist thereunder on the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g. all (i) payments due under leases, other Indebtedness and Taxes are not past due (except to the extent
notified to and approved by Agent prior to the date hereof), excluding any good faith disputes and (ii) accounts payable are not past due (except to the extent (x) within historical norms or (y) notified to and approved by Agent prior
to the date hereof), excluding any good faith disputes; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h. there is no default in existence under any Material Contract by a Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x. the Agent shall have received a certificate of a duly authorized officer of each Loan Party (with such
certification to be in such Person's capacity as an officer of such Loan Party and not in such Person's individual capacity), certifying (i) that the attached copy of such Loan Party's Organizational Documents (including, without
limitation, such Loan Party's charter documents) are true and complete and in full force and effect, and remain in full force and effect, (ii) that an attached copy of resolutions authorizing execution and delivery of this Agreement is
true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this Agreement, (iii) to the title, name and
signature of each Person authorized to sign the Loan Documents, and (iv) that either (a) the attached copies are all of the consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan
Party and the validity against such Loan Party of this Agreement and related documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (v) that no such consents, licenses or approvals are
so required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xi. the Agent shall have received good standing or subsistence certificates, as applicable, for each Loan Party,
issued by the appropriate official of such Loan Party's jurisdiction of organization, dated as of a recent date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xii. the Agent shall have received a favorable legal opinion addressed to the Lenders and the Agent, dated as of
the Effective Date, in form and substance reasonably satisfactory to the Agent, from Stikeman Elliott LLP, Canadian counsel to the Borrower and their Subsidiaries; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;xiii. all action on the part of the Loan Parties necessary for the valid execution, delivery and performance by
the Borrower of this Agreement shall have been duly and effectively taken;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The representations and warranties set forth in <u>Section</u> <u>2</u> of this Amendment shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the Effective Date with the same effect as though such representations and warranties had been made on and as of the Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All fees and expenses required to be paid on the Effective Date, including those due and payable pursuant to the Second Amendment Fee Letter, shall have been paid in full in cash (or the Agent shall be satisfied with the arrangements made in respect thereof) to the extent, in the case of reimbursement of expenses.

SECTION 4. Reference to and Effect on the Credit Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On and after the Effective Date, each reference in the Credit Agreement to "this Agreement," "hereunder," "hereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Credit Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Credit Agreement and each of the other Loan Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Agent, under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents. On and after the Effective Date, this Amendment shall for all purposes constitute a Loan Document.

SECTION 5. Acknowledgment; Liens Unimpaired. Each of the Borrower and the other Loan Parties hereby acknowledges that it has read this Amendment and consents to its terms, and further hereby affirms, confirms, represents, warrants and agrees that (a) notwithstanding the effectiveness of this Amendment, the obligations of such Person under each of the Loan Documents to which such Person is a party shall not be impaired and each of the Loan Documents to which such Person is a party (after giving effect to this Amendment) is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects and (b) after giving effect to this Amendment, (i) the execution, delivery, performance or effectiveness of this Amendment shall not impair the validity, effectiveness or priority of the Liens granted pursuant to the Loan Documents and such Liens shall continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred, and (ii) any guarantee, as and to the extent provided in the Loan Documents, shall continue in full force and effect in respect of the Obligations under the Credit Agreement and the other Loan Documents.

SECTION 6. Costs and Expenses. The Borrower hereby agrees to reimburse the Agent for its reasonable costs and expenses incurred in connection with this Amendment, including the reasonable fees, disbursements and other charges of counsel for the Agent, all in accordance with the terms and conditions of Section 15.7 of the Amended Credit Agreement.

SECTION 7. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Amendment. Execution of any such counterpart may be by means of (a) an electronic signature that complies with applicable law, as in effect from time to time,; (b) an original manual signature; or (c) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Any party delivering an executed counterpart of this Amendment by faxed, scanned or photocopied manual signature shall also deliver an original manually executed counterpart, but the failure to deliver an original manually executed counterpart shall not affect the validity, enforceability and binding effect of this Amendment.

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SECTION 8. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

SECTION 9. Headings. Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Amendment.

[Continued on following page.]

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**IN WITNESS WHEREOF**, each of the undersigned has caused its duly authorized officer to execute and deliver this Amendment as of the date first written above.

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| | |
|:---|:---|
| **BIRKS GROUP INC.**., as Borrower | **BIRKS GROUP INC.**., as Borrower |
| By: | <u>/s/ Katia Fontana</u>  |
| Name: Katia Fontana, CPA | Name: Katia Fontana, CPA |
| Title: VP and Chief Financial Officer | Title: VP and Chief Financial Officer |
| By: | <u>/s/ Marco Pasteris</u>  |
| Name: Marco Pasteris | Name: Marco Pasteris |
| Title: Vice President, Finance | Title: Vice President, Finance |
| **CASH, GOLD & SILVER INC.,** as guarantor | **CASH, GOLD & SILVER INC.,** as guarantor |
| By: | <u>/s/ Miranda Melfi</u>  |
| Name: Miranda Melfi | Name: Miranda Melfi |
| Title: Secretary | Title: Secretary |
| By: | <u>/s/ Katia Fontana</u>  |
| Name: Katia Fontana, CPA | Name: Katia Fontana, CPA |
| Title: Vice President | Title: Vice President |
| **BIRKS INVESTMENTS INC.,** as guarantor | **BIRKS INVESTMENTS INC.,** as guarantor |
| By: | <u>/s/ Miranda Melfi</u>  |
| Name: Miranda Melfi | Name: Miranda Melfi |
| Title: Secretary | Title: Secretary |
| By: | <u>/s/ Katia Fontana</u>  |
| Name: Katia Fontana, CPA | Name: Katia Fontana, CPA |
| Title: Vice President | Title: Vice President |

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[BIRKS—SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]

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| | |
|:---|:---|
| **WELLS FARGO CAPITAL FINANCE CORPORATION CANADA**, as Agent and as Lender | **WELLS FARGO CAPITAL FINANCE CORPORATION CANADA**, as Agent and as Lender |
| By: | <u>/s/ Carmela Massari</u>  |
| Name: Carmela Massari | Name: Carmela Massari |
| Title: Senior Vice President, Portfolio Manager | Title: Senior Vice President, Portfolio Manager |

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[BIRKS—SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]

------

**Guarantor Acknowledgement** 

Reference is hereby made to the foregoing Second Amendment to Amended and Restated Credit Agreement dated as of , 2025 (the "***Amendment***"; capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Amendment), by and among Birks Group Inc., Wells Fargo Capital Finance Corporation Canada, as agent (the "***Agent***") and Lender, and the other parties party thereto. Each of the undersigned, in its capacity as a Guarantor, acknowledges that its consent to the foregoing Amendment is not required, but each of the undersigned nevertheless does hereby consent to the foregoing Amendment and to the documents and agreements referred to therein. Nothing herein shall in any way limit any of the terms or provisions of any guarantee provided to the Agent or the Loan Documents executed by the undersigned (as the same may be amended, restated, amended and restated, supplemented, or otherwise modified from time to time), all of which are hereby ratified and affirmed in all respects, and remain in full force and effect.

Immediately after giving effect to the foregoing Amendment, each Guarantor reaffirms each Lien granted by it to the Agent under each of the Loan Documents to which it is a party, which Liens shall continue in full force and effect during the term of the Amended Credit Agreement and shall continue to secure the Obligations (after giving effect to the Amendment), in each case, on and subject to the terms and conditions set forth in the Amended Credit Agreement and the other Loan Documents, and hereby restates, ratifies, and reaffirms each and every term and condition set forth in the Amended Credit Agreement and the Loan Documents to which it is a party as such Loan Documents are effective as of the date hereof. Each Guarantor hereby acknowledges and agrees that, immediately after giving effect to the Amendment, all of its respective obligations and liabilities under the Loan Documents to which it is a party remain in full force and effect.

[Continued on following page.]

[BIRKS—SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]

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| | |
|:---|:---|
| **Guarantors:** | **Guarantors:** |
| **CASH, GOLD & SILVER INC.,** as guarantor | **CASH, GOLD & SILVER INC.,** as guarantor |
| By: | <u>/s/ Miranda Melfi</u>  |
| Name: Miranda Melfi | Name: Miranda Melfi |
| Title: Secretary | Title: Secretary |
| By: | <u>/s/ Katia Fontana</u>  |
| Name: Katia Fontana, CPA | Name: Katia Fontana, CPA |
| Title: Vice President | Title: Vice President |
| **BIRKS INVESTMENTS INC.,** as guarantor | **BIRKS INVESTMENTS INC.,** as guarantor |
| By: | <u>/s/ Miranda Melfi</u>  |
| Name: Miranda Melfi | Name: Miranda Melfi |
| Title: Secretary | Title: Secretary |
| By: | <u>/s/ Katia Fontana</u>  |
| Name: Katia Fontana, CPA | Name: Katia Fontana, CPA |
| Title: Vice President | Title: Vice President |

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[BIRKS—SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]

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**EXHIBIT A** 

**AMENDED CREDIT AGREEMENT** 

[See attached.]

------

**EXHIBIT A TO SECOND AMENDMENT TO AMENDED AND RESTATED** 

**CREDIT AGREEMENT** 

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| | |
|:---|:---|
| ![LOGO](g81203g02l32.jpg)  | <br> **AMENDED AND RESTATED CREDIT AGREEMENT**<br>**by and among** |
| **WELLS FARGO CAPITAL FINANCE CORPORATION CANADA,** | **WELLS FARGO CAPITAL FINANCE CORPORATION CANADA,** |
| **as Administrative Agent,** | **as Administrative Agent,** |
| **THE LENDERS THAT ARE PARTIES HERETO** | **THE LENDERS THAT ARE PARTIES HERETO** |
| **as the Lenders,** | **as the Lenders,** |
| **and** | **and** |
| **BIRKS GROUP INC.,** | **BIRKS GROUP INC.,** |
| **as Borrower** | **as Borrower** |
| **Dated as of December 24, 2021** | **Dated as of December 24, 2021** |

---

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**TABLE OF CONTENTS** 

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| | | |
|:---|:---|:---|
|  |  | Page |
| **1.** | **DEFINITIONS AND CONSTRUCTION** | **1** |
| &nbsp;&nbsp;&nbsp;&nbsp;1.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Definitions** | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Accounting Terms** | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **PPSA** | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Construction** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Time References** | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Schedules and Exhibits** | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Exchange Rates; Currency Equivalents; Applicable Currency** | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Quebec Interpretation** | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;1.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Rates** | 5 |
| **2.** | **LOANS AND TERMS OF PAYMENT** | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Revolving Loans** | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **[Intentionally Omitted]** | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Borrowing Procedures and Settlements** | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Payments; Reductions of Commitments; Prepayments** | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Promise to Pay; Promissory Notes** | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations** | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Crediting Payments** | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Designated Account** | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Maintenance of Loan Accounts; Statements of Obligations** | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.10. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Fees** | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.11. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Letters of Credit** | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Non-Base Rate Option** | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.13. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Capital Requirements** | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.14. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Currencies** | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.15. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Interest Act* (Canada); Criminal Rate of Interest; Nominal Rate of Interest** | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;2.16. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Accordion** | 40 |
| **3.** | **CONDITIONS; TERM OF AGREEMENT** | **41** |
| &nbsp;&nbsp;&nbsp;&nbsp;3.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Conditions Precedent to the Initial Extension of Credit** | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;3.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Conditions Precedent to all Extensions of Credit** | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;3.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Maturity** | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;3.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Effect of Maturity** | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;3.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Early Termination by Borrower** | 42 |

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| &nbsp;&nbsp;&nbsp;&nbsp;3.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Post-Closing Covenants** | 42 |
| **4.** | **REPRESENTATIONS AND WARRANTIES** | **42** |
| &nbsp;&nbsp;&nbsp;&nbsp;4.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Due Organization and Qualification; Subsidiaries** | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Due Authorization; No Conflict** | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Governmental Consents** | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Binding Obligations; Perfected Liens** | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Title to Assets; No Encumbrances** | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Litigation** | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Compliance with Laws** | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Financial Statements; No Material Adverse Effect** | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Solvency** | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.10. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Canadian Pension Plan** | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.11. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Environmental Condition** | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Complete Disclosure** | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.13. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Patriot Act*; Canadian AML and Anti-Terrorism Laws** | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.14. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Indebtedness** | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.15. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Payment of Taxes** | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.16. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Margin Stock** | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.17. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Governmental Regulation** | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.18. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **OFAC** | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.19. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Employee and Labor Matters** | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.20. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Intellectual Property** | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.21. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Eligible Accounts** | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.22. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Eligible Inventory** | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.23. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Location of Inventory and Equipment** | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.24. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Inventory Records** | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.25. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Hedge Agreements** | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.26. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Credit Card Arrangements** | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.27. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **No Defaults; Material Contracts** | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;4.28. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Operations of Certain Subsidiaries** | 49 |
| **5.** | **AFFIRMATIVE COVENANTS** | **50** |
| &nbsp;&nbsp;&nbsp;&nbsp;5.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Financial Statements, Reports, Certificates** | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Reporting** | 50 |

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| &nbsp;&nbsp;&nbsp;&nbsp;5.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Existence** | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Maintenance of Properties** | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Taxes** | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Insurance** | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Inspection** | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Compliance with Laws and Material Contracts** | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Environmental** | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.10. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Disclosure Updates** | 52 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.11. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Formation of Subsidiaries** | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Further Assurances** | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.13. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **[Intentionally Omitted]** | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.14. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Location of Inventory; Chief Executive Office, Etc** | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.15. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank Products | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.16. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Hedge Agreements** | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.17. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Canadian Compliance** | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;5.18. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Credit Card Notifications** | 55 |
| **6.** | **NEGATIVE COVENANTS** | **55** |
| &nbsp;&nbsp;&nbsp;&nbsp;6.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Indebtedness** | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Liens** | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Restrictions on Fundamental Changes** | 55 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Disposal of Assets** | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Nature of Business** | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Prepayments and Amendments** | 57 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Restricted Payments** | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Accounting Methods** | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Investments** | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.10. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Transactions with Affiliates** | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.11. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Use of Proceeds** | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Limitation on Issuance of Equity Interests** | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.13. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **[Intentionally Omitted]** | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.14. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **[Intentionally Omitted]** | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.15. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Canadian Employee Benefits** | 60 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.16. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Sale and Leaseback Transactions** | 61 |

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| &nbsp;&nbsp;&nbsp;&nbsp;6.17. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Negative Pledges** | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;6.18. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Restrictions on Subsidiary Distributions** | 62 |
| **7.** | **FINANCIAL COVENANT** | **63** |
| &nbsp;&nbsp;&nbsp;&nbsp;7.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Minimum Excess Availability** | 63 |
| **8.** | **EVENTS OF DEFAULT** | **63** |
| &nbsp;&nbsp;&nbsp;&nbsp;8.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Payments** | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Covenants** | 63 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Judgments** | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Voluntary Bankruptcy, etc** | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Involuntary Bankruptcy, etc** | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Default Under Other Agreements** | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Default Under Term Loan Documents** | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Default Under Damiani Purchase Documents** | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Representations, etc** | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.10. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Guarantee** | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.11. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Security Documents** | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Loan Documents** | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;8.13. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Change of Control** | 66 |
| **9.** | **RIGHTS AND REMEDIES** | **66** |
| &nbsp;&nbsp;&nbsp;&nbsp;9.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Rights and Remedies** | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;9.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Remedies Cumulative** | 67 |
| **10.** | **WAIVERS; INDEMNIFICATION** | **67** |
| &nbsp;&nbsp;&nbsp;&nbsp;10.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Demand; Protest; etc** | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;10.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **The Lender Group's Liability for Collateral** | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;10.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Indemnification** | 67 |
| **11.** | **NOTICES** | **68** |
| **12.** | **CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION** | **69** |
| **13.** | **ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS** | **71** |
| &nbsp;&nbsp;&nbsp;&nbsp;13.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Assignments and Participations** | 71 |
| &nbsp;&nbsp;&nbsp;&nbsp;13.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Successors** | 75 |
| **14.** | **AMENDMENTS; WAIVERS** | **75** |
| &nbsp;&nbsp;&nbsp;&nbsp;14.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Amendments and Waivers** | 75 |

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| &nbsp;&nbsp;&nbsp;&nbsp;14.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Replacement of Certain Lenders** | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;14.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **No Waivers; Cumulative Remedies** | 78 |
| **15.** | **AGENT; THE LENDER GROUP** | **78** |
| &nbsp;&nbsp;&nbsp;&nbsp;15.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Appointment and Authorization of Agent** | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **[Intentionally Omitted]** | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Liability of Agent** | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Reliance by Agent** | 79 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Notice of Default or Event of Default** | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Credit Decision** | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Costs and Expenses; Indemnification** | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Agent in Individual Capacity** | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Successor Agent** | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.10. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Lender in Individual Capacity** | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.11. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Collateral Matters** | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Restrictions on Actions by Lenders; Sharing of Payments** | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.13. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Agency for Perfection** | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.14. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Payments by Agent to the Lenders** | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.15. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Concerning the Collateral and Related Loan Documents** | 86 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.16. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information** | 86 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.17. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Several Obligations; No Liability** | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;15.18. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Quebec Security** | 87 |
| **16.** | **WITHHOLDING TAXES** | **87** |
| &nbsp;&nbsp;&nbsp;&nbsp;16.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Payments** | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;16.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Exemptions** | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;16.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Reductions** | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;16.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Refunds** | 91 |
| **17.** | **GENERAL PROVISIONS** | **91** |
| &nbsp;&nbsp;&nbsp;&nbsp;17.1. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Effectiveness** | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.2. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Section Headings** | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.3. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Interpretation** | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.4. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Severability of Provisions** | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.5. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Bank Product Providers** | 91 |

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| &nbsp;&nbsp;&nbsp;&nbsp;17.6. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Debtor-Creditor Relationship** | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.7. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Counterparts; Electronic Execution** | 92 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.8. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Revival and Reinstatement of Obligations; Certain Waivers** | 93 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.9. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Confidentiality** | 93 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.10. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Survival** | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.11. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ***Patriot Act*; Canadian Anti-Money Laundering & Anti-Terrorism Legislation** | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.12. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Integration** | 96 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.13. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Birks Group Inc. as Agent for Borrower** | 96 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.14. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Judgment Currency** | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.15. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **No Setoff** | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.16. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Intercreditor Agreement** | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.17. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Acknowledgement Regarding Any Supported QFCs** | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.18. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Erroneous Payments** | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;17.19. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Reaffirmation** | 101 |

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**EXHIBITS AND SCHEDULES** 

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| | |
|:---|:---|
| Exhibit A-1 | Form of Assignment and Acceptance |
| Exhibit B-1 | Form of Borrowing Base Certificate |
| Exhibit B-4 | Form of Bank Product Provider Agreement |
| Exhibit C-1 | Form of Compliance Certificate |
| Exhibit C-2 | Form of Credit Card Notification |
| Exhibit I-1 | Form of Information Certificate |
| Exhibit L-1 | Form of Non-Base Rate Notice |
| Schedule A-1 | Agent's Canadian Account |
| Schedule A-2 | Agent's US Account |
| Schedule A-3 | Authorized Persons |
| Schedule C-1 | Commitments |
| Schedule D-1 | Canadian Designated Account(s) |
| Schedule D-2 | US Designated Account(s) |
| Schedule E-1 | Eligible Inventory Locations |
| Schedule P-1 | Permitted Investments |
| Schedule P-2 | Permitted Liens |
| Schedule R-1 | Real Property Collateral |
| Schedule 1.1 | Definitions |
| Schedule 3.1 | Conditions Precedent |
| Schedule 3.6 | Conditions Subsequent |
| Schedule 4.1 | Capitalization of Borrower and its Subsidiaries |
| Schedule 4.6(b) | Litigation |
| Schedule 4.11 | Environmental Matters |
| Schedule 4.14 | Permitted Indebtedness |
| Schedule 4.19 | Employee and Labour Matters |
| Schedule 4.20 | Intellectual Property |
| Schedule 4.23 | Location of Inventory; Chief Executive Office |
| Schedule 4.26 | Credit Card Arrangements |
| Schedule 4.27 | Material Contracts |
| Schedule 5.1 | Financial Statements, Reports, Certificates |
| Schedule 5.2 | Collateral Reporting |
| Schedule 6.5 | Nature of Business |

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**AMENDED AND RESTATED CREDIT AGREEMENT** 

**THIS AMENDED AND RESTATED CREDIT AGREEMENT** (this "<u>Agreement</u>"), is entered into as of December 24, 2021, by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a "<u>Lender</u>", as that term is hereinafter further defined), **WELLS FARGO CAPITAL FINANCE CORPORATION CANADA**, an Ontario corporation, as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, "<u>Agent</u>"), **BIRKS GROUP INC.** and together with each other Person organized under the laws of Canada or a province thereof that joins hereunder as a "Borrower" after the Closing Date in accordance with the terms hereof (each, a "<u>Borrower</u>" and all references herein to "Borrower" shall include each such additional Borrower who so joins).

RECITALS

**WHEREAS** Birks Group Inc., as original borrower (in such capacity, the "<u>Original Borrower</u>") and Wells Fargo Canada Corporation, as administrative agent (the "<u>Original Agent</u>") entered into a Credit Agreement dated as October 23, 2017 (as amended pursuant to Amendment No. 1 dated as of June 29, 2018, Amendment No. 2 dated as of April 18, 2019, Amendment No. 3 dated as of December 20, 2019; Amendment No. 4 dated as of July 2, 2020, Amendment No. 5 dated as of August 31, 2021 and Amendment No. 6 dated as of December 15, 2021, the "<u>Original Credit Agreement</u>").

**AND WHEREAS** the Original Agent assigned of all its interest, as lender, in the Original Credit Agreement to the Agent pursuant to an assignment and acceptance agreement between the Original Agent, as assignor and the Agent, as assignee dated as of October 1, 2018 and the Agent named herein concurrently replaced the Original Agent as agent under the Original Credit Agreement.

**AND WHEREAS** the parties hereto wish to amend and restate the Original Credit Agreement on the terms and conditions set forth herein.

**NOW, THEREFORE**, in consideration of the mutual agreements, provisions and covenants contained herein, the parties hereto agree that the Original Credit Agreement is hereby amended and restated in its entirety as follows:

1. **DEFINITIONS AND CONSTRUCTION.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. **<u>Definitions</u>**. Capitalized terms used in this Agreement shall have the meanings specified therefor on <u>Schedule 1.1</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. **<u>Accounting Terms</u>**. All accounting terms not specifically defined herein shall be construed in accordance with GAAP; <u>provided</u>, that if Administrative Borrower notifies Agent that Borrower requests an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Original Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and Borrower agrees that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrower after such Accounting Change conform as nearly as possible to their respective positions before such Accounting Change and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred. When used herein, the term "financial statements" shall include the notes and schedules thereto. Whenever the term "Borrower" is used in respect of a financial covenant or a related definition, it shall be understood to mean Borrower and its Subsidiaries on a consolidated basis, unless the context clearly requires otherwise. Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the Statement of Financial Accounting Standards No. 159 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof and (b) the term "unqualified opinion" as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified, and (ii) does not include any qualification as to scope, going concern or similar items.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. **<u>PPSA</u>**. Any terms used in this Agreement that are defined in the PPSA shall be construed and defined as set forth in the PPSA unless otherwise defined herein. Notwithstanding the foregoing, and where the context so requires, (i) any term defined in this Agreement by reference to the PPSA shall also have any extended, alternative or analogous meaning given to such term in the Code, in all cases for the extension, preservation or betterment of the security granted by a Loan Party formed in the United States and rights of the Collateral located in the United States, (ii) all references to Canada or to any subdivision, department, agency or instrumentality thereof shall be deemed to refer also to the United States of America or to any subdivision, department, agency or instrumentality thereof, and (iii) all references to federal or state securities law of the United States shall be deemed to refer also to analogous applicable federal and provincial securities laws in Canada.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4. **<u>Construction</u>**. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms "includes" and "including" are not limiting, and the term "or" has, except where otherwise indicated, the inclusive meaning represented by the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to "law" means all international, foreign, federal, provincial, state and local statutes, treaties, rules, guidelines, regulations, by-laws, ordinances, decrees, codes and administrative or judicial or arbitral or administrative or ministerial or departmental or regulatory precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of any Governmental Authority. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties. All references to "province" or like terms shall include "territory" and like terms. Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean (a) the payment or repayment in full in immediately available funds in the Applicable Currency of (i) the principal amount of, and interest accrued and unpaid with respect to, all outstanding Loans, together with the payment of any premium applicable to the repayment of the Loans, (ii) all Lender Group Expenses that have accrued and are unpaid regardless of whether demand has been made therefor, (iii) all fees or charges that have accrued hereunder or under any other Loan Document (including the Letter of Credit Fees and the Unused Line Fee) and are unpaid; <u>provided</u> that such fees or charges shall not include fees and charges accrued pursuant to Letters of Credit that have been cash collateralized in accordance with the Letter of Credit Collateralization requirements under this Agreement and Bank Product Obligations (other than Hedge Obligations) to the extent Bank Product Collateralization has been provided in respect thereof, (b) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Letter of Credit Collateralization in the Applicable Currency, (c) in the case of obligations with respect to Bank Products (other than Hedge Obligations), providing Bank Product Collateralization in the Applicable Currency, (d) the receipt by Agent of cash collateral in the Applicable Currency in order to secure any other contingent Obligations for which a claim or demand for payment has been made on or prior to such time or in respect of matters or circumstances known to Agent or a Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense (including legal expenses to the extent payable pursuant to Section 10.3), such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Obligations, but in no event greater than 103% of the face amount of such claim or demand to the extent a specific amount has been claimed or demanded, (e) the payment or repayment in full in immediately available funds in the Applicable Currency of all other outstanding Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Hedge Agreements provided by Hedge Providers) other than, in any case, (i) unasserted contingent indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or cash collateralized, and (iii) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid, and (f) the termination of all of the Commitments of the Lenders. Any reference herein to any Person shall be construed to include such Person's successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5. **<u>Time References</u>**. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, all references to time of day refer to Eastern standard time or Eastern daylight saving time, as in effect in Toronto, Ontario on such day. For purposes of the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to and including"; <u>provided</u> that, with respect to a computation of fees or interest payable to Agent or any Lender, such period shall in any event consist of at least one full day.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6. **<u>Schedules and Exhibits</u>**. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7. **<u>Exchange Rates; Currency Equivalents; Applicable Currency</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All references to "Dollars" or "$" shall mean Canadian Dollars unless otherwise specified herein. For purposes of this Agreement and the other Loan Documents, the Canadian Dollar Equivalent of the Revolving Loans, Letters of Credit, other Obligations and other references to amounts denominated in a currency other than Canadian Dollars shall be determined in accordance with the terms of this Agreement. Such Canadian Dollar Equivalent shall become effective as of such Revaluation Date for such Revolving Loans, Letters of Credit and other Obligations and shall be the Canadian Dollar Equivalent employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur for such Revolving Loans, Letters of Credit and other Obligations. Except as otherwise expressly provided herein or in the applicable other Loan Document, the applicable amount of any currency for purposes of this Agreement and the other Loan Documents (including all calculations in connection with the covenants, including the financial covenants) shall be the Canadian Dollar Equivalent thereof, and for the purpose of such calculations, comparisons, measurements or determinations, amounts denominated in currencies other than Canadian Dollars shall be converted into the Canadian Dollar Equivalent of such amount on the date of calculation, comparison, measurement or determination. Notwithstanding the foregoing, for the purposes of financial statements prepared by Borrower, the Canadian Dollar Equivalent of each amount in a currency other than Canadian Dollars shall be determined in accordance with GAAP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Wherever in this Agreement and the other Loan Documents in connection with a borrowing, conversion, continuation or prepayment of a Revolving Loan or the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Canadian Dollars, but such Revolving Loan or Letter of Credit is denominated in US Dollars, such amount shall be the relevant US Dollar Equivalent of such Canadian Dollar amount (rounded to the nearest US Dollar, with 0.5 of a unit being rounded upward).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8. **<u>Quebec Interpretation</u>**. For all purposes of any assets, liabilities or entities located in the Province of Quebec and for all purposes pursuant to which the interpretation or construction of this Agreement may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) "personal property" shall include "movable property", (b) "real property" shall include "immovable property", (c) "tangible property" shall include "corporeal property", (d) "intangible property" shall include "incorporeal property", (e) "security interest", "mortgage" and "lien" shall include a "hypothec", "prior claim" and a "resolutory clause", (f) all references to filing, registering or recording under the PPSA shall include publication under the Civil Code of Quebec, (g) all references to "perfection" of or "perfected" liens or security interest shall include a reference to an "opposable" or "set up" lien or security interest as against third parties, (h) any "right of offset", "right of setoff" or similar expression shall include a "right of compensation", (i) "goods" shall include "corporeal movable property" other than chattel paper, documents of title, instruments, money and securities, (j) an "agent" shall include a "mandatary", (k) "construction liens" shall include "legal hypothecs", (l) "joint and several" shall include "solidary", (m) "gross negligence or willful misconduct" shall be deemed to be "intentional or gross fault", (n) "beneficial ownership" shall include "ownership on behalf of another as mandatary", (o) "easement" shall include "servitude", (p) "priority" shall include "prior claim", (q) "survey" shall include "certificate of location and plan", and (r) "fee simple title" shall include "absolute ownership".

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9. **<u>Rates</u>**. The interest rate on Loans denominated in Dollars may be determined by reference to a benchmark rate that is, or may in the future become, the subject of regulatory reform or cessation. Regulators have signaled the need to use alternative reference rates for some of these benchmark rates and, as a result, such benchmark rates may cease to comply with applicable laws and regulations, may be permanently discontinued or the basis on which they are calculated may change. Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to (a) the continuation of<u>,</u> administration of, submission of, calculation of or any other matter related to any rates in the definition of any Benchmark, including the Term SOFR Reference Rate, Term SOFR, the Term CORRA Reference Rate, Term CORRA or any other Benchmark, or any component definition thereof or rates referenced in the definition thereof, or with respect to any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any then-current Benchmark or any Benchmark Replacement) as it may or may not be adjusted pursuant to <u>Section</u> <u>2.12(d)(iii)</u>, will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, the Term SOFR Reference Rate, Term SOFR, the Term CORRA Reference Rate, Term CORRA such Benchmark or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. Agent and its affiliates or other related entities may engage in transactions that affect the calculation of any Benchmark, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto and such transactions may be adverse to the Borrower. Agent may select information sources or services in its reasonable discretion to ascertain any Benchmark, any component definition thereof or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service. Each determination of any Benchmark (or any Benchmark Replacement) shall be made by Agent and shall be conclusive in the absence of manifest error.

2. **LOANS AND TERMS OF PAYMENT.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1. **<u>Revolving Loans</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Revolving Lender with a Revolver Commitment agrees (severally, not jointly or jointly and severally) to make revolving loans in Canadian Dollars or US Dollars (as selected by Administrative Borrower) ("<u>Revolving Loans</u>") to Borrower in an amount at any one time outstanding not to exceed the Canadian Dollar Equivalent of the lesser of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Lender's Revolver Commitment, and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) such Lender's Pro Rata Share of an amount equal to the lesser of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the amount equal to (1) the Maximum Credit Amount less (2) the sum of (x) the Letter of Credit Usage at such time plus (y) the principal amount of Swing Loans outstanding at such time, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the amount equal to the Borrowing Base as of such date (based upon the Borrowing Base set forth in the most recent Borrowing Base Certificate delivered by Borrower to Agent) less the sum of (1) the Letter of Credit Usage at such time, plus (2) the principal amount of the Swing Loans outstanding at such time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Amounts borrowed pursuant to this <u>Section</u> <u>2.1</u> may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. The outstanding principal amount of the Revolving Loans, together with interest accrued and unpaid thereon, shall constitute Obligations and shall be due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and payable pursuant to the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right (but not the obligation), in the exercise of its Permitted Discretion, to establish and increase or decrease Receivable Reserves, Inventory Reserves, Loan to Value Reserves, Bank Product Reserves, Canadian Priority Payable Reserves and other Reserves against the Borrowing Base; provided, that Agent shall notify Borrower at least 5 Business Days prior to the date on which any such reserve is to be established or increased; provided further, that (A) Borrower may not obtain any new Revolving Loans (including Swing Loans) or Letters of Credit to the extent that such Revolving Loan (including Swing Loans) or Letter of Credit would cause an Overadvance after giving effect to the establishment or increase of such reserve as set forth in such notice; (B) no such prior notice shall be required for changes to any reserves established under this Agreement resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation set forth in this Agreement or previously utilized; (C) no such prior notice shall be required during the continuance of any Event of Default and (D) no such prior notice shall be required with respect to any Reserve established in respect of any consensual Lien that has priority over Agent's Liens on the Collateral. The amount of any Receivable Reserve, Inventory Reserve, Loan to Value Reserves, Bank Product Reserve, Canadian Priority Payables Reserve or other Reserve shall be established by Agent in its Permitted Discretion and shall have a reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such reserve and shall not be duplicative of any other Reserve established and currently maintained. No reserve shall be implemented with respect to matters which are already specifically reflected as ineligible Accounts or Inventory or Credit Card Receivables.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Anything to the contrary in this <u>Section</u> <u>2.1</u> notwithstanding, at no time shall the Canadian Dollar Equivalent of the Revolver Usage exceed the Maximum Credit Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2. **<u>[Intentionally Omitted]</u>**.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3. **<u>Borrowing Procedures and Settlements</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Procedure for Borrowing Revolving Loans**. Each Borrowing shall be made by a written request by an Authorized Person delivered to Agent and received by Agent no later than 1:00 p.m. (i) on the Business Day that is the requested Funding Date in the case of a request for a Base Rate Loan or, if available, a Swing Loan, and (ii) on the Benchmark Rate Business Day that is 3 Benchmark Rate Business Days prior to the requested Funding Date in the case of a Term CORRA Rate Loan and on the RFR Business Day that is 3 RFR Business Days prior to the requested Funding Date in the case of a request for a SOFR Rate Loan, in each case, specifying (A) the amount and type of such Borrowing, and whether in Canadian Dollars or US Dollars, as applicable and (B) with respect to any Non-Base Rate Loan, the Interest Period therefor and (C) the requested Funding Date (which shall be a Business Day); <u>provided</u>, that Agent may, in its sole discretion, elect to accept as timely requests that are received later than 1:00 p.m. on the applicable Business Day, RFR Business Day or Benchmark Rate Business Day. At Agent's election, in lieu of delivering the above-described written request, any Authorized Person may give Agent telephonic notice of such request by the required time. In such circumstances, Borrower agrees that any such telephonic notice will be confirmed by Administrative Borrower in writing within 24 hours of the giving of such telephonic notice, but the failure to provide such written confirmation shall not affect the validity of the request. If Borrower requests a borrowing of Non-Base Rate Loans in any such request, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Making of Swing Loans.** In the case of a request for a Swing Loan by Administrative Borrower and so long as either (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus all payments or other amounts applied to Swing Loans since the last Settlement Date, plus the amount of the requested Swing Loan does not exceed 10% of the Maximum Credit Amount, or (ii) the Swing Lender, in its sole discretion, agrees to make such Swing Loan notwithstanding the foregoing limitation, the Swing Lender shall make a Revolving Loan (any such Revolving Loan for the account of Borrower made by Swing Lender pursuant to this <u>Section</u> <u>2.3(b)</u> being referred to as a "<u>Swing Loan</u>" and all such Revolving Loans for the account of Borrower by Swing Lender being referred to as "<u>Swing Loans</u>") available to Borrower on the Funding Date applicable thereto by transferring immediately available funds in the Applicable Currency in the amount of such requested Borrowing to the Canadian Designated Account or US Designated Account, as applicable. Each Swing Loan shall be deemed to be a Revolving Loan hereunder and shall be subject to all the terms and conditions (including <u>Section</u> <u>3</u>) applicable to other Revolving Loans except that all payments (including interest) on any Swing Loan shall be payable to the Swing Lender solely for its own account. Subject to the provisions of <u>Section</u> <u>2.3(d)(ii)</u>, Swing Lender shall not make or be obligated to make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in <u>Section</u> <u>3</u> will not be satisfied or waived on the requested Funding Date for the Borrowing, or (ii) the requested Borrowing would exceed Excess Availability on such Funding Date. Swing Lender shall not otherwise be required to determine whether the applicable conditions precedent set forth in <u>Section</u> <u>3</u> have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan. The Swing Loans shall constitute Revolving Loans and Obligations, and bear interest at the rate applicable from time to time to Revolving Loans in the Applicable Currency that are Base Rate Loans. Notwithstanding anything contained herein to the contrary, Swing Loans shall not be available at any time that WF Canada is the only Lender.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Making of Revolving Loans**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the event that the Swing Lender is not obligated to make a Swing Loan, then after receipt of a request for a Borrowing pursuant to <u>Section</u> <u>2.3(a)</u>, Agent shall notify the applicable Lenders by telecopy, telephone, email, or other electronic form of transmission, of the requested Borrowing; such notification to be sent on the Business Day or RFR Business Day, as applicable that is (A) in the case of a Base Rate Loan, at least 1 Business Day prior to the requested Funding Date, (B) in the case of a request for a SOFR Rate Loan, prior to 1:00 p.m. at least 3 RFR Business Days prior to the requested Funding Date, (C) in the case of request for a Term CORRA Rate Loan, prior to 1:00 p.m. at least three Benchmark Rate Business Days prior to the requested Funding Date. If Agent has notified the applicable Lenders of a requested Borrowing on the Business Day that is 1 Business Day prior to the Funding Date, then each Lender with the applicable Revolving Commitment shall make the amount of such Lender's Pro Rata Share of the requested Borrowing available to Agent in immediately available funds in the Applicable Currency, to Agent's US Account or Agent's Canadian Account, as applicable, not later than 10:00 a.m. on the Business Day that is the requested Funding Date. After Agent's receipt of the proceeds of such Revolving Loans from the applicable Lenders, Agent shall make the proceeds thereof available to Borrower on the applicable Funding Date by transferring immediately available funds in the Applicable Currency equal to such proceeds received by Agent to the US Designated Account or the Canadian Designated Account, as applicable; <u>provided</u>, that, subject to the provisions of <u>Section</u> <u>2.3(d)(ii)</u>, no Lender shall have an obligation to make any Revolving Loan, if (1) one or more of the applicable conditions precedent set forth in <u>Section</u> <u>3</u> will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the Excess Availability on such Funding Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Unless Agent receives notice from a Lender prior to 9:30 a.m. on the Business Day that is the requested Funding Date relative to a requested Borrowing as to which Agent has notified the Lenders of a requested Borrowing that such Lender will not make available as and when required hereunder to Agent for the account of Borrower, the amount of that Lender's Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent in immediately available funds in the Applicable Currency on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrower, a corresponding amount. If, on the requested Funding Date, any Lender shall not have remitted the full amount that it is required to make available to Agent in immediately available funds in the Applicable Currency and if Agent has made available to Borrower such amount on the requested Funding Date, then such Lender shall make the amount of such Lender's Pro Rata Share of the requested Borrowing available to Agent in immediately available funds in the Applicable Currency, to Agent's Applicable Account, no later than 10:00 a.m. on the Business Day that is the first Business Day after the requested Funding Date (in which case, the interest accrued on such Lender's portion of such Borrowing for the Funding Date shall be for Agent's separate account). If any Lender shall not remit the full amount that it is required to make available to Agent in immediately available funds in the Applicable Currency as and when required hereby and if Agent has made available to Borrower such amount, then that Lender shall be obligated to immediately remit such amount to Agent, together with interest at the applicable Defaulting Lender Rate for each day until the date on which such amount is so remitted. A notice submitted by Agent to any Lender with respect to amounts owing under this <u>Section</u> <u>2.3(c)(ii)</u> shall be conclusive, absent manifest error. If the amount that a Lender is required to remit is made available to Agent, then such payment to Agent shall constitute such Lender's Revolving Loans for all purposes of this Agreement. If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Administrative Borrower of such failure to fund and, upon demand by Agent, Borrower shall pay such amount in the Applicable Currency to Agent, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the applicable Revolving Loans composing such Borrowing.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Protective Advances and Optional Overadvances**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any contrary provision of this Agreement or any other Loan Document notwithstanding, but subject to <u>Section</u> <u>2.3(d)(iv)</u>, at any time (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) that any of the other applicable conditions precedent set forth in <u>Section</u> <u>3</u> are not satisfied or waived, Agent hereby is authorized by Borrower and the Lenders, from time to time, in Agent's sole discretion, to make Revolving Loans to, or for the benefit of, Borrower, in each case, on behalf of the Revolving Lenders, that Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (the Revolving Loans described in this <u>Section</u> <u>2.3(d)(i)</u> shall be referred to as "<u>Protective Advances</u>"). The Protective Advances shall be made in Canadian Dollars or US Dollars, as determined by Agent. Notwithstanding the foregoing, the aggregate Canadian Dollar Equivalent amount of all Protective Advances outstanding at any one time shall not exceed 10% of the Maximum Credit Amount (unless Required Lenders otherwise agree to a higher amount).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Any contrary provision of this Agreement or any other Loan Document notwithstanding, but subject to <u>Section</u> <u>2.3(d)(iv)</u>, the Lenders hereby authorize Agent or the Swing Lender, as applicable, and either Agent or the Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Revolving Loans (including Swing Loans) to Borrower notwithstanding that an Overadvance exists or would be created thereby, so long as with respect to any such Revolving Loans, (i) after giving effect to any such Revolving Loans, the Canadian Dollar Equivalent of the outstanding Revolver Usage does not exceed the Borrowing Base by more than 10% of the Maximum Credit Amount (unless Required Lenders otherwise agree to a higher amount), and (ii) after giving effect to such Revolving Loans, the Canadian Dollar Equivalent of the outstanding Revolver Usage (except for and excluding amounts charged to the applicable Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Credit Amount. In the event Agent obtains actual knowledge that the Canadian Dollar Equivalent of the Revolver Usage exceeds the amounts permitted by the immediately foregoing provisions, regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the applicable Loan Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances and provide notice as promptly as practicable thereafter), and the Lenders with applicable Revolver Commitments thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrower intended to reduce, within 30 days, the outstanding principal amount of the applicable Revolving Loans to Borrower to an amount permitted by the preceding sentence. In such circumstances, if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders. In any event: (x) if any unintentional Overadvance remains outstanding for more than 30 days, unless otherwise agreed to by the Required Lenders, Borrower shall immediately repay Advances in an amount sufficient to eliminate all such unintentional Overadvances, and (y) after the date all such Overadvances have been eliminated, there must be at least 5 consecutive days before intentional Overadvances are made. The foregoing provisions are meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrower, which shall continue to be bound by the provisions of <u>Section</u> <u>2.4(e)</u>. Each Lender with a Revolver Commitment shall be obligated to make Revolving Loans in accordance with <u>Section</u> <u>2.3</u> in, or settle Overadvances made by Agent with Agent as provided in <u>Section</u> <u>2.3(e)</u> (or <u>Section</u> <u>2.3(g)</u>, as applicable) for, the amount of such Lender's Pro Rata Share of any unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as permitted under this <u>Section</u> <u>2.3(d)(ii)</u>, and any Overadvances resulting from the charging to the applicable Loan Account of interest, fees, or Lender Group Expenses.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Each Protective Advance and each Overadvance (each, "<u>Extraordinary Advance</u>") shall be deemed to be a Revolving Loan hereunder. No Extraordinary Advance shall be eligible to be a Non-Base Rate Loan. Prior to Settlement with respect to Extraordinary Advances, all payments on the Extraordinary Advances, including interest thereon, shall be payable to Agent solely for its own account. The Extraordinary Advances shall be repayable on demand, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Revolving Loans in the Applicable Currency that are Base Rate Loans. The provisions of this <u>Section</u> <u>2.3(d)</u> are for the exclusive benefit of Agent, Swing Lenders and the Lenders, and are not intended to benefit Borrower (or any other Loan Party) in any way.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, no Extraordinary Advance may be made by Agent if such Extraordinary Advance would cause the aggregate Canadian Dollar Equivalent principal amount of Extraordinary Advances outstanding to exceed an amount equal to 10% of the Maximum Credit Amount (unless Required Lenders otherwise agree to a higher amount). For the avoidance of doubt, nothing in this <u>Section</u> <u>2.3(d)</u> shall require any Lender to advance Revolving Loans in excess of such Lender's Revolver Commitment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Settlement**. It is agreed that each Lender's funded portion of the Revolving Loans is intended by the Lenders to equal, at all times, such Lender's Pro Rata Share of the outstanding Revolving Loans. Such agreement notwithstanding, Agent, Swing Lenders, and the other Lenders agree (which agreement shall not be for the benefit of Borrower) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Revolving Loans (including the Swing Loans and the Extraordinary Advances) shall take place on a periodic basis in accordance with the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Agent shall request settlement ("<u>Settlement</u>") with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent in its sole discretion (1) on behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for itself, with respect to the outstanding Extraordinary Advances, and (3) with respect to Loan Parties' payments or other amounts received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 2:00 p.m. on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the "<u>Settlement Date</u>"). Such notice of a Settlement Date shall include a summary statement of the amount of outstanding Revolving Loans (including Swing Loans and Extraordinary Advances) for the period since the prior Settlement Date. Subject to the terms and conditions contained herein (including <u>Section</u> <u>2.3(g)</u>): (y) if the amount of the Revolving Loans (including Swing Loans and Extraordinary Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender's Pro Rata Share of the Revolving Loans (including Swing Loans, and Extraordinary Advances) as of a Settlement Date, then Agent shall, by no later than 12:00 p.m. on the Settlement Date, transfer in immediately available funds in the Applicable Currency to a deposit account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances); and (z) if the amount of the Revolving Loans (including the Swing Loans and Extraordinary Advances) made by a Lender is less than such Lender's Pro Rata Share of the applicable Revolving Loans (including applicable Swing Loans and applicable Extraordinary Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m. on the Settlement Date transfer in immediately available funds in the Applicable Currency to Agent's Applicable Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) and Revolving Loans (including Swing Loans and Extraordinary Advances). Such amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable Swing Loans or Extraordinary Advances. If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In determining whether a Lender's balance of the Revolving Loans (including Swing Loans and Extraordinary Advances) is less than, equal to, or greater than such Lender's Pro Rata Share of the Revolving Loans as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments applicable to such Obligations actually received in good funds by Agent with respect to principal, interest, fees payable by Borrower and allocable to the Lenders hereunder, and proceeds of Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Between Settlement Dates, Agent, to the extent Extraordinary Advances for the account of Agent or Swing Loans for the account of a Swing Lender are outstanding, may pay over to Agent or such Swing Lender, as applicable, any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the Extraordinary Advances or the Swing Loans. Between Settlement Dates, Agent, to the extent no Extraordinary Advances or Swing Loans are outstanding, may pay over to the Swing Lender any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the Swing Lender's Pro Rata Share of the Revolving Loans. If, as of any Settlement Date, payments or other amounts of the Loan Parties received since the then immediately preceding Settlement Date have been applied to Swing Lender's Pro Rata Share of the Revolving Loans other than to its Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders (other than a Defaulting Lender if Agent has implemented the provisions of <u>Section</u> <u>2.3(g)</u>), to be applied to the outstanding Revolving Loans of such Lenders, an amount such that each such Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans. During the period between Settlement Dates, a Swing Lender with respect to its Swing Loans, Agent with respect to Extraordinary Advances, and each Lender with respect to the Revolving Loans other than Swing Loans and Extraordinary Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by such Swing Lender, Agent, or the Lenders, as applicable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Anything in this <u>Section</u> <u>2.3(e)</u> to the contrary notwithstanding, in the event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in <u>Section</u> <u>2.3(g)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Notation**. Agent, as a non-fiduciary agent for Borrower, shall maintain a register showing in the Applicable Currency the principal amount of the Revolving Loans, owing to each Lender, including Swing Loans owing to the Swing Lender, and Extraordinary Advances owing to Agent, and the interests therein of each Lender, from time to time and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **Defaulting Lenders**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Notwithstanding the provisions of <u>Section</u> <u>2.4(b)(ii)</u>, Agent shall not be obligated to transfer to a Defaulting Lender any payments made by or on behalf of any Loan Party to Agent for the Defaulting Lender's benefit or any proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such proceeds of Collateral or payments pertaining to or securing Obligations, (i) first, to Agent, to the extent of any Extraordinary Advances that were made by Agent and that were required to be, but were not, paid by the Defaulting Lender, (ii) second, to Swing Lender to the extent of any Swing Loans that were made by Swing Lender and that were required to be, but were not, paid by the Defaulting Lender, (iii) third, to Issuing Lender, to the extent of the portion of a Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender, (iv) fourth, to each Non-Defaulting Lender ratably in accordance with its Revolver Commitments (but, in each case, only to the extent that such Defaulting Lender's portion of a Revolving Loan (or other funding obligation) was funded by such other Non-Defaulting Lender), (v) fifth, at Borrower's request (so long as no Event of Default exists and the conditions set forth on <u>Section</u> <u>3.2</u> are satisfied), the funding of any Revolving Loans in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, or reasonably determined by the Agent, (vi) sixth, in Agent's sole discretion, to a suspense account maintained by Agent, the proceeds of which shall be retained by Agent and may be made available to be re-advanced to or for the benefit of Borrower (upon the request of Administrative Borrower and subject to the conditions set forth in <u>Section</u> <u>3.2</u>) as if such Defaulting Lender had made its portion of Revolving Loans (or other funding obligations) hereunder, and (vii) seventh, from and after the date on which all other Obligations have been paid in full, to such Defaulting Lender in accordance with tier (A)(13) of <u>Section</u> <u>2.4(b)(ii)</u>. Subject to the foregoing, Agent may hold and, in its discretion, re-lend to Borrower for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata Share in connection therewith) and for the purpose of calculating the fees payable under <u>Section</u> <u>2.10</u>, such Defaulting Lender shall be deemed not to be a "Lender" and such Lender's Commitment shall be deemed to be zero; <u>provided</u>, that the foregoing shall not apply to any of the matters governed by <u>Section</u> <u>14.1(a)(i)</u> through (iii). The provisions of this <u>Section</u> <u>2.3(g)</u> shall remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Lenders, and Borrower shall have waived, in writing, the application of this <u>Section</u> <u>2.3(g)</u> to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform its future obligations hereunder (on which earlier date, so long as no Event of Default has occurred and is continuing, any remaining cash collateral held by Agent pursuant to <u>Section</u> <u>2.3(g)(ii)</u> shall be released to Borrower). The operation of this <u>Section</u> <u>2.3(g)</u> shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by Borrower of its duties and obligations hereunder to Agent, Issuing Lenders, or to the Lenders other than such Defaulting Lender. Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrower, at their option, upon written notice by Administrative Borrower to Agent, to arrange for a substitute Lender to assume the Commitments and Loans of such Defaulting Lender and the Commitments and Loans of any Affiliate of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lenders shall have no right to refuse to be replaced hereunder, and agree to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agree that they shall be deemed to have executed and delivered such document if they fail to do so) subject only to being paid its share of the outstanding Obligations (other than Bank Product Obligations, but including (1) all interest, fees, and other amounts that may be due and payable in respect thereof, and (2) an assumption of its Pro Rata Share of its participation in the Letters of Credit); <u>provided</u>, that any such assumption of the Commitments and Loans of such Defaulting Lenders shall not be deemed to constitute a waiver of any of the Lender Groups' or Borrower's rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund. In the event of a direct conflict between the priority provisions of this <u>Section</u> <u>2.3(g)</u> and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this <u>Section</u> <u>2.3(g)</u> shall control and govern.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If any Swing Loan or Letter of Credit is outstanding at the time that a Lender becomes a Defaulting Lender then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) such Defaulting Lender's Swing Loan Exposure and Letter of Credit Exposure shall be reallocated among the applicable Non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent (x) the sum of all Non-Defaulting Lenders' Revolver Usage plus such Defaulting Lender's Swing Loan Exposure and US Letter of Credit Exposure does not exceed all Non-Defaulting Lenders' Revolver Commitments does not exceed the total of all Non-Defaulting Lenders' Revolver Commitments, and (y) the conditions set forth in <u>Section</u> <u>3.2</u> are satisfied at such time;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) if the reallocation described in clause (A) above cannot, or can only partially, be effected, Borrower shall within one Business Day following notice by the Agent (x) first, prepay such Defaulting Lender's Swing Loan Exposure (after giving effect to any partial reallocation pursuant to clause (A) above) and (y) second, cash collateralize such Defaulting Lender's applicable Letter of Credit Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to the Agent, for so long as such Letter of Credit Exposure is outstanding; <u>provided</u>, that Borrower shall not be obligated to cash collateralize any Defaulting Lender's Letter of Credit Exposure if such Defaulting Lender is also an the Issuing Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) if Borrower cash collateralizes any portion of such Defaulting Lender's Letter of Credit Exposure pursuant to this <u>Section</u> <u>2.3(g)(ii)</u>, Borrower shall not be required to pay any Letter of Credit Fees to Agent for the account of such Defaulting Lender pursuant to <u>Section</u> <u>2.6(b)</u> with respect to such cash collateralized portion of such Defaulting Lender's Letter of Credit Exposure during the period such Letter of Credit Exposure is cash collateralized;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) to the extent the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated pursuant to this <u>Section</u> <u>2.3(g)(ii)</u>, then the Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to <u>Section</u> <u>2.6(b)</u> shall be adjusted in accordance with such Non-Defaulting Lenders' Letter of Credit Exposure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) to the extent any Defaulting Lender's Letter of Credit Exposure is neither cash collateralized nor reallocated pursuant to this <u>Section</u> <u>2.3(g)(ii)</u>, then, without prejudice to any rights or remedies of any Issuing Lender or any Lender hereunder, all Letter of Credit Fees that would have otherwise been payable to such Defaulting Lender under <u>Section</u> <u>2.6(b)</u> with respect to such portion of such Letter of Credit Exposure shall instead be payable to the applicable Issuing Lender until such portion of such Defaulting Lender's Letter of Credit Exposure is cash collateralized or reallocated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) so long as any Lender is a Defaulting Lender, Swing Lender shall not be required to make any Swing Loan and Issuing Lender shall not be required to issue, amend, or increase any Letter of Credit, in each case, to the extent (x) the Defaulting Lender's Pro Rata Share of such Swing Loans or Letter of Credit cannot be reallocated pursuant to this <u>Section</u> <u>2.3(g)(ii)</u> or (y) the Swing Lender or Issuing Lender, as applicable, has not otherwise entered into arrangements reasonably satisfactory to the Swing Lender or Issuing Lender, as applicable, and Borrower to eliminate such Swing Lender's or Issuing Lender's risk with respect to the Defaulting Lender's participation in such Swing Loans or Letters of Credit; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G) Agent may release any cash collateral provided by Borrower pursuant to this <u>Section</u> <u>2.3(g)(ii)</u> to the Issuing Lender and Issuing Lender may apply any such cash collateral to the payment of such Defaulting Lender's Pro Rata Share of any Letter of Credit Disbursement that is not reimbursed by Borrower in respect of its Letter of Credit Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) **Independent Obligations**. All Revolving Loans (other than Swing Loans and Extraordinary Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Revolving Loan (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4. **<u>Payments; Reductions of Commitments; Prepayments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Payments by Borrower**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Except as otherwise expressly provided herein, all payments by Borrower shall be made to Agent's Applicable Account for the account of the Lender Group and shall be made in immediately available funds in the Applicable Currency, no later than 1:30 p.m. on the date specified herein. Any payment received by Agent later than 1:30 p.m. shall be deemed to have been received (unless Agent, in its sole discretion, elects to credit it on the date received) on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Unless Agent receives notice from Administrative Borrower prior to the date on which any payment is due to the Lenders that Borrower will not make such payment in full as and when required, Agent may assume that Borrower has made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrower does not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Apportionment and Application**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) So long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all principal and interest payments received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses received by Agent (other than fees or expenses that are for Agent's separate account or for the separate account of Issuing Lender) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates. Subject to <u>Section</u> <u>2.4(b)(iv)</u> and <u>Section</u> <u>2.4(e)</u>, all payments to be made hereunder by Borrower shall be remitted to Agent and all such payments, and all proceeds of Collateral securing Obligations received by Agent, shall be applied, so long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the balance of the Revolving Loans outstanding and, thereafter, to Borrower (to be wired to the Canadian Designated Account or US Designated Account, as applicable) or such other Person entitled thereto under applicable law.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) At any time that an Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent and all proceeds of Collateral received by Agent shall be applied as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) All payments in respect of Obligations and all proceeds of Collateral securing the Obligations received by Agent shall be applied as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) <u>first</u>, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents in respect of Obligations, until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) <u>second</u>, to pay any fees or premiums then due to Agent under the Loan Documents in respect of Obligations until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) <u>third</u>, to pay interest due in respect of all Protective Advances until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) <u>fourth</u>, to pay the principal of all Protective Advances until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) <u>fifth</u>, ratably, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents in respect of Obligations, until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) <u>sixth</u>, ratably, to pay any fees or premiums then due to any of the Lenders under the Loan Documents in respect of Obligations until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) <u>seventh</u>, to pay interest accrued in respect of the Swing Loans until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) <u>eighth</u>, to pay the principal of all Swing Loans until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) <u>ninth</u>, ratably, to pay interest accrued in respect of the Revolving Loans (other than Protective Advances) until paid in full,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) <u>tenth</u>, ratably

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. to pay the principal of all Revolving Loans until paid in full,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. to Agent, to be held by Agent, for the benefit of Issuing Lender (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of Issuing Lender, a share of each Letter of Credit Disbursement), as cash collateral in an amount up to 103% of the then Letter of Credit Usage relating to Canadian Dollar-denominated Letters of Credit and 108% of the then existing Letter of Credit Usage relating to US Dollar-denominated Letters of Credit (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any Letter of Credit Disbursement as and when such disbursement occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this <u>Section</u> <u>2.4(b)(ii)</u>, beginning with tier (A)(1) hereof),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. ratably, up to the amount (after taking into account any amounts previously paid pursuant to this clause iii. during the continuation of the applicable Application Event) of the most recently established Bank Product Reserve, which amount was established prior to the occurrence of, and not in contemplation of, the subject Application Event, to (I) ratably to the Bank Product Providers of Bank Products (based on the Bank Product Reserve, if any, established for each Bank Product of such Bank Product Provider) up to the amounts then certified by the applicable Bank Product Provider to Agent (in form and substance reasonably satisfactory to Agent) to be due and payable to such Bank Product Provider on account of Bank Product Obligations, and (II) with any balance to be paid to Agent, to be held by Agent, for the ratable benefit (based on the Bank Product Reserve established for each Bank Product) of the Bank Product Providers for Bank Products, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Bank Product Obligations shall be reapplied pursuant to this <u>Section</u> <u>2.4(b)(ii)</u>, beginning with tier (A)(1) hereof),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) **<u>[Intentionally Omitted]</u>**,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) <u>twelfth</u>, to pay any other Obligations other than Obligations owed to Defaulting Lenders (including being paid, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of Bank Product Obligations), with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Bank Product Obligations shall be reapplied pursuant to this <u>Section</u> <u>2.4(b)(ii)</u>, beginning with tier (A)(1) hereof),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) <u>thirteenth</u>, ratably to pay any Obligations owed to Defaulting Lenders; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) <u>fourteenth</u>, to Borrower (to be wired to the Canadian Designated Account or US Designated Account, as applicable) or such other Person entitled thereto under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) [**Intentionally Omitted**]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in <u>Section</u> <u>2.3(e)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) In each instance, so long as no Application Event has occurred and is continuing, <u>Section</u> <u>2.4(b)(ii)(A)</u> shall not apply to any payment made by Borrower to Agent and specified by Administrative Borrower to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) For purposes of <u>Section</u> <u>2.4(b)(ii)</u>, "paid in full" of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) In the event of a direct conflict between the priority provisions of this <u>Section</u> <u>2.4</u> and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, if the conflict relates to the provisions of <u>Section</u> <u>2.3(g)</u> and this <u>Section</u> <u>2.4</u>, then the provisions of <u>Section</u> <u>2.3(g)</u> shall control and govern, and if otherwise, then the terms and provisions of this <u>Section</u> <u>2.4</u> shall control and govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Reduction of Commitments**. The Revolver Commitments shall terminate on the Maturity Date. Borrower may reduce the Revolver Commitments without premium or penalty other than payment of the Applicable Revolver Reduction Premium pursuant to the Fee Letter, to an amount (which may be zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all Revolving Loans not yet made as to which a request has been given by Borrower under <u>Section</u> <u>2.3(a)</u>, plus (C) the amount of all Letters of Credit not yet issued as to which a request has been given by Administrative Borrower pursuant to <u>Section</u> <u>2.11(a)</u>. Each such reduction shall be in an amount which is not less than $5,000,000 (unless the applicable Revolver Commitments are being reduced to zero and the amount of the applicable Revolver Commitments in effect immediately prior to such reduction are less than $5,000,000), shall be made by providing not less than 10 Business Days prior written notice to Agent, and shall be irrevocable. Once reduced, the Revolver Commitments may not be increased except to the extent of any Available Increase Amount then available. Each such reduction of the applicable Revolver Commitments shall reduce the applicable Revolver Commitments of each Lender proportionately in accordance with its ratable share thereof. Any notice delivered pursuant to this Section 2.4(c) may state that such notice is conditioned upon the effectiveness of a third party transaction, in which case such notice may be revoked (by written notice to Agent on or prior to the specified effective date of termination) if such effectiveness does not occur.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Optional Prepayments**. Borrower may prepay the principal of any Revolving Loan at any time in whole or in part, without premium or penalty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Mandatory Prepayments**. If, at any time, (A) the Canadian Dollar Equivalent of the Revolver Usage on such date exceeds (B) the lesser of the Borrowing Base reflected in the Borrowing Base Certificate most recently delivered by Borrower to Agent and the Maximum Credit Amount (other than an excess arising solely as a result of fluctuations in exchange rates that does not continue for more than one Business Day), then Borrower shall, within one Business Day, prepay the Obligations in accordance with <u>Section</u> <u>2.4(f)(i)</u> in an aggregate amount equal to the amount of such excess.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Application of Payments**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Each prepayment pursuant to <u>Section</u> <u>2.4(e)</u> shall, (A) so long as no Application Event shall have occurred and be continuing, be applied, *first*, to the outstanding principal amount of the Revolving Loans until paid in full, and *second*, to cash collateralize the Letters of Credit in an amount equal to 103% of the then existing Letter of Credit Usage relating to Canadian Dollar-denominated Letters of Credit and 108% of the then existing Letter of Credit Usage relating to US Dollar-denominated Letters of Credit, and (B) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in <u>Section</u> <u>2.4(b)(ii)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) No prepayment applied to the Revolving Loans or to cash collateralize Letter of Credit Usage under <u>Section</u> <u>2.4(f)(i)</u> shall result in a reduction in the Maximum Credit Amount; <u>provided</u>, that if an Event of Default exists, Required Lenders may elect for any such prepayment applied to Obligations to result in a permanent reduction of the Maximum Credit Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5. **<u>Promise to Pay; Promissory Notes</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower agrees to pay the Lender Group Expenses owing by Borrower on the earlier of (i) the first day of the month following the date on which the applicable Lender Group Expenses were first incurred or (ii) the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the applicable Loan Account pursuant to the provisions of <u>Section</u> <u>2.6(d)</u> shall be deemed to constitute a demand for payment thereof for the purposes of this subclause (ii)). Borrower promises to pay all of the Obligations (including principal, interest, premiums, if any, fees, costs, and expenses (including Lender Group Expenses)) owing by Borrower in full on the Maturity Date or, if earlier, on the date on which such Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement. Borrower agrees that their obligations contained in the first sentence of this <u>Section</u> <u>2.5(a)</u> shall survive payment or satisfaction in full of all other Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any Lender may request that any portion of its Commitments or the Loans made by it be evidenced by one or more promissory notes. In such event, Borrower shall execute and deliver to such Lender the requested promissory notes payable to the order of such Lender in a form furnished by Agent and reasonably satisfactory to Borrower. Thereafter, the portion of the Commitments and Loans evidenced by such promissory notes and interest thereon shall at all times be represented by one or more promissory notes in such form payable to the order of the payee named therein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6. **<u>Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Interest Rates**. Except as provided in <u>Section</u> <u>2.6(c)</u>, all Loans, and all Obligations (except for undrawn Letters of Credit) that have been charged to a Loan Account pursuant to the terms hereof, shall bear interest as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the relevant Obligation is a Non-Base Rate Loan in Canadian Dollars, at a per annum rate equal to if Borrower has selected Adjusted Term CORRA with respect to such Obligation pursuant to the terms hereof, Adjusted Term CORRA *<u>plus</u>* the Term CORRA Rate Margin,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the relevant Obligation in a Non-Base Rate Loan in US Dollars. at a per annum ratio equal to the Term SOFR Rate plus the SOFR Rate Margin,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if the relevant Obligation is a Base Rate Loan in Canadian Dollars, at a per annum rate equal to the Canadian Base Rate plus the Base Rate Margin,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the relevant Obligation is a Base Rate Loan in US Dollars, at a per annum rate equal to the US Base Rate plus the Base Rate Margin,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) otherwise, at a per annum rate equal to the Canadian Base Rate (if such Obligation is denominated in Canadian Dollars) plus the Base Rate Margin or the US Base Rate (if such Obligation is denominated in US Dollars) plus the Base Rate Margin.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Letter of Credit Fee**. Borrower shall pay to Agent, for the ratable account of the Revolving Lenders with a Revolver Commitment, a Letter of Credit fee (the "<u>Letter of Credit Fees</u>") (which fee shall be in addition to the fronting fees and commissions, other fees, charges and expenses set forth in <u>Section</u> <u>2.11(k)</u>) with respect to the Letter of Credit Usage, that shall accrue at a per annum rate equal to (i) the Non-Base Rate Margin times the Letter of Credit Usage in the case of standby Letters of Credit; and (ii) the Non-Base Rate Margin less 0.50% in the case of commercial Letters of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Default Rate**. Upon the occurrence and during the continuation of an Event of Default and at the election of the Required Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all Loans, and all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof, shall bear interest at a per annum rate equal to 2 percentage points above the per annum rate otherwise applicable thereunder, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Letter of Credit Fee shall be increased to 2 percentage points above the per annum rate otherwise applicable hereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Payment**. Except to the extent provided to the contrary in <u>Section</u> <u>2.10</u>, <u>Section</u> <u>2.11(k)</u> or <u>Section</u> <u>2.12(a)</u>, (i) all interest, all Letter of Credit Fees and all other fees payable hereunder or under any of the other Loan Documents shall be due and payable, in arrears, on the first day of each month, and (ii) all costs and expenses payable hereunder or under any of the other Loan Documents, and all Lender Group Expenses shall be due and payable on the earlier of (x) the first day of the month following the date on which the applicable costs, expenses, or Lender Group Expenses were first incurred or (y) the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the applicable Loan Account pursuant to the provisions of the following sentence shall be deemed to constitute a demand for payment thereof for the purposes of this subclause (y)). Borrower hereby authorizes Agent, from time to time without prior notice to Borrower, to charge to the Loan Account (A) on the first day of each month, all interest accrued during the prior month on the Revolving Loans hereunder, (B) on the first day of each month, all Letter of Credit Fees accrued or chargeable hereunder during the prior month, (C) as and when incurred or accrued, all fees and costs provided for in <u>Section</u> <u>2.10(a)</u> or <u>(c)</u> and owing by Borrower, (D) as and when due and payable, all other fees payable hereunder or under any of the other Loan Documents by Borrower, (E) as and when incurred or accrued, the fronting fees and all commissions, other fees, charges and expenses provided for in <u>Section</u> <u>2.11(k)</u>, as applicable, owing by Borrower, (F) as and when incurred or accrued, all other Lender Group Expenses owing by Borrower, and (G) as and when due and payable all other payment obligations payable under any Loan Document or any Bank Product Agreement (including any amounts due and payable to the Bank Product Providers in respect of Bank Products) owing by Borrower. Agent shall endeavor to provide prompt notice to the Administrative Borrower after any costs and expenses described in this Section 2.6(d) are charged to the Loan Account; provided that (x) any failure to give or delay in giving such notice shall not relieve Borrower of their obligation to pay such costs and expenses, (y) delivery of such notice shall not be required during the continuance of any Event of Default, and (z) the Agent shall have no liability, in any event, for failing to deliver such notice. All amounts (including interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan Document or under any Bank Product Agreement) charged to the applicable Loan Account shall thereupon constitute Revolving Loans hereunder for the account of Borrower, shall constitute Obligations hereunder of Borrower, and shall initially accrue interest at the rate then applicable to Base Rate Loans in the Applicable Currency (unless and until converted into Non-Base Rate Loans in accordance with the terms of this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Computation**. All interest and fees chargeable under the Loan Documents (other than amounts accruing at the Base Rate or Adjusted Term CORRA) shall be computed on the basis of a 360 day year. All interest and fees chargeable under the Loan Documents accruing at the Base Rate or Adjusted Term CORRA shall be computed on the basis of a 365 or 366 for the actual number of days elapsed in the period during which the interest or fees accrue. In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Intent to Limit Charges to Maximum Lawful Rate**. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Subject to <u>Section</u> <u>2.15,</u> Borrower and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; <u>provided</u>, that, anything contained herein to the contrary notwithstanding, if such rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrower are and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the applicable Obligations to the extent of such excess.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7. **<u>Crediting Payments</u>**. The receipt of any payment item by Agent shall not be required to be considered a payment on account unless such payment item is a wire transfer of immediately available funds in the Applicable Currency made to Agent's Applicable Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrower shall be deemed not to have made such payment and interest shall be calculated accordingly. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent's Applicable Account on a Business Day on or before 1:30 p.m. If any payment item is received into Agent's Applicable Account on a non-Business Day or after 1:30 p.m. on a Business Day (unless Agent, in its sole discretion, elects to credit it on the date received), it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8. **<u>Designated Account</u>**. Agent is authorized to make the Revolving Loans, and Issuing Lender is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to <u>Section</u> <u>2.6(d)</u>. Borrower agrees to establish and maintain the US Designated Account and Canadian Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Revolving Loans requested by or on behalf of Borrower and made by Agent or the applicable Lenders hereunder. Unless otherwise agreed by Agent and Borrower, any Revolving Loan or Swing Loan requested by or on behalf of Borrower and made by Agent or the Lenders hereunder shall be made to the Canadian Designated Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9. **<u>Maintenance of Loan Accounts; Statements of Obligations</u>**. Agent shall maintain accounts on its books in the name of Borrower (with respect to Canadian Dollars, the "<u>Canadian Loan Account</u>" and with respect to US Dollars, the "<u>US Loan Account</u>") on which Borrower will be charged with all Revolving Loans (including Extraordinary Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrower or for Borrower's account, the Letters of Credit issued or arranged by a Issuing Lender for Borrower's account, and all other payment Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses of Borrower with respect thereto. Agent shall maintain an account on its books in the name of Borrower (the "<u>Canadian Loan Account</u>") on which Borrower will be charged with all Revolving Loans (including Extraordinary Advances and Swing Loans) made by Agent, Canadian Swing Lender, or the Lenders to Borrower or for Borrower's account, the Letters of Credit issued or arranged by an Issuing Lender for Borrower's account, and all other payment Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses of Borrower with respect thereto. In accordance with <u>Section</u> <u>2.7</u>, the applicable Loan Account will be credited with all payments received by Agent from Borrower or for Borrower's account. Agent shall make available to Administrative Borrower monthly statements regarding the Loan Accounts, including the principal amount of the Revolving Loans, interest accrued hereunder, fees accrued or charged hereunder or under the other Loan Documents, and a summary itemization of all charges and expenses constituting Lender Group Expenses accrued hereunder or under the other Loan Documents, and each such statement, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrower and the Lender Group unless, within 60 days after Agent first makes such a statement available to Administrative Borrower, Administrative Borrower shall deliver to Agent written objection thereto describing the error or errors contained in such statement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10. **<u>Fees</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Agent's Fees**. Borrower shall pay to Agent, for the account of Agent, unless otherwise indicated, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Unused Line Fees**. Borrower shall pay to Agent, for the ratable account of the Revolving Lenders (other than Defaulting Lenders) with a Revolver Commitment, an unused line fee (the "<u>Unused Line Fee</u>") in an amount equal to the Applicable Unused Line Fee Percentage per annum times the result of (i) the aggregate amount of the Revolver Commitments, less (ii) the average amount of the Revolver Usage during the immediately preceding month (or portion thereof), which Unused Line Fee shall be due and payable in arrears on the first day of each month from and after the Original Closing Date up to the first day of the month prior to the date on which the Obligations are paid in full and on the date on which the Obligations are paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Field Examination and Other Fees**. Borrower shall pay to Agent, field examination, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows (i) reasonable and documented out-of-pocket expenses (including travel, meals, and lodging) if it elects to employ the services of one or more third Persons to perform field examinations of Borrower or its Subsidiaries, to establish electronic collateral reporting systems, to appraise the Collateral (including Eligible Accounts), or any portion thereof, or to assess Borrower's or its Subsidiaries' business valuation; <u>provided</u>, that so long as no Event of Default shall have occurred and be continuing, Borrower shall not be obligated to reimburse Agent for more than 2 field examinations of each Loan Party during any calendar year, or more than 2 appraisals of Inventory of each Loan Party during any 12-month period; <u>provided further</u>, <u>however</u>, that if Excess Availability is less than 15% of the Line Cap for a period of 5 consecutive Business Days at any time during any 12-month period, then Borrower shall be obligated to reimburse Agent for an additional field examination of each Loan Party during such 12-month period and for an additional appraisal of Inventory of each Loan Party during such 12-month period.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11. **Letters of Credit**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to the terms and conditions of this Agreement, upon the request of Administrative Borrower made in accordance herewith, and prior to the Maturity Date, Issuing Lender agrees to issue, or, if Issuing Lender is WF Canada, to cause an Underlying Issuer (including as Issuing Lender's agent) to issue, a requested Letter of Credit for the account of Borrower. If Issuing Lender is WF Canada, it may, at its option, elect to cause an Underlying Issuer to issue a requested Letter of Credit. If WF Canada makes such election, it agrees that it will enter into arrangements relative to the reimbursement of such Underlying Issuer (which may include, among other means, by becoming an applicant with respect to such Letter of Credit or entering into undertakings or other arrangements that provide for reimbursement of such Underlying Issuer with respect to such drawings under Letter of Credit; each such obligation or undertaking, irrespective of whether in writing, a "<u>Reimbursement Undertaking</u>") with respect to Letters of Credit issued by such Underlying Issuer for the account of Borrower. By submitting a request to Issuing Lender for the issuance of a Letter of Credit, Administrative Borrower shall be deemed to have requested that (x) Issuing Lender issue the requested Letter of Credit or (y) in the case in which WF Canada is the Issuing Lender, an Underlying Issuer issue the requested Letter of Credit (and, in such case, to have requested WF Canada to issue a Reimbursement Undertaking with respect to such requested Letter of Credit). Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by an Authorized Person and delivered to Issuing Lender via telefacsimile or other electronic method of transmission reasonably acceptable to Issuing Lender and reasonably in advance of the requested date of issuance, amendment, renewal, or extension. Each such request shall be in form and substance reasonably satisfactory to Issuing Lender and (i) shall specify (A) the amount of such Letter of Credit and whether such Letter of Credit to be issued in Canadian Dollars, US Dollars, English Pounds or Euros, (B) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name and address of the beneficiary of the Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent, Issuing Lender or Underlying Issuer may request or require, to the extent that such requests or requirements are consistent with the Issuer Documents that Issuing Lender or Underlying Issuer generally requests for Letters of Credit in similar circumstances. Issuing Lender's records of the content of any such request will be conclusive, absent manifest error. Anything contained herein to the contrary notwithstanding, Issuing Lender may, but shall not be obligated to, issue a Letter of Credit that supports the obligations of Borrower in respect of (x) a lease of real property to the extent that the face amount of such Letter of Credit exceeds the highest rent (including all rent-like charges) payable under such lease for a period of one year, or (y) an employment contract to the extent that the face amount of such Letter of Credit exceeds the highest compensation payable under such contract for a period of one year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Issuing Lender shall have no obligation to issue a Letter of Credit or a Reimbursement Undertaking in respect of a Letter of Credit, in either case, if any of the following would result after giving effect to the requested issuance:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Canadian Dollar Equivalent of the Letter of Credit Usage would exceed $5,000,000,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Canadian Dollar Equivalent of the Letter of Credit Usage would exceed the Maximum Credit Amount less the Canadian Dollar Equivalent of the outstanding amount of Revolving Loans, or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the Canadian Dollar Equivalent of the Letter of Credit Usage would exceed the Borrowing Base at such time less the outstanding principal balance of the Canadian Dollar Equivalent of the Revolving Loans at such time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event there is a Defaulting Lender as of the date of any request for the issuance of a Letter of Credit, the Issuing Lender shall not be required to issue or arrange for such Letter of Credit or any applicable Reimbursement Undertaking to the extent (i) the Defaulting Lender's Letter of Credit Exposure with respect to such Letter of Credit or any applicable Reimbursement Undertaking may not be reallocated pursuant to <u>Section</u> <u>2.3(g)(ii)</u>, the Issuing Lender has not otherwise entered into arrangements reasonably satisfactory to it and Borrower to eliminate the Issuing Lender's risk with respect to the participation in such Letter of Credit or any applicable Reimbursement Undertaking of the Defaulting Lender, which arrangements may include Borrower cash collateralizing such Defaulting Lender's Letter of Credit Exposure in accordance with <u>Section</u> <u>2.3(g)(ii)</u>. Additionally, Issuing Lender shall have no obligation to issue a Letter of Credit or a Reimbursement Undertaking in respect of a Letter of Credit if (A) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain Issuing Lender from issuing such Letter of Credit or a Reimbursement Undertaking or Underlying Issuer from issuing such Letter of Credit, or any law applicable to Issuing Lender or Underlying Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Issuing Lender or Underlying Issuer shall prohibit or request that Issuing Lender or Underlying Issuer refrain from the issuance of letters of credit generally or such Letter of Credit or Reimbursement Undertaking, as applicable, in particular, (B) the issuance of such Letter of Credit or Reimbursement Undertaking would violate one or more policies of Issuing Lender or Underlying Issuer applicable to letters of credit generally, or (C) amounts demanded to be paid under any Letter of Credit will or may not be in Canadian Dollars, US Dollars, British Pounds or Euros.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any Issuing Lender (other than WF Canada or any of its Affiliates) shall notify Agent in writing no later than the Business Day immediately following the Business Day on which such Issuing Lender issued any Letter of Credit or Reimbursement Undertaking; <u>provided</u> that (i) until Agent advises any such Issuing Lender that the provisions of <u>Section</u> <u>3.2</u> are not satisfied, or (ii) unless the aggregate amount of the Letters of Credit issued in any such week exceeds such amount as shall be agreed by Agent and such Issuing Lender, such Issuing Lender shall be required to so notify Agent in writing only once each week of the Letters of Credit or Reimbursement Undertaking issued by such Issuing Lender during the immediately preceding week as well as the daily amounts outstanding for the prior week, such notice to be furnished on such day of the week as Agent and such Issuing Lender may agree. Each Letter of Credit shall be in form and substance reasonably acceptable to Issuing Lender and Underlying Issuer, including the requirement that the amounts payable thereunder must be payable in Canadian Dollars, US Dollars, British Pounds or Euros. If Issuing Lender makes a payment under a Letter of Credit or a Reimbursement Undertaking, Borrower shall jointly and severally pay to Agent an amount equal to the applicable Letter of Credit Disbursement on the Business Day such Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be a Revolving Loan in US Dollars for any Letter of Credit issued in US Dollars and in Canadian Dollars for any Letter of Credit issued in another currency (notwithstanding any failure to satisfy any condition precedent set forth in <u>Section</u> <u>3</u>) in an amount equal to the Canadian Dollar Equivalent thereof and, initially, shall bear interest at the rate then applicable to Revolving Loans in the applicable currency that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to be a Revolving Loan hereunder, Borrower's obligation to pay the amount of such Letter of Credit Disbursement to Issuing Lender shall be automatically converted into an obligation to pay the resulting Revolving Loan. Promptly following receipt by Agent of any payment from Borrower pursuant to this paragraph, Agent shall distribute such payment to Issuing Lender or, to the extent that any Revolving Lenders have made payments pursuant to <u>Section</u> <u>2.11A(e)</u> to reimburse Issuing Lender, then to such Revolving Lender and Issuing Lender as their interests may appear.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Promptly following receipt of a notice of a Letter of Credit Disbursement pursuant to <u>Section</u> <u>2.11(d)</u>, each Revolving Lender agrees to fund its Pro Rata Share of any Revolving Loan deemed made pursuant to <u>Section</u> <u>2.11(d)</u> on the same terms and conditions as if Administrative Borrower had requested the amount thereof as a Revolving Loan and Agent shall promptly pay to Issuing Lender the amounts so received by it from the Revolving Lenders. By the issuance of a Letter of Credit or Reimbursement Undertaking (or an amendment, renewal, or extension of a Letter of Credit or Reimbursement Undertaking) and without any further action on the part of Issuing Lender or the Revolving Lenders, Issuing Lender shall be deemed to have granted to each Revolving Lender with a Revolver Commitment, and each Revolving Lender with a Revolver Commitment shall be deemed to have purchased, a participation in each Letter of Credit issued by Issuing Lender and each Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such Letter of Credit or Reimbursement Undertaking, and each such Revolving Lender agrees to pay to Agent, for the account of Issuing Lender, such Revolving Lender's Pro Rata Share of any Letter of Credit Disbursement made by Issuing Lender under the applicable Letter of Credit or Reimbursement Undertaking. In consideration and in furtherance of the foregoing, each Revolving Lender with a Revolver Commitment hereby absolutely and unconditionally agrees to pay to Agent, for the account of Issuing Lender, such Revolving Lender's Pro Rata Share of each Letter of Credit Disbursement made by Issuing Lender and not reimbursed by Borrower on the date due as provided in <u>Section</u> <u>2.11(d)</u>, or of any reimbursement payment that is required to be refunded (or that Agent or Issuing Lender elects, based upon the advice of counsel, to refund) to Borrower for any reason. Each Revolving Lender with a Revolver Commitment acknowledges and agrees that its obligation to deliver to Agent, for the account of Issuing Lender, an amount equal to its respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this <u>Section</u> <u>2.11(e)</u> shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in <u>Section</u> <u>3</u>. If any such Revolving Lender fails to make available to Agent the amount of such Revolving Lender's Pro Rata Share of a Letter of Credit Disbursement as provided in this Section, such Revolving Lender shall be deemed to be a Defaulting Lender and Agent (for the account of Issuing Lender) shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Borrower agrees to indemnify, defend and hold harmless each Letter of Credit Related Person (to the fullest extent permitted by law) from and against any Letter of Credit Indemnified Costs, which arise out of or in connection with, or as a result of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Letter of Credit or any pre-advice of its issuance or Reimbursement Undertaking;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any transfer, sale, delivery, surrender or endorsement of any Drawing Document at any time(s) held by any such Letter of Credit Related Person in connection with any Letter of Credit or Reimbursement Undertaking;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any action or proceeding arising out of, or in connection with, any Letter of Credit or Reimbursement Undertaking (whether administrative, judicial or in connection with arbitration), including any action or proceeding to compel or restrain any presentation or payment under any Letter of Credit or Reimbursement Undertaking, or for the wrongful dishonor of, or honoring a presentation under, any Letter of Credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) any independent undertakings issued by the beneficiary of any Letter of Credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) any unauthorized instruction or request made to Issuing Lender or Underlying Issuer in connection with any Letter of Credit or Reimbursement Undertaking or requested Letter of Credit or Reimbursement Undertaking or error in computer or electronic transmission;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) an adviser, confirmer or other nominated person seeking to be reimbursed, indemnified or compensated in connection with any Letter of Credit or Reimbursement Undertaking;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any third party seeking to enforce the rights of an applicant, beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds or holder of an instrument or document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) the fraud, forgery or illegal action of parties in connection with a Letter of Credit or Reimbursement Undertaking other than the Letter of Credit Related Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Issuing Lender's or Underlying Issuer's performance of the obligations of a confirming institution or entity that wrongfully dishonors a confirmation in connection with a Letter of Credit; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de facto governmental or regulatory authority or cause or event beyond the control of the Letter of Credit Related Person related to a Letter of Credit or Reimbursement Undertaking;

in each case, including that result from the Letter of Credit Related Person's own negligence; <u>provided</u>, <u>however</u>, that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification under clauses (i) through (x) above to the extent that such Letter of Credit Indemnified Costs may be determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Letter of Credit Related Person claiming indemnity. Borrower hereby agrees to pay the Letter of Credit Related Person claiming indemnity on demand from time to time all amounts owing under this <u>Section</u> <u>2.11(f)</u>. If and to the extent that the obligations of Borrower under this <u>Section</u> <u>2.11(f)</u> are unenforceable for any reason, Borrower agrees to make the maximum contribution to the Letter of Credit Indemnified Costs permissible under applicable law. This indemnification provision shall survive termination of this Agreement and all Letters of Credit and Reimbursement Undertaking.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The liability of Issuing Lender (or any other Letter of Credit Related Person) under, in connection with or arising out of any Letter of Credit (or pre-advice) or Reimbursement Undertaking, regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Borrower that are caused directly by Issuing Lender's gross negligence or willful misconduct in (i) honoring a presentation under a Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such Letter of Credit, (ii) failing to honor a presentation under a Letter of Credit that strictly complies with the terms and conditions of such Letter of Credit or (iii) retaining Drawing Documents presented under a Letter of Credit. Each Issuing Lender and Underlying Issuer shall be deemed to have acted with due diligence and reasonable care if such Person's conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement. Borrower's aggregate remedies against Issuing Lender and any other Letter of Credit Related Person for wrongfully honoring a presentation under any Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by Borrower to Issuing Lender in respect of the honored presentation in connection with such Letter of Credit under <u>Section</u> <u>2.11(d)</u>, plus interest at the rate then applicable to Revolving Loans in the applicable currency that are Base Rate Loans hereunder. Borrower shall take action to avoid and mitigate the amount of any damages claimed against Issuing Lender or any other Letter of Credit Related Person, including by enforcing their rights against the beneficiaries of the Letters of Credit. Any claim by Borrower under or in connection with any Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by Borrower as a result of the breach or alleged wrongful conduct complained of; and (y) the amount (if any) of the loss that would have been avoided had Borrower taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing Issuing Lender or Underlying Issuer to effect a cure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Administrative Borrower is responsible for preparing or approving the final text of the Letter of Credit as issued by Issuing Lender or Underlying Issuer, irrespective of any assistance Issuing Lender or Underlying Issuer may provide such as drafting or recommending text or by Issuing Lender's or Underlying Issuer's use or refusal to use text submitted by Administrative Borrower. Borrower is solely responsible for the suitability of the Letter of Credit for Borrower's purposes. With respect to any Letter of Credit containing an "automatic amendment" to extend the expiration date of such Letter of Credit, each of Issuing Lender and Underlying Issuer, in its sole and absolute discretion, may give notice of nonrenewal of such Letter of Credit and, if Borrower does not at any time want such Letter of Credit to be renewed, Administrative Borrower will so notify Agent and Issuing Lender at least 15 calendar days before Issuing Lender or Underlying Issuer is required to notify the beneficiary of such Letter of Credit or any advising bank of such nonrenewal pursuant to the terms of such Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Borrower's reimbursement and payment obligations under this <u>Section</u> <u>2.11</u> are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, including:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any lack of validity, enforceability or legal effect of any Letter of Credit, any Reimbursement Undertaking or this Agreement or any term or provision therein or herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) payment against presentation of any draft, demand or claim for payment under any Drawing Document that does not comply in whole or in part with the terms of the applicable Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of such Person purporting to be a successor or transferee of the beneficiary of such Letter of Credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Issuing Lender or any of its branches or Affiliates or Underlying Issuer or any of its branches or Affiliates being the beneficiary of any Letter of Credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Issuing Lender or any correspondent or Underlying Issuer or any correspondent honoring a drawing against a Drawing Document up to the amount available under any Letter of Credit even if such Drawing Document claims an amount in excess of the amount available under the Letter of Credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the existence of any claim, set-off, defense or other right that Borrower or any of its Subsidiaries may have at any time against any beneficiary, any assignee of proceeds, Issuing Lender, Underlying Issuer or any other Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any other event, circumstance or conduct whatsoever, whether or not similar to any of the foregoing that might, but for this <u>Section</u> <u>2.11(i)</u>, constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, Borrower's or any of its Subsidiaries' reimbursement and other payment obligations and liabilities, arising under, or in connection with, any Letter of Credit, whether against Issuing Lender, Underlying Issuer, the beneficiary or any other Person; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) the fact that any Default or Event of Default shall have occurred and be continuing;

<u>provided</u>, <u>however</u>, that subject to <u>Section</u> <u>2.11(g)</u> above, the foregoing shall not release Issuing Lender or Underlying Issuer from such liability to Borrower as may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction against Issuing Lender or Underlying Issuer following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of Borrower to Issuing Lender arising under, or in connection with, this <u>Section</u> <u>2.11</u> or any Letter of Credit or Reimbursement Undertaking or its correspondent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Without limiting any other provision of this Agreement, Issuing Lender and each other Letter of Credit Related Person (if applicable) shall not be responsible to Borrower for, and Issuing Lender's rights and remedies against Borrower and the obligation of Borrower to reimburse Issuing Lender for each drawing under each Letter of Credit and each Reimbursement Undertaking shall not be impaired (except in the case of the gross negligence or willful misconduct of the Issuing Lender or any of its Affiliates as finally determined in a court of competent jurisdiction) by:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) honor of a presentation under any Letter of Credit that on its face substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit requires strict compliance by the beneficiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) acceptance as a draft of any written or electronic demand or request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Issuing Lender's or Underlying Issuer's determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the Letter of Credit);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) acting upon any instruction or request relative to a Letter of Credit or requested Letter of Credit that each of Issuing Lender and Underlying Issuer in good faith believes to have been given by a Person authorized to give such instruction or request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) payment to any paying or negotiating bank (designated or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where Issuing Lender or Underlying Issuer has issued, confirmed, advised or negotiated such Letter of Credit, as the case may be;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) honor of a presentation after the expiration date of any Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by Issuing Lender or Underlying Issuer, as applicable, if subsequently Issuing Lender or Underlying Issuer, as applicable, or any court or other finder of fact determines such presentation should have been honored;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) honor of a presentation that is subsequently determined by Issuing Lender or Underlying Issuer, as applicable, to have been made in violation of international, federal, provincial, state or local restrictions on the transaction of business with certain prohibited Persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Borrower shall pay immediately upon demand to Agent for the account of Issuing Lender as non-refundable fees, commissions, and charges (it being acknowledged and agreed that any charging of such fees, commissions, and charges to the Canadian Loan Account pursuant to the provisions of <u>Section</u> <u>2.6(d)</u> shall be deemed to constitute a demand for payment thereof for the purposes of this <u>Section</u> <u>2.11(k)</u>): (i) a fronting fee which shall be imposed by Issuing Lender upon the issuance of each Letter of Credit of 0.125% per annum of the face amount thereof, *<u>plus</u>* (ii) any and all other customary commissions, fees and charges then in effect imposed by, and any and all reasonable and documented expenses incurred by, Issuing Lender or Underlying Issuer, or by any adviser, confirming institution or entity or other nominated person, relating to Letters of Credit, at the time of issuance of any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including transfers, assignments of proceeds, amendments, drawings, renewals or cancellations). Notwithstanding the foregoing, if Issuing Lender is a Person other than WF Canada, all fronting fees payable in respect of Letters of Credit issued by such Issuing Lender shall be paid by Borrower immediately upon demand directly to such Issuing Lender for its own account. Borrower shall also pay directly to Underlying Issuer all of its fees, commissions and charges.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) If by reason of (x) any Change in Law, or (y) compliance by Issuing Lender or any other member of the Lender Group or Underlying Issuer with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit or any Reimbursement Undertaking issued or caused to be issued hereunder or hereby, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) there shall be imposed on Issuing Lender or any other member of the Lender Group or Underlying Issuer any other condition regarding any Letter of Credit or any Reimbursement Undertaking,

and the result of the foregoing is to increase, directly or indirectly, the cost to Issuing Lender or any other member of the Lender Group or Underlying Issuer of issuing, making, participating in, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Administrative Borrower, and Borrower shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate Issuing Lender or any other member of the Lender Group or Underlying Issuer for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Revolving Loans in the applicable currency that are Base Rate Loans hereunder; <u>provided</u>, that (A) Borrower shall not be required to provide any compensation pursuant to this <u>Section</u> <u>2.11(l)</u> for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to Administrative Borrower, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by Agent of any amount due pursuant to this <u>Section</u> <u>2.11(l)</u>, as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Unless otherwise expressly agreed by Issuing Lender and Borrower when a Letter of Credit is issued, (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of UCP shall apply to each commercial Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) In the event of a direct conflict between the provisions of this <u>Section</u> <u>2.11</u> and any provision contained in any Issuer Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this <u>Section</u> <u>2.11</u> shall control and govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12. **<u>Non-Base Rate Option</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Interest and Interest Payment Dates**. In lieu of having interest charged at the rate based upon the Base Rate, Borrower shall have the option, subject to <u>Section</u> <u>2.12(b)</u> below (the "<u>Non-Base Rate Option</u>") to have interest on all or a portion of the Revolving Loans be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a Non-Base Rate Loan, or upon continuation of a Non-Base Rate Loan as a Non-Base Rate Loan) at a rate of interest based upon the Non-Base Rate. Interest on Non-Base Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto; <u>provided</u>, that, subject to the following clauses (ii) and (iii), in the case of any Interest Period greater than 3 months in duration, interest shall be payable at 3 month intervals after the commencement of the applicable Interest Period and on the last day of such Interest Period, (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the date on which this Agreement is terminated pursuant to the terms hereof. On the last day of each applicable Interest Period, unless Borrower has properly exercised the Non-Base Rate Option with respect thereto, the interest rate applicable to such Non-Base Rate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder. At any time that an Event of Default has occurred and is continuing, at the written election of the Required Lenders, Borrower no longer shall have the option to request that Revolving Loans bear interest at a rate based upon the Non-Base Rate; provided that, for the avoidance of doubt, any Revolving Loans that are Non-Base Rate Loans as the time of such election shall continue as Non-Base Rate Loans until the end of the applicable Interest Period (and shall then automatically convert to Base Rate Loans of the same type).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Non-Base Rate Election**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Borrower may, at any time and from time to time, so long as Borrower has not received a notice from Agent (which notice Agent may elect to give or not give in its discretion unless Agent is directed to give such notice by the Required Lenders, in which case, it shall give the notice to Borrower), after the occurrence and during the continuance of an Event of Default, to terminate the right of Borrower to exercise the Non-Base Rate Option during the continuance of such Event of Default, elect to exercise the Non-Base Rate Option by Administrative Borrower notifying Agent prior to 11:00 a.m. (A) at least 3 Benchmark Rate Business Days prior to the commencement of the proposed Interest Period in the case of a Term CORRA Rate Loan and (B) with respect to an RFR Option electing Term SOFR at least 3 RFR Business Days prior to the commencement of the requested Interest Period (as applicable, the "<u>Non-Base Rate Deadline</u>"). The election of the Non-Base Rate Option by Borrower for a permitted portion of the Revolving Loans, and an Interest Period pursuant to this Section, shall be made by delivery by Administrative Borrower to Agent of a Non-Base Rate Notice received by Agent before the Non-Base Rate Deadline. Promptly upon its receipt of each such Non-Base Rate Notice, Agent shall provide a copy thereof to each of the affected Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Each Non-Base Rate Notice shall be irrevocable and binding on Borrower. In connection with each Non-Base Rate Loan, Borrower shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender (excluding any loss of anticipated profits and excluding any differential on applicable margin on funds so redeployed (in each case, other than breakage costs or any fees associated therewith)) as a result of (A) the payment of any principal of such Non-Base Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of such Non-Base Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any Non-Base Rate Loan on the date specified in any Non-Base Rate Notice delivered pursuant hereto (such losses, costs, or expenses, "<u>Funding Losses</u>"). A certificate of Agent or a Lender delivered to Administrative Borrower setting forth in reasonable detail any amount or amounts that Agent or such Lender is entitled to receive pursuant to this <u>Section</u> <u>2.12</u> shall be conclusive absent manifest error. Borrower, if such Non-Base Rate Loan is a Revolving Loan, shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate. If a payment of a Non-Base Rate Loan on a day other than the last day of the applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion at the request of Administrative Borrower, hold the amount of such payment as cash collateral in support of the Obligations until the last day of such Interest Period and apply such amounts to the payment of the applicable Non-Base Rate Loan on such last day, it being agreed that Agent has no obligation to so defer the application of payments to any Non-Base Rate Loan and that, in the event that Agent does not defer such application, Borrower shall be obligated to pay any resulting Funding Losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Unless Agent, in its sole discretion, agrees otherwise, Borrower shall have not more than 10 Non-Base Rate Loans in effect at any given time. Borrower may only exercise the Non-Base Rate Option for proposed Non-Base Rate Loans of at least $500,000 or US$500,000, as applicable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Conversion**. Borrower may convert Non-Base Rate Loans to Base Rate Loans in the Applicable Currency at any time; <u>provided</u>, that in the event that Non-Base Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any prepayment through the required application by Agent of any payments or proceeds of Collateral in accordance with <u>Section</u> <u>2.4(b)</u> or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with <u>Section</u> <u>2.12(b)(ii)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Special Provisions Applicable to Non-Base Rate**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Non-Base Rate may be adjusted by Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining deposits in any Applicable Currency or increased costs (other than Taxes which shall be governed by <u>Section</u> <u>16</u>), in each case, due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including any Changes in Law (including any changes in Tax laws (except changes of general applicability in corporate income Tax laws)) and changes in the reserve requirements imposed by the Board of Governors, which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the applicable Non-Base Rate. In any such event, the affected Lender shall give Administrative Borrower and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, Administrative Borrower may, by notice to such affected Lender (A) require such Lender to furnish to Administrative Borrower a statement setting forth in reasonable detail the basis for adjusting such Non-Base Rate and the method for determining the amount of such adjustment, or (B) repay the Non-Base Rate Loans of such Lender with respect to which such adjustment is made (together with any amounts due under <u>Section</u> <u>2.12(b)(ii)</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Subject to the provisions set forth in <u>Section</u> <u>2.12(d)(iii)</u> below, in connection with any Non-Base Rate Loan, a request therefor, a conversion to or a continuation thereof or otherwise, if for any reason Agent shall determine (which determination shall be conclusive and binding absent manifest error) that (A) if Term SOFR or Term CORRA is utilized in any calculations hereunder or under any other Loan Document with respect to any Obligations, interest, fees, commissions or other amounts, reasonable and adequate means do not exist for ascertaining Term SOFR or Term CORRA, as applicable, for the applicable Interest Period with respect to a proposed SOFR Rate Loan or such Term CORRA Rate Loan, as applicable, on or prior to the first day of such Interest Period, (B) a fundamental change has occurred in foreign exchange or interbank markets with respect to the Applicable Currency (including changes in national or international financial, political or economic conditions or currency exchange rates or exchange controls), (C) any Change in Law any time after the date hereof, in the reasonable opinion of any Lender, makes it unlawful or impractical for such Lender to fund or maintain any applicable Non-Base Rate Loans or to continue such funding or maintaining, or to determine or charge interest rates using Term CORRA or Term SOFR, and, in the case of this clause (C), such Lender has provided notice of such determination to Agent, Agent shall promptly give notice to Administrative Borrower. Upon notice thereof by Agent to Administrative Borrower, any obligation of the Lenders to make Non-Base Rate Loans, as applicable, in the Applicable Currency, and any right of Borrower to convert any Loan in the Applicable Currency to or continue any Loan as an Non Base Rate Loan in the Applicable Currency (to the extent of the affected Non-Base Rate Loans, the affected Interest Periods), shall be suspended until Agent (with respect to this clause (D), at the instruction of all affected Lenders) revokes such notice. Upon receipt of such notice, (I) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of Non-Base Rate Loans in each such affected Applicable Currency (to the extent of the affected SOFR Rate Loans or, in the case of Non-Base Rate Loans, the affected Interest Periods) or, failing that, (1) in the case of any request for a borrowing of an affected Non-Base Rate Loan, Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans in the Applicable Currency in the amount specified therein and (2) in the case of any request for a borrowing of an affected Non-Base Rate Loan then such request shall be ineffective and any outstanding affected Non-Base Rate Loans will be deemed to have been converted into Base Rate Loans in the Applicable Currency at the end of the applicable Interest Period (or immediately if it is unlawful for any such Loan to be outstanding until such time). Upon any such prepayment or conversion, Borrower shall also pay accrued interest on the amount so prepaid or converted, together with any additional amounts required pursuant to <u>Section</u> <u>2.12(b)(ii)</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Benchmark Replacement Setting</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) <u>Benchmark Replacement</u>. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event, with respect to any Benchmark, Agent and Administrative Borrower may amend this Agreement to replace such Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. on the fifth (5th) Business Day after Agent has posted such proposed amendment to all Lenders and Administrative Borrower so long as Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Required Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this <u>Section</u> <u>2.12(d)(iii)</u> will occur prior to the applicable Benchmark Transition Start Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>Benchmark Replacement Conforming Changes</u>. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) <u>Notices; Standards for Decisions and Determinations</u>. Agent will promptly notify Administrative Borrower and the Lenders of (1) the implementation of any Benchmark Replacement and (2) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement Agent will promptly notify Administrative Borrower of the removal or reinstatement of any tenor of a Benchmark pursuant to <u>Section</u> <u>2.12(d)(iii)(D)</u>. Any determination, decision or election that may be made by Agent or, if applicable any Lender (or group of Lenders) pursuant to this Section 2.12(d)(iii) including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party hereto or any other Loan Document, except, in each case, as expressly required pursuant to this <u>Section</u> <u>2.12(d)(iii)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) <u>Unavailability of Tenor of Benchmark.</u> Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (1) if any then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (I) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by Agent in its reasonable discretion or (II) the administrator of such Benchmark or the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative, then Agent may modify the definition of "Interest Period" (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable, non-representative, non-compliant or non-aligned tenor and (2) if a tenor that was removed pursuant to clause (1) above either (I) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (II) is not, or is no longer, subject to an announcement that it is not or will not be representative, then Agent may modify the definition of "Interest Period" (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) <u>Benchmark Unavailability Period</u>. Upon Administrative Borrower's receipt of notice of the commencement of a Benchmark Unavailability Period with respect to a given Benchmark, (I) the Borrower may revoke any pending request for a borrowing of, conversion to or continuation of Non-Base Rate Loans, in each case, to be made, converted or continued during any Benchmark Unavailability Period denominated in the Applicable Currency and, failing that, (1) in the case of any request for any affected Non-Base Rate Loans, if applicable, Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans in the Applicable Currency in the amount specified therein and (2) in the case of any request for any affected Non-Base Rate Loan, then such request shall be ineffective and any outstanding affected Non-Base Rate Loans, if applicable, will be deemed to have been converted into Base Rate Loans in the Applicable Currency at the end of the applicable Interest Period. Upon any such prepayment or conversion, the Borrower shall also pay accrued on the amount so prepaid or converted, together with any additional amounts required pursuant to <u>Section</u> <u>2.12(b)(ii)</u>. During a Benchmark Unavailability Period with respect to any Benchmark or at any time that a tenor for any then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark that is the subject of such Benchmark Unavailability Period or such tenor for such Benchmark, as applicable, will not be used in any determination of Base Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) **No Requirement of Matched Funding**. Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire deposits in the Applicable Currency to fund or otherwise match fund any Obligation as to which interest accrues at Term SOFR or Adjusted Term CORRA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13. **<u>Capital Requirements</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If, after the date hereof, any Issuing Lender or any Lender reasonably determines that (i) any Change in Law regarding capital or reserve requirements for banks or bank holding companies, or (ii) compliance by such Issuing Lender or such Lender, or their respective bank holding companies, with any guideline, request or directive of any Governmental Authority regarding capital adequacy (whether or not having the force of law), has the effect of reducing the return on such Issuing Lender's, such Lender's, or such holding companies' capital as a consequence of such Issuing Lender's or such Lender's commitments hereunder to a level below that which such Issuing Lender, such Lender, or such holding companies could have achieved but for such Change in Law or compliance (taking into consideration such Issuing Lender's, such Lender's, or such holding companies' then existing policies with respect to capital adequacy and assuming the full utilization of such entity's capital) by any amount deemed by such Issuing Lender or such Lender to be material, then such Issuing Lender or such Lender may notify Administrative Borrower and Agent thereof. Following receipt of such notice, Borrower agrees to pay such Issuing Lender or such Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within 30 days after presentation by such Issuing Lender or such Lender of a statement in the amount and setting forth in reasonable detail such Issuing Lender's or such Lender's calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error). In determining such amount, such Issuing Lender or such Lender may use any reasonable averaging and attribution methods. Failure or delay on the part of such Issuing Lender or any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Issuing Lender's or such Lender's right to demand such compensation; <u>provided</u> that Borrower shall not be required to compensate any Issuing Lender or a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that such Issuing Lender or such Lender notifies Administrative Borrower of such Change in Law giving rise to such reductions and of such Lender's intention to claim compensation therefor; <u>provided</u> <u>further</u> that if such claim arises by reason of the Change in Law that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any Issuing Lender or any Lender requests additional or increased costs referred to in <u>Section</u> <u>2.11(l)</u> or <u>Section</u> <u>2.12(d)(i)</u> or amounts under <u>Section</u> <u>2.13(a)</u> or sends a notice under <u>Section</u> <u>2.12(d)(i)</u> relative to changed circumstances (such Issuing Lender or Lender, an "<u>Affected Lender</u>"), then such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to <u>Section</u> <u>2.11(l)</u>, <u>Section</u> <u>2.12(d)(i)</u> or <u>Section</u> <u>2.13(a)</u>, as applicable, or would eliminate the illegality or impracticality of funding or maintaining Non-Base Rate Loans and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it. Borrower agrees to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment. If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrower's obligation to pay any future amounts to such Affected Lender pursuant to <u>Section</u> <u>2.11(l)</u>, <u>Section</u> <u>2.11(1)</u>, <u>Section</u> <u>2.12(d)(i)</u> or <u>Section</u> <u>2.13(a)</u>, as applicable, or to enable Borrower to obtain Non-Base Rate Loans, then Administrative Borrower (without prejudice to any amounts then due to such Affected Lender under <u>Section</u> <u>2.11(l)</u>, <u>Section</u> <u>2.12(d)(i)</u> or <u>Section</u> <u>2.13(a)</u>, as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under <u>Section</u> <u>2.11(l)</u>, <u>Section</u> <u>2.12(d)(i)</u> or <u>Section</u> <u>2.13(a)</u>, as applicable, or indicates that it is no longer unlawful or impractical to fund or maintain Non-Base Rate Loans, may designate a different Issuing Lender or substitute a Lender, in each case, reasonably acceptable to Agent to purchase the Obligations owed to such Affected Lender (and its Affiliates) and such Affected Lender's (and its Affiliates') commitments hereunder (a "<u>Replacement Lender</u>"), and if such Replacement Lender agrees to such purchase, such Affected Lender (and its Affiliates) shall assign to the Replacement Lender its Obligations and commitments, and upon such purchase by the Replacement Lender, which such Replacement Lender shall be deemed to be "Issuing Lender" or a "Lender" (as the case may be) for purposes of this Agreement and such Affected Lender shall cease to be an "Issuing Lender" or a "Lender" (as the case may be) for purposes of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything herein to the contrary, the protection of <u>Sections 2.11(l)</u>, <u>2.12(d)</u>, and 2.13 shall be available to each Issuing Lender and each Lender (as applicable) regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, judicial ruling, judgment, guideline, treaty or other change or condition which shall have occurred or been imposed, so long as it shall be customary for Issuing Lenders or Lenders affected thereby to comply therewith. Notwithstanding any other provision herein, neither any Issuing Lender nor any Lender shall demand compensation pursuant to this <u>Section</u> <u>2.13</u> if it shall not at the time be the general policy or practice of such Issuing Lender or such Lender (as the case may be) to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14. **<u>Currencies</u>**. The Revolving Loans and other Obligations (unless such other Obligations expressly provide otherwise) shall be made and repaid in Canadian Dollars. The Revolving Loans shall be denominated in Canadian Dollars or US Dollars (as selected by Administrative Borrower in accordance with <u>Section</u> <u>2.3</u> at the time such Revolving Loan is requested) except (a) Protective Advances made by Agent shall be denominated in Canadian Dollars or US Dollars (as selected by Agent), (b) Letters of Credit may be issued in Canadian Dollars, US Dollars, British Pounds or Euros, and (c) Revolving Loans charged to the Applicable Loan Account pursuant to <u>Section</u> <u>2.6</u> to pay fees, interest, expenses and other amounts shall be denominated in the Applicable Currency of such fees, interest, expenses and other amounts. All Obligations denominated in Canadian Dollars shall be repaid in Canadian Dollars and all Obligations denominated in US Dollars shall be repaid in Canadian Dollars. Payments made in a currency other than the currency in which the applicable Obligations are denominated may be accepted by the Agent in its sole discretion and, if so accepted, Borrower agrees that the Agent may convert the payment made to the currency of the applicable Obligations at the applicable Spot Rate in accordance with its normal practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15. ***<u>Interest Act</u>* <u>(Canada); Criminal Rate of Interest; Nominal Rate of Interest</u>**. Notwithstanding anything to the contrary contained in this Agreement or in any other Loan Document:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) whenever interest payable by Borrower is calculated on the basis of a period which is less than the actual number of days in a calendar year, each rate of interest determined pursuant to such calculation is, for the purposes of the *Interest Act* (Canada), equivalent to such rate multiplied by the actual number of days in the calendar year in which such rate is to be ascertained and divided by the number of days used as the basis of such calculation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Borrower confirms that it fully understands and is able to calculate the rate of interest applicable to the Loans based on the methodology for calculating annual rates provided for in this Agreement. The Borrower hereby irrevocably agrees not to plead or assert, whether by way of defense or otherwise, in any proceeding relating to this Agreement or any other Loan Documents, that the interest payable under this Agreement and the calculation thereof has not been adequately disclosed to the Borrower as required pursuant to Section 4 of the Interest Act (Canada),

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in no event shall the aggregate "interest" (as defined in Section 347 of the *Criminal Code* (Canada), as the same shall be amended, replaced or re-enacted from time to time (the "<u>Criminal Code Section</u>")) payable (whether by way of payment, collection or demand) by Borrower to Agent or any Lender under this Agreement or any other Loan Document exceed the effective annual rate of interest on the "credit advanced" (as defined in that section) under this Agreement or such other Loan Document lawfully permitted under that section and, if any payment, collection or demand pursuant to this Agreement or any other Loan Document in respect of "interest" (as defined in that section) is determined to be contrary to the provisions of that section and the amount of such payment or collection shall be refunded by Agent and Lenders to Borrower with such "interest" deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the Criminal Code Section to result in a receipt by Agent or such Lender of interest at a rate not in contravention of the Criminal Code Section, such adjustment to be effected, to the extent necessary, as follows: firstly, by reducing the amounts or rates of interest required to be paid to Agent or that Lender; and then, by reducing any fees, charges, expenses and other amounts required to be paid to the affected Agent or Lender which would constitute "interest". Notwithstanding the foregoing, and after giving effect to all such adjustments, if Agent or any Lender shall have received an amount in excess of the maximum permitted by the Criminal Code Section, then Borrower shall be entitled, by notice in writing to the Agent or affected Lender, to obtain reimbursement from Agent or that Lender in an amount equal to such excess. For the purposes of this Agreement and each other Loan Document to which Borrower is a party, the effective annual rate of interest payable by Borrower shall be determined in accordance with generally accepted actuarial practices and principles over the term of the loans on the basis of annual compounding for the lawfully permitted rate of interest and, in the event of dispute, a certificate of a Fellow of the Institute of Actuaries appointed by Agent for the account of Borrower will be conclusive for the purpose of such determination in the absence of evidence to the contrary,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) all calculations of interest payable by Borrower under this Agreement or any other Loan Document are to be made on the basis of the nominal interest rate described herein and therein and not on the basis of effective yearly rates or on any other basis which gives effect to the principle of deemed reinvestment of interest. The parties acknowledge that there is a material difference between the stated nominal interest rates and the effective yearly rates of interest and that they are capable of making the calculations required to determine such effective yearly rates of interest,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any provision of this Agreement that would oblige Borrower to pay any fine, penalty or rate of interest on any arrears of principal or interest secured by a mortgage on real property or hypothec on immovables that has the effect of increasing the charge on arrears beyond the rate of interest payable on principal money not in arrears shall not apply to Borrower, which shall be required to pay interest on money in arrears at the same rate of interest payable on principal money not in arrears, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) if there is a conflict, inconsistency, ambiguity or difference between any provision of this <u>Section</u> <u>2.15</u> and any other Section of this Agreement or any other Loan Document with respect to Borrower then the provisions of this <u>Section</u> <u>2.15</u> shall prevail and be paramount.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16. **<u>Accordion</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) At any time during the period from and after the Closing Date through but excluding the date that is three months prior to the Maturity Date, at the option and upon written request of Borrower (but subject to the conditions set forth in clause (b) below), the Revolver Commitments and the Maximum Credit Amount may be increased by an amount in the aggregate for all such increases of the Revolver Commitments and the Maximum Credit Amount not to exceed the Available Increase Amount (each such increase, an "<u>Increase</u>"); <u>provided</u>, that in no event shall the Revolver Commitments and the Maximum Credit Amount be increased to an amount in excess of $98,000,000. Each Lender shall increase its Revolver Commitment (it being understood that each Lender shall be obligated to increase its Revolver Commitments with respect to Increases in an aggregate amount not exceeding $5,000,000 but no Lender shall be obligated to increase its Revolver Commitment with respect to any further Increases requested, if a result of such Increase, the aggregate amount of the Increases to the Revolver Commitments made pursuant this <u>Section</u> <u>2.16</u> would exceed $5,000,000) by its Pro Rata Share of the proposed Increase upon the date that such proposed Increase becomes effective (the "<u>Increase Date</u>"). Any Increase shall be in an amount of at least $1,000,000 and integral multiples of $1,000,000 in excess thereof. In no event may the Revolver Commitments and the Maximum Credit Amount be increased pursuant to this <u>Section</u> <u>2.16</u> on more than 5 occasions in the aggregate for all such Increases. Additionally, for the avoidance of doubt, it is understood and agreed that in no event shall the aggregate amount of the Increases to the Revolver Commitments exceed $13,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the following shall be conditions precedent to any Increase of the Revolver Commitments and the Maximum Credit Amount in connection therewith:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Increase whereby as a result of such Increase, the aggregate principal amount of the Increases to the Revolver Commitments made pursuant this <u>Section</u> <u>2.16</u> exceeds $5,000,000, shall (x) require approval in writing by the Agent, and (y) Agent or Borrower have obtained the commitment of one or more Lenders (or other prospective lenders) reasonably satisfactory to Agent and Borrower to provide the applicable Increase and any such Lenders (or prospective lenders), Borrower, and Agent have signed a joinder agreement to this Agreement (an "<u>Increase Joinder</u>"), in form and substance reasonably satisfactory to Agent, to which such Lenders (or prospective lenders), Borrower, and Agent are party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) each of the conditions precedent set forth in <u>Section</u> <u>3.2</u> are satisfied,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Borrower shall have paid the Increase fee payable pursuant to the Fee Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Unless otherwise specifically provided herein, all references in this Agreement and any other Loan Document to Revolving Loans shall be deemed, unless the context otherwise requires, to include Revolving Loans made pursuant to the increased Revolver Commitments and the Maximum Credit Amount pursuant to this <u>Section</u> <u>2.16</u>.

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3. **CONDITIONS; TERM OF AGREEMENT.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1. **<u>Conditions Precedent to the Initial Extension of Credit</u>**. The obligation of the Lender Group (or any member thereof) to make any Revolving Loans hereunder or to extend any other credit hereunder on or after the Closing Date is subject to the fulfillment (or waiver by Agent and each Lender), to the satisfaction of Agent and each Lender, of each of the conditions precedent set forth in Part B of <u>Schedule 3.1</u> (the making of such initial extensions of credit by a Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent). The parties acknowledge that the conditions precedent set forth in Part A of the <u>Schedule 3.1</u> with respect to the initial extension of credit under the Original Credit Agreement have been satisfied or waived in accordance with the terms thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2. **<u>Conditions Precedent to all Extensions of Credit</u>**. The obligation of the Lender Group (or any member thereof) to make any Revolving Loans hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent (unless waived in accordance with the terms hereof):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the representations and warranties of Borrower and its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3. **<u>Maturity</u>**. This Agreement shall continue in full force and effect for a term ending on the Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4. **<u>Effect of Maturity</u>**. On the Maturity Date, all commitments of the Lender Group to provide additional credit hereunder shall automatically be terminated and all of the Obligations shall become due and payable immediately without notice or demand and Borrower shall be required to repay all of the Obligations in full. No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Commitments) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Agent's Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations have been paid in full and the Commitments have been terminated. When all of the Obligations have been paid in full and the Lender Group's obligations to provide additional credit under the Loan Documents have been terminated irrevocably, Agent will, at Borrower's sole expense, execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent's Liens and all notices of security interests and liens previously filed by Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5. **<u>Early Termination by Borrower</u>**. Borrower has the option, at any time upon 10 Business Days prior written notice to Agent by Administrative Borrower, to terminate this Agreement and terminate the Commitments hereunder by repaying to Agent all of the Obligations in full and the Applicable Prepayment Premium pursuant to the Fee Letter. The foregoing notwithstanding, (a) Administrative Borrower may rescind termination notices relative to proposed payments in full of the Obligations with the proceeds of third party Indebtedness if the closing for such issuance or incurrence does not happen on or before the date of the proposed termination (in which case, a new notice shall be required to be sent in connection with any subsequent termination), and (b) Administrative Borrower may extend the date of termination at any time with the consent of Agent (which consent shall not be unreasonably withheld or delayed).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6. **<u>Post-Closing Covenants</u>**. Borrower covenants and agrees to satisfy each item on Part B of <u>Schedule 3.6</u> on or before the date set forth on <u>Schedule 3.6</u> for such item.

4. **REPRESENTATIONS AND WARRANTIES.** 

In order to induce the Lender Group to enter into this Agreement, Borrower makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Revolving Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Revolving Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. **<u>Due Organization and Qualification; Subsidiaries</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower and, subject to the completion of any transaction permitted by <u>Section</u> <u>6.3</u>, each of its Subsidiaries (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified or registered to do business in any jurisdiction where the failure to be so qualified would reasonably be expected to result in a Material Adverse Effect, and (iii) has all requisite corporate, limited liability or other organizational power and authority (as applicable) to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Set forth on <u>Schedule 4.1</u> is a complete and accurate description as of the Closing Date of the authorized Equity Interests of Borrower and each of its Subsidiaries, by class, and, as of the Closing Date, a description of the number of shares of each such class that are issued and outstanding. Neither Borrower nor any of its Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security convertible into or exchangeable for any of its Equity Interests except for any Equity Interests (other than Disqualified Equity Interests) that are permitted by the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Set forth on <u>Schedule 4.1</u> (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of the Loan Parties' direct and indirect Subsidiaries, showing: (i) the number of shares of each class of common and preferred Equity Interests authorized for each of such Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Borrower. All of the outstanding Equity Interests of each such Subsidiary has been validly issued and is fully paid and non-assessable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Except as set forth on <u>Schedule 4.1,</u> there are no subscriptions, options, warrants, or calls relating to any shares of Borrower's or any of its Subsidiaries' Equity Interests as of the Closing Date, including any right of conversion or exchange under any outstanding security or other instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. **<u>Due Authorization; No Conflict</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary organizational action on the part of such Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, provincial, state, foreign or local law or regulation applicable to any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries where any such violation would individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (ii) violate the Governing Documents of any Loan Party or its Subsidiaries, (iii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material agreement of any Loan Party or its Subsidiaries where any such conflict, breach or default would individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iv) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party or its Subsidiaries, other than Permitted Liens, or (v) require any approval of any holder of Equity Interests of a Loan Party or its Subsidiaries or any approval or consent of any Person under any material agreement of any Loan Party or its Subsidiaries, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of material agreements, for consents or approvals, the failure to obtain would not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. **<u>Governmental Consents</u>**. The execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date or where any such failure to do the foregoing would not individually or in the aggregate reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4. **<u>Binding Obligations; Perfected Liens</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors' rights generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Agent's Liens are validly created, perfected (other than (i) any Excluded Deposit Accounts (as defined in the Canadian Security Documents)), and first priority Liens, subject only to Permitted Liens which are non-consensual Permitted Liens, Purchase Money Liens securing Permitted Purchase Money Indebtedness and Liens securing the interests of lessors under Capital Leases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5. **<u>Title to Assets; No Encumbrances</u>**. Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property), all of their respective assets reflected in the most recent financial statements delivered pursuant to <u>Section</u> <u>5.1</u>, in each case except for (i) [Reserved], and (ii) minor defects in title that do not interfere with any sale, transfer, or other disposition of such property, or its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes. All of such assets are free and clear of Liens except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6. **<u>Litigation</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) There are no actions, suits, or proceedings pending or, to the knowledge of Borrower, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Schedule 4.6(b)</u> sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities of a Loan Party in excess of, $1,000,000 that, as of the Closing Date, is pending or, to the knowledge of Borrower, after due inquiry, threatened in writing against a Loan Party or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the procedural status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Loan Parties' and their Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7. **<u>Compliance with Laws</u>**. No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect, or is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, in each case that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8. **<u>Financial Statements; No Material Adverse Effect</u>**. All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrower to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and, subject to the impact of the Original Closing Date US Divestiture, present fairly in all material respects, the Loan Parties' and their Subsidiaries' consolidated financial condition as of the date thereof and results of operations for the period then ended. Since October 30, 2021 no event, circumstance, or change has occurred that has or would reasonably be expected to result in a Material Adverse Effect with respect to the Loan Parties and their Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9. **<u>Solvency</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Loan Parties, taken as a whole, are Solvent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10. **<u>Canadian Pension Plan</u>**. As of the Closing Date, no Loan Party, nor any of its Subsidiaries maintains or contributes to any Canadian Pension Plans nor have any liabilities or obligations in respect of a Canadian Defined Benefit Plan that has been terminated or wound up.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11. **<u>Environmental Condition</u>**. Except as set forth on <u>Schedule 4.11</u> or except as, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, (a) no Loan Party's nor any of its Subsidiaries' properties or assets has ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any respect, of or has given rise to liability of a Loan Party or any of its Subsidiaries, or to the knowledge of Borrower, liability of previous owners or operators, under any applicable Environmental Law, (b) no Loan Party's nor any of its Subsidiaries' properties or assets has ever been designated or identified in any manner pursuant to any Environmental Law as a Hazardous Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has received written notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding Environmental Action or other written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liabilities.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12. **<u>Complete Disclosure</u>**. All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrower's industry) furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about Borrower's industry) hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The Projections delivered to Agent on April 29, 2021 represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrower's good faith estimate, on the date such Projections are delivered, of the Loan Parties' and their Subsidiaries' future performance for the periods covered thereby based upon assumptions believed by Borrower to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, and no assurances can be given that such Projections will be realized, and although reflecting Borrower's good faith estimate, projections or forecasts based on methods and assumptions which Borrower believed to be reasonable at the time such Projections were prepared, are not to be viewed as facts, and that actual results during the period or periods covered by the Projections may differ materially from projected or estimated results).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13. ***<u>Patriot Act</u>*<u>; Canadian AML and Anti-Terrorism Laws</u>**. To the extent applicable, each Loan Party and each of its Subsidiaries is in compliance in all material respects with the (a) *Trading with the Enemy Act*, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (*USA Patriot Act* of 2001) (the "*<u>Patriot Act</u>*") and all applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation. No part of the proceeds of the Loans made hereunder will be used by any Loan Party or any of their Affiliates, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the *United States Foreign Corrupt Practices Act* of 1977, as amended.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14. **<u>Indebtedness</u>**. Set forth on <u>Schedule 4.14</u> is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding as of the Closing Date (excluding Indebtedness referenced in paragraph (a) and paragraphs (c) through (h) of the definition of "Permitted Indebtedness") and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date. As of the Closing Date, Borrower has no outstanding Indebtedness or trade payables owing to any of the secured parties listed in paragraph 8 of Part A of <u>Schedule 3.6</u> that is secured by the security perfected by the PPSA registration in favour of the applicable secured party listed therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15. **<u>Payment of Taxes</u>**. All Federal, provincial and state income Tax returns and all other material Tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely filed, and all Federal, provincial and state income Taxes and all other material Taxes shown on such Tax returns to be due and payable and all material assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable, except (a) where failure to do so could not reasonably be expected to have a Material Adverse Effect; or (b) the validity of such Tax is the subject of a Permitted Protest as contemplated by <u>Section</u> <u>5.5</u> Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all Taxes not yet due and payable. Borrower does not know of any material proposed Tax assessment against a Loan Party or any of its Subsidiaries that is not being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by appropriate proceedings; <u>provided</u> such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16. **<u>Margin Stock</u>**. No Loan Party nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the loans made to Borrower will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.17. **<u>Governmental Regulation</u>**. No Loan Party nor any of its Subsidiaries is subject to regulation under the *Federal Power Act* or the *Investment Company Act* of 1940 or under any other federal, provincial or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable. No Loan Party nor any of its Subsidiaries is a "registered investment company" or a company "controlled" by a "registered investment company" or a "principal underwriter" of a "registered investment company" as such terms are defined in the *Investment Company Act* of 1940.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.18. **<u>OFAC</u>**. No Loan Party nor any of its Subsidiaries is in violation of any of the country or list based economic and trade sanctions administered and enforced by OFAC or any Canadian Governmental Authority. No Loan Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or (c) to its knowledge derives revenues directly or indirectly, from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. No proceeds of any loan made hereunder will be used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.19. **<u>Employee and Labor Matters</u>**. Except as set forth on <u>Schedule 4.19</u>, no Loan Party nor any of its Subsidiaries is a party to or otherwise bound by any collective bargaining or similar agreement with any union or other labor organization. Except to the extent would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, there is (i) no unfair labor practice charge or complaint pending or, to the knowledge of Borrower, threatened against Borrower or any of its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against Borrower or any of its Subsidiaries which arises out of or under any collective bargaining agreement and that would reasonably be expected to result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against Borrower or its Subsidiaries that could reasonably be expected to result in a material liability, or (iii) to the knowledge of Borrower, after due inquiry, no union representation question existing with respect to the employees of Borrower or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of Borrower or its Subsidiaries. None of Borrower or its Subsidiaries has incurred any liability or obligation under the *Worker Adjustment and Retraining Notification Act* or similar state or foreign law, which remains unpaid or unsatisfied which could reasonably be expected to result in a Material Adverse Effect. The hours worked and payments made to, classification of, employees of Borrower and its Subsidiaries have not been in violation of the *Fair Labor Standards Act* or any other applicable legal requirements, except to the extent such violations would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All material payments due from Borrower or its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of Borrower and all remittances and withholdings on account of Taxes and employer or employee contribution to benefit plans have been remitted to the applicable Governmental Authority when due, except where the failure to do so would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.20. **<u>Intellectual Property</u>**. Each Loan Party and Subsidiary owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without conflict with any rights of others. There is no pending or, to any Loan Party's knowledge, threatened material Intellectual Property Claim with respect to any Loan Party, any Subsidiary or any of their Property (including any Intellectual Property). All Intellectual Property owned by any Loan Party or any Subsidiary and registered with the U.S. Patent and Trademark Office, the Canadian Intellectual Property Office or any applicable Governmental Authority in the European Union is identified on <u>Schedule 4.20</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.22. **<u>Eligible Inventory</u>**. As to each item of Inventory that is identified by Borrower as Eligible Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.23. **<u>Location of Inventory and Equipment</u>**. Except for the third-party warehouse locations identified on <u>Schedule 4.23</u>, the Inventory and Equipment of Borrower is not stored with a bailee, warehouseman, or similar party and is located only at, or in-transit between, the locations identified on <u>Schedule 4.23</u> (as such Schedule may be updated pursuant to <u>Section</u> <u>5.14</u>).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.24. **<u>Inventory Records</u>**. Each Loan Party keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries' Inventory and the book value thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.25. **<u>Hedge Agreements</u>**. On each date that any Hedge Agreement is executed by any Hedge Provider, each Loan Party party to such Hedge Agreement satisfies all eligibility, suitability and other requirements under the *Commodity Exchange Act* and the Commodity Futures Trading Commission regulations and, in the case of a guarantor of Hedge Obligations, is a Qualified ECP Guarantor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.26. **<u>Credit Card Arrangements</u>**. <u>Schedule 4.26</u> is a list describing all arrangements as of the Closing Date to which any Loan Party is a party with respect to the processing and/or payment to such Loan Party of the proceeds of any credit card charges and debit card charges for sales made by such Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.27. **<u>No Defaults; Material Contracts</u>**. No event or circumstance has occurred or exists as of the date of this Agreement that constitutes a Default or Event of Default. <u>Schedule 4.27</u> contains a true, correct and complete list of all Material Contracts, and except as described thereon, all such Material Contracts are in full force and effect. No Loan Party or Subsidiary is in default, and no event or circumstance has occurred or exists that with the passage of time or giving of notice would constitute a default, under any Material Contract which would enable the other contracting party to terminate such Material Contract. There is no basis upon which any party (other than a Loan Party or the Subsidiary) could terminate a Material Contract prior to its scheduled termination date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.28. **<u>Operations of Certain Subsidiaries</u>**. As of the Closing Date, CGS is inactive and does not engage in any trade or business, own any assets or owe any Indebtedness or any other obligation or liability except as expressly permitted hereunder in its capacity as a Loan Party and the ownership of all of the outstanding shares of CGS USA. Each of CGS USA and Birks Jewellers Limited, is inactive and does not engage in any trade or business, own any assets or owe any Indebtedness or any other obligation or liability other than, in the case of CGS USA, (a) the provision of limited support services to Borrower and (b) the payment by Borrower to CGS USA of up to US$500,000 in the aggregate in each Fiscal Year in the form of Permitted Intercompany Advances and reimbursements of reasonable and documented expenses incurred by CGS USA for and on behalf of Borrower, provided that no Default or Event of Default has occurred and is continuing at the time of any such payment.

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5. **AFFIRMATIVE COVENANTS.** 

Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. **<u>Financial Statements, Reports, Certificates</u>**. Borrower (a) will deliver to Agent each of the financial statements, reports, and other items set forth on <u>Schedule 5.1</u> no later than the times specified therein, (b) agree that no Subsidiary of a Loan Party will have a Fiscal Year different from that of Borrower, (c) agree to maintain a system of accounting that enables Borrower to produce financial statements in accordance with GAAP, and (d) agree that they will, and will cause each other Loan Party to, (i) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to their Subsidiaries' sales (for avoidance of doubt, Agent and Lenders hereby acknowledge that the reporting system maintained by the Loan Parties on the Closing Date satisfies this clause (i)), and (ii) agree that they will, and will cause each other Loan Party to maintain their billing and reporting system materially consistent with that in effect as of the Closing Date, and shall only make material modifications thereto with notice to, and with the consent of, the Agent (such consent not to be unreasonably withheld or delayed).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. **<u>Reporting</u>**. Borrower (a) will deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the reports set forth on <u>Schedule 5.2</u> at the times specified therein, and (b) agree to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. **<u>Existence</u>**. Except as otherwise permitted under <u>Section</u> <u>6.3</u> or <u>Section</u> <u>6.4</u>, Borrower will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect such Person's valid existence and good standing in its jurisdiction of organization and, except as would not reasonably be expected to result in a Material Adverse Effect, good standing with respect to all other jurisdictions in which it is qualified or required to be qualified to do business and any rights, franchises, permits, licenses, accreditations, authorizations, or other approvals material to their businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. **<u>Maintenance of Properties</u>**. Borrower will, and will cause each of its Subsidiaries to, maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, casualty, and condemnation and Permitted Dispositions excepted (and except where the failure to so maintain and preserve assets would not reasonably be expected to result in a Material Adverse Effect).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5. **<u>Taxes</u>**. Borrower will, and will cause each of its Subsidiaries to, pay in full before delinquency or before the expiration of any extension period all Federal, provincial and state income and capital Taxes and all other material Taxes imposed, levied, or assessed against it, or any of its assets or in respect of any of its income, capital, businesses, or franchises, except to the extent that the validity of such Tax is the subject of a Permitted Protest.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6. **<u>Insurance</u>**. Borrower will, and will cause each of its Subsidiaries to, at Borrower's expense, maintain insurance respecting each of each Loan Party's and its Subsidiaries' assets wherever located, covering liabilities, losses or damages as are customarily are insured against by other Persons engaged in same or similar businesses and similarly situated and located and flood insurance coverage acceptable to Agent with respect to all Real Property Collateral (to the extent flood insurance is required). All such policies of insurance shall be with financially sound and reputable insurance companies that are reasonably acceptable to Agent (it being agreed that any insurance providers which have a policy in effect with Borrower or any of its Subsidiaries as of the Closing Date are acceptable to Agent) and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and, in any event, in amount, adequacy, and scope reasonably satisfactory to Agent (it being agreed that the amount, adequacy, and scope of the policies of insurance of Borrower in effect as of the Closing Date are acceptable to Agent). All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard lenders' loss payable endorsement with a standard non-contributory "lender" or "secured party" clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders' interest in the Collateral and to any payments to be made under such policies. All certificates of property and general liability insurance are to be delivered to Agent, with lenders' loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and shall provide for not less than 30 days (10 days in the case of non-payment), or such shorter period as Agent may agree, prior written notice to Agent of the exercise of any right of cancellation. If any Loan Party or its Subsidiaries fails to maintain such insurance, Agent may arrange for such insurance, but at Borrower's expense and without any responsibility on Agent's part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Borrower shall give Agent prompt notice of any loss exceeding $1,000,000 covered by Borrower or its Subsidiaries' casualty or business interruption insurance. Upon the occurrence and during the continuance of an Event of Default, Agent shall have the sole right to file claims under any property and general liability insurance policies in respect of the Collateral, to receive, receipt and give acquittance for any payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such insurance policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7. **<u>Inspection</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower will, and will cause each of its Subsidiaries to, permit Agent, any Lender and each of their respective duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees (provided an authorized representative of a Borrower shall be allowed to be present) at such reasonable times and intervals as Agent or any Lender, as applicable, may designate and, so long as no Default or Event of Default has occurred and is continuing, with reasonable prior notice to Administrative Borrower and during regular business hours.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower will, and will cause each of its Subsidiaries to, permit Agent and each of its duly authorized representatives or agents to conduct appraisals and valuations at such reasonable times and intervals as Agent may designate; <u>provided</u> that the expenses required to be paid by the Loan Parties in connection therewith shall be subject to any applicable limitation set forth in <u>Section</u> <u>2.10(c)</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8. **<u>Compliance with Laws</u> <u>and Material Contracts</u>**. Borrower will, and will cause each of its Subsidiaries to, comply with (a) the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority, and (b) all of its Material Contracts, except in each case where non-compliance with which, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.9. **<u>Environmental</u>**. Borrower will, and will cause each of its Subsidiaries to,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Keep any property either owned or operated by any Loan Party or its Subsidiaries free of any Environmental Liens (other than Permitted Liens) or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens (other than Permitted Liens),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Comply with applicable Environmental Laws, except where a failure to comply would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, and provide to Agent documentation of such compliance which Agent reasonably requests,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Promptly notify Agent of any release of which Borrower has knowledge of a Hazardous Material in any reportable quantity or which could reasonably be expected to result in material liabilities of any Loan Party or its Subsidiaries from or onto property owned or operated by any Loan Party or its Subsidiaries and take any Remedial Actions required to abate said release or otherwise to come into compliance, in all material respects, with applicable Environmental Law, except where a failure to comply would not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, and provide to Agent documentation of such compliance which Agent reasonably requests, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Promptly, but in any event within 5 Business Days of its receipt thereof, provide Agent with written notice of any of the following: (i) notice that an Environmental Lien has been filed against any of the real or personal property of a Loan Party or its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against a Loan Party or its Subsidiaries that individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority that would reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.10. **<u>Disclosure Updates</u>**. Each Loan Party will, promptly and in no event later than fifteen Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.11. **<u>Formation of Subsidiaries</u>**. Borrower will, at the time that any Loan Party forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Closing Date, (x) within 30 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion) (a) cause such new Subsidiary to provide to Agent a joinder to the Canadian Security Documents and other applicable Loan Documents (including this Agreement to the extent that such Subsidiary is to be joined as a Borrower hereunder), as applicable, which joinder shall include such provisions as Agent shall consider necessary or desirable for the inclusion of such Subsidiary as a Borrower or other Loan Party including such provisions as are necessary or desirable to reflect the formation of such Subsidiary under the laws of a jurisdiction other than Canada or the location of Collateral outside of Canada and a guarantee of the Obligations, if required, together with such other security agreements, ,as well as appropriate financing statements (and with respect to all Real Property Collateral subject (or required hereunder to be subject) to a Mortgage, fixture filings) all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens)) in and to the assets of such newly formed or acquired Subsidiary (other than Excluded Property, as defined in the Canadian Security Documents); to the applicable Canadian Security Documents, the guarantee and such other security agreements shall not be required to be provided to Agent with respect to Obligations, if the costs to the Loan Parties of providing such guarantee or such security agreements are unreasonably excessive (as determined by Agent in consultation with Administrative Borrower) in relation to the benefit to Agent and the Lenders of the security or guarantee afforded thereby and (b) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which, in its reasonable judgment, is necessary with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance, or other documentation with respect to all Real Property Collateral owned in fee and required to be subject to a Mortgage), and (y) within 60 days of such formation or acquisition (or such later date as permitted by Agent in its sole discretion), (a) cause such new Subsidiary to provide to Agent Mortgages with respect to any Real Property owned in fee of such new Subsidiary with a fair market value greater than $1,000,000, as well as appropriate fixture filings, all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the Real Property assets of such newly formed or acquired Subsidiary); and (b) provide to Agent all other documentation, including one or more opinions of counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including policies of title insurance, evidence of flood certification documentation (to the extent required) or other documentation with respect to all Real Property owned in fee and subject to (or required hereunder to be subject to) a Mortgage). Any document, agreement, or instrument executed or issued pursuant to this <u>Section</u> <u>5.11</u> shall constitute a Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.12. **<u>Further Assurances</u>**. Borrower will, and will cause each of the other Loan Parties to, at any time upon the reasonable request of Agent, execute or deliver, or cause to be executed or delivered to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, mortgages, deeds of trust, opinions of counsel, and all other documents (the "<u>Additional Documents</u>") that Agent may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better perfect Agent's Liens in all of the assets of Loan Parties (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal), to create and perfect Liens in favor of Agent in any Real Property acquired by any Loan Party with a fair market value in excess of $1,000,000, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents. To the maximum extent permitted by applicable law, if any Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, Borrower, each Borrower and each other Loan Party hereby authorizes Agent to execute any such Additional Documents in the applicable Loan Party's name and authorizes Agent to file such executed Additional Documents in any appropriate filing office. In furtherance of, and not in limitation of, the foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the assets of each Loan Party, including all of the outstanding Equity Interests of Borrower and its Subsidiaries. Without limiting the generality of the foregoing, the Borrower shall ensure that promptly, and in no event more than 15 days, following the Montrovest Merger, Montel shall sign an acknowledgment and confirmation in respect of the Montrovest Subordination Agreement in form and substance satisfactory to the Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.13. **<u>[Intentionally Omitted]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.14. **<u>Location of Inventory; Chief Executive Office, Etc.</u>**. Borrower will, and will cause each other Loan Party to, keep its Inventory only at (or in-transit between or to) its locations identified on <u>Schedule 4.23</u> and its chief executive office (and registered office) only at the locations identified on <u>Schedule 4.23</u>; <u>provided</u>, that Administrative Borrower may amend <u>Schedule 4.23</u> so long as such amendment occurs by written notice to Agent not less than 10 days, or such later date as Agent agrees in its sole discretion, prior to the date on which such Inventory is moved to such new location or such chief executive office or registered office is relocated and so long as such new location is within continental Canada in the case of the chief executive office and the registered office of a Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.15. **<u>Bank Products</u>**. On or before the 120<sup>th</sup> day after the Original Closing Date, the Loan Parties shall establish their primary depository and treasury management relationships in the United States with Wells Fargo or one or more of its Affiliates and their primary depository and treasury management relationships in Canada with Wells Fargo or one or more of its Affiliates, Bank of Montreal, The Toronto-Dominion Bank, Royal Bank of Canada, National Bank of Canada, Canadian Imperial Bank of Commerce or any other Canadian bank reasonably acceptable to Agent and will maintain such depository and treasury management relationships at all times during the term of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.16. **<u>Hedge Agreements</u>**. Borrower agrees that it shall offer to Wells Fargo or one or more of its respective Affiliates the first opportunity to bid for all Hedge Agreements to be entered into by any Loan Party or any of its Subsidiaries during the term of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.17. **<u>Canadian Compliance</u>**. In addition to and without limiting the generality of <u>Section</u> <u>5.8</u>, with respect to any Canadian Pension Plan established after the Closing Date, Borrower will, and will cause each of its Subsidiaries to, (a) comply with applicable provisions and funding requirements of the *Income Tax Act* (Canada) and applicable federal or provincial pension benefits legislation and other applicable laws with respect to all Canadian Pension Plans except where the failure to do so would not reasonably be expected to result in a Material Adverse Effect and (b) furnish to Agent upon Agent's written request such additional information about any Canadian Pension Plan for which Borrower or its Subsidiaries would reasonably expect to incur any material liability. All employer or employee payments, contributions or premiums required to be remitted, paid to or in respect of Canadian statutory benefit plans that Borrower or any of its Subsidiaries is required to participate in or comply with, including the Canada Pension Plan or Quebec Pension Plan as maintained by the Government of Canada or Province of Quebec, respectively, and plans administered pursuant to applicable workplace safety insurance and employment insurance legislation will be paid or remitted by each such Person in accordance with the terms thereof, any agreements relating thereto and all applicable laws except (i) to the extent that any amount so payable is subject to a Permitted Protest and a Canadian Priority Payable Reserve for such amount has been established (ii) for failures resulting from administrative oversight which are promptly remedied once Borrower or its Subsidiary becomes aware thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.18. **<u>Credit Card Notifications</u>**. Within 30 days of the Original Closing Date (or such later date as Agent may agree), deliver to the Agent copies of notifications (each, a "<u>Credit Card Notification</u>") substantially in the form attached hereto as <u>Exhibit C-2</u>, or otherwise in form and substance reasonably acceptable to Agent, which have been executed on behalf of such Loan Party and delivered to such Loan Party's Credit Card Issuers and Credit Card Processors listed on <u>Schedule 4.26</u>. No Loan Party shall enter into any agreements with Credit Card Issuers or Credit Card Processors other than the ones expressly contemplated herein or in <u>Section</u> <u>4.26</u> unless Agent has received a copy of the Credit Card Notification sent to such new or additional Credit Card Issuer or Credit Card Processor.

6. **NEGATIVE COVENANTS.** 

Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. **<u>Indebtedness</u>**. Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness. Borrower shall not incur any Indebtedness or have trade payables owing to any secured party listed in paragraph 8 of Part A of <u>Schedule 3.6</u> that is secured by the security perfected by the PPSA registration in favour of such secured party until it has satisfied its obligations under paragraph 8 of Part A of <u>Schedule 3.6</u> with respect to such PPSA Registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. **<u>Liens</u>**. Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. **<u>Restrictions on Fundamental Changes</u>**. Borrower will not, and will not permit any of its Subsidiaries to,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) other than in order to consummate a Permitted Acquisition, enter into any merger, amalgamation, consolidation, reorganization, or recapitalization, or reclassify its Equity Interests, except for (i) any merger or amalgamation between Loan Parties; <u>provided</u> that Borrower must be the survivor of any merger or amalgamation to which it is a party (or, in the case of an amalgamation, the continuing corporation resulting therefrom must be liable for the Obligations of Borrower under the Loan Documents), (ii) any merger or amalgamation between a Loan Party (other than Borrower) and a Subsidiary of such Loan Party that is not a Loan Party so long as such Loan Party is the surviving entity of any such merger or amalgamation (or, in the case of an amalgamation, the continuing corporation resulting therefrom) must be liable for the Obligations of such Loan Party under the Loan Documents and the priority of the Agent's Liens on the Collateral is not affected thereby, and (iii) any merger or amalgamation between Subsidiaries of Borrower that are not Loan Parties,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except for (i) the liquidation or dissolution of non-operating Subsidiaries of Borrower with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of a Loan Party (other than Borrower) or any of its wholly-owned Subsidiaries so long as all of the assets (including any interest in any Equity Interests) of such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Borrower that is not a Loan Party (other than any such Subsidiary the Equity Interests of which (or any portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of Borrower that is not liquidating or dissolving, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) suspend or cease operating a substantial portion of its or their business, except as permitted pursuant to clauses (a) or (b) above or in connection with a transaction permitted under <u>Section</u> <u>6.4</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. **<u>Disposal of Assets</u>**. Borrower will not, and will not permit any of its Subsidiaries to, convey, sell, lease, license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell, lease, license, assign, transfer, or otherwise dispose of) any of its or their assets other than (a) Permitted Dispositions; (b) transactions expressly permitted by <u>Sections 6.3 or 6.9</u>; and (c) sales of equipment, furniture and fixtures in the ordinary course of business to a Person other than a Subsidiary that is not a Loan Party and subject to compliance with <u>Section</u> <u>6.10</u>, if applicable, provided the proceeds of such sales of equipment shall be applied to repay the Revolving Loans and/or provide Letter of Credit Collateralization, as applicable, without a permanent reduction in the Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. **<u>Nature of Business</u>**. Borrower will not, and will not permit any of its Subsidiaries to, make any change in the nature of its or their business as described in <u>Section</u> <u>4.28</u> or <u>Schedule 6.5</u> or acquire any properties or assets that are not reasonably related to the conduct of such business activities; <u>provided</u>, that the foregoing shall not prevent Borrower and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. **<u>Prepayments and Amendments</u>**. Borrower will not, and will not permit any of its Subsidiaries to,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except in connection with Refinancing Indebtedness permitted by <u>Section</u> <u>6.1</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) make any payments in respect of the Montrovest Debt other than, so long as no Default or Event of Default then exists or would (after taking into consideration the payment to be made) result therefrom and subject to the Montrovest Subordination Agreement, (x) regularly scheduled payments of interest in respect of the Montrovest Debt as and when due pursuant to the Montrovest Debt Documents (y) the principal payments of US$1,250,000 on or about July 20, 2018 and US$1,250,000 on or about July 20, 2019 pursuant to the Montrovest Debt 2017 and (z) the fee payment in an aggregate amount not to exceed $10,000 annually pursuant to the Montrovest Debt 2017. No other prepayment of, or payment of principal on, the Montrovest Debt may be made without the prior written consent of Agent in its sole discretion, unless the Restricted Payment Conditions are satisfied with respect to such prepayment or payment,<u>;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) make any payment on account of Indebtedness (other than as permitted under paragraph<u>paragraphs</u> (a)(i) above <u>as well as (a)(iv) and (a)(v) below</u>) that has been contractually subordinated in right of payment to the Obligations if (A) such payment is not permitted at such time under the subordination terms and conditions applicable to such Indebtedness and<u>or</u> , (B) where applicable, the Restricted Payment Conditions have not been satisfied,<u>;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) make any payment on account of the Damiani Subordinated Indebtedness other than payments in the amounts and on the due dates therefor set out in the Damiani Inventory Purchase Agreement provided that any such payment is permitted to be made at such time under the Damiani Subordination Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(iv)</u> <u>make any payment on account of the Mangrove Debt, except to the extent there is no Event of Default existing on such payment date, (A) any payment of fees or interest in an aggregate amount not to exceed $750,000 (the "Mangrove Payment Cap") and (B) any payment of fees or interest in excess of the Mangrove Payment Cap, to the extent the Restricted Payment Conditions have been satisfied with respect to such payment; or</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(v)</u> <u>make any payment on account of the Seller Notes, except, to the extent there is no Event of Default existing on such payment date, any payment of principal or interest when due and payable on the maturity date of the applicable Seller Note;</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Directly or indirectly, amend, modify, or change any of the terms or provisions of, or, in the case of (b)(i) only, waive any of its material rights under:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Term Loan Documents (except to the extent expressly permitted by the Intercreditor Agreement), the Management Agreement (except to the extent expressly permitted by the Management Subordination Agreement), the Quebec Subordinated Debt Documents, the Damiani Purchase Documents, the RM JV Agreement to the extent that, in the case of the RM JV Agreement, such amendment, modification or change would be reasonably expected to be adverse to the interests of the Lenders, the Montrovest Debt Documents (except to the extent expressly permitted by the Montrovest Subordination Agreement), or any Additional Subordinated Debt Documents or any other agreement, instrument, document, indenture, or other writing evidencing or concerning Indebtedness that is contractually subordinated in right of payment to the Obligations; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) make any payments in respect of the Term Loan Debt other than regularly scheduled interest payments pursuant to the terms of the Term Loan Agreement.

Each Loan Party shall deliver to Agent complete and correct copies of any amendment, restatement, supplement or other modification to or waiver of the Management Agreement, the Quebec Subordinated Debt Documents, the Damiani Purchase Documents, the RM JV Agreement, the Montrovest Debt Documents, any Additional Subordinated Debt Documents or Governing Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. **<u>Restricted Payments</u>**. Borrower will not, and will not permit any of its Subsidiaries to, make any Restricted Payment; <u>provided</u>, that, so long as it is permitted by law, and, so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower may declare and pay distributions to the holders of its Equity Interests to so long as the following conditions<u>Restricted Payment Conditions</u> are satisfied and Administrative Borrower has delivered a certificate to Agent prior to the payment of any such distribution certifying satisfaction of the Restricted Payment Conditions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Loan Parties shall be permitted to make payments of principal and interest on Permitted Intercompany Advances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Borrower shall be permitted to pay Gestofi S.A. fees and expenses in an aggregate amount not greater than US$300,000 for each calendar year for services provided to Borrower by employees of Gestofi S.A., as well as the amounts permitted to be paid pursuant to the Management Subordination Agreement, provided that no Default or Event of Default shall have occurred and be continuing at the time of such payment or would result therefrom,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower shall be permitted to, without duplication, (i) pay to any of Regaluxe S.r.L., Montrovest B.V. (which, following the Montrovest Merger, shall mean Montel) or Gestofi S.A., an aggregate amount not to exceed US$300,000 in any Fiscal Year (or such greater amount to the extent consented to in writing by the Agent in its sole discretion) for expenses incurred by any of Regaluxe S.r.L., Montrovest B.V. (which, following the Montrovest Merger, shall mean Montel) or Gestofi S.A. on behalf of (a) the Chairman of the Board of Directors of the Borrower in connection with carrying out his duties as Chairman of the Board of Directors of the Borrower in the ordinary course of business and (b) the Chairman of the Executive Committee of the Borrower in connection with carrying out his duties as Chairman of the Executive Committee of the Borrower in the ordinary course of business, (ii) pay to Niccolo Rossi, an aggregate amount not to exceed €225,000 in any calendar year for carrying out his duties as Chairman of the Board of Directors of the Borrower plus, an aggregate amount not to exceed €60,000 in any calendar year for carrying out his duties as Chairman of the Executive Committee of the Borrower and (iii) (x) pay Regaluxe S.r.L. a fee of not more than 3.5% of the total price of the goods sold to Regaluxe S.r.L. in the form of a discount (which fee shall be payable to cover import duties and the carrying costs of value-added Taxes financing), and (y) reimburse Regaluxe S.r.L. for other reasonable costs and expenses incurred by Regaluxe S.r.L. in connection with the importation by Regaluxe S.r.L. of goods of the Borrower and the subsequent sale of such goods by Regaluxe S.r.L. to certain Italian jewelry stores (so long as, to the extent requested by the Agent, the Agent is provided with satisfactory documentation supporting such fees, costs and expenses), provided that in each case, no Default or Event of Default shall have occurred and be continuing at the time of such payment or would result therefrom;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the purchase by Borrower of Equity Interests issued by it from employees of Mayor's Jewelers, Inc., in an aggregate amount not to exceed US$100,000 on the Original Closing Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Borrower shall be permitted to pay Carlo Coda Nunziante up to an amount not greater than EUR€150,000 in the aggregate per annum on account of consulting services provided to the Borrower, reimbursement of expenses in connection therewith and applicable taxes payable by the Borrower in connection therewith, provided that no Default or Event of Default shall have occurred and be continuing at the time of such payment or would result therefrom.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8. **<u>Accounting Methods</u>**. Borrower will not, and will not permit any of its Subsidiaries to, modify or change its Fiscal Year or its method of accounting (other than as may be required to conform to GAAP, subject to Section 1.2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9. **<u>Investments</u>**. Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment except for Permitted Investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10. **<u>Transactions with Affiliates</u>**. Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction with any Affiliate of Borrower or any of its Subsidiaries except for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) transactions (other than the payment of management, consulting, monitoring, or advisory fees) between Borrower or its Subsidiaries, on the one hand, and any Affiliate of Borrower or its Subsidiaries, on the other hand, so long as such transactions are no less favorable, taken as a whole, to Borrower or its Subsidiaries, as applicable, than would be obtained in an arm's length transaction with a non-Affiliate; <u>provided</u>, <u>however</u> the foregoing restrictions shall not apply to (x) Permitted Dispositions permitted pursuant to clause (n) thereof or (y) other transactions between any Loan Party and any other Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) so long as it has been approved by Borrower's or its applicable Subsidiary's Board of Directors (or comparable governing body) in accordance with applicable law, any indemnity provided for the benefit of directors (or comparable managers), officers and employees of Borrower or its applicable Subsidiary,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) so long as it has been approved by Borrower's or its applicable Subsidiary's Board of Directors (or comparable governing body) in accordance with applicable law, reasonable and customary fees, compensation, benefits and incentive arrangements paid or provided to, and indemnities provided on behalf of or to, officers, directors or employees of Borrower (or any direct or indirect Borrower thereof) or any of Borrower's Subsidiaries,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) transactions permitted by <u>Section</u> <u>6.3</u> or <u>Section</u> <u>6.7</u>, or any Permitted Intercompany Advance,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any transaction with an Affiliate otherwise permitted hereunder where the only consideration paid by Borrower or any Subsidiary is Borrower's Qualified Equity Interests, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) loans or advances to directors, officers and employees permitted under <u>Section</u> <u>6.9</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11. **<u>Use of Proceeds</u>**. Borrower will not, and will not permit any of its Subsidiaries to, use the proceeds of any Loan made hereunder for any purpose other than consistent with the terms and conditions hereof, for their lawful and permitted purposes (including without limitation financing the ongoing working capital, capital expenditures, Permitted Acquisitions and general corporate needs of Borrower and its Subsidiaries, as well as, on the Closing Date, to pay the fees, costs, and expenses incurred in connection with this Agreement, the other Loan Documents and the other transactions contemplated hereby and thereby).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12. **<u>Limitation on Issuance of Equity Interests</u>**. Borrower will not, and will not permit any of its Subsidiaries to issue or sell or enter into any agreement or arrangement for the issuance or sale of any of its Equity Interests, other than (a) the issuance or sale of Qualified Equity Interests by Borrower, (b) the issuance and sale of Qualified Equity Interests by any Loan Party or any Subsidiary of a Loan Party to a Loan Party to which such Loan Party is a direct Subsidiary, (c) the issuance and sale of Qualified Equity Interests by any Subsidiary that is not a Loan Party to another Subsidiary, (d) transfers and replacements of then-outstanding Equity Interests, provided that any such transfer or replacements do not (i) give rise to a Change of Control, (ii) include any transfer of Equity Interests held by a Loan Party to a Person that is not a Loan Party (other than a Permitted Disposition) or (iii) include any transfer of Equity Interests from a Loan Party to a Person that is not a Loan Party (other than a Permitted Disposition), (e) the issuance or sale of Qualified Equity Interests by any Person that is not a Loan Party, and (f) issuances of Qualified Equity Interests by a newly created Subsidiary to such Subsidiary's direct parent in accordance with the terms of the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13. **<u>[Intentionally Omitted]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.14. **<u>[Intentionally Omitted]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.15. **<u>Canadian Employee Benefits</u>**. Borrower will not, and will not permit any of its Subsidiaries to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) establish, maintain, sponsor, administer, contribute to, participate in or assume or incur any liability in respect of any Canadian Defined Benefit Plan or amalgamate with any Person if such Person, sponsors, administers, contributes to, participates in or has any liability in respect of, any Canadian Defined Benefit Plan other than a Canadian Multi-Employer Plan, unless a Canadian Priority Payables Reserve for unremitted and due pension plan contributions or wind-up deficiency amounts has been established.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) terminate any Canadian Pension Plan in a manner, or take any other action with respect to any Canadian Pension Plan, which would reasonably be expected to result in a Material Adverse Effect, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) fail to make full payment when due of any amounts, under the provisions of any Canadian Pension Plan, any agreement relating thereto or applicable law if such failure would reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.16. **<u>Sale and Leaseback Transactions</u>**. Borrower will not, and will not permit any of its Subsidiaries to, become or remain liable as lessee or as a guarantor or other surety, directly or indirectly, with respect to any lease whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred; provided that a Borrower and its Subsidiaries may become and remain liable as lessee, guarantor or other surety with respect to any such lease if and to the extent that Borrower or any of its Subsidiaries would be permitted to enter into, and remain liable under, such lease to the extent that the transaction would constitute a Permitted Sale Leaseback Transaction, assuming the sale and leaseback transaction constituted Indebtedness in a principal amount not to exceed the gross proceeds of the sale.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.17. **<u>Negative Pledges</u>**. Borrower will not, and will not permit any of its Subsidiaries to, enter into any agreement prohibiting the creation or assumption of any Lien upon any of its properties or assets, whether now owned or hereafter acquired, other than (a) this Agreement and the other Loan Documents, (b) any agreements governing any Permitted Liens securing Capitalized Lease Obligations or Permitted Purchase Money Indebtedness otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (c) restrictions set forth in the RM JV Agreement (applicable only to the assets that are the subject of such agreement and the equity interests in RM JV) and any other provision limiting the disposition or distribution of assets or property in joint venture agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements to the extent such joint venture or similar agreement is permitted under this Agreement, (d) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the disposition of all or substantially all of the Equity Interests or assets of such Subsidiary that applies only to the Equity Interests or assets of such Subsidiary, (e) customary provisions in leases, licenses and other contracts restricting the assignment thereof, (f) any other agreement that does not restrict in any manner (directly or indirectly) Liens which may now or hereafter be created pursuant to any of the Loan Documents to secure any Obligations, and (g) any prohibition that (i) exists pursuant to the requirements of applicable law, (ii) consists of customary restrictions and conditions contained in any agreement relating to any transaction permitted under <u>Section</u> <u>6.3</u> or <u>6.4</u>, (iii) restricts subletting or assignment of leasehold interests contained in any lease governing a leasehold interest of a Borrower or its Subsidiaries, (iv) exists in any agreement in effect at the time such Subsidiary becomes a Subsidiary of Borrower, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary, (v) exists in any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired or (vi) is imposed by any renewal, extension, refinancing, refund or replacement (or successive extensions, renewals, refinancings, refunds or replacements) that are otherwise permitted by the Loan Documents or the contracts, instruments or obligations referred to in clause (b), (c), (d), (e), (f), (g)(iv) or (g)(v) above; provided that such renewals, extensions, refinancings, refunds or replacements (or successive extensions, renewals, refinancings, refunds or replacements), taken as a whole, are not more materially restrictive with respect to such prohibitions than those contained in the original agreement, as determined in good faith by the Board of Directors of Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.18. **<u>Restrictions on Subsidiary Distributions</u>**. Borrower will not, and will not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction of any kind on the ability of any such Subsidiary to (i) pay dividends or make any other distributions on any of such Subsidiary's Equity Interests owned by Borrower or any other Subsidiary Borrower, (ii) repay or prepay any Indebtedness owed by such Subsidiary to Borrower or any other Subsidiary of Borrower, (iii) make loans or advances to Borrower or any other Subsidiary of Borrower, or (iv) transfer any of its property or assets to Borrower or any other Subsidiary of Borrower, except in each case, encumbrances or restrictions (a) imposed by this Agreement and the other Loan Documents, (b) contained in an agreement with respect to a Permitted Disposition, (c) contained in any agreements governing any Permitted Liens securing Capitalized Lease Obligations or Permitted Purchase Money Indebtedness otherwise permitted hereby (in which case, any encumbrance or restriction shall only be effective against the assets financed thereby), (d) constituting customary restrictions in joint venture agreements and other similar agreements applicable to joint ventures permitted hereunder and applicable solely to such joint venture, (e) contained in any agreement of a Subsidiary that is not a Loan Party governing Permitted Indebtedness, (f) contained in any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired, or (g) contained in, or existing by reasons of, any agreement or instrument (i) existing on the Closing Date, (ii) relating to property existing at the time of the acquisition thereof, so long as the encumbrance or restriction relates only to the property so acquired, (iii) relating to any Indebtedness of, or otherwise to, any Subsidiary at the time such Subsidiary was merged, amalgamated or consolidated with or into, or acquired by, a Borrower or a Subsidiary or became a Subsidiary and not created in contemplation thereof, (iv) effecting a renewal, extension, refinancing, refund or replacement (or successive extensions, renewals, refinancings, refunds or replacements) of Indebtedness issued under an agreement referred to in clauses (c), (e), (f) and (g)(i) through (g)(iii) above, so long as the encumbrances and restrictions contained in any such renewal, extension, refinancing, refund or replacement agreement, taken as a whole, are not materially more restrictive than the encumbrances and restrictions contained in the original agreement, as determined in good faith by the Board of Directors of Borrower, (v) constituting customary provisions restricting subletting or assignment of any leases of a Borrower or any Subsidiary or provisions in agreements that restrict the assignment of such agreement or any rights thereunder, (vi) constituting restrictions on the sale or other disposition of any property securing Indebtedness as a result of a Lien on such property permitted hereunder, (vii) constituting restrictions on net worth or on cash or other deposits imposed by customers under contracts entered into in the ordinary course of business, (viii) constituting provisions contained in agreements or instruments relating to Indebtedness permitted hereunder that prohibit the transfer of all or substantially all of the assets of the obligor under that agreement or instrument unless the transferee assumes the obligations of the obligor under such agreement or instrument, or (ix) constituting any encumbrance or restriction with respect to property under a lease or other agreement that has been entered into for the employment or use of such property.

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7. **FINANCIAL COVENANT**  **<u>[RESERVED]</u>** **.** 

Borrower covenants and agrees that, until termination of all of the Commitments and payment in full of the Obligations, Borrower will:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. **Minimum Excess Availability**. Maintain Excess Availability of not less than 10% of the Maximum Credit Amount at all times, except that Borrower shall not be in breach of this covenant if Excess Availability falls below 10% of the Maximum Credit Amount for not more than two consecutive Business Days once during any Fiscal Month.

8. **EVENTS OF DEFAULT.** 

Any one or more of the following events shall constitute an event of default (each, an "Event of Default") under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. **<u>Payments</u>**. If Borrower fails to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due to the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of 5 Business Days, (b) all or any portion of the principal of the Loans, or (c) any amount payable to Issuing Lender in reimbursement of any drawing under a Letter of Credit (which does not become a Revolving Loan in accordance with <u>Section</u> <u>2.11)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. **<u>Covenants</u>**. If any Loan Party or any of its Subsidiaries:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) fails to perform or observe any covenant or other agreement contained in any of (i) <u>Sections 3.6</u>, <u>5.1</u>, <u>5.2</u>, <u>5.3</u>, <u>5.6</u> and <u>5.7</u> (solely if Borrower refuses to allow Agent or its representatives or agents to visit Borrower's properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss Borrower's affairs, finances, and accounts with officers and employees of Borrower), <u>5.15</u> or <u>5.16</u>, (ii) <u>Section</u> <u>6</u>, (iii) <u>Section 7</u>, or (iv) <u>Section</u> <u>7</u> of the Canadian Security Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) fails to perform or observe any covenant or other agreement contained in any of <u>Sections 5.3</u> (other than if Borrower is not in good standing in its jurisdiction of organization), <u>5.4</u>**<u>,</u>** <u>5.5</u>, <u>5.8</u>, <u>5.11</u>, <u>5.12</u>, <u>5.14</u> and such failure continues for a period of 15 days after the earlier of (i) the date on which such failure shall first become known to any officer of Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this <u>Section</u> <u>8</u> (in which event such other provision of this <u>Section</u> <u>8</u> shall govern), and such failure continues for a period of 30 days after the earlier of (i) the date on which such failure shall first become known to any officer of Borrower or (ii) the date on which written notice thereof is given to Administrative Borrower by Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3. **<u>Judgments</u>**. If one or more judgments, requirements to pay, orders, or awards for the payment of money, or requirements to pay money, involving an aggregate amount of $1,000,000, or more (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 45 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4. **<u>Voluntary Bankruptcy, etc</u><u>.</u>** If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5. **<u>Involuntary Bankruptcy, etc</u><u>.</u>** If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6. **<u>Default Under Other Agreements</u>**. If there is (a) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party's or any of its Subsidiaries' Indebtedness involving an aggregate amount of $1,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party's or its Subsidiary's obligations thereunder, or (b) a default in or an involuntary early termination of one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party involving an aggregate Hedge Termination Value of $1,000,000 or more, beyond any grace period provided therefor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7. **<u>Default Under Term Loan Documents</u>**. If there is (i) any breach or default of a Loan Party or any of its Subsidiaries occurs under any of the Term Loan Documents (or any documents relating to renewals, refinancings and extensions of the Indebtedness incurred thereunder) or any Secured Hedging Agreement or (ii) any such Indebtedness shall become or be declared to be due and payable, or be required to be prepaid or repurchased (other than by a regularly scheduled or required prepayment), prior to the stated maturity thereof; provided that such breach or default shall be deemed continuing hereunder until the Agent or the Required Lenders have expressly waived such breach or default in writing, notwithstanding the fact that such breach or default may have been waived under the terms of the Term Loan Documents or any Secured Hedging Agreement;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8. **<u>Default Under Damiani Purchase Documents</u>**. If (i) the Borrower fails to make any payment when due and payable under the Damiani Inventory Purchase Agreement or if there is a material breach or default by a Loan Party or any of its Subsidiaries under any of the Damiani Purchase Documents and, in each case, such failure, breach or default continues for a period of at least 30 days, (ii) any Damiani Subordinated Indebtedness shall become or be declared to be due and payable, or be required to be prepaid (other than by a scheduled or required payment in accordance with the terms of the Damiani Inventory Purchase Agreement), prior to the stated due date thereof (iii) any action is taken by Damiani to initiate the commencement of a Standstill Period (as defined in the Damiani Subordination Agreement) or (iv) the validity or enforceability of the Damiani Subordination Agreement shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or Damiani or any of its Affiliates or agents shall be permitted (by judicial order or otherwise) to take enforcement actions or institute any proceeding (including for the return of Inventory) against any Obligor or any Assets in violation of the Damiani Subordination Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9. **<u>Representations, etc</u>**. If any warranty, representation, certificate, statement, or Record made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10. **<u>Guarantee</u>**. If the obligation of any Guarantor under the guarantee of any of the Obligations (including any guarantee contained in any Loan Document) is limited in any material respect or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.11. **<u>Security Documents</u>**. If any Canadian Security Document or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected (to the extent required thereby) and, except to the extent of Permitted Liens which are non-consensual Permitted Liens, permitted Purchase Money Liens, the interests of lessors under Capital Leases, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, or (b) as the result of an action or failure to act on the part of Agent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.12. **<u>Loan Documents</u>**. The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.13. **<u>Change of Control</u>**. A Change of Control shall occur, whether directly or indirectly.

9. **RIGHTS AND REMEDIES.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. **<u>Rights and Remedies</u>**. Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall (in each case under clauses (a) or (b) by written notice to Administrative Borrower), in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) declare the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrower shall be obligated to repay all of such Obligations in full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by Borrower, and (ii) direct Borrower to provide (and Borrower agrees that upon receipt of such notice Borrower will provide) Letter of Credit Collateralization to Agent to be held as security for Borrower's reimbursement obligations for drawings that may subsequently occur under issued and outstanding Letters of Credit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) declare the Commitments terminated, whereupon the Commitments shall immediately be terminated together with (i) any obligation of any Revolving Lender to make Revolving Loans, (ii) the obligation of any Swing Lender to make Swing Loans, and (iii) the obligation of any Issuing Lender to issue, or cause the issuance of, Letters of Credit; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents, under applicable law, or in equity.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in <u>Section</u> <u>8.4</u> or <u>Section</u> <u>8.5</u>, in addition to the remedies set forth above, without any notice to Borrower or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations (other than the Bank Product Obligations), inclusive of the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents, shall automatically become and be immediately due and payable and Borrower shall automatically be obligated to repay all of such Obligations in full (including Borrower being obligated to provide (and Borrower agrees that they will provide) (1) Letter of Credit Collateralization to Agent to be held as security for Borrower's reimbursement obligations in respect of drawings that may subsequently occur under issued and outstanding Letters of Credit and (2) Bank Product Collateralization to be held as security for Borrower's or its Subsidiaries' obligations in respect of outstanding Bank Products), without presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived by Borrower.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. **<u>Remedies Cumulative</u>**. The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the PPSA, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Event of Default shall be deemed a continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

10. **WAIVERS; INDEMNIFICATION.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. **<u>Demand; Protest; etc</u>**. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group pursuant to the Loan Documents on which Borrower may in any way be liable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. **<u>The Lender Group</u><u>'</u><u>s Liability for Collateral</u>**. Borrower hereby agrees that: (a) so long as Agent complies with its obligations, if any, under the PPSA, the Lender Group shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. **<u>Indemnification</u>**. Borrower shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an "<u>Indemnified Person</u>") harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable and documented out-of-pocket fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought but without duplication of any losses, costs and expenses as to which a Borrower is liable to such Indemnified Person pursuant to <u>Section</u> <u>2.13</u> or <u>Article 16</u>), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided that Borrower shall not be liable for costs and expenses (including lawyers' fees) of any Lender (other than Wells Fargo and WF Canada) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Borrower's and its Subsidiaries' compliance with the terms of the Loan Documents (<u>provided</u>, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders that do not involve any acts or omissions of any Loan Party, or (ii) disputes solely between or among the Lenders and their respective Affiliates that do not involve any acts or omissions of any Loan Party; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to Taxes, which shall be governed by <u>Section</u> <u>16</u> except to the extent arising from primarily a non-Tax claim), (b) with respect to any actual or prospective investigation, litigation, or proceeding related to this Agreement, any other Loan Document, the making of any Loans or issuance of any Letters of Credit hereunder, or the use of the proceeds of the Loans or the Letters of Credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, and (c) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets or properties owned, leased or operated by Borrower or any of its Subsidiaries or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of Borrower or any of its Subsidiaries (each and all of the foregoing, the "<u>Indemnified Liabilities</u>"). The foregoing to the contrary notwithstanding, Borrower shall not have any obligation to any Indemnified Person under this <u>Section</u> <u>10.3</u> with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person or its officers, directors, employees, lawyers, or agents. This provision shall survive the termination of this Agreement and the repayment in full of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrower were required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrower with respect thereto. **WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.**

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11. **NOTICES.** 

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile. In the case of notices or demands to Borrower or Borrower or Agent, as the case may be, they shall be sent to the respective address set forth below:

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| | |
|:---|:---|
| If to Borrower or | Birks Group Inc. |
| Administrative | 2020 Robert-Bourassa Blvd. |
| Borrower: | Suite 200 |
|  | Montreal, Quebec |
|  | H3A 2A5 |
|  | Attn: Chief Financial Officer |
|  | Fax No.: 514-397-2537 |
|  | Email: kfontana@birksgroup.com |

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---

| | |
|:---|:---|
| with copies to: | Birks Group Inc. |
|  | 2020 Robert-Bourassa Blvd. |
|  | Suite 200 |
|  | Montreal, Quebec |
|  | H3A 2A5 |
|  | Attn: General Counsel |
|  | Fax No.: 514-397-2537 |
|  | Email: mmelfi@birksgroup.com |
| If to Agent: | Wells Fargo Capital Finance Corporation Canada |
|  | 125 High St. |
|  | 11<sup>th</sup> floor |
|  | MAC J9266-114 |
|  | Boston, MA 02110 |
|  | eFax No.: 855-842-6360 |
|  | Email: Emily.J.Abrahamson@wellsfargo.com |

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Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party. All notices or demands sent in accordance with this <u>Section</u> <u>11</u>, shall be deemed received on the earlier of the date of actual receipt or 3 Business Days after the deposit thereof in the mail; <u>provided</u>, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the "return receipt requested" function, as available, return email or other written acknowledgment).

12. **CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE PROVINCE OF ONTARIO; <u>PROVIDED</u>, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS <u>SECTION 12(b)</u>.**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A "<u>CLAIM</u>"). BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS LOCATED IN THE PROVINCE OF ONTARIO, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST AGENT, ANY SWING LENDER, ANY OTHER LENDER, ANY ISSUING LENDER, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.**

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13. **ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1. **<u>Assignments and Participations</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) (i) Subject to the conditions set forth in clause (a)(ii) below, any Lender may assign and delegate all or any portion of its rights and duties under the Loan Documents (including the Obligations owed to it and its Commitments) to one or more assignees so long as such prospective assignee is an Eligible Transferee (each, an "<u>Assignee</u>"), with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) Administrative Borrower; <u>provided</u>, that no consent of Administrative Borrower shall be required (1) if an Event of Default has occurred and is continuing, or (2) in connection with an assignment to a Person that is a Lender or an Affiliate (other than natural persons) of a Lender or a Related Fund; <u>provided</u> <u>further</u>, that Administrative Borrower shall be deemed to have consented to a proposed assignment unless it objects thereto by written notice to Agent within 10 Business Days after having received notice thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) Agent, Swing Lenders, and Issuing Lenders; provided that no such consent shall be required in connection with an assignment to a Person that is a Lender or an Affiliate of a Lender (other than a natural person).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Assignments shall be subject to the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) no assignment may be made to a natural person,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) no assignment may be made to a Loan Party or an Affiliate of a Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the amount of the Commitments and the other rights and obligations of the assigning Lender hereunder and under the other Loan Documents subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to Agent) shall be in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply to (I) an assignment or delegation by any Lender to any other Lender, an Affiliate of any Lender, or a Related Fund of such Lender or (II) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) the parties to each assignment shall execute and deliver to Agent an Assignment and Acceptance; <u>provided</u>, that Borrower and Agent may continue to deal solely and directly with the assigning Lender in connection with the interest so assigned to an Assignee until written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Administrative Borrower and Agent by such Lender and the Assignee,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F) unless waived by Agent, the assigning Lender or Assignee has paid to Agent, for Agent's separate account, a processing fee in the amount of $3,500,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G) the Assignee, if it is not a Lender, shall deliver to Agent an Administrative Questionnaire in a form approved by Agent (the "<u>Administrative Questionnaire</u>"), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(H) the Assignee shall have the ability to make Revolving Loans in accordance with the terms of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) From and after the date that Agent receives the executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall be a "Lender" and shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to <u>Section</u> <u>10.3</u>) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); <u>provided</u>, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender's obligations under <u>Section</u> <u>15</u> and <u>Section</u> <u>17.9(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Immediately upon Agent's receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to <u>Section</u> <u>13.1(b)</u>, this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a "<u>Participant</u>") participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the "<u>Originating Lender</u>") hereunder and under the other Loan Documents; <u>provided</u>, that (i) the Originating Lender shall remain a "Lender" for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a "Lender" hereunder or under the other Loan Documents and the Originating Lender's obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrower, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender's rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) decreases the amount or postpones the due dates of scheduled principal repayments or prepayments or premiums payable to such Participant through such Lender, (v) no participation shall be sold to a natural person, (vi) no participation shall be sold to a Loan Party or an Affiliate of a Loan Party, and (vii) all amounts payable by Borrower hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Borrower, the Collateral, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of <u>Section</u> <u>17.9</u>, disclose all documents and information which it now or hereafter may have relating to Borrower and its Subsidiaries and their respective businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement in favor of the Bank of Canada and the Bank of Canada may enforce such pledge or security interest in any manner permitted under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Agent (acting solely for this purpose as a non-fiduciary agent on behalf of Borrower) shall maintain, or cause to be maintained, a register (the "<u>Register</u>") on which it enters the name and address of each Lender as the registered owner of the Revolver Commitments (and the principal amount thereof and stated interest thereon) held by such Lender (each, a "<u>Registered Loan</u>"). Other than in connection with an assignment by a Lender of all or any portion of its portion of the Revolver Commitments to an Affiliate of such Lender or a Related Fund of such Lender (i) a Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any evidencing the same), Borrower shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the case of any assignment by a Lender of all or any portion of its Revolver Commitments to an Affiliate of such Lender or a Related Fund of such Lender, and which assignment is not recorded in the Register, the assigning Lender, on behalf of Borrower, shall maintain a register comparable to the Register.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) In the event that a Lender sells participations in the Registered Loan, such Lender, acting solely for this purpose as a non-fiduciary agent on behalf of Borrower, shall maintain (or cause to be maintained) a register on which it enters the name of all participants in the Registered Loans held by it (and the principal amount (and stated interest thereon) of the portion of such Registered Loans that is subject to such participations) (the "<u>Participant Register</u>"). A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Agent shall make a copy of the Register (and each Lender shall make a copy of its Participant Register to the extent it has one) available for review by Borrower from time to time as Borrower may reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2. **<u>Successors</u>**. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; <u>provided</u>, that Borrower may not assign this Agreement or any rights or duties hereunder without the Lenders' prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by the Lenders shall release Borrower from its Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to <u>Section</u> <u>13.1</u> and, except as expressly required pursuant to <u>Section</u> <u>13.1</u>, no consent or approval by Borrower is required in connection with any such assignment.

14. **AMENDMENTS; WAIVERS.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1. **<u>Amendments and Waivers</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with respect to any departure by Borrower or Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are party thereto and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; <u>provided</u>, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly and adversely affected thereby and in the case of an amendment, all of the Loan Parties that are party thereto, do any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) increase the amount of or extend the expiration date of any Commitment of any Lender (except as contemplated by <u>Section</u> <u>2.16</u>) or amend, modify, or eliminate the fifth sentence of <u>Section</u> <u>2.4(c)</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document, <u>provided</u>, <u>however</u>, that, notwithstanding anything to the contrary in this Agreement, any waiver (or amendment to the terms) of any mandatory prepayment of Advances pursuant to <u>Section</u> <u>2.4(e)</u> shall be effective when signed or consented to by the Required Lenders and Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) reduce the principal of, or the rate of interest on, any Loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except in connection with the waiver of applicability of <u>Section</u> <u>2.6(c)</u> which waiver shall be effective with the written consent of the Required Lenders),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) amend, modify, or eliminate this Section or any provision of this Agreement providing for consent or other action by all Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) amend, modify, or eliminate <u>Section</u> <u>3.1</u> or <u>3.2</u>,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) amend, modify, or eliminate <u>Section</u> <u>15.11</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) other than as permitted by <u>Section</u> <u>15.11</u>, release Agent's Lien in and to any of the Collateral,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) amend, modify, or eliminate the definitions of "Required Lenders", "Supermajority Lenders" or "Pro Rata Share",

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) contractually subordinate any of Agent's Liens (other than in respect of Permitted Liens securing Capital Leases or Permitted Purchase Money Indebtedness permitted hereunder),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) other than in connection with a merger, amalgamation, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) amend, modify, or eliminate any of the provisions of <u>Section</u> <u>2.4(b)(i)</u> or <u>(ii)</u>, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) amend, modify, or eliminate any of the provisions of <u>Section</u> <u>13.1</u> with respect to assignments to, or participations with, Persons who are Loan Parties or Affiliates of Loan Parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No amendment, waiver, modification, or consent shall amend, modify, waive, or eliminate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of Agent and Borrower (and shall not require the written consent of any of the Lenders),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any provision of <u>Section</u> <u>15</u> pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrower, and the Required Lenders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No amendment, waiver, modification, elimination, or consent shall amend, without written consent of Agent, Borrower and the Supermajority Lenders, modify, or eliminate the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Credit Card Receivables and Eligible Inventory that are used in such definition to the extent that any such change results in more credit being made available to Borrower based upon the Borrowing Base, but not otherwise, or the definition of Maximum Credit Amount);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to an Issuing Lender, or any other rights or duties an Issuing Lender under this Agreement or the other Loan Documents, without the written consent of such Issuing Lender, Agent, Borrower, and the Required Lenders;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to a Swing Lender, or any other rights or duties of a Swing Lender under this Agreement or the other Loan Documents, without the written consent of such Swing Lender, Agent, Borrower, and the Required Lenders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Anything in this <u>Section</u> <u>14.1</u> to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of Borrower, shall not require consent by or the agreement of any Loan Party (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any other Loan Document may be entered into without the consent of, or over the objection of, any Defaulting Lender other than any of the matters governed by <u>Section</u> <u>14.1(a)(i) through (iii)</u> that affect such Lender and (iii) any amendment contemplated by <u>Section</u> <u>2.12(d)(iii)</u> of this Agreement in connection with a Benchmark Transition Event shall be effective as contemplated by such <u>Section</u> <u>2.12(d)(iii)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2. **<u>Replacement of Certain Lenders</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent, authorization, or agreement of the Required Lenders, the Supermajority Lenders or all Lenders directly and adversely affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not of all Lenders, the Supermajority Lenders but not of all Lenders or all Lenders affected thereby, or (ii) any Lender makes a claim for compensation under <u>Section</u> <u>16</u>, then Borrower or Agent, upon at least 5 Business Days prior irrevocable notice, may permanently replace any Lender that failed to give its consent, authorization, or agreement (a "<u>Non-Consenting Lender</u>"), together with its Affiliates, or any Lender that made a claim for compensation (a "<u>Tax Lender</u>"), together with its Affiliates, with one or more Replacement Lenders, and the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall have no right to refuse to be replaced hereunder. Such notice to replace the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Prior to the effective date of such replacement, the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, being repaid in full its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including (i) all interest, fees and other amounts that may be due in payable in respect thereof, and (ii) an assumption of its Pro Rata Share of participations in the Letters of Credit). If the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, Agent may, but shall not be required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, and irrespective of whether Agent executes and delivers such Assignment and Acceptance, the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall be made in accordance with the terms of <u>Section</u> <u>14.2</u>. Until such time as one or more Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, hereunder and under the other Loan Documents, the Non-Consenting Lender (and its Affiliates) or Tax Lender (and its Affiliates), as applicable, shall remain obligated to make the Non-Consenting Lender's (and its Affiliates') or Tax Lender's (and its Affiliates'), as applicable, Pro Rata Share of Revolving Loans and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of participations in such Letters of Credit.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3. **<u>No Waivers; Cumulative Remedies</u>**. No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Agent or any Lender on any occasion shall affect or diminish Agent's and each Lender's rights thereafter to require strict performance by Borrower of any provision of this Agreement. Agent's and each Lender's rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

15. **AGENT; THE LENDER GROUP.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1. **<u>Appointment and Authorization of Agent</u>**. Each Lender hereby designates and appoints WF Canada as its agent under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to designate, appoint, and authorize) Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Agent agrees to act as agent for and on behalf of the Lenders (and the Bank Product Providers) on the conditions contained in this <u>Section</u> <u>15</u>. Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender (or Bank Product Provider), and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent. Without limiting the generality of the foregoing, the use of the term "agent" in this Agreement or the other Loan Documents with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only a representative relationship between independent contracting parties. Each Lender hereby further authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to act as the secured party under each of the Loan Documents that create a Lien on any item of Collateral. Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, payments and proceeds of Collateral, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, (c) make Revolving Loans, for itself or on behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive, apply, and distribute payments and proceeds of the Collateral as provided in the Loan Documents, (e) open and maintain such bank accounts and cash management arrangements as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes, (f) perform, exercise, and enforce any and all other rights and remedies of the Lender Group with respect to Borrower or its Subsidiaries, the Obligations, the Collateral, or otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2. **<u>[Intentionally Omitted]</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3. **<u>Liability of Agent</u>**. None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders (or Bank Product Providers) for any recital, statement, representation or warranty made by Borrower or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of Borrower or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lenders (or Bank Product Providers) to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of Borrower or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4. **<u>Reliance by Agent</u>**. Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrower or counsel to any Lender), independent accountants and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable. If Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product Providers) against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders (and Bank Product Providers).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.5. **<u>Notice of Default or Event of Default</u>**. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a "notice of default." Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge. If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to its Participants, if any. Subject to <u>Section</u> <u>15.4</u>, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with <u>Section</u> <u>9</u>; <u>provided</u>, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.6. **<u>Credit Decision</u>**. Each Lender (and Bank Product Provider) acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of Borrower and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender (or Bank Product Provider). Each Lender represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, documents and information as it has deemed appropriate, made its own appraisal of an investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrower. Each Lender also represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrower or any other Person party to a Loan Document. Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender (or Bank Product Provider) with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of Borrower or any other Person party to a Loan Document that may come into the possession of any of the Agent-Related Persons. Each Lender acknowledges (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent does not have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is expressly specified herein) to provide such Lender (or Bank Product Provider) with any credit or other information with respect to Borrower, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent's or its Affiliates' or representatives' possession before or after the date on which such Lender became a party to this Agreement (or such Bank Product Provider entered into a Bank Product Agreement).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.7. **<u>Costs and Expenses; Indemnification</u>**. Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, legal fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrower are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient amounts from payments or proceeds of the Collateral received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders (or Bank Product Providers). In the event Agent is not reimbursed for such costs and expenses by Borrower or its Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender's ratable thereof. Whether or not the transactions contemplated hereby are consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrower and without limiting the obligation of Borrower to do so) from and against any and all Indemnified Liabilities; <u>provided</u>, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person's gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make a Revolving Loan or other extension of credit hereunder. Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender's ratable share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Loan Document to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrower. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.8. **<u>Agent in Individual Capacity</u>**. WF Canada and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Borrower and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though WF Canada were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group. The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, WF Canada or its Affiliates may receive information regarding Borrower or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Borrower or such other Person and that prohibit the disclosure of such information to the Lenders (or Bank Product Providers), and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them. The terms "Lender" and "Lenders" include WF Canada in its individual capacity.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.9. **<u>Successor Agent</u>**. Agent may resign as Agent upon 30 days prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Borrower (unless such notice is waived by Borrower) and without any notice to the Bank Product Providers. If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Borrower (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a successor Agent for the Lenders (and the Bank Product Providers). If, at the time that Agent's resignation is effective, it is acting as an Issuing Lender or a Swing Lender, such resignation shall also operate to effectuate its resignation as such Issuing Lender or such Swing Lender, as applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit, or to make Swing Loans. If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders and Borrower, a successor Agent. If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of Borrower (such consent not to be unreasonably withheld, delayed, or conditioned). In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term "Agent" shall mean such successor Agent and the retiring Agent's appointment, powers, and duties as Agent shall be terminated. After any retiring Agent's resignation hereunder as Agent, the provisions of this <u>Section</u> <u>15</u> shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.10. **<u>Lender in Individual Capacity</u>**. Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with Borrower and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group (or the Bank Product Providers). The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding Borrower or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of Borrower or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.11. **<u>Collateral Matters</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by Borrower of all of the Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrower certify to Agent that the sale or disposition is permitted under <u>Section</u> <u>6.4</u> (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in which neither Borrower nor any of its Subsidiaries owned any interest at the time Agent's Lien was granted nor at any time thereafter, (iv) constituting property leased or licensed to Borrower or its Subsidiaries under a lease or license that has expired or is terminated in a transaction permitted under this Agreement, or (v) in connection with a credit bid or purchase authorized under this <u>Section</u> <u>15.11</u>. The Loan Parties and the Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based upon the instruction of the Required Lenders, to (a) consent to the sale of, credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, or similar Insolvency Laws in any other relevant jurisdiction, including Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the PPSA, including pursuant to Sections 9-610 or 9-620 of the PPSA or similar Insolvency Laws in any other relevant jurisdiction or any similar provision of the PPSA, or (c) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any other sale or foreclosure conducted or consented to by Agent in accordance with applicable law in any judicial action or proceeding or by the exercise of any legal or equitable remedy. In connection with any such credit bid or purchase, (i) the Obligations owed to the Lenders and the Bank Product Providers shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not impair or unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of the Collateral and, if such contingent or unliquidated claims cannot be estimated without impairing or unduly delaying the ability of Agent to credit bid at such sale or other disposition, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the Collateral that is the subject of such credit bid or purchase) and the Lenders and the Bank Product Providers whose Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the Collateral that is the subject of such credit bid or purchase (or in the Equity Interests of the any entities that are used to consummate such credit bid or purchase), and (ii) Agent, based upon the instruction of the Required Lenders, may accept non-cash consideration, including debt and equity securities issued by any entities used to consummate such credit bid or purchase and in connection therewith Agent may reduce the Obligations owed to the Lenders and the Bank Product Providers (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) based upon the value of such non-cash consideration; <u>provided</u>, that except as otherwise agreed in writing by Required Lenders, Bank Product Obligations not entitled to the application set forth in <u>Section</u> <u>2.4(b)(ii)(A)</u> shall not be entitled to be, and shall not be, credit bid, or used in the calculation of the ratable interest of the Lenders and Bank Product Providers in the Obligations which are credit bid. Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral, all of the Lenders (without requiring the authorization of the Bank Product Providers), or (z) otherwise, the Required Lenders (without requiring the authorization of the Bank Product Providers). Upon request by Agent or Borrower at any time, the Lenders will (and if so requested, the Bank Product Providers will) confirm in writing Agent's authority to release any such Liens on particular types or items of Collateral pursuant to this <u>Section</u> <u>15.11</u>; <u>provided</u>, that (1) anything to the contrary contained in any of the Loan Documents notwithstanding, Agent shall not be required to execute any document or take any action necessary to evidence such release on terms that, in Agent's opinion, could expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly released) upon (or obligations of Borrower in respect of) any and all interests retained by Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Each Lender further hereby irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to irrevocably authorize) Agent, at its option and in its sole discretion, to subordinate any Lien granted to or held by Agent under any Loan Document to the holder of any Permitted Lien on such property if such Permitted Lien secures a Capital Lease or a Permitted Purchase Money Indebtedness permitted hereunder.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank Product Providers) (i) to verify or assure that the Collateral exists or is owned by Borrower or its Subsidiaries or is cared for, protected, or insured or has been encumbered, (ii) to verify or assure that Agent's Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, (iii) to verify or assure that any particular items of Collateral meet the eligibility criteria applicable in respect thereof, (iv) to impose, maintain, increase, reduce, implement, or eliminate any particular Reserve hereunder or to determine whether the amount of any Reserve is appropriate or not, or (v) to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent's own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender (or Bank Product Provider) as to any of the foregoing, except as otherwise expressly provided herein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.12. **<u>Restrictions on Actions by Lenders; Sharing of Payments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of the Lenders agrees that it shall not, without the express written consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set off against the Obligations, any amounts owing by such Lender to Borrower or its Subsidiaries or any deposit accounts of Borrower or its Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender's Pro Rata Share of all such distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; <u>provided</u>, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.13. **<u>Agency for Perfection</u>**. Agent hereby appoints each other Lender (and each Bank Product Provider) as its agent (and each Lender hereby accepts (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to accept) such appointment) for the purpose of perfecting Agent's Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the PPSA or the applicable provisions of any STA, can be perfected by possession or control. Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent's request therefor shall deliver possession or control of such Collateral to Agent or in accordance with Agent's instructions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.14. **<u>Payments by Agent to the Lenders</u>**. All payments to be made by Agent to the Lenders (or Bank Product Providers) shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent. Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.15. **<u>Concerning the Collateral and Related Loan Documents</u>**. Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents. Each member of the Lender Group agrees (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to agree) that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders (and such Bank Product Provider).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.16. **<u>Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information</u>**. By becoming a party to this Agreement, each Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field examination report respecting Borrower or its Subsidiaries (each, a "<u>Report</u>") prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any field examination will inspect only specific information regarding Borrower and its Subsidiaries and will rely significantly upon Borrower's and its Subsidiaries' books and records, as well as on representations of Borrower's personnel,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) agrees to keep all Reports and other material, non-public information regarding Borrower and its Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with <u>Section</u> <u>17.9</u>, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrower, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a loan or loans of Borrower, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys' fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In addition to the foregoing, (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by Borrower or its Subsidiaries to Agent that has not been contemporaneously provided by Borrower or such Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from Borrower or its Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender's notice to Agent, whereupon Agent promptly shall request of Borrower the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from Borrower or such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Borrower a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.17. **<u>Several Obligations; No Liability</u>**. Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender. Except as provided in <u>Section</u> <u>15.7</u>, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group. No Lender shall be responsible to Borrower or any other Person for any failure by any other Lender (or Bank Product Provider) to fulfill its obligations to make credit available hereunder, nor to advance for such Lender (or Bank Product Provider) or on its behalf, nor to take any other action on behalf of such Lender (or Bank Product Provider) hereunder or in connection with the financing contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.18. **<u>Quebec Security</u>**. In its capacity as Agent, for the purposes of holding any hypothec granted to Agent, Wells Fargo is hereby appointed and shall serve as the hypothecary representative for all present and future Lenders and Bank Product Providers as contemplated by Article 2692 of the Civil Code of Québec. Any person who becomes a Lender or a Bank Product Provider shall, by its execution of an Assignment and Acceptance (in the case of a Lender), or by entering into a Bank Product Agreement (in the case of a Bank Product Provider) be deemed to have consented to and confirmed Agent as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a Lender or Bank Product Provider, as the case may be, all actions taken by Agent in such capacity. The substitution of Agent pursuant to the provisions of this <u>Section</u> <u>15</u> also constitute the substitution of the hypothecary representative.

16. **WITHHOLDING TAXES.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1. **<u>Payments</u>**. All payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes except as required by applicable law, and in the event any deduction or withholding of Indemnified Taxes is required by applicable law, Borrower shall comply with the next sentence of this <u>Section</u> <u>16.1</u>. If any Indemnified Taxes are required to be deducted or withheld on a payment made by any Loan Party, such Loan Party agrees that the amount payable by it shall be increased as necessary so that after such deduction or withholding is made every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this <u>Section</u> <u>16.1</u> after withholding or deduction for or on account of any Indemnified Taxes, will not be less than the amount provided for herein. Borrower will furnish to Agent as promptly as possible after the date the payment of any Tax is due pursuant to applicable law, certified copies of Tax receipts or other documentation reasonably requested by Agent evidencing such payment by Borrower. Borrower agrees to pay any present or future stamp, value added, intangible transfer or documentary Taxes or any other excise or property Taxes, charges, or similar levies ("<u>Other Taxes</u>") that arise from any payment made hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise with respect to this Agreement or any other Loan Document. Loan Parties shall indemnify each Indemnified Person (as defined in <u>Section</u> <u>10.3</u>) (collectively a "<u>Tax Indemnitee</u>") for the full amount of Indemnified Taxes or Other Taxes arising in connection with this Agreement or any other Loan Document or breach thereof by any Loan Party (including, without limitation, any Indemnified Taxes or Other Taxes imposed or asserted on, or attributable to, amounts payable under this <u>Section</u> <u>16</u>) imposed on, or paid by, such Tax Indemnitee and all reasonable costs and expenses related thereto (including fees and disbursements of attorneys and other Tax professionals), as and when they are incurred and irrespective of whether suit is brought, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority (other than Indemnified Taxes or Other Taxes and additional amounts that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Tax Indemnitee). The obligations of Loan Parties under this <u>Section</u> <u>16</u> shall survive the termination of this Agreement, the resignation and replacement of the Agent, and the repayment of the Obligations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2. **<u>Exemptions</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If a Lender or Participant is entitled to claim an exemption or reduction from United States withholding tax, such Lender or Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the following before receiving its first payment under this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if such Lender or Participant is entitled to claim an exemption from United States withholding Tax pursuant to the portfolio interest exception, (A) a statement of the Lender or Participant, signed under penalty of perjury, that it is not a (I) a "bank" as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to Borrower for the purposes of Section 881(c)(3)(C) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN, W-8BEN-E or Form W-8IMY (with proper attachments), as applicable;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if such Lender or Participant is entitled to claim an exemption from, or a reduction of, withholding Tax under a United States Tax treaty, a properly completed and executed copy of IRS Form W-8BEN or W-8BEN-E, as applicable;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding Tax because it is effectively connected with a United States trade or business of such Lender, a properly completed and executed copy of IRS Form W-8ECI;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding Tax because such Lender or Participant serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper attachments); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If a Lender or Participant claims an exemption or reduction from withholding Tax in a jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) any such form or forms, as may be reasonably requested by Agent or required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding Tax before receiving its first payment under this Agreement (including, for the avoidance of doubt, if requested, Canada Revenue Agency Forms NR-301, NR-302 or NR-303, as applicable), but only if such Lender or such Participant is legally able to deliver such forms and the completion, execution, or submission of such forms or other documentation in the reasonable judgment of such Lender would not subject such Lender to any material unreimbursed cost or expense or materially prejudice the legal or commercial position of such Lender or its Affiliates, <u>provided</u>, that nothing in this <u>Section</u> <u>16.2(c)</u> shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its Tax returns). Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If a Lender or Participant claims exemption from, or reduction of, withholding Tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrower to such Lender or Participant, such Lender or Participant agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender granting the participation only) of the percentage amount in which it is no longer the beneficial owner of Obligations of Borrower to such Lender or Participant. To the extent of such percentage amount, Agent will treat such Lender's or such Participant's documentation provided pursuant to <u>Section</u> <u>16.2(a)</u> or 16.2(c) as no longer valid. With respect to such percentage amount, such Participant or Assignee may provide new documentation, pursuant to <u>Section</u> <u>16.2(a)</u> or 16.2(c), if applicable. Borrower agrees that each Participant shall be entitled to the benefits of this <u>Section</u> <u>16</u> with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this <u>Section</u> <u>16</u> with respect thereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If a payment made to a Lender under any Loan Document would be subject to U.S. federal income withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such Lender shall deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) at the time or times prescribed by law and at such time or times reasonably requested by Agent (or, in the case of a Participant, the Lender granting the participation) such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by Agent (or, in the case of a Participant, the Lender granting the participation) as may be necessary for Agent or Borrower to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e), "FATCA" shall include any amendments made to FATCA after the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3. **<u>Reductions</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If a Lender or a Participant is subject to an applicable withholding Tax, Agent (or, in the case of a Participant, the Lender granting the participation) may withhold from any payment to such Lender or such Participant an amount equivalent to the applicable withholding Tax. If the forms or other documentation required by <u>Section</u> <u>16.2(a)</u> or 16.2(c) are not delivered to Agent (or, in the case of a Participant, to the Lender granting the participation), then Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any payment to such Lender or such Participant not providing such forms or other documentation an amount equivalent to the applicable withholding Tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Canada Revenue Agency or any other Governmental Authority of Canada or other jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the participation) did not properly withhold Tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify Agent (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding Tax ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of a Participant, to the Lender granting the participation), as Tax or otherwise, including penalties and interest, and including any Taxes imposed by any jurisdiction on the amounts payable to Agent (or, in the case of a Participant, to the Lender granting the participation only) under this <u>Section</u> <u>16</u>, together with all costs and expenses (including attorneys' fees and expenses). The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4. **<u>Refunds</u>**. If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes to which Borrower has paid additional amounts pursuant to this <u>Section</u> <u>16</u>, so long as no Event of Default has occurred and is continuing, it shall pay over such refund to Borrower (but only to the extent of payments made, or additional amounts paid, by Borrower under this <u>Section</u> <u>16</u> with respect to Indemnified Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent or such Lender and without interest (other than any interest paid by the applicable Governmental Authority with respect to such a refund); <u>provided</u>, that Borrower, upon the request of Agent or such Lender, agrees to repay the amount paid over to Borrower (plus any penalties, interest or other charges, imposed by the applicable Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross negligence of Agent hereunder) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything in this Agreement to the contrary, this <u>Section</u> <u>16</u> shall not be construed to require Agent or any Lender to make available its Tax returns (or any other information which it deems confidential) to Borrower or any other Person.

17. **GENERAL PROVISIONS.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.1. **<u>Effectiveness</u>**. This Agreement shall be binding and deemed effective when executed by Borrower, Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.2. **<u>Section Headings</u>**. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.3. **<u>Interpretation</u>**. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or Borrower or Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.4. **<u>Severability of Provisions</u>**. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.5. **<u>Bank Product Providers</u>**. Each Bank Product Provider in its capacity as such shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Agent is acting. Agent hereby agrees to act as agent for such Bank Product Providers and, by virtue of entering into a Bank Product Agreement, the applicable Bank Product Provider shall be automatically deemed to have appointed Agent as its agent and to have accepted the benefits of the Loan Documents. It is understood and agreed that the rights and benefits of each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider's being a beneficiary of the Liens (and, if applicable, guarantees) granted to Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein. In addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be automatically deemed to have agreed that Agent shall have the right, but shall have no obligation, to establish, maintain, relax, or release reserves in respect of the Bank Product Obligations and that if reserves are established there is no obligation on the part of Agent to determine or insure whether the amount of any such reserve is appropriate or not. In connection with any such distribution of payments or proceeds of Collateral, Agent shall be entitled to assume no amounts are due or owing to any Bank Product Provider unless such Bank Product Provider has provided a written certification (setting forth a reasonably detailed calculation) to Agent as to the amounts that are due and owing to it and such written certification is received by Agent a reasonable period of time prior to the making of such distribution. Agent shall have no obligation to calculate the amount due and payable with respect to any Bank Products, but may rely upon the written certification of the amount due and payable from the applicable Bank Product Provider. In the absence of an updated certification, Agent shall be entitled to assume that the amount due and payable to the applicable Bank Product Provider is the amount last certified to Agent by such Bank Product Provider as being due and payable (less any distributions made to such Bank Product Provider on account thereof). Borrower may obtain Bank Products from any Bank Product Provider, although Borrower is not required to do so. Borrower acknowledges and agrees that no Bank Product Provider has committed to provide any Bank Products and that the providing of Bank Products by any Bank Product Provider is in the sole and absolute discretion of such Bank Product Provider. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no provider or holder of any Bank Product shall have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or holder of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or holder be required (other than in their capacities as Lenders, to the extent applicable) for any matter hereunder or under any of the other Loan Documents, including as to any matter relating to the Collateral or the release of Collateral or Guarantors.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.6. **<u>Debtor-Creditor Relationship</u>**. The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor. No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.7. **<u>Counterparts; Electronic Execution</u>**. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Execution of any such counterpart may be by means of (a) an electronic signature that complies with the federal Electronic Signatures in Global and National Commerce Act, as in effect from time to time, state enactments of the Uniform Electronic Transactions Act, as in effect from time to time, or any other relevant and applicable electronic signatures law; (b) an original manual signature; or (c) a faxed, scanned, or photocopied manual signature. Each electronic signature or faxed, scanned, or photocopied manual signature shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Agent reserves the right, in its discretion, to accept, deny, or condition acceptance of any electronic signature on this Agreement. Any party delivering an executed counterpart of this Agreement by faxed, scanned or photocopied manual signature shall also deliver an original manually executed counterpart, but the failure to deliver an original manually executed counterpart shall not affect the validity, enforceability and binding effect of this Agreement. The foregoing shall apply to each other Loan Document, and any notice delivered hereunder or thereunder, *mutatis mutandis*.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.8. **<u>Revival and Reinstatement of Obligations; Certain Waivers</u>**. If any member of the Lender Group or any Bank Product Provider repays, refunds, restores, or returns in whole or in part, any payment or property (including any proceeds of Collateral) previously paid or transferred to such member of the Lender Group or such Bank Product Provider in full or partial satisfaction of any Obligation or on account of any other obligation of any Loan Party under any Loan Document or any Bank Product Agreement, because the payment, transfer, or the incurrence of the obligation so satisfied is asserted or declared to be void, voidable, or otherwise recoverable under any law relating to creditors' rights, including provisions of the Bankruptcy Code or other Insolvency Laws relating to fraudulent transfers, preferences, or other voidable or recoverable obligations or transfers (each, a "<u>Voidable Transfer</u>"), or because such member of the Lender Group or Bank Product Provider elects to do so on the reasonable advice of its counsel in connection with a claim that the payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to any such Voidable Transfer, or the amount thereof that such member of the Lender Group or Bank Product Provider elects to repay, restore, or return (including pursuant to a settlement of any claim in respect thereof), and as to all reasonable costs, expenses, and attorneys' fees of such member of the Lender Group or Bank Product Provider related thereto, (i) the liability of the Loan Parties with respect to the amount or property paid, refunded, restored, or returned will automatically and immediately be revived, reinstated, and restored and will exist and (ii) Agent's Liens securing such liability shall be effective, revived, and remain in full force and effect, in each case, as fully as if such Voidable Transfer had never been made. If, prior to any of the foregoing, (A) Agent's Liens shall have been released or terminated or (B) any provision of this Agreement shall have been terminated or cancelled, Agent's Liens, or such provision of this Agreement, shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligation of any Loan Party in respect of such liability or any Collateral securing such liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.9. **<u>Confidentiality</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Agent and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding Borrower and its Subsidiaries, their operations, assets, and existing and contemplated business plans ("<u>Confidential Information</u>") shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement, except: (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group and to employees, directors and officers of any member of the Lender Group (the Persons in this clause (i), "<u>Lender Group Representatives</u>") on a "need to know" basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the Bank Product Providers), <u>provided</u> that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this <u>Section</u> <u>17.9</u>, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; <u>provided</u> that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrower with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrower pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrower, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, <u>provided</u>, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Borrower with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Borrower pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives), (viii) in connection with any assignment, participation or pledge of any Lender's interest under this Agreement, <u>provided</u> that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information either subject to the terms of this <u>Section</u> <u>17.9</u> or pursuant to confidentiality requirements substantially similar to those contained in this <u>Section</u> <u>17.9</u> (and such Person may disclose such Confidential Information to Persons employed or engaged by them as described in clause (i) above), (ix) in connection with any litigation or other adversary proceeding involving parties hereto to the extent such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; <u>provided</u>, that, prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation involving any Person (other than Borrower, Agent, any Lender, any of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Borrower with prior written notice thereof, and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Anything in this Agreement to the contrary notwithstanding, Agent may disclose information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services or in its marketing or promotional materials, with such information to consist of deal terms and other information customarily found in such publications or marketing or promotional materials and may otherwise use the name, logos, and other insignia of Borrower or the other Loan Parties and the Commitments provided hereunder in any "tombstone" or other advertisements, on its website or in other marketing materials of the Agent; <u>provided</u> that, in the case of this clause, Agent will submit its proposed form of "tombstone" or comparable advertising to the Administrative Borrower for approval prior to Agent's initial external use thereof, which approval of the Administrative Borrower shall not be unreasonably withheld, conditioned or delayed, and, following receipt of such approval from the Administrative Borrower, Agent shall not be required to see further approval for any Loan Party to use such "tombstone" or other comparable advertising on its website or in its other marketing materials.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Loan Parties hereby acknowledge that Agent or its Affiliates may make available to the Lenders materials or information provided by or on behalf of Borrower hereunder (collectively, "<u>Borrower Materials</u>") by posting Borrower Materials on IntraLinks, SyndTrak or another similar electronic system (the "<u>Platform</u>") and certain of the Lenders may be "public-side" Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Loan Parties or their securities) (each, a "<u>Public Lender</u>"). The Loan Parties shall be deemed to have authorized Agent and its Affiliates and the Lenders to treat Borrower Materials marked "PUBLIC" or otherwise at any time filed with the SEC as not containing any material non-public information with respect to the Loan Parties or their securities for purposes of United States federal and state securities laws. All Borrower Materials marked "PUBLIC" are permitted to be made available through a portion of the Platform designated as "Public Investor" (or another similar term). Agent and its Affiliates and the Lenders shall be entitled to treat Borrower Materials that are not marked "PUBLIC" or that are not at any time filed with the SEC as being suitable only for posting on a portion of the Platform not marked as "Public Investor" (or such other similar term).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.10. **<u>Survival</u>**. All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent, any Issuing Lender, or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any Loan or any fee or any other amount payable under this Agreement is outstanding or unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or been terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.11. ***<u>Patriot Act</u>*<u>; Canadian Anti-Money Laundering</u> <u>& Anti-Terrorism Legislation</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender that is subject to the requirements of the *Patriot Act* hereby notifies Borrower that pursuant to the requirements of the *Patriot Act*, it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow such Lender to identify Borrower in accordance with the *Patriot Act*. In addition, if Agent is required by law or regulation or internal policies to do so, it shall have the right to periodically conduct (a) *Patriot Act* searches, OFAC/PEP searches, and customary individual background checks for the Loan Parties and (b) OFAC/PEP searches and customary individual background checks for the Loan Parties' senior management and key principals, and Borrower agrees to cooperate in respect of the conduct of such searches and further agrees that the reasonable costs and charges for such searches shall constitute Lender Group Expenses hereunder and be for the account of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Loan Party acknowledges that, pursuant to the provisions of Canadian Anti-Money Laundering & Anti-Terrorism Legislation, Agent and Lenders may be required to obtain, verify and record information regarding each Loan Party, its respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of such Loan Party, and the transactions contemplated hereby. The Loan Parties shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Lender or Agent, or any prospective assign or participant of a Lender or Agent, necessary in order to comply with any applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation, whether now or hereafter in existence. If Agent has ascertained the identity of any Loan Party or any authorized signatories of any Loan Party for the purposes of applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation, then the Agent:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a "written agreement" in such regard between each Lender and the Agent within the meaning of applicable Canadian Anti-Money Laundering & Anti-Terrorism Legislation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.

Notwithstanding the provisions of this Section and except as may otherwise be agreed in writing, each Lender agrees that Agent has no obligation to ascertain the identity of the Loan Parties or any authorized signatories of the Loan Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from the Loan Parties or any such authorized signatory in doing so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.12. **<u>Integration</u>**. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof. The foregoing to the contrary notwithstanding, all Bank Product Agreements, if any, are independent agreements governed by the written provisions of such Bank Product Agreements, which will remain in full force and effect, unaffected by any repayment, prepayments, acceleration, reduction, increase, or change in the terms of any credit extended hereunder, except as otherwise expressly provided in such Bank Product Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.13. **<u>Birks Group Inc. as Agent for Borrower</u>**. To the extent a Person other than Birks Group Inc. is a borrower hereunder, Borrower hereby irrevocably appoints Birks Group Inc. as the borrowing agent and attorney-in-fact for all Borrower (the "<u>Administrative Borrower</u>") which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (a) to provide Agent with all notices with respect to Revolving Loans and Letters of Credit obtained for the benefit of Borrower and all other notices and instructions under this Agreement and the other Loan Documents (and any notice or instruction provided by Administrative Borrower shall be deemed to be given by Borrower hereunder and shall bind Borrower), (b) to receive notices and instructions from members of the Lender Group (and any notice or instruction provided by any member of the Lender Group to the Administrative Borrower in accordance with the terms hereof shall be deemed to have been given to Borrower), and (c) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Revolving Loans and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Loan Accounts and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrower in order to utilize the collective borrowing powers of Borrower in the most efficient and economical manner and at their request, and that Lender Group shall not incur liability to Borrower as a result hereof. Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Accounts and the Collateral in a combined fashion since the successful operation of Borrower is dependent on the continued successful performance of the integrated group. To induce the Lender Group to do so, and in consideration thereof, Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group by Borrower or by any third party whosoever, arising from or incurred by reason of (i) the handling of the Loan Accounts and Collateral of Borrower as herein provided, or (ii) the Lender Group's relying on any instructions of the Administrative Borrower, except that Borrower will have no liability to the relevant Agent-Related Person or Lender-Related Person under this <u>Section</u> <u>17.13</u> with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.14. **<u>Judgment Currency</u>**. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of Borrower in respect of any such sum due from it to Agent or any Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the "<u>Judgment Currency</u>") other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the "<u>Agreement Currency</u>"), be discharged only to the extent that on the Business Day following receipt by Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to Agent or any Lender from Borrower in the Agreement Currency, Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Agent or such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to Agent or any Lender in such currency, Agent or such Lender, as the case may be, agrees to return the amount of any excess to Borrower (or to any other Person who may be entitled thereto under applicable law).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.15. **<u>No Setoff</u>**. All payments made by Borrower hereunder or under any note or other Loan Document will be made without setoff, counterclaim, or other defense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.16. **<u>Intercreditor Agreement</u>**. The parties hereto acknowledge that the exercise of certain of the Agent's rights and remedies hereunder may be subject to, and restricted by, the provisions of the Intercreditor Agreement regarding intercreditor arrangements among the Agent and the Term Loan Agent. Notwithstanding the foregoing, each Loan Party expressly acknowledges and agrees that the Intercreditor Agreement is solely for the benefit of the parties thereto, and that notwithstanding the fact that the exercise of certain of the Agent's and Lenders' rights under the Loan Documents may be subject to the Intercreditor Agreement, no action taken or not taken by the Agent or any Lender in accordance with the terms of the Intercreditor Agreement shall constitute, or be deemed to constitute, a waiver by the Agent or any Lender of any rights such Person has with respect to any Loan Party under any Loan Document and except as specified therein, nothing contained in the Intercreditor Agreement shall be deemed to modify any of the provisions of this Agreement and the other Loan Documents, which, as among the Loan Parties, the Agent and the Lenders, shall remain in full force and effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.17. **<u>Acknowledgement Regarding Any Supported QFCs</u>**. To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedge Agreements or any other agreement or instrument that is a QFC (such support, "QFC Credit Support" and each such QFC a "Supported QFC"), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the "U.S. Special Resolution Regimes") in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States): In the event a Covered Entity that is party to a Supported QFC (each, a "Covered Party") becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.18. **<u>Erroneous Payments</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender and each other Bank Product Provider and any other party hereto hereby severally agrees that if (i) the Agent notifies(which such notice shall be conclusive absent manifest error) such Lender or any Bank Product Provider (or the Lender which is an Affiliate of a Lender or Bank Product Provider) or any other Person that has received funds from the Agent or any of its Affiliates, either for its own account or on behalf of a Lender or Bank Product Provider (each such recipient, a "<u>Payment Recipient</u>") that the Agent has determined in its sole discretion that any funds received by such Payment Recipient were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not known to such Payment Recipient) or (ii) any Payment Recipient receives any payment from the Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, (y) that was not preceded or accompanied by a notice of payment, prepayment or repayment sent by the Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, as applicable, or (z) that such Payment Recipient otherwise becomes aware was transmitted or received in error or by mistake (in whole or in part) then, in each case, an error in payment shall be presumed to have been made (any such amounts specified in clauses (i) or (ii) of this <u>Section</u> <u>17.18(a)</u>, whether received as a payment, prepayment or repayment of principal, interest, fees, distribution or otherwise; individually and collectively, an "<u>Erroneous Payment</u>"), then, in each case, such Payment Recipient is deemed to have knowledge of such error at the time of its receipt of such Erroneous Payment; provided that nothing in this Section shall require the Agent to provide any of the notices specified in clauses (i) or (ii) above. Each Payment Recipient agrees that it shall not assert any right or claim to any Erroneous Payment, and hereby waives any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Agent for the return of any Erroneous Payments, including without limitation waiver of any defense based on "discharge for value" or any similar doctrine.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Without limiting the immediately preceding clause (a), each Payment Recipient agrees that, in the case of clause (a)(ii) above, it shall promptly notify the Agent in writing of such occurrence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the case of either clause (a)(i) or (a)(ii) above, such Erroneous Payment shall at all times remain the property of the Agent and shall be segregated by the Payment Recipient and held in trust for the benefit of the Agent, and upon demand from the Agent such Payment Recipient shall (or, shall cause any Person who received any portion of an Erroneous Payment on its behalf to), promptly, but in all events no later than one Business Day thereafter, return to the Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made in same day funds and in the currency so received, together with interest thereon in respect of each day from and including the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Agent at the greater of the Federal Funds Rate and a rate determined by the Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Agent for any reason, after demand therefor by the Agent in accordance with immediately preceding clause (c), from any Lender that is a Payment Recipient or an Affiliate of a Payment Recipient (such unrecovered amount as to such Lender, an "<u>Erroneous Payment Return Deficiency</u>"), then at the sole discretion of the Agent and upon the Agent's written notice to such Lender (i) such Lender shall be deemed to have made a cashless assignment of the full face amount of the portion of its Loans (but not its Commitments) with respect to which such Erroneous Payment was made (the "<u>Erroneous Payment Impacted Loans</u>") to the Agent or, at the option of the Agent, the Agent's applicable lending affiliate (such assignee, the "<u>Agent Assignee</u>") in an amount that is equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Agent may specify) (such assignment of the Loans (but not Commitments) of the Erroneous Payment Impacted Loans, the "<u>Erroneous Payment Deficiency Assignment</u>") plus any accrued and unpaid interest on such assigned amount, without further consent or approval of any party hereto and without any payment by the Agent Assignee as the assignee of such Erroneous Payment Deficiency Assignment. Without limitation of its rights hereunder, following the effectiveness of the Erroneous Payment Deficiency Assignment, the Agent may make a cashless reassignment to the applicable assigning Lender of any Erroneous Payment Deficiency Assignment at any time by written notice to the applicable assigning Lender and upon such reassignment all of the Loans assigned pursuant to such Erroneous Payment Deficiency Assignment shall be reassigned to such Lender without any requirement for payment or other consideration. The parties hereto acknowledge and agree that (1) any assignment contemplated in this clause (d) shall be made without any requirement for any payment or other consideration paid by the applicable assignee or received by the assignor, (2) the provisions of this clause (d) shall govern in the event of any conflict with the terms and conditions of <u>Section</u> <u>13</u> and (3) the Agent may reflect such assignments in the Register without further consent or action by any other Person.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each party hereto hereby agrees that (x) in the event an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for any reason, the Agent (1) shall be subrogated to all the rights of such Payment Recipient and (2) is authorized to set off, net and apply any and all amounts at any time owing to such Payment Recipient under any Loan Document, or otherwise payable or distributable by the Agent to such Payment Recipient from any source, against any amount due to the Agent under this <u>Section</u> <u>17.18</u> or under the indemnification provisions of this Agreement, (y) the receipt of an Erroneous Payment by a Payment Recipient shall not for the purpose of this Agreement be treated as a payment, prepayment, repayment, discharge or other satisfaction of any Obligations owed by the Borrower or any other Loan Party, except, in each case, to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Agent from the Borrower or any other Loan Party (or any other Person on behalf of the Borrower) for the purpose of making for a payment on the Obligations and (z) subject to the preceding clause (y), to the extent that an Erroneous Payment was in any way or at any time credited as payment or satisfaction of any of the Obligations, the Obligations or any part thereof that were so credited, and all rights of the Payment Recipient, as the case may be, shall be reinstated and continue in full force and effect as if such payment or satisfaction had never been received.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Each party's obligations under this <u>Section</u> <u>17.18</u> shall survive the resignation or replacement of the Agent or any transfer of right or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The provisions of this <u>Section</u> <u>17.18</u> to the contrary notwithstanding, (i) nothing in this <u>Section</u> <u>17.18</u> will constitute a waiver or release of any claim of any party hereunder arising from any Payment Recipient's receipt of an Erroneous Payment and (ii) there will only be deemed to be a recovery of the Erroneous Payment to the extent that Agent has received payment from the Payment Recipient in immediately available funds the Erroneous Payment Return Deficiency, whether directly from the Payment Recipient, as a result of the exercise by Agent of its rights of subrogation or set off as set forth above in clause (e) or as a result of the receipt by Agent Assignee of a payment of the outstanding principal balance of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment, but excluding any other amounts in respect thereof (it being agreed that any payments of interest, fees, expenses or other amounts (other than principal) received by Agent Assignee in respect of the Loans assigned to Agent Assignee pursuant to an Erroneous Payment Deficiency Assignment shall be the sole property of the Agent Assignee and shall not constitute a recovery of the Erroneous Payment).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.19. **<u>Reaffirmation</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On the Closing Date, the Original Credit Agreement shall be amended and restated in its entirety hereby and the provisions of the Original Credit Agreement shall be superseded by the provisions hereof. In addition, unless specifically amended hereby or contemporaneously herewith, each of the other "Loan Documents" (as defined in the Original Credit Agreement) shall continue in full force and effect and, from and after the Closing Date, (i) all references to loans or Revolving Loans to, or notes issued by, or Obligations of, the Original Borrower therein shall be deemed to refer to the loans or Revolving Loans to, or notes issued by, or Obligations of, Borrower hereunder, and (ii) all references to the "Loan Documents" contained therein shall be deemed to refer to the Loan Documents as defined in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) It is the intention of each of the parties hereto that the Original Credit Agreement be amended and restated so as to preserve the perfection and priority of all security interests securing Indebtedness and Obligations under the Original Credit Agreement and that all Indebtedness and Obligations of Borrower hereunder and Borrower and the Guarantors under the other Loan Documents shall be secured by the applicable Loan Documents and that this Agreement does not constitute a novation of any or all of the obligations and liabilities existing under the Original Credit Agreement, the other "Loan Documents" (as defined in the Original Credit Agreement) or any related documents. The parties confirm that the Canadian Security Documents delivered in connection with the execution of the Original Credit Agreement shall remain in full force and effect and shall continue to secure the Obligations of Borrower hereunder and the Guarantors thereunder.

[Signature pages to follow]

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**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

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| | |
|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| By: |  |
|  | Name: Katia Fontana, CPA |
|  | Title: VP, Chief Financial Officer |
| By: |  |
|  | Name: Miranda Melfi |
|  | Title: VP, HR, Chief Legal Officer and |
|  | Corporate Secretary |
| **WELLS FARGO CAPITAL FINANCE CORPORATION CANADA**, as Agent, and as the initial Lender hereunder | **WELLS FARGO CAPITAL FINANCE CORPORATION CANADA**, as Agent, and as the initial Lender hereunder |
| By: |  |
|  | Name: Carmela Massari |
|  | Title: Senior Vice President, Portfolio |
|  | Manager |

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Signature Page to Credit Agreement

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**By execution hereof, each Guarantor acknowledges, agrees and consents to all of the terms and conditions of (a) this Agreement; and (b) (A) all Loan Documents to which it is a party, including all guarantees granted by such Guarantor to and in favour of the Agent, and (B) all security granted by such Guarantor to and in favour of the Agent, security for the Obligations, are, in the case of (A) and (B), in full force and effect and are hereby confirmed and all obligations of all parties thereunder are not affected or prejudiced in any manner.** 

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| | |
|:---|:---|
| **CASH, GOLD & SILVER INC.**, as guarantor | **CASH, GOLD & SILVER INC.**, as guarantor |
| By: |  |
|  | Name: Katia Fontana, CPA |
|  | Title: VP, Chief Financial Officer |
| By: |  |
|  | Name: Miranda Melfi |
|  | Title: VP, HR, Chief Legal Officer and |
|  | Corporate Secretary |

---

Signature Page to Credit Agreement

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**By execution hereof, each Guarantor acknowledges, agrees and consents to all of the terms and conditions of (a) this Agreement; and (b) (A) all Loan Documents to which it is a party, including all guarantees granted by such Guarantor to and in favour of the Agent, and (B) all security granted by such Guarantor to and in favour of the Agent, security for the Obligations, are, in the case of (A) and (B), in full force and effect and are hereby confirmed and all obligations of all parties thereunder are not affected or prejudiced in any manner.** 

---

| | |
|:---|:---|
| **BIRKS INVESTMENTS INC.**, as guarantor | **BIRKS INVESTMENTS INC.**, as guarantor |
| By: |  |
|  | Name: Katia Fontana |
|  | Title: VP, Chief Financial Officer |
| By: |  |
|  | Name: Miranda Melfi |
|  | Title: VP, HR, Chief Legal Officer and |
|  | Corporate Secretary |

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Signature Page to Credit Agreement

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**<u>Schedule 1.1</u>**

**Definitions** 

As used in the Agreement, the following terms shall have the following definitions:

"<u>Account</u>" means an account (as that term is defined in the PPSA).

"<u>Account Debtor</u>" means any Person who is obligated on an Account, chattel paper, or an intangible.

"<u>Accounting Changes</u>" means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions, including, to the extent applicable, the Chartered Professional Accountants Canada).

"<u>Acquired Indebtedness</u>" means Indebtedness of a Person whose assets or Equity Interests are acquired by Borrower or any of its Subsidiaries in a Permitted Acquisition; <u>provided</u>, that such Indebtedness (a) is either purchase money Indebtedness or a Capital Lease with respect to Equipment or mortgage financing with respect to Real Property, (b) was in existence prior to the date of such Permitted Acquisition, and (c) was not incurred in connection with, or in contemplation of, such Permitted Acquisition.

"<u>Acquisition</u>" means (a) the purchase or other acquisition by a Person or its Subsidiaries of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, amalgamation, consolidation, or otherwise) by a Person or its Subsidiaries of all or substantially all of the Equity Interests of any other Person.

"<u>Additional Documents</u>" has the meaning specified therefor in <u>Section</u> <u>5.12</u> of the Agreement.

<u>"Additional Subordinated Debt</u>" means such unsecured Indebtedness incurred by any Loan Party after the date of this Agreement to the extent that such Indebtedness is Permitted Indebtedness and is expressly subordinated to the full payment of the Obligations on terms and conditions and pursuant to a Subordination Agreement in form, scope and substance satisfactory to Agent and the Required Lenders.

<u>"Additional Subordinated Debt Documents</u>" means all documents, instruments and agreements executed in connection with any Additional Subordinated Debt, any such documents, instruments and agreements being in form, scope and substance satisfactory to Agent and the Required Lenders.

"<u>Adjusted Term CORRA</u>" means, for purposes of any calculation, the rate per annum equal to (a) Term CORRA for such calculation plus (b) the Term CORRA Adjustment; provided that if Adjusted Term CORRA as so determined shall ever be less than the Floor, then Adjusted Term CORRA shall be deemed to be the Floor.

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"<u>Administrative Borrower</u>" has the meaning specified therefor in <u>Section</u> <u>17.13</u> of the Agreement.

"<u>Administrative Questionnaire</u>" has the meaning specified therefor in <u>Section</u> <u>13.1(a)</u> of the Agreement.

"<u>Affected Lender</u>" has the meaning specified therefor in <u>Section</u> <u>2.13(b)</u> of the Agreement.

"<u>Affiliate</u>" means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Equity Interests, by contract, or otherwise; <u>provided</u>, that, for purposes of the definition of Eligible Accounts and <u>Section</u> <u>6.10</u> of the Agreement: (a) any Person which owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person.

"<u>Agent</u>" has the meaning specified therefor in the preamble to the Agreement.

"<u>Agent's Applicable Account</u>" means the Agent's Canadian Account and/or the Agent's US Account, as the context requires.

"<u>Agent's Canadian Account</u>" means the Deposit Account identified on <u>Schedule A-1</u> as Agent's Canadian Account (or such other Deposit Account that has been designated as such, in writing, by Agent to Administrative Borrower and the Lenders).

"<u>Agent's Liens</u>" means the Liens granted by Borrower or any of its Subsidiaries to Agent under the Loan Documents and securing all or a portion of the Obligations.

"<u>Agent's US Account</u>" means the Deposit Account identified on <u>Schedule A-2</u> as Agent's US Account (or such other Deposit Account that has been designated as such, in writing, by Agent to Administrative Borrower and the Lenders).

"<u>Agent-Related Persons</u>" means Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

"<u>Agreement</u>" means the Credit Agreement to which this <u>Schedule 1.1</u> is attached.

"<u>Applicable Currency</u>" means Canadian Dollars; <u>provided</u>, that with respect to Revolving Loans and any other Obligations denominated in US Dollars, Applicable Currency means US Dollars.

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"<u>Applicable Margin</u>" means, as of any date of determination and with respect to Base Rate Loans or Non-Base Rate Loans, as applicable, the applicable margin set forth in the following table that corresponds to the Average Excess Availability of Borrower for the most recently completed Fiscal Quarter**;** <u>provided</u>, that for the period from the Closing Date through the end of the Fiscal Quarter ending December 25, 2021, the Applicable Revolver Margin shall be set at the margin in the row styled "Level III":

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Level | Average<br>Excess<br>Availability<br>as a % of the<br>Line Cap | Applicable Margin in<br>Respect of Base Rate<br>Loans (the "Base Rate<br>Margin") | Applicable Margin in<br>respect of Term<br>CORRA Rate Loans<br>(the "Term CORRA<br>Rate Margin") | Applicable Margin in<br>respect of SOFR<br>Rate Loans (the<br>"SOFR Rate<br>Margin") |
| &nbsp;&nbsp;&nbsp;I | ≥ 66% | 0.00% | 1.50% | 1.625% |
| &nbsp;&nbsp;&nbsp;II | < 66% but ≥ 33% | 0.25% | 1.75% | 1.875% |
| &nbsp;&nbsp;&nbsp;III | < 33% | 0.50% | 2.00% | 2.125% |

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The Applicable Margin shall be re-determined by Agent as of the first day of each Fiscal Quarter of Borrower.

"<u>Applicable Unused Line Fee Percentage</u>" means 0.25% per annum.

"<u>Application Event</u>" means the (a) occurrence of a failure by Borrower to repay all of the Obligations in full on the Maturity Date, or (b) the occurrence and continuance of an Event of Default and the election by the Agent or the Required Lenders during such continuance to require that payments and proceeds of Collateral be applied pursuant to <u>Section</u> <u>2.4(b)(ii)</u> of the Agreement.

"<u>Assignee</u>" has the meaning specified therefor in <u>Section</u> <u>13.1(a)</u> of the Agreement.

"<u>Assignment and Acceptance</u>" means an Assignment and Acceptance Agreement substantially in the form of <u>Exhibit A-1</u> to the Agreement.

"<u>Authorized Person</u>" means any one of the individuals identified on <u>Schedule A-3</u> to the Agreement, as such schedule is updated from time to time by written notice from Administrative Borrower to Agent.

"<u>Availability Block</u>" means, as of any date of determination, the greater of (i) ten percent (10%) multiplied by the Term Loan Borrowing Base (calculated without giving effect to the Availability Block), and (ii) $8,500,000 plus (A) from December 20 to January 20 of any given Fiscal Year, $5,000,000, or (B) from January 21 to January 31 of any given Fiscal Year, $2,000,000.

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"<u>Available Increase Amount</u>" means, as of any date of determination, an amount equal to the result of (a) $13,000,000 minus (b) the aggregate principal amount of Increases to the Revolver Commitments previously made pursuant to <u>Section</u> <u>2.16</u> of the Agreement.

"<u>Available Tenor</u>" means, as of any date of determination and with respect to any then-current Benchmark, for any Currency, as applicable, (a) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an Interest Period pursuant to this Agreement or (b) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of "Interest Period" pursuant to <u>Section</u> <u>2.12(d)(iii)(D)</u>.

"<u>Average Excess Availability</u>" means, with respect to any period, the sum of the aggregate amount of Excess Availability for each Business Day in such period (calculated as of the end of each respective Business Day) divided by the number of Business Days in such period.

"<u>Bank Product</u>" means any one or more of the following financial products or accommodations extended to a Loan Party by a Bank Product Provider: (a) credit cards (including commercial credit cards (including so-called "purchase cards", "procurement cards" or "<u>P-cards</u>")), (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management Services, or (f) transactions under Hedge Agreements.

"<u>Bank Product Agreements</u>" means those agreements entered into from time to time by a Loan Party with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

"<u>Bank Product Collateralization</u>" means, with respect to the Bank Product Obligations, as applicable, providing cash collateral (pursuant to documentation reasonably satisfactory to Agent) in the Applicable Currency to be held by Agent for the benefit of the applicable Bank Product Providers (other than the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the reasonably estimated credit exposure with respect to the applicable then existing Bank Product Obligations (other than Hedge Obligations).

"<u>Bank Product Obligations</u>" means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by any Loan Party to any Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, (b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to any Loan Party; <u>provided</u>, in order for any item described in clauses (a), (b), or (c) above, as applicable, to constitute "Bank Product Obligations", if the applicable Bank Product Provider is any Person other than Wells Fargo or its Affiliates, then the applicable Bank Product must have been provided on or after the Closing Date and Agent shall have received a Bank Product Provider Agreement within 10 days after the date of the provision of the applicable Bank Product to a Loan Party.

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"<u>Bank Product Provider</u>" means any Lender or any of its Affiliates, including each of the foregoing in its capacity, if applicable, as a Hedge Provider; <u>provided</u>, that no such Person (other than Wells Fargo or its Affiliates) shall constitute a Bank Product Provider with respect to a Bank Product unless and until Agent receives a Bank Product Provider Agreement from such Person with respect to the applicable Bank Product within 10 days after the provision of such Bank Product to Borrower or any of its Subsidiaries; <u>provided</u> <u>further</u>, that if, at any time, a Lender ceases to be a Lender under the Agreement, then, from and after the date on which it ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Bank Product Providers and the obligations with respect to Bank Products provided by such former Lender or any of its Affiliates shall no longer constitute Bank Product Obligations.

"<u>Bank Product Provider Agreement</u>" means an agreement in substantially the form attached hereto as <u>Exhibit B-4</u> to the Agreement, in form and substance satisfactory to Agent, duly executed by the applicable Bank Product Provider, Borrower, and Agent.

"<u>Bank Product Reserves</u>" means, as of any date of determination, those reserves that Agent has established (based upon the applicable Bank Product Provider's reasonable and good faith determination of its credit exposure to the Loan Parties in respect of Bank Product Obligations) in respect of Bank Products then provided or outstanding.

"<u>Bankruptcy Code</u>" means title 11 of the United States Code, as in effect from time to time.

"<u>Base Rate</u>" means the Canadian Base Rate; <u>provided</u>, that with respect to Obligations denominated in US Dollars, Base Rate means the US Base Rate.

"<u>Base Rate Loan</u>" means a Revolving Loan that bears interest at a rate determined by reference to the applicable Base Rate. All Base Rate Loans shall be denominated in Canadian Dollars (if bearing interest at the Canadian Base Rate) or denominated in Dollars (if bearing interest at the U.S. Base Rate).

"<u>Base Rate Margin</u>" has the meaning set forth in the definition of Applicable Margin.

"<u>Benchmark</u>" means, initially, with respect to any (a) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, US Dollars, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or then-current Benchmark for US Dollars, then "Benchmark" means, with respect to such Obligations, interest, fees, commissions or other amounts, the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.12(d)(iii); and (b) Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Canadian Dollars, the Term CORRA Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term CORRA Reference Rate or then-current Benchmark for Canadian Dollars, then "Benchmark" means, with respect to such Obligations, interest, fees, commissions or other amounts, the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.12(d)(iii).

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"<u>Benchmark Rate Business Day</u>" means, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to Canadian Dollars, any day (other than a Saturday or Sunday) on which banks are open for business in Toronto, Ontario, Canada.

"<u>Benchmark Replacement</u>" means with respect to any Benchmark Transition Event for any then-current Benchmark, the sum of: (a) the alternate benchmark rate that has been selected by Agent and Administrative Borrower as the replacement for such Benchmark giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for such Benchmark for syndicated credit facilities denominated in US Dollars or Canadian Dollars, as applicable, at such time and (b) the related Benchmark Replacement Adjustment; provided that, in each case, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement shall be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

"<u>Benchmark Replacement Adjustment</u>" means, with respect to any replacement of any then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Agent and Administrative Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in US Dollars or Canadian Dollars, as applicable.

"<u>Benchmark Replacement Date</u>" means, the earliest to occur of the following events with respect to the then-current Benchmark for US Dollars or Canadian Dollars, as applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) in the case of clause (a) or (b) of the definition of "Benchmark Transition Event," the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors (if applicable) of such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in the case of clause (c) of the definition of "Benchmark Transition Event", the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; <u>provided</u> that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

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For the avoidance of doubt, the "Benchmark Replacement Date" will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors (if applicable) of such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Transition Event</u>" means with respect to the then-current Benchmark for US Dollars or Canadian Dollars, as applicable, the occurrence of one or more of the following events with respect to such Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors (if applicable) of such Benchmark (or such component thereof), permanently or indefinitely; <u>provided</u> that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor (if applicable) of such Benchmark (or such component thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors, the Federal Reserve Bank of New York, the central bank for the Currency applicable to such Benchmark, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors (if applicable) of such Benchmark (or such component thereof) permanently or indefinitely; <u>provided</u> that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor (if applicable) of such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such Benchmark (or such component thereof) or, if such Benchmark is a term rate, all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.

For the avoidance of doubt, a "Benchmark Transition Event" will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor (if applicable) of such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Transition Start Date</u>" means with respect to any Benchmark for US Dollars or Canadian Dollars, as applicable,, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90<sup>th</sup> day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).

"<u>Benchmark Unavailability Period</u>" means, with respect to any then-current Benchmark for US Dollars or Canadian Dollars, as applicable, the period (if any) (x) beginning at the time that a Benchmark Replacement Date with respect to such Benchmark pursuant to clauses (a) or (b) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Loan Document in accordance with <u>Section</u> <u>2.12(d)(iii)</u> and (y) ending at the time that a Benchmark Replacement has replaced such Benchmark for all purposes hereunder and under any Loan Document in accordance with <u>Section</u> <u>2.12(d)(iii)</u>.

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"<u>BHC Act Affiliate</u>" of a Person means an "affiliate" (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such Person.

"<u>Board of Directors</u>" means, as to any Person, the Board of Directors (or comparable managers) of such Person, or any committee thereof duly authorized to act on behalf of the Board of Directors (or comparable managers).

"<u>Board of Governors</u>" means the Board of Governors of the Federal Reserve System of the United States (or any successor).

"<u>Borrower</u>" has the meaning specified therefor in the preamble to the Agreement.

"<u>Borrower Materials</u>" has the meaning specified therefor in <u>Section</u> <u>17.9(c)</u> of the Agreement.

"<u>Borrowing</u>" means a borrowing consisting of Revolving Loans made on the same day by the Revolving Lenders with Revolver Commitments (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by Agent in the case of an Extraordinary Advance.

"<u>Borrowing Base</u>" means, as of any date of determination, the Canadian Dollar Equivalent amount of the result of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 90% of the amount of Eligible Credit Card Receivables of Borrower, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) 90% of the amount of Eligible Accounts of Borrower, provided that the amount thereof included in the Borrowing Base shall not exceed 20% of the aggregate amount of the Borrowing Base, plus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 90% of the amount calculated by multiplying the Inventory Net Recovery Percentage of the relevant Eligible Inventory Category identified in the most recent Inventory appraisal ordered and obtained by Agent by the cost (based on GAAP) of such Eligible Inventory provided that the amount of Eligible Non-Possessory Inventory included in Eligible Inventory for the purpose of calculating the Borrowing Base shall not exceed 5% of the aggregate amount of the Eligible Inventory, minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the aggregate amount of Receivables Reserves, Loan to Value Reserves, Bank Product Reserves, Inventory Reserves, Canadian Priority Payables Reserves and other Reserves, if any, established by Agent in accordance with Section 2.1(c) of the Agreement with respect to the Borrowing Base, minus

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the Availability Block.

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"<u>Borrowing Base Certificate</u>" means a certificate in the form of <u>Exhibit B-1</u>, containing the calculation of the Borrowing Base.

"<u>Business Day</u>" means any day that is not a Saturday, Sunday, or other day on which banks are authorized or required to close in the State of New York or the Provinces of Ontario or Quebec, except that, if a determination of a Business Day shall relate to a SOFR Rate Loan, the term "Business Day" also shall exclude any day on which banks are closed for dealings in US Dollar deposits in the London interbank market.

"<u>Canadian Anti-Money Laundering & Anti-Terrorism Legislation</u>" means Part II.1 of the Criminal Code (Canada), The *Proceeds of Crime (Money Laundering) and Terrorist Financing Act* (Canada) and the *United Nations Act* (Canada), together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the *United Nations Act* (Canada) and any similar Canadian legislation in effect from time to time.

"<u>Canadian Base Rate</u>" means, on any day, the rate per annum equal to the greatest of (a) the Floor, (b) Adjusted Term CORRA for a one-month tenor as in effect on such day (provided that clause (b) shall not be applicable during any period in which Adjusted Term CORRA is unavailable, unascertainable or illegal) plus 1 percentage point and (c) the "prime rate" for Canadian Dollar commercial loans made in Canada as reported by Reuters under Reuters Instrument Code on the "CA Prime Rate (Domestic Interest Rate) – Composite Display" page (or any successor page or such other commercially available service or source (including the Canadian Dollar "prime rate" announced by a Schedule I bank under the *Bank Act* (Canada)) as Agent may designate from time to time). Any change in the Canadian Base Rate due to a change in the foregoing rate shall be effective as of the opening of business on the effective date of such change.

"<u>Canadian Defined Benefit Plan</u>" means any Canadian Pension Plan which contains a "defined benefit provision" as defined in subsection 147.1(1) of the Income Tax Act (Canada) but does not include a Canadian Multi-Employer Plan.

"<u>Canadian Designated Account</u>" means the Canadian Dollar Deposit Account(s) of Borrower identified on <u>Schedule D-1</u> to the Agreement (or such other Deposit Account of Borrower located at Designated Account Bank that has been designated as such, in writing, by Administrative Borrower to Agent).

"<u>Canadian Dollar Equivalent</u>" means, at any time, (a) with respect to any amount denominated in Canadian Dollars, such amount, and (b) with respect to any amount denominated in another currency, the equivalent amount thereof in Canadian Dollars as determined by Agent, at such time, on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date or such other date determined by Agent) for the purchase of Canadian Dollars with such currency. Calculations of the Borrowing Base with respect to items included therein that are not denominated in Canadian Dollars may be adjusted by Agent pursuant to this definition from time and references herein to the Borrowing Base (including references based upon the most recent applicable Borrowing Base Certificate delivered by Borrower to Agent) may reflect such adjustments.

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"<u>Canadian Dollars</u>", "<u>Dollars</u>", "<u>Cdn $</u>" or "<u>$</u>" means the lawful currency of Canada, as in effect from time to time.

"<u>Canadian Multi-Employer Plan</u>" means a "multi-employer pension plan", as such term is defined under the Pension Benefits Act (Ontario), under which a Loan Party is required to contribute pursuant to a collective bargaining agreement and under which (i) the sole obligation of the Loan Party is to make the contributions specified in the applicable collective bargaining agreement, and (ii) the Loan Party has no liability relating to any past or future withdrawals from the plan.

"<u>Canadian Patent Security Agreement</u>" has the meaning specified therefor in the Canadian Security Agreement.

"<u>Canadian Pension Plans</u>" means each pension plan required to be registered under Canadian federal or provincial law that is maintained or contributed to, or to which there is or may be an obligation to contribute by a Loan Party or a Subsidiary thereof, for its employees or former employees, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively.

"<u>Canadian Priority Payables Reserves</u>" means reserves (determined from time to time by Agent in its Permitted Discretion) for: (a) the amount past due and owing by any Loan Party, or the accrued amount for which such Loan Party has an obligation to remit, to a Governmental Authority or other Person pursuant to any applicable law, rule or regulation, in respect of (i) goods and services Taxes, harmonized sales Taxes, other sales Taxes, employee income Taxes, municipal Taxes and other Taxes payable or to be remitted or withheld; (ii) workers' compensation or employment insurance; (iii) federal Canada Pension Plan, Quebec Pension Plan and other statutory pension plan contributions; (iv) vacation or holiday pay; and (v) other like charges and demands, in each case, to the extent that any Governmental Authority or other Person may claim a Lien, trust, deemed trust or other claim ranking or capable of ranking in priority to or *pari passu* with one or more of the Liens granted in the Loan Documents; and (b) the aggregate amount of any other liabilities of any Loan Party (i) in respect of which a trust or deemed trust has been or may be imposed on any Collateral to provide for payment, or (ii) in respect of unremitted and due pension plan contributions in respect of Canadian Pension Plans including normal cost contributions and special payments (iii) without duplication for any amounts referred to in paragraph (b)(ii) amounts representing any unfunded wind-up deficiency whether or not due with respect to a Canadian Defined Benefit Plan, or (iv) which are secured by a Lien, charge, right or claim on any Collateral (other than Permitted Liens that do not have priority over Agent's Liens); in each case, pursuant to any applicable law, rule or regulation and provided such lien, trust, deemed trust, pledge, charge, right or claim ranks or in the Permitted Discretion of Agent, is capable of ranking in priority to or *pari passu* with one or more of the Liens granted in the Loan Documents (such as certain claims by employees for unpaid wages and other amounts payable under the Wage Earner Protection Program Act (Canada)).

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"<u>Canadian Security Agreement</u>" means a<u>the Amended and Restated</u> Canadian Guarantee and Security Agreement dated as of the Original Closing Date<u>July 8, 2025</u>, in form and substance reasonably satisfactory to Agent, executed and delivered by each Loan Party to Agent<u>, as it may be amended, supplemented or otherwise modified from time to time</u>.

"<u>Canadian Security Documents</u>" means, collectively, the Canadian Security Agreement, the Quebec Security Documents and any other Loan Document that grants or purports to grant a Lien on any of the assets or interests, and the proceeds thereof, of any Loan Party.

"<u>Canadian Trademark Security Agreement</u>" has the meaning specified therefor in the Canadian Security Agreement.

"<u>Capital Assets</u>" means fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and goodwill); <u>provided</u> that Capital Assets shall not include any item customarily charged directly to expense or depreciated over a useful life of 12 months or less in accordance with GAAP.

"<u>Capital Expenditures</u>" means, with respect to any Person for any period, (a) the amount of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed; and (b) the lease of any assets by Borrower or any of its Subsidiaries as lessee under any synthetic lease to the extent that such assets would have been Capital Assets had the synthetic lease been treated for accounting purposes as a Capital Lease.

"<u>Capital Lease</u>" means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP but excluding leases which would have been characterized as operating leases according to GAAP as in effect on the Original Closing Date.

"<u>Capitalized Lease Obligation</u>" means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

"<u>Cash Equivalents</u>" means obligations that are denominated in Canadian Dollars or United States Dollars (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States or by, or unconditionally guaranteed by, the government of Canada or issued by any agency thereof and backed by the full faith and credit of Canada, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or province of Canada or any political subdivision of any such state or province or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Rating Group ("<u>S&P</u>") or Moody's Investors Service, Inc. ("<u>Moody's</u>"), (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit, time deposits, overnight bank deposits or bankers' acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or a bank organized under the laws of Canada, or any United States or Canadian branch of a foreign bank, in each case having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof or the laws of Canada so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation or the Canadian Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition of recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.

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"<u>Cash Management Services</u>" means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other customary cash management arrangements.

"<u>CGS</u>" means Cash, Gold & Silver Inc., a corporation formed under the laws of Canada.

"<u>CGS USA</u>" means Cash, Gold & Silver<u>Birks</u> USA, Inc., a corporation formed under the laws of Delaware.

"<u>Change in Law</u>" means the occurrence after the date of this Agreement of any of the following: (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; <u>provided</u> that notwithstanding anything in the Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or Canada or foreign regulatory authorities shall, in each case, be deemed to be a "Change in Law," regardless of the date enacted, adopted or issued.

"<u>Change of Control</u>" means that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Montel and Mangrove Holding S.A. collectively fail to own and control, directly or indirectly, a majority of the Equity Interests of Borrower entitled (without regard to the occurrence of any contingency) to vote for the election of members of the Board of Directors of Borrower, or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower fails to own and control, directly or indirectly, 100% of the Equity Interests of each Loan Party (other than Borrower).

"<u>Closing Date</u>" means the date of this Agreement.

"<u>Code</u>" means the New York Uniform Commercial Code, as in effect from time to time.

"<u>Collateral</u>" means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by Borrower or any other Loan Party in or upon which a Lien is granted by such Person in favor of Agent or any of the Lenders under any of the Loan Documents.

"<u>Collateral Access Agreement</u>" means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee or other Person in possession of, having a Lien upon, or having rights or interests in Borrower's or any of its Subsidiaries' books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.

"<u>Commitment</u>" means, with respect to each Lender, its Revolver Commitment, and, with respect to all Lenders, their Revolver Commitments, in each case in such Canadian Dollar amounts as are set forth beside such Lender's name under the applicable heading on <u>Schedule C-1</u> to the Agreement or in the Assignment and Acceptance or Increase Joinder pursuant to which such Lender became a Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of <u>Section 13.1</u> of the Agreement, reductions of the Revolver Commitments pursuant to <u>Section 2.4(c)</u>, and increases to the Revolver Commitments pursuant to <u>Section 2.16</u>.

"<u>Commodity Exchange Act</u>" means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

"<u>Compliance Certificate</u>" means a certificate substantially in the form of <u>Exhibit C-1</u> to the Agreement delivered by a Financial Officer of Borrower to Agent.

"<u>Confidential Information</u>" has the meaning specified therefor in <u>Section 17.9(a)</u> of the Agreement.

"<u>Conforming Changes</u>" means, with respect to the use or administration of any initial Benchmark or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of "Business Day," the definition of "U.S. Government Securities Business Day," the definition of "Benchmark Rate Business Day," the definition of "U.S. Base Rate" (if applicable), the definition of "Canadian Base Rate" (if applicable), the definition of "Interest Period" or any similar or analogous definition (or the addition of a concept of "interest period"), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of <u>Section 2.12</u> and other technical, administrative or operational matters) that Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent decides that adoption of any portion of such market practice is not administratively feasible or if Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

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"<u>Consolidated EBITDA</u>" means, for any period, the sum, without duplication, of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) provision for federal, provincial, local and foreign income Taxes, franchise Taxes and other Taxes in lieu of income Taxes payable, (iv) total depreciation expense, (v) total amortization expense, (vi) transaction expenses incurred by Borrower or any of its Subsidiaries in such period in connection with Permitted Acquisitions to the extent included in the calculation of Excess Availability for purposes of determining whether the applicable Acquisition constitutes a Permitted Acquisition, (vii) fees, costs and expenses incurred on or prior to the Closing Date in connection with this Agreement, the other Loan Documents and the other transactions contemplated hereby or thereby, (viii) financial advisory fees, accounting fees, legal fees and any other similar third party reasonable out-of-pocket fees and out-of-pocket expenses incurred in connection with the pursuit of any acquisition, offering of Equity Interest, investment, disposition, repayment of junior or subordinated Indebtedness, recapitalization, or the incurrence, issuance, repayment, amendment or modification of Indebtedness (in each case, regardless of whether such transaction is consummated), (ix) management and other fees and reimbursement of expenses permitted pursuant to <u>Section 1.1.1(e)</u>, (x) impairment of goodwill and other non-cash items (other than any such non-cash item to the extent it represents an accrual of or reserve for cash expenditures in any future period), <u>and</u> (xi) to the extent actually reimbursed, expenses incurred to the extent covered by indemnification provisions in any agreement in connection with a Permitted Acquisition, and (xii) other unusual or non-recurring cash charges including Restructuring and Integration Costs not to exceed $5,000,000 in the case of the Original Closing Date US Divestiture incurred in the 2018 Fiscal Year and otherwise $2,000,000 in the aggregate for all such charges during any twelve fiscal-month period, but only, in the case of each of the foregoing clauses (ii) through (xii<u>xi</u>), to the extent deducted in the calculation of Consolidated Net Income, less non-cash items added in the calculation of Consolidated Net Income (other than any such non-cash item to the extent it will result in the receipt of cash payments in any future period), all of the foregoing as determined on a consolidated basis for Borrower and its Subsidiaries in conformity with GAAP. Notwithstanding the foregoing, Consolidated EBITDA for the fiscal months ending prior to the date of this Agreement and used in calculating the Fixed Charge Coverage Ratio for the applicable twelve fiscal month period after such date shall be in amounts agreed by the Agent and Borrower.

"<u>Consolidated Fixed Charges</u>" means, with respect to any fiscal period and with respect to Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Consolidated Interest Expense paid (other than interest paid-in-kind, amortization of financing fees, and other non-cash Consolidated Interest Expense) during such period, (b) scheduled principal payments in respect of Indebtedness that are required to be paid during such period (excluding Management Debt to the extent such payments constitute an expense in the calculation of Consolidated Net Income), (c) Restricted Payments made or required to be made in cash during such period; and (d) all management, consulting, monitoring and advisory fees paid in cash to Borrower and its Affiliates during such period. Notwithstanding the foregoing, Consolidated Fixed Charges for the fiscal months ending prior to the date of this Agreement and used in calculating the Fixed Charge Coverage Ratio for the applicable twelve fiscal month period after such date shall be in amounts agreed by the Agent and Borrower.

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"<u>Consolidated Interest Expense</u>" means, for any period, the aggregate of the interest expense of Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

"<u>Consolidated Net Income</u>" means, for any period, the net income (or loss) of Borrower and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP after deduction for non-controlling interest in such Subsidiaries; provided that there shall be excluded (i) the income (or loss) of any Person (other than a Loan Party) in which any other Person (other than a Loan Party) has a joint interest, or a Subsidiary located outside US and Canada, except to the extent of the amount of dividends or other distributions actually paid to Borrower or any of its Subsidiaries by such Person during such period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Borrower or is merged into or amalgamated or consolidated with Borrower or any of its Subsidiaries or that Person's assets are acquired by Borrower or any of its Subsidiaries, (iii) the income of any Subsidiary of Borrower that is not a Loan Party to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary, (iv) (to the extent not included in clauses (i) through (iii) above) any non-cash extraordinary gains or non-cash extraordinary losses, (v) the impact of non-cash currency translation gains and losses and mark to market gains and losses on any Hedge Agreement, (vi) the cumulative effect of a change in accounting principles during such period, and (vii) gains and losses from the early extinguishment of Indebtedness or other derivative instruments.

"<u>Control Agreement</u>" means a control agreement, or blocked account agreement, as applicable, in form and substance reasonably satisfactory to Agent, executed and delivered by Borrower or another Loan Party, Agent, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account).

"CORRA" means a rate equal to the Canadian Overnight Repo Rate Average as administered and published by the CORRA Administrator.

"CORRA Administrator" means the Bank of Canada (or any successor administrator of the Canadian Overnight Repo Rate Average).

"<u>Covered Entity</u>" means any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

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"<u>Covered Party</u>" has the meaning specified therefor in Section 17.17 of this Agreement.

"<u>Credit Card Issuer</u>" shall mean any person (other than a Borrower or any of its Subsidiaries) who issues or whose members issue credit cards, including MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc., Visa International, American Express, Discover, Diners Club, Union Pay, VFI, Inc. (a subsidiary of The Toronto-Dominion Bank Finance Group) and other bank and non-bank credit or debit cards, and other issuers approved by the Agent, after the conduct of such due diligence with respect to such issuers as the Agent considers necessary or appropriate, such approval not to be unreasonably withheld, conditioned or delayed.

"<u>Credit Card Notifications</u>" has the meaning provided in <u>Section 5.18</u>.

"<u>Credit Card Processor</u>" shall mean any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to Borrower's sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.

"<u>Credit Card Receivables</u>" shall mean each "intangible" (as defined in the PPSA) together with all income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to Borrower resulting from charges by a customer of Borrower on credit or debit cards issued by such Credit Card Issuer in connection with the sale of goods by a Borrower, or services performed by a Credit Card Processor or Credit Card Issuer, in each case in the ordinary course of its business.

"<u>Damiani</u>" means, collectively, Damiani International S.A., a corporation incorporated under the laws of Switzerland, and Damiani S.p.A., a corporation incorporated under the laws of Italy.

"<u>Damiani Inventory Purchase Agreement</u>" means the inventory purchase agreement between the Borrower and Damiani dated as of April 18, 2019, as the same may be modified, amended, supplemented or restated in accordance with the prior written consent of the Agent.

"<u>Damiani Purchase Documents</u>" means the Damiani Inventory Purchase Agreement, the Damiani Security, the Damiani Subordination Agreement and all documents, instruments and agreements executed from time to time in connection with the Damiani Inventory Purchase Agreement, including the purchase orders arising thereunder and the documents and agreements giving effect to the Damiani Security, in each case as the same may be modified, amended, supplemented or restated with the prior written consent of the Agent.

"<u>Damiani Security</u>" means (a) the General Security Agreement and Hypothec dated as of April 18, 2019 between the Borrower and Damiani; and (b) any other present and future security, security interests, hypothecs, mortgages, prior claims, liens or charges affecting the Obligors' assets, or any part thereof, now or hereafter held by or for the account of Damiani as security for the Damiani Subordinated Indebtedness created after the date hereof with the consent of the Agent.

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"<u>Damiani Subordinated Indebtedness</u>" means all present and future indebtedness and other liabilities and obligations, contingent or absolute, matured or unmatured, at any time due or accruing due, owing by the Obligors, or any of them, whether alone or with another or others and whether as principal or surety, to Damiani under the Damiani Purchase Documents including in respect of all transactions made pursuant thereto.

"<u>Damiani Subordination Agreement</u>" means that certain Subordination Agreement, dated as of April 18, 2019, among the Borrower, Damiani, the Agent, the Term Loan Agent and Cash, Gold & Silver Inc., as the same may hereafter be amended, restated, supplemented or otherwise modified with the prior written consent of Agent.

"<u>Default</u>" means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

"<u>Default Right</u>" has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

"<u>Defaulting Lender</u>" means any Lender that (a) has failed to fund any amounts required to be funded by it under the Agreement within 1 Business Day of the date that it is required to do so under the Agreement (including the failure to make available to Agent amounts required pursuant to a Settlement or to make a required payment in connection with a Letter of Credit Disbursement), (b) notified Borrower, Agent, or any Lender in writing that it does not intend to comply with all or any portion of its funding obligations under the Agreement, (c) has made a public statement to the effect that it does not intend to comply with its funding obligations under the Agreement or under other agreements generally (as reasonably determined by Agent) under which it has committed to extend credit, (d) failed, within 1 Business Day after written request by Agent, to confirm that it will comply with the terms of the Agreement relating to its obligations to fund any amounts required to be funded by it under the Agreement, (e) otherwise failed to pay over to Agent or any other Lender any other amount required to be paid by it under the Agreement within 1 Business Day of the date that it is required to do so under the Agreement, or (f) (i) becomes or is insolvent or has a Borrower company that has become or is insolvent or (ii) becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian or appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a Borrower company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

"<u>Defaulting Lender Rate</u>" means (a) for the first 3 days from and after the date the relevant payment is due, the Canadian Base Rate (if such Obligations are denominated in Canadian Dollars) or the US Base Rate (if such Obligations are denominated US Dollars), and (b) thereafter, the interest rate then applicable to Revolving Loans in the Applicable Currency that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).

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"<u>Deposit Account</u>" means any deposit account maintained in Canada for the deposit of funds with a Canadian Bank reasonably acceptable to Agent.

"<u>Designated Account Bank</u>" has the meaning specified therefor in <u>Schedule D-1</u> to the Agreement (or such other bank that is located within Canada that has been designated as such, in writing, by Administrative Borrower to Agent).

"<u>Disqualified Equity Interests</u>" means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provide for the scheduled payments of dividends in cash, or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Maturity Date.

"<u>Drawing Document</u>" means any Letter of Credit or other document presented for purposes of drawing under any Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date (except that this period shall be extended to 150 days after the original invoice date with respect to Accounts arising from initial orders made by an Account Debtor that becomes a customer of the Borrower after the Closing Date) or within 60 days of due date,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Accounts with respect to which the Account Debtor is an Affiliate of any Loan Party or an employee or agent of any Loan Party or any Affiliate of any Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Accounts arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Accounts that are not payable in US Dollars or Canadian Dollars,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in Canada or the United States, or is not organized under the laws of the United States or any state thereof, or the laws of Canada or any province thereof, (ii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which Borrower has complied, to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), (ii) any state of the United States, or (iii) a Governmental Authority of Canada or any province thereof (exclusive, however, of Accounts with respect to which Borrower has complied, to the reasonable satisfaction of Agent, with any applicable assignment of claims statute, including the Financial Administration Act (Canada)),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Accounts with respect to which the Account Debtor is a creditor of a Loan Party, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of recoupment or setoff, or dispute,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which any Loan Party has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor, unless the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance and issuer or domestic confirming bank) that has been delivered to Agent and is directly drawable by Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Account Debtor's financial condition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Accounts that are not subject to a valid and perfected first priority Agent's Lien (subject to Permitted Liens having priority under applicable law for which reserves have been established pursuant to <u>Section 2.1(c))</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned Entity, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Accounts that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by Borrower of the subject contract for goods or services.

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"<u>Eligible Credit Card Receivables</u>" shall mean on any date of determination of the Borrowing Base, each Credit Card Receivable that satisfies the following criteria at the time of creation and continues to meet the same at the time of such determination, as determined by the Agent in its Permitted Discretion: such Credit Card Receivable (i) has been earned by performance and represents the bona fide amounts due to Borrower from a Credit Card Issuer or Credit Card Processor, and in each case originated in the ordinary course of business of such Borrower, and (ii) is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of <u>clauses (a)</u> through <u>(h)</u> below; <u>provided</u>, that such criteria may be revised from time to time by Agent in Agent's Permitted Discretion to address the results of any field examination performed by (or on behalf of) Agent from time to time after the Closing Date. Without limiting the foregoing, to qualify as an Eligible Credit Card Receivable, such Credit Card Receivable shall indicate no Person other than Borrower as payee or remittance party. In determining the amount to be so included, the face amount of a Credit Card Receivable shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that Borrower may be obligated to rebate to a customer, a Credit Card Issuer or Credit Card Processor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Credit Card Receivable but not yet applied by the Credit Parties to reduce the amount of such Credit Card Receivable. Any Credit Card Receivable included within any of the following categories shall not constitute an Eligible Credit Card Receivable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Credit Card Receivables which do not constitute an "intangible" (as defined in the PPSA), as applicable or an Account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Credit Card Receivables that have been outstanding for more than five Business Days from the date of sale;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Credit Card Receivables that are not subject to a valid and perfected first priority Agent's Lien (subject to Permitted Liens having priority under applicable law for which Reserves have been established pursuant to <u>Section 2.1(c))</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Credit Card Receivables which are disputed, are with recourse, or with respect to which a claim, counterclaim, offset or chargeback has been asserted (to the extent of such dispute, claim, counterclaim, offset or chargeback);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Credit Card Receivables as to which the Credit Card Issuer or Credit Card Processor has the right under certain circumstances to require a Credit Party to repurchase the Credit Card Receivables from such Credit Card Issuer or Credit Card Processor;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Credit Card Receivables due from a Credit Card Issuer or Credit Card Processor which is the subject of any bankruptcy or insolvency proceedings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Credit Card Receivables which are not a valid, legally enforceable obligation of the applicable Credit Card Issuer or Credit Card Processor with respect thereto; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Credit Card Receivables which do not conform to all representations, warranties or other provisions in the Credit Documents relating to Credit Card Receivables in all material respects.

"<u>Eligible Inventory</u>" means Inventory of Borrower that consists of finished goods held for sale in the ordinary course of Borrower's business and complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; <u>provided</u>, that such criteria may be revised from time to time by Agent in Agent's Permitted Discretion to address the results of any field examination or appraisal performed by Agent from time to time after the Closing Date. In determining the amount to be so included, Inventory shall be valued at cost on a basis consistent with Borrower's historical accounting practices. An item of Inventory shall not be included in Eligible Inventory if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower does not have good, valid, and marketable title thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Borrower does not have actual and exclusive possession thereof unless such Inventory is Eligible Non-Possessory Inventory,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) it is not located at one of the locations in Canada or in the continental United States set forth on <u>Schedule E-1</u> (as such <u>Schedule E-1</u> may be amended from time to time with the prior written consent of Agent) to the Agreement (or in-transit from one such location to another such location),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) it is in-transit to or from a location of Borrower (other than in-transit from one location set forth on <u>Schedule E-1</u> to the Agreement to another location set forth on <u>Schedule E-1</u> to the Agreement),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) commencing 90 days after the date hereof, it is located on real property leased by Borrower (other than store locations) or in a contract warehouse, in each case, unless either (1) it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises or (2) Agent has established a Landlord Reserve with respect to such location,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) it is the subject of a bill of lading or other document of title,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) it is not subject to a valid and perfected first priority Agent's Lien (subject to Permitted Liens having priority under applicable law for which Reserves have been established pursuant to <u>Section 2.1(c))</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) it consists of personalized items or custom items which cannot be readily re-sold to other customers, damaged or defective goods or "seconds";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) it consists of goods that are obsolete, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Borrower's business, bill and hold goods, or Inventory acquired on consignment, or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) it is subject to third party trademark, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights.

"<u>Eligible Inventory Category</u>" means the categories of Eligible Inventory set forth below or such other categories as may be determined by Agent from time to time in its Permitted Discretion (including, without limiting the generality of Agent's Permitted Discretion, it being understood that Agent shall have received an Inventory appraisal (and such other Collateral reporting) satisfactory to Agent prior to the inclusion of any other categories or any adjustments to such categories in the calculations set forth on the Borrowing Base Certificate in connection with such implementation):

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| |
|:---|
| &nbsp;&nbsp;&nbsp;**Eligible Inventory Category** |
| &nbsp;&nbsp;&nbsp;Watches and Clocks |
| &nbsp;&nbsp;&nbsp;Fine Jewelry |
| &nbsp;&nbsp;&nbsp;Bridal |
| &nbsp;&nbsp;&nbsp;Giftware |
| &nbsp;&nbsp;&nbsp;Loose Stones |
| &nbsp;&nbsp;&nbsp;Silver |
| &nbsp;&nbsp;&nbsp;Gold |
| &nbsp;&nbsp;&nbsp;Service |
| &nbsp;&nbsp;&nbsp;Rolex Watches |
| &nbsp;&nbsp;&nbsp;Patek Philippe |
| &nbsp;&nbsp;&nbsp;Graff |

---

**"**<u>Eligible Non-Possessory Inventory</u>**"** means Inventory of Borrower that is otherwise Eligible Inventory and that satisfies the following criteria as determined in the Agent's Permitted Discretion:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Person in possession of such Inventory is a bailee or processor or agent of Borrower that is acceptable to Agent and is held pursuant to bailment, processor or agency arrangements acceptable to the Agent and such Person maintains exclusive possession of such Inventory until delivered to Borrower or placed in transit to a location of Borrower identified on <u>Schedule E-1</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) title in such Inventory has passed to Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) such Inventory is subject to a Collateral Access Agreement, processor agreement or bailee agreement as required by the Agent, in each case in form and content satisfactory to the Agent and executed by the bailee, processor, agent or other Person in possession of such Inventory, as the case may be, and such Inventory is segregated or otherwise separately identifiable from goods of others, if any, held by the Person in possession of such Inventory, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Agent in its Permitted Discretion (i) has established such Reserves (including Reserves for processing and bailee charges and applicable customs charges and duties) as it considers necessary or appropriate with respect to such Inventory, and (ii) is satisfied that such Inventory is not subject to any Person's right or claim (other than those for which appropriate Reserves have been established) which is senior to, or pari passu with, the Agent's Lien on such Inventory or may otherwise adversely impact the ability of the Agent to realize upon such Inventory.

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"<u>Eligible Transferee</u>" means (a) any Lender (other than a Defaulting Lender), any Affiliate of any Lender (other than a Defaulting Lender) and any Related Fund of any Lender; (b) (i) a commercial bank organized under the laws of Canada or the United States or any state thereof, and having total assets in excess of $1,000,000,000; (ii) a commercial bank organized under the laws of any other country or a political subdivision thereof; <u>provided</u> that (A) (x) such bank is acting through a branch or agency located in the United States or Canada or (y) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country, and (B) such bank has total assets in excess of $1,000,000,000; (c) any other entity (other than a natural person) that is an "accredited investor" (as defined under the Securities Act (Ontario)) that extends credit or buys loans as one of its businesses including insurance companies, investment or mutual funds and lease financing companies, and having total assets in excess of $1,000,000,000; and (d) during the continuation of an Event of Default, any other Person approved by Agent.

"<u>Environmental Action</u>" means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials in violation of Environmental laws (a) from any assets, properties, or businesses of Borrower, or any Subsidiary of Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by Borrower, or any Subsidiary of Borrower, or any of their predecessors in interest.

"<u>Environmental Law</u>" means any applicable federal, provincial, state, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on Borrower or any of its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

"<u>Environmental Liabilities</u>" means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.

"<u>Environmental Lien</u>" means any Lien in favor of any Governmental Authority for Environmental Liabilities.

"<u>Equipment</u>" means equipment (as that term is defined in the PPSA).

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"<u>Equity Interests</u>" means, with respect to a Person, all of the shares, options, warrants, interests, participations, or other equivalents (regardless of how designated, whether voting or non-voting) of or in such Person, whether voting or nonvoting, including capital stock (or other ownership or profit interests or units) or preferred stock.

"<u>Erroneous Payment</u>" has the meaning specified therefor in <u>Section 17.18</u> of this Agreement.

"<u>Erroneous Payment Deficiency Assignment</u>" has the meaning specified therefor in <u>Section 17.18(d)</u> of this Agreement.

"<u>Erroneous Payment Impacted Loans</u>" has the meaning specified therefor in <u>Section 17.18(d)</u> of this Agreement.

"<u>Erroneous Payment Return Deficiency</u>" has the meaning specified therefor in <u>Section 17.18(d)</u> of this Agreement.

"<u>Event of Default</u>" has the meaning specified therefor in <u>Section 8</u> of the Agreement.

"<u>Excess Availability</u>" means, as of any date of determination, the amount that Borrower is entitled to borrow as Revolving Loans under <u>Section 2.1</u> of the Agreement (after giving effect to the then outstanding Revolver Usage).

"<u>Excluded Swap Obligation</u>" means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the agreement of such Loan Party to be jointly and severally liable for such Swap Obligation of another Loan Party or any guarantee of such Loan Party of, or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party's failure for any reason to constitute an "eligible contract participant" as defined in the Commodity Exchange Act and the regulations thereunder at the time the agreement of such Loan Party to be jointly and severally liable for such Swap Obligation or guarantee of such Swap Obligation or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such joint and several liability or guarantee or security interest is or becomes illegal.

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"<u>Excluded Taxes</u>" means (i) any Tax imposed on the net income or net profits of any Lender or any Participant (including any branch profits Taxes), in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender or such Participant is organized or the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender's or such Participant's principal office is located in each case as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the Tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under the Agreement or any other Loan Document); (ii) Canadian federal withholding Taxes that would not have been imposed but for the Lender's or a Participant's failure to comply with the requirements of <u>Section 16.2</u> of the Agreement, (iii) any Canadian federal withholding Taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), except that Excluded Taxes shall not include (A) any amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive pursuant to <u>Section 16.1</u> of the Agreement, if any, with respect to such withholding Tax at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), and (B) additional Canadian federal withholding Taxes that may be imposed after the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), as a result of a change in law, rule, regulation, order or other decision with respect to any of the foregoing by any Governmental Authority, (iv) any United States federal withholding Taxes imposed under FATCA, and (v) any Canadian federal withholding Taxes imposed as a result of any Lender or any Participant (A) not dealing at arm's length (within the meaning of the Income Tax Act (Canada)) with a Loan Party, or (B) being a "specified shareholder" (within the meaning of Subsection 18(5) of the Income Tax Act (Canada)) of a Loan Party, or not dealing at arm's length with such "specified shareholder" of a Loan Party.

"<u>Existing Credit Facilities</u>" means, collectively, (i) the Second Amended and Restated Revolving Credit and Security Agreement, dated as of June 8, 2011 among Mayor's Jewelers, Inc. Birks & Mayors Inc. the lenders party thereto and Bank of America, N.A. as administrative agent, as supplemented, amended and restated from time to time, and (ii) the Third Amended and Restated Term Loan Agreement and Security Agreement, dated as of November 21, 2014 among Mayor's Jewelers, Inc., Borrower, the lenders party thereto and Crystal Financial LLC, as administrative agent and collateral agent, as supplemented, amended and restated from time to time.

"<u>Extraordinary Advances</u>" has the meaning specified therefor in <u>Section 2.3(d)(iii)</u> of the Agreement.

"<u>FATCA</u>" means Sections 1471 through 1474 of the IRC, as of the date of the Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

"<u>Federal Funds Rate</u>" means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal funds brokers of recognized standing selected by it.

"<u>Fee Letter</u>" means that certain fee letter, dated as of even date with the Agreement, among Borrower and Agent, in form and substance reasonably satisfactory to Agent, as amended, restated or supplemented from time to time.

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"<u>Financial Officer</u>" means the (i) chairman of the board, (ii) president, (iii) chief executive officer, (iv) treasurer, (v) chief financial officer, (vi) director of financial planning and reporting or (vii) director, financial controller, in each case, of Borrower or, if the context requires, a Loan Party.

"<u>Fiscal Month</u>" means each month ending on the last Saturday of each month other than in the case of a 53 week year, in which case two of the Fiscal Months in such Fiscal Year may end on a different day.

"<u>Fiscal Quarter</u>" means each of the three month periods ending on the last Saturday of each of March, June, September and December of any year (other than in the case of a 53 week year, in which case one of the Fiscal Quarters in such Fiscal Year may end on a different day).

"<u>Fiscal Year</u>" means the twelve month period ending on the last Saturday of March of any year.

"<u>Fixed Charge Condition</u>" means, (a) with respect to any proposed Restricted Payment, and, where applicable, any prepayment of Indebtedness, Borrower and its Subsidiaries would have a Fixed Charge Coverage Ratio on a pro forma basis after giving effect to such Restricted Payment or prepayment (with such prepayment being treated as a component of Consolidated Fixed Charges for purposes of this definition) of equal to or greater than 1.1 to 1.0 for the most recently ended 12-month period immediately prior to the proposed date of consummation of such proposed Restricted Payment, or prepayment of Indebtedness for which Agent has received financial statements required to be delivered under Section 5.1; and (b) with respect to any proposed Acquisition, the Fixed Charge Acquisition Condition has been satisfied.

"<u>Fixed Charge Coverage Ratio</u>" means, with respect to any fiscal period and with respect to Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP, the ratio of (a) Consolidated EBITDA for such period minus (i) Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period (to the extent such Capital Expenditures are not financed with proceeds of Indebtedness (other than Revolving Loans) or Equity Interests), (ii) all federal, provincial, state and local income and capital Taxes paid in cash during such period and (iii) all Restricted Payments paid in cash or Cash Equivalents during such period to (b) Consolidated Fixed Charges for such period. Notwithstanding the foregoing, the amount of Capital Expenditures and Taxes for the fiscal months ending prior to the date of this Agreement and used in calculating the Fixed Charge Coverage Ratio for the applicable twelve fiscal month period after such date shall be in amounts agreed by the Agent and Borrower.

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"<u>Floor</u>" means a rate of interest equal to **0.0**%.

"<u>Foreign Lender</u>" means any Lender or Participant that is not resident in Canada within the meaning of the *Income Tax Act* (Canada) for the purposes of Part XIII of the *Income Tax Act* (Canada).

"<u>Funding Date</u>" means the date on which a Borrowing occurs.

"<u>Funding Losses</u>" has the meaning specified therefor in <u>Section 2.12(b)(ii)</u> of the Agreement.

"<u>GAAP</u>" means generally accepted accounting principles as in effect from time to time in the United States, consistently applied, provided that Borrower shall be entitled to elect by notice to Agent and subject to Section 1.2 and such amendments to this Agreement as the Agent may reasonably require to reflect the implementation of such election, Canadian accounting standards for private enterprises or International Financial Reporting Standards, in each case, as set out in the Chartered Professional Accountants Canada Handbook – Accounting.

"<u>Governing Documents</u>" means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.

"<u>Governmental Authority</u>" means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government (including any supra-national bodies such as the European Union or the European Central Bank).

"<u>Guarantor</u>" means (a) as of the Closing Date, CGS and JV Holdco, and (b) thereafter, each Subsidiary of Borrower that is or becomes a guarantor of all or any part of the Obligations. For certainty, CGS USA and Birks Jewellers Limited, Borrower's Hong Kong Subsidiary, shall not be required to be a Guarantor.

"<u>Hazardous Materials</u>" means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as "hazardous substances," "hazardous materials," "hazardous wastes," "toxic substances," or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

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"<u>Hedge Agreement</u>" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement.

"<u>Hedge Obligations</u>" means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of any Loan Party arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Hedge Providers.

"<u>Hedge Provider</u>" means any Lender or any of its Affiliates; <u>provided</u>, that no such Person (other than Wells Fargo or its Affiliates) shall constitute a Hedge Provider unless and until Agent receives a Bank Product Provider Agreement from such Person with respect to the applicable Hedge Agreement within 10 days after the execution and delivery of such Hedge Agreement with Borrower or any of its Subsidiaries; <u>provided further</u>, that if, at any time, a Lender ceases to be a Lender under the Agreement, then, from and after the date on which it ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Hedge Providers and the obligations with respect to Hedge Agreements entered into with such former Lender or any of its Affiliates shall no longer constitute Hedge Obligations.

"<u>Hedge Termination Value</u>" means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements (which may include a Lender or any Affiliate or branch of a Lender).

"<u>Increase</u>" has the meaning specified therefor in <u>Section 2.16</u>.

"<u>Increase Date</u>" has the meaning specified therefor in <u>Section 2.16</u>.

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"<u>Indebtedness</u>" as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and payable in accordance with customary trade practices to the extent not overdue by more than 90 days from the date of the original invoice therefor and, for the avoidance of doubt, other than royalty payments payable in the ordinary course of business in respect of non-exclusive licenses), but including, for the avoidance of doubt, obligations in respect of credit cards, credit card processing services, debit cards, stored value cards and commercial cards (including so-called "commercial cards", "procurement cards" or "p-cards"), and any earn-out or similar obligations to the extent required to be recognized as a liability on the balance sheet of such Person under GAAP, (f) all monetary obligations of such Person owing under Hedge Agreements (which amount shall be calculated based on the Hedge Termination Value as of the date of determination), (g) any Disqualified Equity Interests of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above. For purposes of this definition, (i) the amount of any Indebtedness represented by a guarantee or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness which is limited or is non-recourse to a Person or for which recourse is limited to an identified asset shall be valued at the lesser of (A) if applicable, the limited amount of such obligations, and (B) if applicable, the fair market value of such assets securing such obligation.

"<u>Indemnified Liabilities</u>" has the meaning specified therefor in <u>Section 10.3</u> of the Agreement.

"<u>Indemnified Person</u>" has the meaning specified therefor in <u>Section 10.3</u> of the Agreement.

"<u>Indemnified Taxes</u>" means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of or with respect to any obligation of, any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

"<u>Information Certificate</u>" means a certificate in the form of <u>Exhibit I-1</u> to the Agreement.

"<u>Insolvency Laws</u>" means, collectively, (i) the Bankruptcy Code, (ii) the *Bankruptcy and Insolvency Act* (Canada), (iii) the *Companies' Creditors Arrangement Act* (Canada), (iv) the *Winding-Up and Restructuring Act* (Canada), (v) corporate statutes to the extent such statute is used by a Person to propose an arrangement involving the compromise of the claims of creditors; and (vi) any similar legislation in a relevant jurisdiction, in each case as applicable and as in effect from time to time.

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"<u>Insolvency Proceeding</u>" means any proceeding commenced by or against any Person under any Insolvency Law or under any other provincial, state or federal bankruptcy or insolvency law, each as now and hereafter in effect, any successors to such statutes, and any similar laws in any jurisdiction including, without limitation, any laws relating to assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief and any law permitting a debtor to obtain a stay or a compromise of the claims of its creditors.

"<u>Intercompany Subordination Agreement</u>" means an<u>the amended and restated</u> intercompany subordination agreement <u>dated July 8, 2025</u> executed and delivered by Borrower, each other Loan Party, certain other Subsidiaries of Borrower and Agent, the form and substance of which is reasonably satisfactory to Agent concurrently with the making of the first<u>any</u> intercompany advance to, or other Investment in, Borrower or another Loan Party by a Loan Party or other Subsidiary of Borrower<u>, as it may be amended, supplemented or otherwise modified from time to time</u>.

"<u>Intercreditor Agreement</u>" means the <u>Amended and Restated</u> Intercreditor Agreement dated June 29<u>as of July 8</u>, 2018<u>2025</u> , by and among the Agent and the Term Loan Agent, and acknowledged by each Loan Party, as it may be amended, supplemented or otherwise modified from time to time.

"<u>Interest Period</u>" means,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to each SOFR Rate Loan, a period commencing on the date of the making of such SOFR Rate Loan (or the continuation of a SOFR Rate Loan or the conversion of a Base Rate Loan to a SOFR Rate Loan) and ending 1 or 3 or, subject to availability, 6 months thereafter and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to each Term CORRA Rate Loan, a period commencing on the date of the making of such Term CORRA Rate Loan (or the continuation of a Term CORRA Rate Loan or the conversion of a Base Rate Loan to a Term CORRA Rate Loan) and ending 1 or 3 months thereafter;

<u>provided</u>, that for both SOFR Rate Loans and Term CORRA Rate Loans, (i) interest shall accrue at the applicable rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires and the Interest Period shall commence on the date of advance of or conversion to any SOFR Rate Loan or Term CORRA Rate Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires, (ii) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (iii) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is one, three or six months, as applicable, after the date on which the Interest Period began, as applicable, (iv) Borrower may not elect an Interest Period which will end after the Maturity Date and (v) no tenor that has been removed from this definition pursuant to <u>Section 2.12(d)(iii)(D)</u> shall be available for specification in any borrowing, conversion or continuation notice.

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"<u>Inventory</u>" means inventory (as that term is defined in the PPSA).

"<u>Inventory Net Recovery Percentage</u>" means, as of any date of determination for each Eligible Inventory Category, the percentage of the cost of Borrower's Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of all associated costs and expenses of such liquidation, such percentage to be determined as to each category of Inventory and to be as specified in the most recent appraisal received by Agent from an appraisal company selected by Agent.

"<u>Inventory Reserves</u>" means, as of any date of determination, (a) Landlord Reserves, and (b) those Reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to <u>Section 2.1(c)</u>, to establish and maintain (including Reserves for slow moving Inventory and Inventory shrinkage) with respect to Eligible Inventory.

"<u>Investment</u>" means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, guarantees, advances, capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the ordinary course of business, and (b) bona fide accounts receivable arising in the ordinary course of business), or assumption, purchase or other acquisitions of Indebtedness, Equity Interests (including any partnership or joint venture interest), the acquisition of all or substantially all of the assets of such other Person (or of any division or business line of such other Person), and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto (net of all returns on such Investments except with respect to Permitted Acquisitions; <u>provided</u> that the amount of such returns shall be disregarded for purposes of calculating capacity under any cap or basket with respect to Investments to the extent in excess of such cap or basket), without any adjustment for increases or decreases in value, or write-ups, write-downs, or write-offs with respect to such Investment.

"<u>IRC</u>" means the Internal Revenue Code of 1986, as in effect from time to time.

"<u>ISP</u>" means, with respect to any Letter of Credit, the International Standby Practices 1998 (International Chamber of Commerce Publication No. 590) and any subsequent revision thereof adopted by the International Chamber of Commerce on the date such Letter of Credit is issued.

"<u>Issuer Document</u>" means, with respect to any Letter of Credit, a letter of credit application, a letter of credit agreement, or any other document, agreement or instrument entered into (or to be entered into) by Borrower in favor of Issuing Lender and relating to such Letter of Credit.

"<u>Issuing Lender</u>" means WF Canada or any other Lender that, at the request of Administrative Borrower and with the consent of Agent, agrees, in such Lender's sole discretion, to become an Issuing Lender for the purpose of issuing Letters of Credit or, if WF Canada is the Issuing Lender, shall include WF Canada, to the extent applicable, represented by or acting for, through or on behalf of an Underlying Issuer in its capacity as an issuer of Letters of Credit hereunder. For avoidance of doubt, no Issuing Lender other than WF Canada may issue a Reimbursement Undertaking without Agent's prior written consent.

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"<u>JV Holdco</u>" means Birks Investments Inc., a Canadian corporation wholly-owned by Birks Group Inc.

"<u>JV Partner</u>" means FWI LLC, a California corporation

"<u>Landlord Reserve</u>" means, as to each location at which Borrower has Inventory (other than store locations) or books and records located and as to which a Collateral Access Agreement has not been received by Agent, a reserve in an amount equal to the greater of (a) the number of months' rent for which the landlord will have, under applicable law, a Lien in the Inventory of Borrower to secure the payment of rent or other amounts under the lease relative to such location, or (b) 3 months' rent under the lease relative to such location.

"<u>Lender</u>" has the meaning set forth in the preamble to the Agreement, shall include Issuing Lender and Swing Lender, and shall also include any other Person made a party to the Agreement pursuant to the provisions of <u>Section 13.1</u> of the Agreement and "Lenders" means each of the Lenders or any one or more of them.

"<u>Lender Group</u>" means each of the Lenders (including Issuing Lender and Swing Lender) and Agent, or any one or more of them.

"<u>Lender Group Expenses</u>" means all (a) costs or expenses (including Taxes and insurance premiums) required to be paid by Borrower or any of its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) reasonable and documented out-of-pocket fees or charges paid or incurred by Agent in connection with the Lender Group's transactions with Borrower and its Subsidiaries under any of the Loan Documents, including, photocopying, notarization, couriers and messengers, telecommunication, public record searches, filing fees, recording fees, publication, real estate surveys, real estate title policies and endorsements, and environmental audits, (c) Agent's reasonable and customary fees and charges imposed or incurred in connection with any background checks or OFAC/PEP searches related to Borrower or its Subsidiaries, (d) Agent's reasonable and customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of Borrower (whether by wire transfer or otherwise), together with any reasonable and documented out-of-pocket costs and expenses incurred in connection therewith, (e) reasonable and customary charges imposed or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party, (f) reasonable and documented out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (g) field examination, appraisal, and valuation fees and expenses of Agent related to any field examinations, appraisals, or valuation to the extent of the fees and charges (and up to the amount of any limitation provided in <u>Section 2.10(c)</u> of the Agreement), (h) Agent's reasonable and documented out-of-pocket costs and expenses (including reasonable and documented legal fees and expenses) relative to third party claims or any other lawsuit or adverse proceeding paid or incurred, whether in enforcing or defending the Loan Documents or otherwise in connection with the transactions contemplated by the Loan Documents, Agent's Liens in and to the Collateral, or the Lender Group's relationship with Borrower or any of its Subsidiaries, (i) Agent's reasonable and documented out-of-pocket costs and expenses (including reasonable and documented out-of-pocket legal fees and due diligence expenses) incurred in advising, structuring, drafting, reviewing, administering (including travel, meals, and lodging), syndicating (including reasonable and documented out-of-pocket costs and expenses relative to the rating of the Revolving Loans or the Revolver Commitments, CUSIP, DXSyndicate™, SyndTrak or other communication costs incurred in connection with a syndication of the loan facilities), or amending, waiving, or modifying the Loan Documents, and (j) Agent's and each Lender's reasonable and documented out-of-pocket costs and expenses (including lawyers, accountants, consultants, and other advisors fees and expenses (limited in the case of lawyers to one law firm for Agent (and such other specialty counsel or local counsel as Agent reasonably elects to employ) and (absent any additional counsel as may be needed based on conflicts of interest) one law firm for the Lenders (in the aggregate) other than the Agent)) incurred in terminating, enforcing (including lawyers, accountants, consultants, and other advisors fees and expenses (limited in the case of lawyers to one law firm for Agent (and such other specialty counsel or local counsel as Agent reasonably elects to employ) and (absent any additional counsel as may be needed based on conflicts of interest) one law firm for the Lenders (in the aggregate) other than the Agent) incurred in connection with a "workout," a "restructuring," or an Insolvency Proceeding concerning Borrower or any of its Subsidiaries or in exercising rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether a lawsuit or other adverse proceeding is brought, or in taking any enforcement action or any Remedial Action with respect to the Collateral.

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"<u>Lender Group Representatives</u>" has the meaning specified therefor in <u>Section 17.9</u> of the Agreement.

"<u>Lender-Related Person</u>" means, with respect to any Lender, such Lender, together with such Lender's Affiliates, officers, directors, employees, lawyers, and agents.

"<u>Letter of Credit</u>" means a letter of credit issued by Issuing Lender or Underlying Issuer for the account of Borrower.

"<u>Letter of Credit Collateralization</u>" means with respect to the Letter of Credit Obligations either (a) providing cash collateral in the Applicable Currency (pursuant to documentation reasonably satisfactory to Agent, including provisions that specify that the applicable Letter of Credit Fees and all commissions, fees, charges and expenses provided for in the Agreement (including any fronting fees) will continue to accrue while the applicable Letters of Credit are outstanding) to be held by Agent for the benefit of the applicable Revolving Lenders in an amount equal to 108% of the then existing Letter of Credit Usage relating to US Dollar-denominated Letters of Credit, 103% of the then existing Letter of Credit Usage relating to Canadian Dollar-denominated Letters of Credit, (b) delivering to Agent documentation executed by all beneficiaries under the applicable Letters of Credit, in form and substance reasonably satisfactory to Agent and the applicable Issuing Lender, terminating all of such beneficiaries' rights under the Letters of Credit, or (c) providing Agent with a standby letter of credit, in form and substance reasonably satisfactory to Agent in the Applicable Currency, from a commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 108% of the then existing Letter of Credit Usage relating to US Dollar-denominated Letters of Credit, 108% of the then existing Letter of Credit Usage relating to Canadian Dollar-denominated Letters of Credit, (it being understood that the applicable Letter of Credit Fee and all fronting fees set forth in the Agreement will continue to accrue while the applicable Letters of Credit are outstanding and that any such fees that accrue must be an amount that can be drawn under any such standby letter of credit).

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"<u>Letter of Credit Disbursement</u>" means a payment made by Issuing Lender pursuant to a Letter of Credit or a Reimbursement Undertaking.

"<u>Letter of Credit Exposure</u>" means, as of any date of determination with respect to any Lender, such Lender's Pro Rata Share of the Letter of Credit Usage on such date (including such Lender's Pro Rata Share of Reimbursement Undertakings on such date).

"<u>Letter of Credit Fee</u>" has the meaning specified therefor in <u>Section 2.6(b)</u> of the Agreement.

"<u>Letter of Credit Indemnified Costs</u>" means any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable documented fees and disbursements of lawyers or experts, and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of the indemnification set forth in <u>Section 2.11</u> (as and when they are incurred and irrespective of whether suit is brought), which may be incurred by or awarded against any Letter of Credit Related Person (other than Taxes, which shall be governed by <u>Section 16</u>) in connection with any Letter of Credit.

"<u>Letter of Credit Obligations</u>" means the obligation of Borrower to reimburse Issuing Lender for amounts paid pursuant to Letters of Credit.

"<u>Letter of Credit Related Person</u>" means each member of the Lender Group (including each of each Issuing Lender and its branches, Affiliates, and correspondents and Underlying Issuer and its branches, Affiliates and correspondents) and each such Person's respective directors, officers, employees, lawyers and agents.

"<u>Letter of Credit Usage</u>" means, as of any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit.

"<u>Lien</u>" means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, hypothec or other security arrangement and any other preference, priority, or preferential arrangement in the nature of a security interest of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

"<u>Line Cap</u>" means, as at the date of determination, the lesser of (a) the Maximum Credit Amount; and (b) the Borrowing Base as of such date.

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"<u>Loan</u>" means any Revolving Loan, (including any Swing Loan or Extraordinary Advance) made (or to be made) hereunder.

"<u>Loan Account</u>" means the US Loan Account or the Canadian Loan Account, as context requires.

"<u>Loan Documents</u>" means the Agreement, the Control Agreements, any Borrowing Base Certificate, the Fee Letter, the <u>Second Amendment Fee Letter, the Intercreditor Agreement, the Subordination Agreements, the</u> Credit Card Notifications, the Intercompany Subordination Agreements<u>Agreement</u> , any Issuer Documents, the Letters of Credit, the Mortgages, the Canadian Security Documents, any guaranties executed by any Loan Party, any note or notes executed by Borrower in connection with the Agreement and payable to any member of the Lender Group, and any other instrument or agreement entered into, now or in the future, by any Loan Party or any of its Subsidiaries and any member of the Lender Group in connection with the Agreement.

"<u>Loan Party</u>" means Borrower or any Guarantor.

"<u>Loan to Value Reserve</u>" as of the date of determination by the Agent, from time to time an amount equal to the greater of (a) $0; and (b) the amount, if any, by which the outstanding amount of the Term Loan at such time exceeds the difference between (1) clauses (a), (b), (c) and (d) (excluding the Loan to Value Reserve) set forth in the definition of Term Loan Borrowing Base and (2) clauses (a), (b), (c) and (d) (excluding the Loan to Value Reserve) set forth in the definition of the Borrowing Base.

<u>"Management Agreement"</u> means that certain Management Consulting Services Agreement, dated as of November 20, 2015, between Borrower and Gestofi S.A., in each case, as such agreement may be amended from time to time in accordance with the terms hereof and the Management Subordination Agreement.

<u>"Management Debt"</u> means collectively, all obligations (including, without limitation, retainer fees and indemnification expenses) of Borrower to Gestofi S.A. pursuant to the Management Agreement.

<u>"Management Subordination Agreement"</u> means that certain Management Subordination Agreement, dated as of June 29, 2018, among Borrower, Gestofi S.A., Term Loan Agent and Agent, as the same may hereafter be amended, restated, supplemented or otherwise modified with the consent of Agent.

<u>"Mangrove" means Mangrove Holding S.A.</u>

<u>"Mangrove Debt" means all Indebtedness owing to Mangrove under the Mangrove Debt Documents that constitutes Permitted Indebtedness.</u>

<u>"Mangrove Debt Documents" means, collectively, (i) that certain Loan Agreement dated as of June 26, 2025 by and between Borrower and Mangrove (original principal amount of $3,750,000) and (ii) any other loan agreement entered into by and between Borrower and Mangrove; provided that any such other loan agreement shall be in form, scope and substance and on terms satisfactory to Agent and the Required Lenders and shall be subject to the Mangrove Subordination Agreement.</u>

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<u>"Mangrove Payment Cap" has the meaning specified therefor in Section 6.6(a)(iv) of this Agreement.</u>

<u>"Mangrove Subordination Agreement" means that certain Subordination Agreement, dated as of June 26, 2025 among, *inter alios*, the Borrower, the Agent, the Term Loan Agent and Mangrove, providing for the subordination of the Mangrove Debt and any security therefore, as the same may be hereafter amended, modified, restated, supplemented or replaced from time to time with the consent of Agent and the Required Lenders.</u> 

"<u>Margin Stock</u>" as defined in Regulation U of the Board of Governors of the Federal Reserve System of the United States as in effect from time to time.

"<u>Material Adverse Effect</u>" means (a) a material adverse effect in the business, operations, assets, liabilities or financial condition of the Loan Parties, taken as a whole, (b) a material impairment of Loan Parties' ability to perform their payment or other material obligations under the Loan Documents to which they are parties or of the Lender Group's ability to enforce the Obligations or realize upon a material portion of the Collateral (other than as a result of an action taken or not taken that is solely in the control of Agent), or (c) a material impairment of the enforceability or priority of Agent's Liens with respect to all or a material portion of the Collateral.

"<u>Material Contract</u>" means any agreement or arrangement to which any Loan Party or any of its Subsidiaries is party (other than the Loan Documents) (a) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect or (b) that relates to Indebtedness in an aggregate amount of the Canadian Dollar Equivalent of $2,500,000 or more. Notwithstanding anything to the contrary contained in this Agreement, the term "Material Contract" shall include, for all purposes, each of the following: (i) the Quebec Subordinated Debt Documents, (ii) the Rolex Canada Documents, (iii) the Montrovest Debt Documents, (iv) the Management Agreement; (v) any Additional Subordinated Debt Documents; (vi) the Original Closing Date US Divestiture Agreements; (vii) the Term Loan Documents, (viii) the Franchise Agreement dated as of October 18, 2017 between Borrower and GD Overseas SA, (ix) the Concession Agreement dated as of November 30, 2015 between Borrower and Patek Philippe SA Geneve and (x) the Damiani Debt Documents.

"<u>Maturity Date</u>" means December 24, 2026.

"<u>Maximum Credit Amount</u>" means $85,000,000, as permanently decreased by the amount of reductions in the Revolver Commitments made in accordance with <u>Section 2.4(c)</u> of the Agreement or increased by the amount of any Increase made in accordance with Section 2.16 of the Agreement.

"<u>Montel</u>" means Montel Sàrl, a corporation formed under the laws of Luxembourg, and its successors and permitted assigns.

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"<u>Montrovest Debt</u>" means all Indebtedness owing to Montrovest B.V. (which, following the Montrovest Merger, shall mean Montel) under the Montrovest Debt Documents that constitutes Permitted Indebtedness.

"<u>Montrovest Debt 2017</u>" means Montrovest Debt incurred by the Borrower as of July 28, 2017 and owing to Montrovest B.V. (which, following the Montrovest Merger, shall mean Montel) to the extent such Indebtedness constitutes Permitted Indebtedness in an aggregate principal amount equal to US$2,500,000.

"<u>Montrovest Debt Documents</u>" means, collectively, (i) the Amended and Restated Cash Advance Agreement dated as of June 8, 2011 by and between Borrower and Montrovest B.V., (original principal amount of US$2,000,000), (ii) the Amended and Restated Cash Advance Agreement dated as of June 8, 2011 by and between Borrower and Montrovest B.V., (original principal amount of US$3,000,100), (iii) the Loan Agreement executed on July 28, 2017, with effect as of July 20, 2017 by and between Borrower and Montrovest B.V. and (iv) any other loan agreement entered into by and between Borrower and Montrovest B.V. prior to the Montrovest Merger or thereafter with Montel; provided that any such other loan agreement shall be in form, scope and substance and on terms satisfactory to Agent and the Required Lenders and shall be subject to the Montrovest Subordination Agreement.

"<u>Montrovest Merger</u>" means the merger, pursuant to the laws of Netherlands, of Montrovest B.V. into Montel Sàrl.

"<u>Montrovest Subordination Agreement</u>" means collectively, (i) Section 5.6 of the Montrovest Debt Documents referred to in clauses (i) and (ii) of the definition of "Montrovest Debt Documents", and (ii) the Postponement and Subordination Agreement, dated as of June 29, 2018, among the Borrower, Montrovest B.V. (which, following the Montrovest Merger, shall mean Montel), the Term Loan Agent and Agent, in each case as hereafter amended, restated, supplemented or otherwise modified with the consent of Agent and the Required Lenders.

"<u>Moody's</u>" has the meaning specified therefor in the definition of Cash Equivalents.

"<u>Mortgages</u>" means, individually and collectively, one or more mortgages, deeds of trust, or deeds to secure debt, executed and delivered by Borrower or one of its Subsidiaries in favor of Agent, in form and substance reasonably satisfactory to Agent, that encumber the Real Property Collateral, if any.

"<u>Non-Base Rate</u>" means Adjusted Term CORRA; <u>provided</u>, that with respect to Obligations denominated in US Dollars, Non-Base Rate means the Term SOFR Rate.

"<u>Non-Base Rate Deadline</u>" has the meaning specified therefor in <u>Section 2.12(b)(i)</u> of the Agreement.

"<u>Non-Base Rate Loan</u>" means a Revolving Loan that bears interest at a rate determined by reference to the applicable Non-Base Rate.

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"<u>Non-Base Rate Margin</u>" has the meaning set forth in the definition of Applicable Margin.

"<u>Non-Base Rate Notice</u>" means a written notice in the form of <u>Exhibit N-1</u> to the Agreement.

"<u>Non-Base Rate Option</u>" has the meaning specified therefor in <u>Section 2.12(a)</u> of the Agreement.

"<u>Non-Consenting Lender</u>" has the meaning specified therefor in <u>Section 14.2(a)</u> of the Agreement.

"<u>Non-Defaulting Lender</u>" means each Lender other than a Defaulting Lender.

"<u>Obligations</u>" means (a) all loans (including the Revolving Loans (inclusive of Extraordinary Advances and Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), reimbursement or indemnification obligations with respect to Letters of Credit (irrespective of whether contingent), premiums, liabilities (including all amounts charged to the Loan Account pursuant to this Agreement), obligations (including indemnification obligations) of any Loan Party, fees (including the fees provided for in the Fee Letter) of any Loan Party, Lender Group Expenses (including any fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding) of any Loan Party, guaranties of any Loan Party, and all covenants and duties of any other kind and description owing by any Loan Party arising out of, under, pursuant to, in connection with, or evidenced by this Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any Loan Party is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents, (b) all debts, liabilities, or obligations (including reimbursement obligations, irrespective of whether contingent) owing by Borrower or any other Loan Party to Issuing Lender now or hereafter arising from or in respect of a Letters of Credit, and (c) all Bank Product Obligations; <u>provided</u>, that Obligations shall not include Excluded Swap Obligations. Without limiting the generality of the foregoing, the Obligations under the Loan Documents include the obligation to pay (i) the principal of the Revolving Loans, (ii) the interest accrued on the Revolving Loans, (iii) the amount necessary to reimburse Issuing Lender for amounts paid or payable pursuant to Letters of Credit, (iv) letter of credit commissions, charges, expenses, and fees, in each case in respect of Letters of Credit (v) Lender Group Expenses of any Loan Party, (vi) fees payable by any Loan Party under this Agreement or any of the other Loan Documents, and (vii) indemnities and other amounts payable by any Loan Party under any Loan Document (excluding Excluded Swap Obligations). Any reference in this Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

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"<u>OFAC</u>" means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

"<u>Onset Permitted Sale Leaseback Transactions</u>" means the sale and leaseback of the Property (as such term is defined in the Onset Sale Leaseback Agreement).

"<u>Onset Sale Leaseback Agreement</u>" means the sale and leaseback agreement dated as of March 15, 2017 among, *inter alios*, Borrower and Onset Financial, Inc.

"<u>Original Agent</u>" has the meaning specified therefor in the recitals to the Agreement.

"<u>Original Borrower</u>" has the meaning specified therefor in the recitals to the Agreement.

"<u>Original Closing Date</u>" means the date of the making of the initial Revolving Loan (or other extension of credit) under the Original Agreement.

"<u>Original Closing Date US Divestiture</u>" means the sale of all of the shares of Mayor's Jewelers, Inc., by Borrower pursuant to the Original Closing Date US Divestiture Agreements.

"<u>Original Closing Date US Divestiture Agreements</u>" means, collectively, the US Stock Purchase Agreement, the Transition Services Agreement (as defined in the US Stock Purchase Agreement) and the other agreements, instruments and documents relating thereto and evidencing the Original Closing Date US Divestiture.

"<u>Original Credit Agreement</u>" has the meaning specified therefor in the recitals to the Agreement.

"<u>Originating Lender</u>" has the meaning specified therefor in <u>Section 13.1(e)</u> of the Agreement.

"<u>Other Taxes</u>" has the meaning specified therefor in <u>Section 16.1(a)</u> of the Agreement.

"<u>Overadvance</u>" means, as of any date of determination, that the Revolver Usage is greater than any of the limitations set forth in <u>Section 2.1</u> or <u>Section 2.11</u>.

"<u>Participant</u>" has the meaning specified therefor in <u>Section 13.1(e)</u> of the Agreement.

"<u>Participant Register</u>" has the meaning set forth in <u>Section 13.1</u> of the Agreement.

"<u>Patriot Act</u>" has the meaning specified therefor in <u>Section 4.13</u> of the Agreement.

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"<u>Permitted Acquisition</u>" means any Acquisition after the Closing Date by a Borrower or another Loan Party so long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) no Default or Event of Default shall have occurred and be continuing or would result from the consummation of the proposed Acquisition and the proposed Acquisition is consensual,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the purchase consideration payable in respect of all Permitted Acquisitions (including the proposal acquisition and deferred payment obligations) shall not exceed $10,000,000 in the aggregate during the term of this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Borrower has provided Agent with its due diligence package relative to the proposed Acquisition, including forecasted balance sheets, profit and loss statements, and cash flow statements of the Person or assets to be acquired, all prepared on a basis consistent with such Person's (or assets') historical financial statements, together with appropriate supporting details and a statement of underlying assumptions for the 1 year period following the date of the proposed Acquisition, on a quarter by quarter basis, in form and substance (including as to scope and underlying assumptions) reasonably satisfactory to Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Borrower shall have demonstrated, after giving effect to the consummation of such proposed Acquisition, satisfaction of the applicable Restricted Payment Conditions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Borrower has provided Agent with written notice of the proposed Acquisition at least 5 Business Days prior to the anticipated closing date of the proposed Acquisition and, not later than 5 Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition agreement and other material documents relative to the proposed Acquisition, which agreement and documents must be reasonably acceptable to Agent,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the assets being acquired (other than a de minimis amount of assets in relation to Borrower's and its Subsidiaries' total assets), or the Person whose Equity Interests are being acquired, are useful in or engaged in, as applicable, the business of Borrower and its Subsidiaries or a business reasonably related thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) the assets being acquired (other than a de minimis amount of assets in relation to the assets being acquired) are located within the United States or Canada, or the Person whose Equity Interests are being acquired is organized in a jurisdiction located within the United States or Canada,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) the subject assets or Equity Interests, as applicable, are being acquired directly by a Borrower or one of its Subsidiaries that is a Loan Party, and, in connection therewith, the applicable Loan Party shall have complied with <u>Section 5.11</u> or <u>5.12</u> of the Agreement, as applicable, of the Agreement and, in the case of an acquisition of Equity Interests, the applicable Loan Party shall have demonstrated to Agent that the new Loan Parties have received consideration sufficient to make the joinder documents binding and enforceable against such new Loan Parties, and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Agent shall have received prior to or concurrent with the proposed Acquisition, a certificate signed by an officer of Administrative Borrower certifying compliance with the foregoing conditions.

"<u>Permitted Discretion</u>" means a determination made in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment and made in good faith.

"<u>Permitted Dispositions</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete or no longer used or useful in the ordinary course of business and leases or subleases of Real Property not useful in the conduct of the business of Borrower and its Subsidiaries,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) sales of Inventory (x) to buyers in the ordinary course of business (for the avoidance of doubt, including sales by a Loan Party to another Loan Party), and (y) so long as no Event of Default has occurred and is continuing or would result therefrom, by JV Holdco to RM JV (for resale by RM JV) in accordance with the terms of the RM JV Agreement in an aggregate amount not to exceed US$2,500,000 (the "<u>Permitted JV Inventory Sale</u>"),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of the Agreement or the other Loan Documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the granting of Permitted Liens,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any involuntary loss, damage or destruction of property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) (i) the sale or issuance of Qualified Equity Interests of Borrower, (ii) the sale or issuance of any Qualified Equity Interests of Loan Party to another Loan Party, and (iii) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of any Subsidiary of a Loan Party that is not a Loan Party to a Loan Party or any other Subsidiary of a Loan Party, in each case subject to the terms set forth herein,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) (i) the lapse (other than at the end of their respective terms) of registered patents, trademarks, copyrights and other intellectual property of Borrower or any of its Subsidiaries that are, in the reasonable business judgment of such Loan Party, no longer material or no longer used in the business of Borrower or Subsidiary to the extent not economically desirable in the conduct of its business or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lender Group,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) the making of Restricted Payments that are expressly permitted to be made pursuant to the Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) to the extent constituting dispositions, the making of Permitted Investments that are expressly permitted to be made pursuant to the Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, transfers of assets (i) from any Loan Party (other than transfer of Inventory, Accounts and Credit Card Receivables by Borrower) to another Loan Party, (ii) from a Loan Party to Borrower; provided, that the consideration received for such assets to be so disposed is at least equal to the fair market value thereof and (iii) from any Subsidiary of Borrower that is not a Loan Party to any other Subsidiary of Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) cancellations, terminations or surrenders of any lease,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) the termination or unwinding of any Hedge Agreement in accordance with its terms,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) dispositions by any Subsidiary of its own Equity Interests to qualify directors where required by applicable law,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) dispositions permitted by <u>Section 6.3</u>,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) dispositions or sales of assets, or sell all of the assets of any division or line of business of Borrower or any of its Subsidiaries, in each case, having a fair market value not in excess of $1,000,000 per Fiscal Year; <u>provided</u> that, in each case, (i) the consideration received for such assets shall be in an amount at least equal to the fair market value thereof; and (ii) at least 75% of the consideration received shall be cash or Cash Equivalents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) grants of licenses with respect to intellectual property, or leases or subleases of other property, in the ordinary course of business which licenses, leases and subleases do not materially interfere with the ordinary conduct of the business of Borrower and its Subsidiaries, taken as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) dispositions of Permitted Factoring Facility Accounts to the extent related to a Permitted Factoring Facility, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Permitted Sale Leaseback Transactions.

"<u>Permitted Factoring Facility</u>" means an unsecured factoring facility established by the Borrower which provides for the sale of Permitted Factoring Facility Accounts on a non- recourse basis.

"<u>Permitted Factoring Facility Accounts</u>" shall mean Accounts (whether now existing or arising in the future) which are due to Borrower from Account Debtors located outside of Canada and the United States and which are not otherwise Eligible Accounts.

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"<u>Permitted Indebtedness</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Indebtedness evidenced by the Agreement or the other Loan Documents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indebtedness (including Capital Leases) set forth on <u>Schedule 4.14</u> to this Agreement and any Refinancing Indebtedness in respect of such Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) endorsement for collection, deposit or negotiation and warranties of products or services, in each case incurred in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Quebec Subordinated Debt in an aggregate outstanding amount not to exceed $14,300,000 (as reduced by principal payments from time to time under the applicable Quebec Subordinated Debt Documents) and solely to the extent that such Indebtedness is subject to the Quebec Subordination Agreement; provided that the Quebec Subordinated Debt Documents shall be in form and substance reasonably satisfactory to the Agent and the Required Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the incurrence by Borrower or its Subsidiaries of Indebtedness under Hedge Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with Borrower's and its Subsidiaries' operations and not for speculative purposes; provided that the aggregate Hedge Termination Value of Secured Hedging Obligations shall not exceed $5,000,000 at any one time,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Permitted Intercompany Advances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Indebtedness incurred after the Original Closing Date in connection with the acquisition, lease or leasing after the Original Closing Date of any equipment or fixtures by a Loan Party or under any Capital Lease or Permitted Sale Leaseback Transaction, as well as Permitted Purchase Money Indebtedness secured by Purchase Money Liens, <u>provided</u> that the aggregate principal amount of such Indebtedness of the Loan Parties shall not exceed the Canadian Dollar Equivalent of $15,000,000 at any one time,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) unsecured Indebtedness constituting the Management Debt to the extent subject to the Management Subordination Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) secured Indebtedness in an aggregate amount not to exceed $20,000,000<u>33,500,000</u> at any time, which amount shall include the Term Loan Debt but excluding the Quebec Subordinated Debt, provided that that (a) such Indebtedness (other than the Term Loan Debt) is subordinated in right and time of payment to the Obligations and in Lien priority to the Agent's Liens on terms and conditions satisfactory to the Agent and Required Lenders, (b) the Term Loan Debt remains, at all times, subject to the Intercreditor Agreement, and (c) the Restricted Payment Conditions are satisfied at the time of the incurrence of such Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(j) the Seller Notes;</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(k)</u> (j) Additional Subordinated Debt incurred by Borrower or any of its Subsidiaries in an aggregate outstanding amount not to exceed $15,000,000 at any one time, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(l)</u> (k) Indebtedness under any Permitted Factoring Facility.

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"<u>Permitted Intercompany Advances</u>" means loans and other Investments made by (a) a Loan Party to another Loan Party, (b) a Subsidiary of Borrower that is not a Loan Party to another Subsidiary of Borrower that is not a Loan Party, (c) a Subsidiary of Borrower that is not a Loan Party to a Loan Party, so long as the parties thereto are party to the Intercompany Subordination Agreement, (d) to the extent permitted by <u>Section 4.28</u>, advances made by Borrower to CGS US for the purposes permitted thereunder and (e) except as otherwise permitted under paragraph (d) hereof, Loan Parties to Subsidiaries of Borrower that are not Loan Parties in an aggregate outstanding amount not to exceed $50,000.

"<u>Permitted Investments</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in cash and Cash Equivalents,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) advances or extensions of credit made in connection with purchases of goods or services in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Investments received in settlement of amounts due to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or any of its Subsidiaries,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set forth on <u>Schedule P-1</u> to the Agreement and any modification, replacement, renewal or extension thereof; provided that the amount of the original Investment under this clause (e) is not increased except by the terms of such Investment or as otherwise permitted pursuant to the definition of Permitted Investments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) (i) guarantees permitted under the definition of Permitted Indebtedness, and (ii) other guarantees entered into in the ordinary course of business in respect of real property leases so long as such guarantees under this clause (ii), if made by a Loan Party, are in respect of obligations of another Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Permitted Intercompany Advances,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or any of its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) deposits of cash made to secure performance of operating leases, utilities, and other similar deposits in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Permitted Acquisitions,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Investments resulting from entering into (i) Bank Product Agreements, or (ii) agreements relative to Indebtedness that is permitted under clause (e) of the definition of Permitted Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) equity Investments by any Loan Party in any Subsidiary of such Loan Party which is required by law to maintain a minimum net capital requirement or as may be otherwise required by applicable law,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Investments consisting of non-cash consideration received in connection with Permitted Dispositions,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) non-cash loans and advances to employees, officers, and directors of Borrower or any of its Subsidiaries for the purpose of purchasing Equity Interests in Borrower so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in Borrower, and loans and advances to employees and officers of Borrower or any of its Subsidiaries in the ordinary course of business for any other business purpose and in an aggregate amount not to exceed $200,000 at any one time,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount not to exceed $1,000,000 during the term of the Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Investments (other than Acquisitions) made by a Borrower or a Subsidiary thereof made solely with cash proceeds received by Borrower and contributed to Borrower or Subsidiary substantially concurrently with the making of such Investments in connection with the issuance of Equity Interests (other than Disqualified Equity Interests) of Borrower,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Investments by a Borrower or its Subsidiaries held by a Person that becomes a Subsidiary (or is merged, amalgamated or consolidated with or into a Borrower or a Subsidiary) pursuant to <u>Section 6.9</u> after the Closing Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Investments made by JV Holdco in the form of cash and/or Cash Equivalents in RM JV in order to fund the formation and capitalization of RM JV in an amount not to exceed US$1,000,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Investments made by JV Holdco by way of the Permitted JV Inventory Sale, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) Investments in the form of cash and/or Cash Equivalents made by JV Holdco in the RM JV to finance retail store renovations and improvements and product inventories in accordance with the terms of the RM JV Agreement, in an amount not to exceed US$750,000.

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"<u>Permitted Liens</u>" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Liens granted to, or for the benefit of, Agent to secure the Obligations,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Liens or claims for unpaid Taxes that either (i) are not yet delinquent, or (ii) do not have priority over Agent's Liens and the underlying Taxes are the subject of Permitted Protests,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) judgment Liens arising solely as a result of the existence of judgments, orders, requirements to pay or awards that do not constitute an Event of Default under <u>Section 8.3</u> of the Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Liens set forth on <u>Schedule P-2</u> to the Agreement; <u>provided</u>, that to qualify as a Permitted Lien, any such Lien described on <u>Schedule P-2</u> to the Agreement shall only secure the Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect thereof,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the interests of lessors under operating leases and non-exclusive licensors under license agreements,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Capital Leases and other Permitted Purchase Money Indebtedness described in paragraph (g) of the definition of Permitted Indebtedness so long as (i) such Lien qualifies as a Purchase Money Lien under the terms of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted Protests,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Liens on amounts deposited to secure a Borrower's or any of its Subsidiaries' obligations in connection with workers' compensation or other unemployment insurance,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Liens on amounts deposited to secure a Borrower's or any of its Subsidiaries' obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Liens on amounts deposited to secure a Borrower's or any of its Subsidiaries' reimbursement obligations with respect to surety or appeal bonds obtained in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) with respect to any Real Property, easements, rights of way, and zoning restrictions that do not materially interfere with or impair the use or operation thereof,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) rights of setoff or bankers' liens upon deposits of funds in favor of banks or other depository institutions, solely to the extent incurred in connection with the maintenance of such Deposit Accounts in the ordinary course of business,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Liens granted in the ordinary course of business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under the definition of Permitted Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Liens solely on any cash earnest money deposits made by Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Liens assumed by Borrower or any of its Subsidiaries in connection with a Permitted Acquisition that secure Acquired Indebtedness,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Liens arising from precautionary PPSA financing statements or similar filings made in respect of operating leases entered into by any Loan Party,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Leases or subleases granted to others not interfering in any material respect with the business of Borrower and its Subsidiaries, taken as a whole,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) security deposits to public utilities or to any municipalities or Governmental Authorities or other public authorities when required by the utilities, municipalities or Governmental Authorities or other public authorities in connection with the supply of services or utilities,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Liens arising out of any conditional sale, title retention, consignment or other similar arrangement for the sale of goods in the ordinary course of business entered into by Borrower or its Subsidiaries in the ordinary course of business to the extent such Liens secure only the unpaid purchase price for such goods and related expenses do not attach to any assets other than the goods subject to such arrangements and not otherwise prohibited by this Agreement so long as any Inventory or Accounts of Borrower subject to such Liens are reported as ineligible on the relevant Borrowing Base Certificate,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) the Rolex Canada Liens and any Liens in favor of Rolex Canada Ltd. to the extent constituting valid and Purchase Money Liens in accordance with Applicable Law and subject to the Rolex Canada Subordination Agreement, to the extent applicable,

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) Liens securing the Quebec Subordinated Debt permitted pursuant to paragraph (d) of the definition of Permitted Indebtedness, provided that such Liens shall, at all times be, subordinate and junior in priority to the Liens securing the Obligations pursuant to the Quebec Subordination Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(y)</u> <u>[reserved],</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(z)</u> (y) Liens securing the Permitted Indebtedness described in paragraph (i) of the definition thereof, including such Liens granted in favour of the Term Loan Agent in connection with the Term Loan Agreement, provided that such Liens shall, at all times, be subordinate and junior in priority to the Liens securing the Obligations;<u>,</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>(aa)</u> (z) Liens on Permitted Factoring Facility Assets<u>Accounts</u> securing a Permitted Factoring Facility;<u>,</u> and

"<u>Permitted Protest</u>" means the right of Borrower or any of its Subsidiaries to protest any Lien (other than any Lien that secures some or all of the Obligations), Taxes (other than payroll Taxes or remittances or Taxes that are the subject of a requirement to pay issued by a Canadian Governmental Authority), or rental payment, <u>provided</u> that (a) a reserve with respect to such obligation is established on Borrower's or the applicable Subsidiary's books and records in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by Borrower or the applicable Subsidiary, as applicable, in good faith, and (c) Agent is reasonably satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent's Liens.

"<u>Permitted Purchase Money Indebtedness</u>" means, as of any date of determination, Indebtedness (other than the Obligations, but including Capitalized Lease Obligations), incurred after the Original Closing Date and at the time of, or within 30 days after, the acquisition of any personal property (other than Inventory) for the purpose of financing all or any part of the acquisition cost thereof, in an aggregate principal amount outstanding at any one time not in excess of the amount permitted under paragraph (g) of the definition of Permitted Indebtedness.

"<u>Permitted Sale Leaseback Transactions</u>" means collectively (a) Sale Leaseback Transactions that constitute Permitted Indebtedness pursuant to paragraph (g) of the definition of Permitted Indebtedness; and (b) Onset Permitted Sale Leaseback Transactions.

"<u>Person</u>" means natural persons, corporations, limited liability companies, unlimited liability corporations, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

"<u>Platform</u>" has the meaning specified therefor in <u>Section 17.9(c)</u> of the Agreement.

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"<u>PLCW Accounts</u>" means Accounts due on the private label credit card programs and all Accounts due from corporate sales receivables and wholesale receivables, in each case, of Borrower, which (a) are from an Account Debtor acceptable to Agent in its Permitted Discretion and (b) are determined by Agent in its Permitted Discretion to be eligible for inclusion in Eligible Accounts in an amount reflecting Agent's estimate of the net recovery on such Accounts on a forced liquidation basis, based upon the most recent appraisal of such Accounts undertaken at the request of Agent .

"<u>PPSA</u>" means the Personal Property Security Act (Ontario) and the regulations thereunder, as from time to time in effect; <u>provided</u>, <u>however</u>, if attachment, perfection or priority of Agent's Lien on any Collateral are governed by the personal property security laws of any jurisdiction in Canada other than the laws of the Province of Ontario, "PPSA" means those personal property security laws in such other jurisdiction in Canada (including the Civil Code of Quebec) for the purposes of the provisions hereof relating to such attachment, perfection or priority and for the definitions related to such provisions.

"<u>Pro Rata Share</u>" means, as of any date of determination:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) with respect to a Lender's obligation to make all or a portion of the Revolving Loans, with respect to such Lender's right to receive payments of interest, fees, and principal with respect to the Revolving Loans, and with respect to all other computations and other matters related to the Revolver Commitments or the Revolving Loans, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) with respect to a Lender's obligation to participate in the Letters of Credit, with respect to such Lender's obligation to reimburse Issuing Lender, and with respect to such Lender's right to receive payments of Letter of Credit Fees, and with respect to all other computations and other matters related to the Letters of Credit, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender by (ii) the aggregate Revolving Loan Exposure of all Lenders; <u>provided</u>, that if all of the Revolving Loans have been repaid in full and all Revolver Commitments have been terminated, but Letters of Credit remain outstanding, Pro Rata Share under this clause shall be determined as if the Revolver Commitments had not been terminated and based upon the Revolver Commitments as they existed immediately prior to their termination, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) with respect to all other matters and for all other matters as to a particular Lender (including the indemnification obligations arising under <u>Section 15.7</u> of the Agreement), the Canadian Dollar Equivalent of the percentage obtained by dividing (i) the sum of the Revolving Loan Exposure of such Lender by (ii) the sum of the aggregate Revolving Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to <u>Section 13.1</u>; <u>provided</u>, that if all of the Loans have been repaid in full, all Letters of Credit have been made the subject of Letter of Credit Collateralization, and all Commitments have been terminated, Pro Rata Share under this clause shall be determined as if the Revolving Loan Exposures had not been repaid, collateralized, or terminated and shall be based upon the Revolving Loan Exposures as they existed immediately prior to their repayment, collateralization, or termination.

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"<u>Projections</u>" means Borrower's forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow statements, all prepared on a basis consistent with Borrower's historical financial statements, together with appropriate supporting details and a statement of underlying assumptions, together with projections of monthly Excess Availability for the relevant period.

"<u>Protective Advances</u>" has the meaning specified therefor in <u>Section 2.3(d)(i)</u> of the Agreement.

"<u>Public Lender</u>" has the meaning specified therefor in <u>Section 17.9(c)</u> of the Agreement.

"<u>Purchase Money Lien</u>" means a Lien taken or reserved in personal property to secure payment of related Permitted Purchase Money Indebtedness, provided that such Lien (i) secures an amount not exceeding the lesser of the purchase price of such personal property and the fair market value of such personal property at the time such Lien is taken or reserved, (ii) extends only to such personal property and its proceeds, and (iii) is granted prior to or within 30 days after the purchase of such personal property.

"<u>QFC</u>" has the meaning assigned to the term "qualified financial contract" in, and shall be interpreted in accordance with, 12 U.S.C. § 5390(c)(8)(D).

"<u>QFC Credit Support</u>" has the meaning specified therefor in Section 17.17 of this Agreement.

"<u>Qualified ECP Guarantor</u>" means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant guarantee, keepwell, or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an "eligible contract participant" under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an "eligible contract participant" at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

"<u>Qualified Equity Interests</u>" means and refers to any Equity Interests issued by Borrower (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

"<u>Quebec Security Documents</u>" means, any hypothecs and all other security documents governed by the laws of the Province of Quebec, each in form and substance reasonably satisfactory to Agent, executed and delivered by a Loan Party to the Agent to secure the Obligations, and each as amended, restated, supplemented or modified from time to time.

"<u>Quebec Subordinated Debt</u>" means collectively, (i) all Indebtedness owing to Investissement Québec under the Quebec Subordinated Debt Documents in the original aggregate maximum principal amounts of $10,000,000 and $4,300,000, respectively, which Indebtedness shall be subject to the Quebec Subordination Agreement, and (ii) all other Indebtedness owing to Investissement Québec under the Quebec Subordinated Debt Documents or otherwise, in each case, which Indebtedness shall be expressly subordinate to payment in full of the Obligations pursuant to the Quebec Subordination Agreement.

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"<u>Quebec Subordinated Debt Documents</u>" means, collectively, (i) (A) that certain Offre de Prêt (Loan Offer) from Investissement Québec to Borrower dated June 11, 2020, in respect of a term loan in the original maximum principal amount of $10,000,000 as amended by a letter dated February 18, 2021 from Investissement Québec to Borrower and (B) that certain Offre de Prêt (Loan Offer) from Investissement Québec to Borrower dated February 23, 2021, in respect of a term loan in the original maximum principal amount of $4,300,000, and, in each case, all security and other accessory documents or instruments thereto at any time, and subject at all times to the Quebec Subordination Agreement, (ii) the Quebec Subordinated Security; and (iii) all other agreements, documents and instruments evidencing all or any portion of the Quebec Subordinated Debt, and subject at all times to the Quebec Subordination Agreement, in each case as the same may be modified, amended, supplemented or restated with the prior written consent of the Agent.

"<u>Quebec Subordinated Security</u>" means (a) the hypothecs dated on or about July 2, 2020 and June 18, 2021, respectively, granted by the Borrower in favour of Investissement Québec; and (b) any other present and future security, security interests, hypothecs, mortgages, prior claims, liens or charges affecting any of the Loan Parties' assets, or any part thereof, now or hereafter held by or for the account of Investissement Québec as security for the Quebec Subordinated Debt created after the date hereof with the consent of the Agent, which security shall at all times be subordinated to the security granted by the Loan Parties under the Canadian Security Documents.

"<u>Quebec Subordination Agreement</u>" means the amended and restated subordination agreement dated as of August 24, 2021 between the Borrower, Investissement Québec, the Term Loan Agent and the Agent, as the same may hereafter be amended, restated, supplemented or otherwise modified with the consent of Agent.

"<u>Rate Determination Date"</u> means, with respect to Term CORRA (a) for any calculation with respect to a Term CORRA Rate Loan for any Interest Period, the day that is two (2) Benchmark Rate Business Days prior to the first day of such Interest Period or (b) for any calculation with respect to a Base Rate Loan for any day, the day that is two (2) Benchmark Rate Business Days prior to such day.

"<u>Real Property</u>" means any estates or interests in real property now owned or hereafter acquired by Borrower or one of its Subsidiaries and the improvements thereto.

"<u>Real Property Collateral</u>" means (a) the Real Property identified on <u>Schedule R-1</u> to the Agreement and (b) any Real Property hereafter acquired by any Loan Party with a fair market value in excess of $1,000,000.

"<u>Receivable Reserves</u>" means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to <u>Section 2.1(c)</u>, to establish and maintain (including reserves for Taxes, rebates, discounts, warranty claims, and returns) with respect to the Eligible Accounts.

"<u>Record</u>" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

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"<u>Refinancing Indebtedness</u>" means refinancings, renewals, or extensions of Indebtedness so long as:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.

"<u>Register</u>" has the meaning set forth in <u>Section 13.1(h)</u> of the Agreement.

"<u>Registered Loan</u>" has the meaning set forth in <u>Section 13.1(h)</u> of the Agreement.

"<u>Reimbursement Undertaking</u>" has the meaning specified therefor in <u>Section 2.11(a)</u> of the Agreement.

"<u>Related Fund</u>" means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

"<u>Relevant Governmental Body</u>" means (a) with respect to a Benchmark Replacement in respect of Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, US Dollars, the Board of Governors or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors or the Federal Reserve Bank of New York, or any successor thereto and (b) with respect to a Benchmark Replacement in respect of Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Canadian Dollars, the Bank of Canada, or a committee officially endorsed or convened by the Bank of Canada, or any successor thereto.

"<u>Remedial Action</u>" means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.

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"<u>Replacement Lender</u>" has the meaning specified therefor in <u>Section 2.12(b)</u> of the Agreement.

"<u>Report</u>" has the meaning specified therefor in <u>Section 15.16</u> of the Agreement.

"<u>Required Lenders</u>" means, at any time, Lenders having or holding more than 50% of the sum of the aggregate Canadian Dollar Equivalent of Revolving Loan Exposure of all Lenders; <u>provided</u>, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Required Lenders, and (ii) at any time there are 2 or more Lenders, "Required Lenders" must include at least 2 Lenders (who are not Affiliates of one another).

"<u>Reserves</u>" means, as of any date of determination, those reserves (other than Receivable Reserves, Loan to Value Reserves, Bank Product Reserves, Inventory Reserves and Canadian Priority Payable Reserves) that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including reserves with respect to (a) sums that Borrower or any of its Subsidiaries are required to pay under any Section of the Agreement or any other Loan Document (such as Taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, (b) currency fluctuations, (c) gift cards, gift certificates and customer deposits, and (d) amounts owing by Borrower or any of its Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien, trust or deemed trust, in the Permitted Discretion of Agent likely would have a priority superior to the Agent's Liens (such as Liens, trusts or deemed trust in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other Taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the Borrowing Base.

"<u>Restricted Payment</u>" means to (a) declare or pay any dividend or make any other payment or distribution, directly or indirectly, on account of Equity Interests issued by Borrower or any Subsidiary thereof (including any payment in connection with any merger, amalgamation or consolidation involving Borrower or such Subsidiary) or to the direct or indirect holders of Equity Interests issued by Borrower in its capacity as such (other than dividends or distributions payable in Qualified Equity Interests issued by Borrower), or (b) purchase, redeem, make any sinking fund or similar payment, or otherwise acquire or retire for value (including any payment in connection with any merger, amalgamation or consolidation involving Borrower) any Equity Interests issued by Borrower, (c) make any payment to retire, or to obtain the surrender of, any outstanding warrants, options, or other rights to acquire Equity Interests of Borrower now or hereafter outstanding, and (d) any payments on account of management, consulting or similar fees or any success fees (including, without limitation, the Management Debt).

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"<u>Restricted Payment Conditions</u>" means (x) Excess Availability at all times during the 30 day period ending on the date of such Restricted Payment is greater than 40% of the Line Cap (or, if the Fixed Charge Condition is satisfied, 25% of the Line Cap), (y) after giving effect to a Restricted Payment, incurrence of Permitted Indebtedness described in paragraph (i) of the definition thereof or a Permitted Acquisition (each, a "Payment Event"), Excess Availability is greater than 40% of the Line Cap (or, if the Fixed Charge Condition is satisfied, greater than 25% of the Line Cap), and (z) projected Excess Availability at all times during the 6-month period following the date of such Payment Event is greater than 40% of the Line Cap (or, if the Fixed Charge Condition is satisfied, greater than 25% of the Line Cap) (in each case after giving effect to such Payment Event and as set forth in Excess Availability projections delivered by Borrower to, and satisfactory to, Agent).

"<u>Restructuring and Integration Costs</u>" means business optimization expenses and other restructuring and integration charges (including, without limitation, the costs associated with business optimization programs, including costs of consultants, relocation and recruiting expenses, back office closures, retention costs, severance costs and system establishment costs) in connection with any Permitted Acquisition after the Original Closing Date of such Permitted Acquisition through the first anniversary of the Original Closing Date of such Permitted Acquisition.

"<u>Revaluation Date</u>" means (a) with respect to any Revolving Loan denominated in US Dollars, each of the following: (i) each date of a Borrowing of such Revolving Loan, (ii) each date of a continuation of such Revolving Loan pursuant to <u>Section 2.12</u>, and (iii) such additional dates as Agent shall determine or the Required Lenders shall require, (b) with respect to any Letter of Credit denominated in US Dollars, each of the following: (i) each date of issuance of such Letter of Credit, (ii) each date of an amendment of such Letter of Credit having the effect of increasing the amount thereof, (iii) each date of any payment by an Issuing Lender under such Letter of Credit, and (iv) such additional dates as Agent or an Issuing Lender shall determine or the Required Lenders shall require, and (c) with respect to any other Obligations denominated in US Dollars, each date as Agent shall determine unless otherwise prescribed in this Agreement or any other Loan Documents.

"<u>Revolver Commitment</u>" means, with respect to each Revolving Lender, its Revolver Commitment, and, with respect to all Revolving Lenders, their Revolver Commitments, in each case as set forth beside such Revolving Lender's name under the applicable heading on <u>Schedule C-1</u> to the Agreement or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender under the Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of <u>Section 13.1</u> of the Agreement.

"<u>Revolver Usage</u>" means, as of any date of determination, the sum of (a) the amount of outstanding Revolving Loans (inclusive of Swing Loans and Protective Advances), plus (b) the amount of the Letter of Credit Usage.

"<u>Revolving Lender</u>" means a Lender that has a Revolver Commitment or that has an outstanding Revolving Loan.

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"<u>Revolving Loan Exposure</u>" means, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the Revolver Commitments, the amount of such Lender's Revolver Commitment, and (b) after the termination of the Revolver Commitments, the aggregate outstanding principal amount of the Revolving Loans of such Lender.

"<u>Revolving Loans</u>" has the meaning specified therefor in <u>Section 2.1(a)</u> of the Agreement.

"<u>RFR</u>" means, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to US Dollars, SOFR.

"<u>RFR Business Day</u>" means, with respect to SOFR Rate Loans, a U.S. Government Securities Business Day, <u>provided</u>, that for purposes of notice requirements in <u>Sections 2.3(a)</u>, <u>2.4(d)</u> and <u>2.12(b)</u>, in each case, such day is also a Business Day.

"<u>RFR Loan</u>" means a SOFR Rate Loan.

"<u>RFR Option</u>" has the meaning specified therefor in <u>Section 2.12(a)</u> of this Agreement.

"<u>RM JV</u>" means RMBG Retail Vancouver ULC, an unlimited liability company incorporated under the laws of British Columbia.

"<u>RM JV</u> Agreement" means that certain Shareholders Agreement, dated as of April 16, 2021, by and among JV Partner, JV Holdco and the RM JV, as the same may be modified, amended, supplemented or restated in accordance with Section 6.6(b)(i) or with the prior written consent of the Agent.

"<u>Rolex Canada Collateral</u>" means Collateral of Borrower consisting of Rolex, Tudor and Cellini watches, watchbands, parts and other accessories now or hereafter sold by Rolex Canada Ltd. to Borrower, and all other new Rolex, Tudor and Cellini watches, watch bands, parts and other accessories hereinafter held by Borrower and all cash proceeds of any of the foregoing, including insurance proceeds (but specifically excluding accounts receivable), together with all rights and property of every kind at any time in the possession or control of Rolex Canada Ltd., or any of its agents, or in transit to it, belonging to, for the account of, or subject to the order of such Borrower.

"<u>Rolex Canada Documents</u>" means collectively, (i) the Official Rolex Retailer Agreement dated as of June 6, 2017 between Rolex Canada Ltd. and Borrower, (ii) the Official Rolex Retailer Agreement dated as of June 6, 2017 between Rolex Canada Ltd. and Borrower (carrying on business as Brinkhaus), (iii) the Official Tudor Reseller Agreement dated as of June 6, 2017 between Rolex Canada Ltd. and Borrower, and (iv) the Rolex Canada Security Agreement.

"<u>Rolex Canada Liens</u>" means Liens on the Rolex Canada Collateral granted in favor of Rolex Canada Ltd. pursuant to the Rolex Canada Security Agreement provided that such Liens are subject to the Rolex Canada Subordination Agreement.

"<u>Rolex Canada Security Agreement</u>" means collectively, all security agreements, if any, entered into between the Canadian Borrower and Rolex Canada Ltd. pursuant to Section 3.04 of the Rolex Canada Document described in clause (i) of the definition thereof, which security agreements shall be on terms and conditions satisfactory to Agent and the Required Lenders.

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"<u>Rolex Canada Subordination Agreement</u>" means the subordination provisions of the Rolex Canada Security Agreement, which shall be on terms and conditions satisfactory to Agent and the Required Lenders, and affirmed by Rolex Canada Ltd. pursuant to an acknowledgement letter in form and substance satisfactory to Agent and the Required Lenders, and addressed to the Agent from Rolex Canada Ltd. and acknowledged by Borrower.

"<u>S&P</u>" has the meaning specified therefor in the definition of Cash Equivalents.

"<u>Sale Leaseback Transactions</u>" means sales of any fixed or capital assets acquired after the Original Closing Date by any Loan Party or any Subsidiary: (w) that are made for cash consideration in an amount not less than the fair value of such fixed or capital assets and are consummated within 180 days after such Loan Party or such Subsidiary completes the capital expenditure project for the relevant store or corporate initiative which involved the acquisition or construction of such fixed or capital assets, (x) in respect of which such fixed or capital assets are not assets included in the computation of Borrowing Base, (y) in respect of which the proceeds shall be applied to repay the Revolving Loans and/or Letter of Credit Collateralization, as the case may be (without a permanent reduction in the Commitments) and (z) in respect of which such fixed or capital assets are immediately thereafter leased back to the applicable Loan Party or Subsidiary through a Capital Lease, provided that for certainty, the fixed or capital assets subject to such sales shall not include Inventory or Accounts and shall be limited to the furniture, fixtures and equipment (as such term is defined in the PPSA), including information technology equipment, of any Loan Party or any Subsidiary which are located at a retail location or the chief executive office of any Loan Party or any Subsidiary.

"<u>Sanctioned Entity</u>" means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly controlled by a country or its government, or (d) a Person resident in or determined to be resident in a country, in each case of clauses (a) through (d) that is itself a target of Sanctions.

"<u>Sanctioned Person</u>" means, at any time (a) any Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC's consolidated Non-SDN list or any other Sanctions-related list maintained by any relevant Sanctions authority, (b) a Person or legal entity that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Country, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate) by or acting on behalf of any such Person or Persons described in clauses (a) through (c) above.

"<u>Sanctions</u>" means individually and collectively, respectively, any and all economic sanctions, trade sanctions, financial sanctions, sectoral sanctions, secondary sanctions, trade embargoes anti-terrorism laws and other sanctions laws, regulations or embargoes, including those imposed, administered or enforced from time to time by: (a) the United States of America, including those administered by the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury, the U.S. Department of State, the U.S. Department of Commerce, or through any existing or future executive order, (b) the United Nations Security Council, (c) the European Union or any European Union member state, (d) Her Majesty's Treasury of the United Kingdom, or (e) any other Governmental Authority with jurisdiction over any member of Lender Group or any Loan Party or any of their respective Subsidiaries or Affiliates.

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"<u>SEC</u>" means the United States Securities and Exchange Commission and any successor thereto.

<u>"Second Amendment Fee Letter" means that certain fee letter, dated as of July 8, 2025 between Borrower and Agent, in form and substance reasonably satisfactory to Agent, as amended, modified, supplemented or restated from time to time.</u> 

"<u>Secured Hedging Agreement</u>" means any Hedging Agreement that is entered into by and between Borrower and any Hedge Provider that constitutes Permitted Indebtedness hereunder and is secured by the Agent's Liens.

"<u>Secured Hedging Obligations</u>" means all Indebtedness and other obligations of Borrower arising under, or otherwise with respect to, any Secured Hedging Agreement.

"<u>Securities Account</u>" means a securities account (as that term is defined in the PPSA).

"<u>Securities Act</u>" means the *Securities Act* of 1933, as amended from time to time, and any successor statute.

<u>"Seller Notes" means, collectively, (i) that certain Promissory Note dated as July 8, 2025, made by Borrower in favor of the Vendors' Representative, as agent for the Vendors, in a principal amount of $1,000,000 payable on July 8, 2026 and (ii) that certain Promissory Note dated as of the July 8, 2025 , made by Borrower in favor of Vendors' Representative, as agent for the Vendors, in a principal amount of $1,000,000 payable on July 8, 2027, each in respect of the Store Acquisitions and on terms (including subordination terms) acceptable to the Agent.</u>

"<u>Settlement</u>" has the meaning specified therefor in <u>Section 2.3(e)(i)</u> of the Agreement.

"<u>Settlement Date</u>" has the meaning specified therefor in <u>Section 2.3(e)(i)</u> of the Agreement.

"<u>SOFR</u>" means, a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

"<u>SOFR Administrator</u>" means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

"<u>SOFR Rate Loan</u>" means a Loan that bears interest at a rate determined by reference to, Term SOFR (other than pursuant to clause (c) of the definition of U.S. Base Rate).

"<u>Solvent</u>" means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Person's debts (including contingent liabilities) is less than all of such Person's assets, (b) such Person is not engaged or about to engage in a business or transaction for which the remaining assets of such Person are unreasonably small in relation to the business or transaction or for which the property remaining with such Person is an unreasonably small capital, and (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is "solvent" or not "insolvent", as applicable within the meaning given those terms and similar terms under applicable Insolvency Law or other laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

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<u>"SPA" means that certain share purchase agreement dated as of June 6, 2025 among Borrower, the Vendors and Vendors' Representative, as amended by that certain amendment no. 1 to the share purchase agreement dated as of June 28, 2025.</u> 

"<u>Spot Rate</u>" means, for a currency, the rate determined by Agent to be the rate quoted by Wells Fargo acting in such capacity as the spot rate for the purchase by Wells Fargo of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. (New York time) on the date two Business Days prior to the date as of which the foreign exchange computation is made; <u>provided</u>, that Agent may obtain such spot rate from another financial institution designated by Agent if Wells Fargo acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

"<u>STA</u>" means the Securities Transfer Act, 2006 (Ontario) or to the extent applicable, comparable legislation in other Canadian provinces.

"<u>Standard Letter of Credit Practice</u>" means, for an Issuing Lender, any domestic or foreign law or letter of credit practices applicable in the city in which such Issuing Lender issued the applicable Letter of Credit or, for its branch or correspondent, such laws and practices applicable in the city in which it has advised, confirmed or negotiated such Letter of Credit, as the case may be, in each case, (a) which letter of credit practices are of banks that regularly issue letters of credit in the particular city, and (b) which laws or letter of credit practices are required or permitted under ISP or UCP, as chosen in the applicable Letter of Credit.

<u>"Store Acquisitions" means the acquisition by the Borrower of certain retail stores which operate certain retail stores in the Toronto area pursuant to the SPA.</u>

"<u>Subject Permitted Acquisition</u>" has the meaning specified therefor in the definition of "Permitted Dispositions".

"Subordinated Debt" means collectively, the Management Debt, the Quebec Subordinated Debt, the Montrovest Debt and any Additional Subordinated Debt.

"<u>Subordination Agreements</u>" means collectively, the Management Subordination Agreement, the Quebec Subordination Agreements, the Rolex Canada Subordination Agreements, the Montrovest Subordination Agreement<u>, the Mangrove Subordination Agreement</u> and any other subordination agreement entered into by or among any Loan Party, any subordinated creditor and Agent, in form, scope and substance satisfactory to the Agent and the Required Lenders.

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"<u>Subsidiary</u>" of a Person means a corporation, partnership, limited liability company, unlimited liability corporation, or other entity in which that Person directly or indirectly owns or controls the Equity Interests having ordinary voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability company, or other entity.

"<u>Supermajority Lenders</u>" means, at any time, Lenders having or holding more than 66 2/3% of the sum of the aggregate Canadian Dollar Equivalent of the Revolving Loan Exposure of all Lenders; <u>provided</u>, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Lenders, and (ii) at any time there are 2 or more Lenders, "Supermajority Lenders" must include at least 2 Lenders (who are not Affiliates of one another).

"<u>Supported QFC</u>" has the meaning specified therefor in Section 17.17 of this Agreement.

"<u>Swap Obligation</u>" means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section1a(47) of the *Commodity Exchange Act*.

"<u>Swing Lender</u>" means Agent or any other Lender that, at the request of Borrower and with the consent of Agent agrees, in such Lender's sole discretion, to become the Swing Lender under <u>Section 2.3(b)</u> of the Agreement.

"<u>Swing Loan</u>" has the meaning specified therefor in <u>Section 2.3(b)</u> of the Agreement.

"<u>Swing Loan Exposure</u>" means, as of any date of determination with respect to any Lender, such Lender's Pro Rata Share of the Swing Loans on such date.

"<u>Tax Lender</u>" has the meaning specified therefor in <u>Section 14.2(a)</u> of the Agreement.

"<u>Taxes</u>" means any Taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.

"<u>Term CORRA</u>" means,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) for any calculation with respect to a Term CORRA Rate Loan, the Term CORRA Reference Rate for a tenor comparable to the applicable Interest Period on the applicable Rate Determination Date, as such rate is published by the Term CORRA Administrator; <u>provided</u>, <u>however</u>, that if as of 5:00 p.m. Toronto time on any Rate Determination Date the Term CORRA Reference Rate for the applicable tenor has not been published by the Term CORRA Administrator and a Benchmark Replacement Date with respect to the Term CORRA Reference Rate has not occurred, then Term CORRA will be the Term CORRA Reference Rate for such tenor as published by the Term CORRA Administrator on the first preceding Benchmark Rate Business Day for which such Term CORRA Reference Rate for such tenor was published by the Term CORRA Administrator so long as such first preceding Benchmark Rate Business Day is not more than three (3) Benchmark Rate Business Days prior to such Rate Determination Date, and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) for any calculation with respect to a Base Rate Loan on any day, the Term CORRA Reference Rate for a tenor of one month on the applicable Rate Determination Date, as such rate is published by the Term CORRA Administrator; <u>provided</u>, <u>however</u>, that if as of 5:00 p.m. Toronto time on any Rate Determination Date the Term CORRA Reference Rate for the applicable tenor has not been published by the Term CORRA Administrator and a Benchmark Replacement Date with respect to the Term CORRA Reference Rate has not occurred, then Term CORRA will be the Term CORRA Reference Rate for such tenor as published by the Term CORRA Administrator on the first preceding Benchmark Rate Business Day for which such Term CORRA Reference Rate for such tenor was published by the Term CORRA Administrator so long as such first preceding Benchmark Rate Business Day is not more than three (3) Benchmark Rate Business Days prior to such Rate Determination Date;

"<u>Term CORRA Adjustment</u>" means, for any calculation with respect to a Base Rate Loan or a Term CORRA Rate Loan, a percentage per annum as set forth below for the applicable type of such Loan and (if applicable) Interest Period therefor:

Base Rate Loans:

<u>0.29547%</u> <br>

Term CORRA Rate Loans:

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| | |
|:---|:---|
| Interest Period | Percentage |
| One month | 0.29547% |
| Three months | 0.32138% |

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"<u>Term CORRA Administrator</u>" means CanDeal Benchmark Administration Services Inc. ("CanDeal") or, in the reasonable discretion of Agent, TSX Inc. or an affiliate of TSX Inc. as the publication source of the CanDeal/TMX Term CORRA benchmark that is administered by CanDeal (or a successor administrator of the Term CORRA Reference Rate selected by Agent in its reasonable discretion).

"<u>Term CORRA Rate Loan</u>" means a Loan that bears interest at a rate determined by reference to Adjusted Term CORRA (other than pursuant to clause (b) of the definition of Canadian Base Rate).

"<u>Term CORRA Rate Margin</u>" has the meaning specified therefor in the definition of "Applicable Margin".

"<u>Term CORRA Reference Rate</u>" means the forward-looking term rate based on CORRA.

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"<u>Term Loan</u>" means the credit extensions (including, without limitation, the "Loan" as defined in the Term Loan Agreement) provided to the Borrower by the Term Loan Lenders under the Term Loan Documents.

"<u>Term Loan Agent</u>" means the "Agent", as defined in the Term Loan Agreement.

"<u>Term Loan Agreement</u>" means the Credit Agreement dated as of June 29, 2018, by and between, among others, the Term Loan Agent, as administrative agent, the Term Loan Lenders party thereto from time to time, as lenders, and the Borrower, as borrower, as same may be amended from time to time hereafter to the extent permitted hereunder and in accordance with the Intercreditor Agreement.

"<u>Term Loan Borrowing Base</u>" means the "Borrowing Base" as defined in the Term Loan Agreement.

"<u>Term Loan Debt</u>" means all "Obligations" (as defined in the Term Loan Agreement) owing to the Term Loan Secured Parties under the Term Loan Documents.

"<u>Term Loan Documents</u>" means the "Loan Documents" under and as defined in the Term Loan Agreement.

"<u>Term Loan Lenders</u>" means the "Lenders" as defined in the Term Loan Agreement.

"<u>Term Loan Secured Parties</u>" means the "Lender Group", as defined in the Term Loan Agreement.

"<u>Term Loan Usage</u>" means the aggregate principal balance of the Term Loan owing to all Term Loan Lenders.

"<u>Term SOFR</u>" means,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) for any calculation with respect to a SOFR Rate Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the "<u>Periodic Term SOFR Determination Day</u>") that is two (2) RFR Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; <u>provided</u>, <u>however</u>, that if as of 5:00 p.m. (Eastern time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding RFR Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding RFR Business Day is not more than three (3) RFR Business Days prior to such Periodic Term SOFR Determination Day, and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) for any calculation with respect to a US Base Rate Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the "<u>Base Rate Term SOFR Determination Day</u>") that is two (2) RFR Business Days prior to such day, as such rate is published by the Term SOFR Administrator; <u>provided</u>, <u>however</u>, that if as of 5:00 p.m. (Eastern time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding RFR Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding RFR Business Day is not more than three (3) RFR Business Days prior to such Base Rate SOFR Determination Day;

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<u>provided</u>, <u>further</u>, that if Term SOFR determined as provided above (including pursuant to the proviso under clause (a) or clause (b) above) shall ever be less than the Floor, then Term SOFR shall be deemed to be the Floor.

"<u>Term SOFR Administrator</u>" means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by Agent in its reasonable discretion).

"<u>Term SOFR Reference Rate</u>" means the forward-looking term rate based on SOFR.

"<u>Test Period</u>" shall mean, for any date of determination under this Agreement, the twelve consecutive months of Borrower most recently ended as of such date of determination.

"<u>U.S. Special Resolution Regimes</u>" has the meaning specified therefor in Section of this Agreement.

"<u>U.S.C.</u>" means Title 12 (Banks and Banking) of the United States Code of Federal Regulations.

"<u>U.S. Government Securities Business Day</u>" means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association, or any successor thereto, recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

"<u>UCP</u>" means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits 2007 Revision, International Chamber of Commerce Publication No. 600 and any subsequent revision thereof adopted by the International Chamber of Commerce on the date such Letter of Credit is issued.

"<u>Unadjusted Benchmark Replacement</u>" means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

"<u>Underlying Issuer</u>" means The Toronto-Dominion Bank or one of its Affiliates or such other Person that is acceptable to Agent and Borrower.

"<u>United States</u>" means the United States of America.

"<u>Unused Line Fee</u>" has the meaning specified therefor in <u>Section 2.10(b)</u>.

"<u>US Base Rate</u>" means the greatest of (a) the Floor, (b) the Federal Funds Rate plus <sup>1</sup>⁄<sub>2</sub>%, (c) Term SOFR for a one-month tenor as in effect on such day, plus 1% (1 percentage point) (<u>provided</u> that <u>clause (c)</u> shall not be applicable during any period in which Term SOFR is unavailable, unascertainable or illegal), and (d) the rate of interest announced, from time to time, within Wells Fargo at its principal office in San Francisco as its "prime rate" in effect on such day, with the understanding that the "prime rate" is one of Wells Fargo's base rates (not necessarily the lowest of such rates) and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto and is evidenced by the recording thereof after its announcement in such internal publications as Wells Fargo may designate. Any change in the U.S. Base Rate due to a change in the foregoing rate shall be effective as of the opening of business on the effective day of such change.

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"<u>US Designated Account</u>" means the US Dollar Deposit Account(s) of Borrower identified on <u>Schedule D-2</u> to the Agreement (or such other Deposit Account(s) of Borrower located at Designated Account Bank that has been designated as such, in writing, by Administrative Borrower to Agent).

"<u>US Dollar Equivalent</u>" means, at any time, (a) with respect to any amount denominated in US Dollars, such amount; and (b) with respect to any amount denominated in Canadian Dollars, the equivalent amount thereof in US Dollars as determined by Agent, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date or such other date determined by Agent) for the purchase of US Dollars with Canadian Dollars.

"<u>US Dollars</u>" or "<u>US$</u>" means United States dollars.

"<u>US Loan Account</u>" has the meaning specified therefor in <u>Section 2.9</u> of the Agreement.

"<u>US Stock Purchase Agreement</u>" means that certain Stock Purchase Agreement entered into as of August 11, 2017 by and between Aurum Holdings Ltd. and Birks Group Inc. for the purchase of all shares of capital stock of Mayor's Jewelers, Inc.

<u>"Vendors" means, collectively, Lynn Sutkiewicz, Eric Sutkiewicz, Sutkiewicz Children's Trust, Jordan Sutkiewicz and Michelle Ceresney.</u> 

<u>"Vendors' Representative" means Jordan Sutkiewicz, in his capacity as Vendors' Representative pursuant to the SPA.</u>

"<u>Voidable Transfer</u>" has the meaning specified therefor in <u>Section 17.8</u> of the Agreement.

"<u>Wells Fargo</u>" means Wells Fargo Bank, National Association, a national banking association.

"<u>WF Canada</u>" means Wells Fargo Capital Finance Corporation Canada.

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**EXHIBIT B** 

**FORM OF BORROWING BASE CERTIFICATE** 

**[See attached]** 

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**EXHIBIT C** 

**Schedule 5.1** 

[See attached.]

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**<u>Schedule 5.1</u>**

**<u>FINANCIAL STATEMENTS, REPORTS, CERTIFICATES</u>**

Deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the financial statements, reports, or other items set forth below at the following times in form satisfactory to Agent:<sup>1</sup>

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| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;as soon as available, but in any event within 30 days after the end of each Fiscal Month during Borrower's Fiscal Year, | (a) an unaudited consolidated balance sheet, income statement, statement of cash flow, covering Borrower's and its Subsidiaries' operations during such period and compared to the prior period and plan, together with a corresponding discussion and analysis of results from management for its semi-annual and annual reports, and<br>(b) a Compliance Certificate along with the underlying calculations, including the calculations to arrive at Excess Availability and Fixed Charge Coverage Ratio. |
| &nbsp;&nbsp;&nbsp;as soon as available, but in any event within 120 days after the end of Borrower's Fiscal Year, | (c) consolidated financial statements of Borrower and its Subsidiaries for each such Fiscal Year, audited by independent certified public accountants reasonably acceptable to Agent and certified, without any qualifications (including any (i) "going concern" or like qualification or exception, (ii) qualification or exception as to the scope of such audit, or (iii) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of <u>Section 7</u> of the Agreement), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, statement of cash flow, and statement of shareholder's equity, and, if prepared, such accountants' letter to management), and<br>(d) a Compliance Certificate along with the underlying calculations, including the calculations to arrive at Excess Availability and Fixed Charge Coverage Ratio. |

---

<sup>1</sup> Note: Financial statements to be presented in CAD.

------

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;as soon as available, but in any event within 30 days after the start of Borrower's Fiscal Year, | (e) copies of Borrower's Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to Agent, in its Permitted Discretion, for the forthcoming Fiscal Year, month by month, certified by a Financial Officer of Borrower as being such officer's good faith estimate of the financial performance of Borrower and its Subsidiaries during the period covered thereby, including projected Excess Availability for the relevant period, together with a corresponding discussion and analysis of results from management (including assumptions used in the Projections). |
| &nbsp;&nbsp;&nbsp;promptly, but in any event within 5 Business Days after a Financial Officer or the Borrower's General Counsel has knowledge of any event or condition that constitutes a Default or an Event of Default, | (f) notice of such event or condition and a statement of the curative action that Borrower proposes to take with respect thereto (including, without limitation, in respect of any default under a Seller Note). |
| &nbsp;&nbsp;&nbsp;promptly after the commencement thereof, but in any event within 5 Business Days after the service of process with respect thereto on Borrower or any of its Subsidiaries, | (g) notice of all actions, suits, or proceedings brought by or against Borrower or any of its Subsidiaries before any Governmental Authority which reasonably could be expected to result in a Material Adverse Effect. |

---

------

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;within 30 days after the end of each Fiscal Month during Borrower's Fiscal Year, | (h) a certification by a senior officer of Borrower, in form and substance reasonably satisfactory to Agent (i) that all rent payments of Borrower and its Subsidiaries have been made, (ii) that no lease defaults exist for such period, (iii) as to the amount of outstanding consignment accounts payable for such calendar month and the book value determined in accordance with GAAP of Inventory held on a consignment basis and (iv) describing the long-term debt of Borrower and its Subsidiaries as of the end of such calendar month. |
| &nbsp;&nbsp;&nbsp;promptly upon receipt or dispatch thereof, or entry into, | (i) any consignment arrangement (whether such consignment arrangement is documented or otherwise) in which Borrower or any of its Subsidiaries acts as a consignee, notify Agent in writing of such consignment arrangement, specifying the consignor, the consignee and true, complete and accurate copies of such consignment agreement and any amendments, modifications, supplements, waivers or other modifications thereto as well as at the request of Agent, all related documents. |
| &nbsp;&nbsp;&nbsp;promptly upon the request of Agent, | (j) a calculation of the aggregate Hedge Termination Value of all Secured Hedging Obligations, and<br>(k) any other information reasonably requested relating to the financial condition of Borrower or its Subsidiaries. |
| &nbsp;&nbsp;&nbsp;promptly following the delivery thereof, | (l) copies of all quarterly reporting packages provided to the holders of the Equity Interests of RM JV promptly following delivery thereof to JV Holdco. |

---

## Exhibit 4.40

**Exhibit 4.40** 

**<u>LOAN AGREEMENT</u>** 

**LOAN AGREEMENT** dated as of June 26, 2025 ****(the "**Effective Date**")

---

| | |
|:---|:---|
| **BETWEEN:** | **MANGROVE HOLDING S.A.,** a legal person incorporated under the laws of Switzerland |
|  | (the "**Lender**"); |
| **AND:** | **BIRKS GROUP INC.,** a legal person incorporated under the laws of Canada |
|  | (the "**Borrower**"); |

---

**WHEREAS** the Lender committed to provide financial support to the Borrower in the amount of $3,750,000 on terms and conditions as set forth in letters of agreement between the parties hereto dated July 15, 2024 and November 27, 2024 (the "**Mangrove Financial Support Letters**");

**WHEREAS** Borrower has not made any payments towards the closing fee or the committed capital charge which are contemplated in the Mangrove Financial Support Letters; and

**WHEREAS** the Borrower wishes to borrow a certain amount from the Lender and the Lender has agreed to lend such amount to the Borrower, subject to and in accordance with the provisions hereof.

**NOW THEREFORE, THE PARTIES HERETO HAVE AGREED AS FOLLOWS:** 

**ARTICLE 1** 

**<u>DEFINITIONS</u>**

1.1 In this Agreement, capitalized terms not otherwise defined herein, shall have the following meaning:

"**Agreement**" means this loan agreement as amended, amended and restated, supplemented or otherwise modified from time to time.

"**Committed Capital Fee**" means a fee of $177,740.

"**Cash Interest Threshold Amount**" means $522,260.

"**Closing Fee**" means a closing fee of $50,000.

"**Interest Payment Date**" means the first business day of each calendar month.

------

"**Maturity Date**" means December 24, 2026.

"**Revolving Credit Agreement**" means the amended and restated credit agreement dated as of December 24, 2021, among the Borrower, as borrower, the lenders party thereto from time to time, as lenders and Wells Fargo Capital Finance Corporation Canada, as administrative agent, as amended, amended and restated, supplemented, refinanced, replaced or otherwise modified and in effect from time to time.

"**Revolving Credit Secured Parties**" means, collectively, Wells Fargo Capital Finance Corporation Canada, in its capacity as administrative agent pursuant to the Revolving Credit Agreement, the lenders under the Revolving Credit Agreement (including, without limitation, the Issuing Lender and the Swing Lender (each as defined in the Revolving Credit Agreement)) and the Bank Product Providers (as defined in the Revolving Credit Agreement).

"**Senior Agents**" means, collectively, Wells Fargo Capital Finance Corporation Canada, in its capacity as administrative agent pursuant to the Revolving Credit Agreement and Crystal Financial LLC, in its capacity as administrative agent pursuant to the Term Loan Agreement.

"**Senior Credit Agreements**" means, collectively, the Revolving Credit Agreement and the Term Loan Agreement.

"**Senior Secured Parties**" means, collectively, the Revolving Credit Secured Parties and the Term Loan Secured Parties.

"**Term Loan Agreement**" means the credit agreement dated as of June 29, 2018, among , *inter alios,* the Borrower, as borrower, the lenders party thereto from time to time, as lenders and Crystal Financial LLC, as administrative agent, as amended, amended and restated, supplemented, refinanced, replaced or otherwise modified and in effect from time to time.

"**Term Loan Secured Parties**" means, collectively, Crystal Financial LLC, in its capacity as administrative agent pursuant to the Term Loan Agreement and the lenders under the Revolving Term Loan Agreement.

**ARTICLE 2** 

**<u>TERMINATION OF MANGROVE FINANCIAL SUPPORT LETTER</u>**

2.1  **<u>Termination</u>** 

The Mangrove Financial Support Letters are hereby terminated.

**ARTICLE 3** 

**<u>LOAN</u>**

**3.1**  **<u>The Loan</u>** 

Subject to the provisions hereof, the Lender agrees to lend to the Borrower on the date hereof on a non-revolving basis by way of a single advance (the "**Advance**") three million seven hundred and fifty thousand Canadian dollars ($3,750,000) (the "**Loan**").

------

**3.2**  **<u>Purpose of the Loan</u>** 

The Loan shall be used by the Borrower for its working capital requirements.

**3.3**  **<u>Interest</u>** 

The principal amount of the Loan which, at any time and from time to time, remains outstanding (including any increase thereof pursuant to Section 3.4) shall bear interest, calculated daily, from the date of disbursement up to and including the day preceding the date of repayment at an annual rate of 15%, inclusive of all applicable withholding taxes (the "**Interest**").

**3.4**  **<u>Payment of Interest</u>** 

The accrued Interest is payable to the Lender monthly in arrears on each Interest Payment Date, provided that the payment thereof is permitted pursuant to Section 6.6. Notwithstanding the foregoing, in the event that, pursuant to Section 6.6, Interest can not be paid in cash by the Borrower, the amount of all accrued Interest which becomes due and payable shall, on a dollar for dollar basis on the next Interest Payment Date, automatically increase the principal amount of the Loan (and thereby satisfy the payment of such accrued Interest).

**3.5**  **<u>Committed Capital Fee</u>** 

On the Effective Date, the Borrower shall pay the Committed Capital Fee to the Lender. The Borrower hereby irrevocably authorizes and directs the Lender to reduce the proceeds of the Advance by an amount equal to the Commitment Capital Fee (in full satisfaction of the payment thereof).

3.6  **<u>Closing Fee</u>** 

On the Effective Date, the Borrower shall pay the Closing Fee to the Lender. The Borrower hereby irrevocably authorizes and directs the Lender to reduce the proceeds of the Advance by an amount equal to the Closing Fee (in full satisfaction of the payment thereof).

3.7  **<u>Repayment of the Loan</u>** 

The Borrower hereby agrees to repay the outstanding principal amount of the Loan, together with all accrued and unpaid Interest, in full on the Maturity Date. The Borrower may prepay the Loan, in whole or in part, at any time, without any premium or penalty. Any repayment or prepayment must be permitted pursuant to Section 6.6. herein.

------

**ARTICLE 4** 

**<u>REPRESENTATIONS AND WARRANTIES</u>**

**4.1** **Representations and Warranties of the Borrower** 

The Borrower hereby represents and warrants to the Lender that:

**4.1.1**  **<u>Incorporation</u>** 

The Borrower is a corporation duly incorporated and organized, validly existing and in good standing under all laws, ordinances, decrees, orders, rules, regulations and directives of governmental bodies, in each case having the force of law, and all applicable provisions of treaties, as well as all ordinances and other decrees of tribunals and arbitrators (the "**Laws**") of its jurisdiction of incorporation and of all jurisdictions in which it carries on business. The Borrower has the capacity and power, whether corporate or otherwise, to hold its assets and carry on the business presently carried on by it or which it proposes to carry on hereafter in each jurisdiction where such business is carried on.

**4.1.2**  **<u>Authorization</u>** 

The Borrower has the power and has taken all necessary steps under applicable Law to be authorized to borrow hereunder and to execute and deliver and perform its obligations under this Agreement in accordance with the terms and conditions hereof, which has been duly executed and delivered by duly authorized officers of the Borrower and is, and when executed and delivered in accordance with the terms thereof, shall be a legal, valid and binding obligation of the Borrower enforceable in accordance with its terms.

**4.1.3**  **<u>Compliance of this Agreement</u>** 

The execution and delivery of and performance of the obligations under this Agreement in accordance with the terms therein do not require any consents or approvals, do not violate any Laws, do not conflict with, violate or constitute a breach under the constating documents or by-laws of the Borrower or under any material agreements, contracts or deeds to which the Borrower is a party or which is binding upon it or its assets.

**4.1.4**  **<u>Regulatory Approvals</u>** 

The Borrower is not required to obtain any consent, approval, authorization, permit or license, nor to effect any filing or registration with any federal, provincial or other regulatory authority in connection with the execution, delivery or performance of this Agreement, and none have been obtained or effected.

------

**4.2** **Representations and Warranties of the Lender** 

The Lender hereby represents and warrants to the Borrower that:

**4.2.1**  **<u>Incorporation</u>** 

The Lender is a corporation duly incorporated and organized, validly existing and in good standing under the Laws of its jurisdiction of incorporation and of all jurisdictions in which it carries on business. The Lender has the capacity and power, whether corporate or otherwise, to hold its assets and carry on the business presently carried on by it or which it proposes to carry on hereafter in each jurisdiction where such business is carried on.

**4.2.2**  **<u>Authorization</u>** 

The Lender has the power and has taken all necessary steps under applicable Law to be authorized to extend the Loan hereunder and to execute and deliver and perform its obligations under this Agreement in accordance with the terms and conditions hereof, which Agreement has been duly executed and delivered by duly authorized officers of the Lender and is, and when executed and delivered in accordance with the terms thereof shall be a legal, valid and binding obligation of the Lender enforceable in accordance with its terms.

**4.2.3**  **<u>Compliance of this Agreement</u>** 

The execution and delivery of and performance of the obligations under this Agreement in accordance with the terms therein do not require any consents or approvals, do not violate any Laws, do not conflict with, violate or constitute a breach under the constating documents or by-laws of the Lender or under any material agreements, contracts or deeds to which the Lender is a party or which is binding upon it or its assets.

**4.2.4**  **<u>Regulatory Approvals</u>** 

The Lender is not required to obtain any consent, approval, authorization, permit or license, nor to effect any filing or registration with any federal, provincial or other regulatory authority in connection with the execution, delivery or performance of this Agreement, and none have been obtained or effected.

**ARTICLE 5** 

**<u>INDEMNITY</u>**

**5.1**  **<u>Indemnity</u>** 

The Borrower shall at all times protect, indemnify and hold harmless the Lender and its affiliates, directors, officers, agents and employees (collectively, the "**Indemnified Parties**") from and against any losses, claims, damages, liabilities or other expenses which arise out of or in connection with the Loan or this Agreement, including those which may arise from or in respect of the failure of the Borrower to pay principal, interest, or any other amount hereunder when due, the exercise by the Lender of its rights and recourses under this Agreement and at Law and any action, suit or proceeding (whether or not any Indemnified Party is a party or is subject thereto). Any payments in connection with the indemnification pursuant to this Section 5.1 must be made in accordance with Section 6.6. herein.

------

**ARTICLE 6** 

**<u>MISCELLANEOUS</u>**

**6.1**  **<u>Notice</u>** 

Any notice or other communication required or permitted to be given by the terms of this Agreement, shall be in writing and be effectively given if delivered personally, sent by courier service, sent by registered mail, or sent by email, or other means of electronic communication and confirmed through receipt of electronic or other written confirmation that the notice has been received by the other party.

Notice to the Borrower shall be given to:

Birks Group Inc.

2020 Robert-Bourassa Blvd., Suite 200

Montreal, Quebec, Canada H3A 2A5

Attention: Vice-President, Human Resources, Chief Legal Officer and Corporate Secretary

Email: mmelfi@birksgroup.com

Notice to the Lender shall be given to:

Mangrove Holdings S.A.

Rue de la Place d'Armes 3

c/o Fiduciaire Muller Christe & Associés SA,

2000 Neuchâtel

Attention: Christian Michel Reiser

Email : cmr@reiser.law

or as either party may designate in writing from time to time. Any notice sent by registered mail shall be deemed to be received within ten (10) business days.

**6.2**  **<u>Payments</u>** 

All payments to the Lender contemplated hereunder shall, unless the Borrower receives written instructions to the contrary from the Lender, be made at the address for the Lender set forth in Section 6.1

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**6.3**  **<u>Rights and Recourses</u>** 

The rights and recourses of the Lender under this Agreement are cumulative and do not exclude any other rights and recourses which the Lender might have, and no omission or delay on the part of the Lender in the exercise of any right shall have the effect of operating as a waiver of such right, and the partial or sole exercise of a right or power will not prevent the Lender from exercising thereafter any other right or power.

**6.4**  **<u>Benefit of Agreement</u>** 

This Agreement shall be binding upon enure to the benefit of each party hereto and its successors and permitted assigns, as well as in the case of Section 6.6, the Senior Secured Parties. This Agreement may be assigned by the Lender without the Borrower's consent, provided that the assignee thereof agrees in writing to be bound by the terms of Section 6.6 herein pursuant to documentation satisfactory to each Senior Agent. The Borrower may not assign this Agreement without the prior written consent of the Lender.

**6.5**  **<u>Further Assurances</u>** 

The Borrower covenants and agrees that, at the request of the Lender and subject at all times to Section 6.6, the Borrower will at any time and from time to time execute and deliver such further and other documents and instruments (collectively, the "**Further Documents**") and do all acts and things as the Lender in its absolute discretion requires in order to evidence the indebtedness of the Borrower under this Agreement or otherwise.

**6.6**  **<u>Subordination</u>** 

Notwithstanding anything to the contrary contained herein, each of the parties hereto acknowledges, agrees and covenants that all of the Borrower's obligations hereunder and under the Further Documents (collectively, the "**Borrower Obligations**") shall, at all times, be inferior, junior and fully subordinated to all present and future indebtedness, liabilities and other obligations of the Borrower to the Senior Secured Parties under the Senior Credit Agreements, as well as all security documents and any other documents executed in connection with the Senior Credit Agreements, in each case as amended, supplemented or replaced from time (collectively, the "**Senior Obligations**") and that payment of the Borrower Obligations, in whole or in part, whether in principal, interest, or otherwise, whether at maturity, before maturity or upon default, shall be postponed to the indefeasible payment of the Senior Obligations in full unless otherwise consented to in writing by the Senior Agents, save and except for so long as no Default or Event of Default (each as defined in the Revolving Credit Agreement and the Term Loan Agreement) then exist or would (taking into account the payment to be made) result therefrom, the Borrower can make cash payments of accrued Interest on each Interest Payment Date until such payments reach, in the aggregate, the Cash Interest Threshold Amount and thereafter if the Restricted Payment Conditions (as defined in the Revolving Credit Agreement and the Term Loan Agreement) have been satisfied with respect to such payment. As long as the Senior Obligations remain outstanding, the Borrower shall not grant any security to the Lender in order to secure the Borrower Obligations.

------

The parties hereto acknowledge that they have entered into that certain postponement and subordination agreement dated as of the date hereof (the "**Subordination Agreement**") between Senior Agents, the Lender and the Borrower, with respect the subordination of the Borrower Obligations to the Senior Obligations and that any payments made in connection with the Borrower Obligations shall be at all times subject to and in accordance with the terms of the Subordination Agreement. If there is a conflict, inconsistency, ambiguity or difference between any provision of this Agreement and the Subordination Agreement, the provisions of the Subordination Agreement shall prevail, and such provision of this Agreement shall be amended to the extent only to eliminate any such conflict, inconsistency, ambiguity or difference.

Each of the Senior Agents are third party beneficiaries of this Section 6.6.

**6.7**  **<u>Amendments</u>** 

This Agreement may only be amended, amended and restated or otherwise modified in accordance with the terms of the Subordination Agreement by an agreement in writing signed by the parties hereto.

**6.8**  **<u>Currency</u>** 

All amounts referred to herein are expressed in the lawful currency of Canada.

**6.9**  **<u>Applicable Law</u>** 

This Agreement, its interpretation and its application shall be governed by the Laws of the Province of Québec and the laws of Canada applicable thereto. The parties hereto irrevocably attorn to the jurisdiction of the Superior Court of Québec sitting in Montreal.

**6.10**  **<u>Language</u>** 

The parties acknowledge that they have required that the present Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto be drawn up in English. *Les parties reconnaissent avoir exigé la rédaction en anglais de la présente convention ainsi que de tous documents exécutés, avis donnés et procédures judiciaires intentées, directement ou indirectement, relativement ou à la suite de la présente convention*.

**6.11**  **<u>Entire Agreement</u>** 

This Agreement together with all documents to be delivered in conjunction herewith constitutes the entire agreement by and among the parties pertaining to the Loan and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties with respect thereto.

------

***[Signature page follows]***

------

**IN WITNESS WHEREOF**, the parties hereto have signed this Agreement as of the date first hereinabove mentioned.

---

| | |
|:---|:---|
| **MANGROVE HOLDING S.A.** | **MANGROVE HOLDING S.A.** |
| By: | /s/ Christian Reiser |
|  | Name: Christian Reiser |
|  | Title: Sole Director |
| By: |  |
|  | Name: |
|  | Title: |
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| By: | /s/ Jean-Christophe Bédos |
|  | Name: Jean-Christophe Bédos |
|  | Title: President and Chief Executive Officer |
| By: | /s/ Katia Fontana |
|  | Name: Katia Fontana |
|  | Title: Vice President and Chief Financial Officer |

---

## Exhibit 4.41

**Exhibit 4.41** 

**EXECUTION VERSION** 

**BIRKS GROUP INC.** 

as Purchaser

and

**PERSONS LISTED IN EXHIBIT A HERETO** 

as Vendors

and

Jordan Sutkiewicz

as Vendors' Representative

**SHARE PURCHASE AGREEMENT** 

**JUNE 6, 2025** 

------

**SHARE PURCHASE AGREEMENT** 

This Share Purchase Agreement is made as of June 6, 2025, between (i) Birks Group Inc., a corporation existing under the federal laws of Canada (the "**Purchaser**"), (ii) the Persons listed in Exhibit A (collectively, the "**Vendors**"), and (iii) Jordan Sutkiewicz (the "**Vendors' Representative**"). The Purchaser, the Vendors and the Vendors' Representative are each sometimes referred to herein as a "**Party**" and, collectively, as the "**Parties**".

**WHEREAS**:

A. The issued and outstanding capital of 1067830 Ontario Limited (the "**Target**") is set forth
in Section 3.3(2) of the Disclosure Letter.

B. The issued and outstanding capital of each Holding Entity is set forth in Section 3.2(2) of the
Disclosure Letter.

C. The Vendors are the legal and beneficial owners of the number and class of shares of the Target or the
Holding Entities, as applicable and as listed in Section 3.3(2) and Section 3.2(2) of the Disclosure Letter, which constitutes all of the issued and outstanding shares of the Target and the Holding Entities (the "**Purchased Shares** ").

D. The Vendors have agreed to sell to the Purchaser and the Purchaser has agreed to purchase from the Vendors,
as of the Closing Time, the Purchased Shares, on the terms and conditions set out herein.

**NOW THEREFORE** this Agreement witnesses that in consideration of the premises and the mutual agreements and covenants contained herein, the Parties covenant and agree as follows:

**Article 1** 

**Interpretation** 

**Section 1.1 Definitions** 

In this Agreement the following words and phrases will have the following meanings:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "**Ancillary Agreements**" means the Consulting Agreements, the License Agreement, the Vendor
Notes, and all other agreements, documents, certificates and instruments executed and delivered by the Parties at Closing pursuant to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "**Anti-Spam Laws**" mean any legislation regulating commercial electronic messages, including
(i) *An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act* (Canada); and (ii) any other legislation regulating commercial electronic messages in
the jurisdictions where the Target Group conducts its Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "**Arbitrator Accounting Firm**" has the meaning set forth in Section 2.5(2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "**ASPE**" means generally accepted accounting principles as set out in the CPA Canada Handbook
– Accounting Standards for Private Enterprises, as applicable, at the relevant time applied on a consistent basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "**Assets**" means all property or assets of any nature or kind, whether real or personal,
tangible or intangible, corporeal or incorporeal, and includes any interest therein.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "**Authorization**" means, with respect to any Person, any order, permit, certificate of
authorization, declaration of compliance, ruling, exception, grandfathering rights, approval, consent, agreement, directive, notice, waiver, license, filing or other authorization of, to or with any Governmental Authority having jurisdiction over
such Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "**Books and Records**" means, with respect to the Business, all relevant books of account, Tax
records, financial records, personnel records, sales and purchase records, customer (individual and corporate) and supplier lists, software logs, formulae, technical documents including specifications, operating guides and manuals, business reports,
budgets, plans and projections, marketing and advertising materials, in each case, for the period from and after June 30, 2018, and all other documents, files, correspondence and other information (whether in writing or electronic form) in the
possession of the Target Group or the Vendors, to the extent related to the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Business**" means the Target's operation of retail stores primarily engaged in the sale
of luxury watches and jewelry under the name "European" in the Greater Toronto Area and, for greater certainty, the "Business" excludes each of the Diamonds Direct Business and the Watches Direct Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "**Business Day**" means a day other than Saturday, Sunday or any day on which Canadian
chartered banks are closed for business in Toronto, Ontario.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "**Census**" has the meaning set out in Section 3.3(24).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "**CEWS**" means the Canada Emergency Wage Subsidy, enacted in Section 125.7 of the Tax
Act, and any other COVID-19 related loan program or direct or indirect wage, rent or other subsidy offered by any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "**CEWS Returns**" means any and all Tax Returns filed or required to be filed, or required to
be prepared and kept on file, in respect of CEWS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "**Closing**" has the meaning set out in Section 6.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "**Closing Date**" has the meaning set out in Section 6.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "**Closing Date Cash**" means, with respect to the Target Group, on a consolidated basis, the
sum of, without duplication, all unrestricted cash and cash equivalents of the Target, in each case, determined as of immediately prior to the Closing Time and in accordance with ASPE. Notwithstanding the foregoing, the calculation of Cash shall be
made without giving effect to the consummation of the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "**Closing Date Indebtedness**" means, as of immediately prior to the Closing Time, without
duplication, and to the extent not included in Working Capital, the sum of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) all liabilities and obligations (including any principal and accrued interest related thereto) and any
premium, penalties (prepayment or otherwise), fees (breakage or otherwise) payable by the Target Group in respect of (i) borrowed money or shareholder advances; (ii) indebtedness issued in substitution or exchange for borrowed money or
shareholder advances; (iii) lease obligations that are required to be classified as capitalized lease obligations in accordance with ASPE, (iv) deferred purchase price obligations related to property previously acquired; (v) any
consignment sale obligations; (vi) any success, retention, transaction, change of control or similar bonuses, severance payments, retention payments or similar payments payable to any Person by the Target Group in connection with, or as a
result of, the transactions contemplated by this Agreement; and/or (vii) the employer's share of any payroll Taxes attributable to the amounts described in clause (vi); and

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) all Transaction Expenses incurred by and for the benefit of the Target Group;

in each case, to the extent unpaid and outstanding by the Target Group as of immediately prior to the Closing Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "**Closing Date Working Capital**" has the meaning set forth in Section 2.5(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "**Closing Time**" means 12:01 a.m. (Toronto time) on the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "**Confidentiality Agreement**" means the non-disclosure agreement between the Target and the Purchaser dated February 20, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) "**Consultant Contracts**" has the meaning set forth in Section 3.3(24).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) "**Consulting Agreements**" means (i) the consulting agreements to be entered into as of
Closing between the Target, on the one hand, and each of Jordan Sutkiewicz and Michelle Ceresney, on the other hand, in the form attached as Exhibit B hereto, and (ii) the consulting agreement to be entered into as of Closing between the
Target, on the one hand, and Eric Sutkiewicz, on the other hand, in the form attached as Exhibit C hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) "**Collective Agreements**" means collective agreements and related documents including without
limitation Contracts with any employee association in respect of the employees of the Target or any Subsidiary, and any benefit agreements, letters of understanding, letters of intent and other written communications (including arbitration awards)
by which the Target or any Subsidiary is bound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) "**Contract**" means, with respect to any Person, any agreement, purchase order, contract,
lease, license, or other legally binding undertaking or commitment of any nature made in writing by or in favour of such Person, as the case may be, including, in respect of the Target and any Subsidiary, the Material Contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) "**Contract Consents**" has the meaning set forth in Section 3.3(15).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) "**Covered Plans**" means collectively the IPPs, the Health Spend Accounts and the Travel
Insurance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) "**Debt Financing**" has the meaning set forth in Section 9.18.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) "**Debt Financing Sources**" has the meaning set forth in Section 9.18.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) "**Data Security and Privacy Requirements**" means (i) all Privacy Obligations;
(ii) all Contracts between the Target or any Subsidiary and any Person that are applicable to the processing of Personal Information; (iii) all written documented policies and procedures of the Target Group relating to the collection, use,
disclosure or processing of Personal Information, including all published consumer-facing website and mobile application privacy policies and formalized written internal information security policies; (iv) the Payment Card Industry Data
Security Standard issued by the PCI Security Standards Council (or any Canadian or foreign equivalent), as they may be amended from time to time ()"**PCI DSS** "); and (v) any Anti-Spam Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) "**Diamonds Direct Business**" means the business related to the operation of the Diamonds
Direct Locations and any online business related thereto generated via european.ca or diamondsdirect.ca.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) "**Diamonds Direct Locations**" means the four (4) Canadian-based Diamonds Direct
locations listed in Section 1.1(dd) of the Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) "**Direct Claim**" means any cause, matter, thing, act, omission or state of facts not
involving a Third Party Claim which entitles an Indemnified Person to make a claim for indemnification under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) "**Disclosure Letter**" means the letter of disclosure (including the schedules thereto) dated
the date hereof and signed by the Vendors and delivered to the Purchaser concurrently with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) "**Disclosure Supplement**" has the meaning set forth in Section 4.5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) "**Economic Sanctions Laws**" means all Laws relating to anti-terrorism, export controls, and
sanctions targets, including prohibited or restricted international trade and financial transactions and lists maintained by any Governmental Authority targeting certain countries, territories, entities or Persons, and all Authorizations issued
pursuant to such Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) "**Employee Plans**" has the meaning set forth in Section 3.3(25).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) "**Employment Contracts**" has the meaning set forth in Section 3.3(24).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) "**Encumbrance**" means any lien, claim, charge, pledge, hypothecation, security interest,
mortgage, title retention agreement, option or encumbrance of any nature or kind whatsoever, including the Encumbrances listed in Section 1.1(kk) of the Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) "**Estimated Closing Working Capital**" has the meaning set forth in Section 2.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mm) "**Excluded IP**" means the Intellectual Property listed in Section 1.1(mm) of the
Disclosure Letter which will be transferred as part of the Pre-Closing Reorganization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn) "**Final Closing Statement**" has the meaning set forth in Section 2.5(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oo) "**Financial Statements**" means the Interim Financial Statements and the Year-End Financial Statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pp) "**First Maturity Date**" has the meaning set forth in Section 2.8(1)(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qq) "**First Vendors' Note**" means the unsecured, subordinated promissory note to be issued
at Closing by the Purchaser in the name of the Vendors' Representative, as agent for the Vendors (each in accordance with such Vendor's Pro Rata Share), in the principal amount of $1,000,000, with principal and interest due and payable on
the First Maturity Date, subject to the terms and conditions set forth in Section 2.7, a form of which is appended hereto as Exhibit D.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rr) "**Governmental Authority**" means: (i) any court, tribunal, judicial body or arbitral
body or arbitrator; (ii) any domestic or foreign government or supranational body or authority whether multinational, national, federal, provincial, territorial, state, municipal or local and any governmental agency, governmental authority,
governmental body, governmental bureau, governmental department, governmental tribunal or governmental commission of any kind whatsoever; (iii) any subdivision or authority of any of the foregoing; (iv) any quasi-governmental or private
body or public body exercising any regulatory, administrative, expropriation or taxing authority under or for the account of the foregoing; (v) any stock or securities exchange; and (vi) any public utility authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ss) "**Health Spend Accounts**" means the Employee Plan listed and described in
Section 1.1(ss) of the Disclosure Letter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(tt) "**Holding Entities**" means, collectively, 1000012146 Ontario Inc. and 1000012167 Ontario
Inc., and each is referred to as a "**Holding Entity** ".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uu) "**Indemnified Person**" means a Purchaser's Indemnified Person or a Vendors'
Indemnified Person, as the context requires.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vv) "**Indemnifying Person**" means a Party against which a claim is made for indemnification under
this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ww) "**Information Technology Systems**" means all software, servers, computers, computer
systems, workstations, networks, data communications lines, databases, websites, routers, hubs, switches and all other information technology equipment, and all associated documentation, whether owned licensed or used by either the Target and-or any of the Subsidiary with respect to the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) "**Intellectual Property**" means all intellectual property and industrial property rights and
assets, and all rights, interests and protections that are associated with, similar to, or required for the exercise of, any of the foregoing, however arising, under the Laws of any jurisdiction throughout the world, whether registered or
unregistered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(yy) "**Interim Financial Statements**" means the consolidated unaudited financial statements of the
Target for the period beginning on July 1, 2024, and ending on April 30, 2025, copies of which are included in Section 1.1(yy) of the Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(zz) "**Interim Period**" means the period between the close of business on the date of this
Agreement and the Closing Time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aaa) "**Inventory**" means all inventory of any type and description relating to the Business
and owned by the Target Group, regardless of condition or merchantability, that is located at the Leased Premises together with any such inventory in transit between the Leased Premises or repair centres, but excluding any inventory on consignment.
For greater certainty and subject to Section 8.8(8)(2), the Inventory shall include all inventory owned by the Target Group that is associated with the Diamonds Direct Business and the Watches Direct Business. For further greater certainty, the
Inventory excludes any inventory transferred pursuant to the Pre-Closing Reorganization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bbb) "**Inventory Count**" has the meaning set forth in Section 4.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ccc) "**IPPs**" means, collectively, the Employee Plans that are "individual pension
plans" as defined in subsection 8300(1) of the *Income Tax Regulations* (Canada) and listed and described in Section 1.1(ccc) of the Disclosure Letter; provided further that "**IPPs**" includes each trust or other funding
Contract exclusively relating to one or more of the IPPs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ddd) "**knowledge of the Vendors**" or any other similar knowledge qualification means the actual
knowledge of those Persons listed in Section 1.1(ddd) of the Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(eee) "**Last Financial Statement Date**" means June 30, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(fff) "**Laws**" means (i) all statutes, regulations, statutory rules, orders, and terms and
conditions of any grant of approval, permission, authority or license of any court, governmental entity, statutory body or self-regulatory authority, and (ii) to the extent considered by a Governmental Authority as requiring compliance as if
having the force of law or which establish the interpretative position of the law by such Governmental Authority, standards, policies, practices, guidelines, notices and protocols of any Governmental Authority. The term "applicable" with
respect to such Laws and in the context that refers to one or more Persons, means that such Laws apply to such Person or Persons or its or their business, undertaking, property or securities and emanate from a governmental entity, statutory body or
self-regulatory authority having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ggg) "**Leased Premises**" means the premises subject to the Leases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hhh) "**Leases**" means all written leases, subleases, licenses of occupation and other similar
agreements and all amendments, extensions, assignments, non-disturbance agreements, and variations thereof or any guarantee or security agreements therefor, of the real properties leased, subleased, licensed
or occupied by the Target or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) "**License Agreement**" means the license agreement in the form of Exhibit E attached hereto to
be entered into between the Purchaser, the Target and Diamonds Direct Incorporated at Closing with respect to certain intellectual property owned by Diamonds Direct Incorporated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jjj) "**Licensed Intellectual Property**" has the meaning set forth in Section 3.3(22)(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kkk) "**Material Adverse Effect**" or "**Material Adverse Change**" means any state of
facts, event, change or effect that is or would reasonably be expected to be material and adverse to the Target Group or the Business, taken as a whole; provided, however, that (i) "Material Adverse Effect" or "Material Adverse
Change" shall not include any event, change, or effect, directly or indirectly, arising out of or attributable to: (A) general economic or political conditions; (B) conditions generally affecting the industries in which the Target
Group operates; (C) any changes in financial or securities markets in general; (D) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof, any natural or man-made disaster or acts of God; (E) general outbreaks of illness; (F) any action required or permitted by this Agreement; (G) any changes in applicable Laws or accounting rules or principles,
including ASPE; or (H) the public announcement, pendency or completion of the transactions contemplated by this Agreement, including losses or threatened losses of employees, customers, suppliers, distributors or others having relationships
with the Target or the Subsidiaries; and (ii) any event, occurrence, fact, condition or change referred to in clauses (A) through (E) shall be taken into account in determining whether a Material Adverse Effect has occurred or could
reasonably be expected to occur to the extent that such event, change or effect has a disproportionate effect on the Target Group compared to other similarly situated participants in the industries in which the Target Group conducts the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(lll) "**Material Contracts**" has the meaning set forth in Section 3.3(16).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mmm) [Intentionally omitted].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nnn) "**Objection Notice**" has the meaning set forth in Section 2.5(2).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ooo) "**OHS**" has the meaning set forth in Section 3.3(24)(10).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ppp) "**Ordinary Course**" means, with respect to an action taken by a Person, that such action is
consistent with the past practices of the Person and is taken in the ordinary course of the normal day-to-day operations of the Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qqq) "**Outside Date**" means July 21, 2025 or such other date agreed by the Parties in
writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rrr) "**Owned Intellectual Property**" has the meaning set forth in Section 3.3(22)(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(sss) "**Payoff Creditors**" means the creditors set forth in Section 2.7(1) of the Disclosure
Letter.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ttt) "**Payoff Letter**" means, with respect to any Payoff Creditor, a letter in form and substance
satisfactory to the Purchaser, acting reasonably, setting out the Closing Date Indebtedness as of the Closing Time owed to such Payoff Creditor and containing an irrevocable undertaking from such Payoff Creditor to terminate all instruments relating
to such Closing Date Indebtedness and discharge at Closing all Encumbrances on the assets of the Target or any Subsidiary other than Permitted Encumbrances, that exist for its benefit, subject to receipt of payment of such Closing Date Indebtedness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uuu) "**Permitted Encumbrances**" means the Encumbrances set forth in Section 1.1(uuu) of the
Disclosure Letter, but only to the extent such Encumbrances conform to their description therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vvv) "**Person**" includes any individual, firm, partnership, joint venture, venture capital fund,
limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative, estate, group, body corporate, corporation, unincorporated association or organization, governmental entity,
syndicate, proprietorship or other entity, whether or not having legal status.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(www) "**Personal Information**" means any information under the possession or control of the Target
Group concerning a natural Person (individual) or device, including: (a) information that identifies, could be used to identify or is otherwise identifiable with an individual, such as name (including children's name and their parents
and/or guardians' name), physical address, telephone number, email address, financial account number or government-issued identifier (including social security number and driver's license number, tax identification number, passport number)
medical, health, financial (including bank account information) or insurance information, date of birth and any other data used or intended to be used to identify, contact or precisely locate an individual (e.g., geolocation data); (b) information
that is created, maintained, or accessed by an individual (e.g. online account information, including user names and passwords); (c) any data regarding an individual's activities online or on a mobile device or other application (e.g., searches
conducted, web pages or content visited or viewed); and (d) Internet Protocol addresses or unique device identifiers. "Personal Information" may relate to any individual, including a current, prospective or former customer or employee
of any Person and includes information in any form, including paper, electronic and other forms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxx) "**Pre-Closing Reorganization**" means all
transactions, steps and filings described in Section 1.1(xxx) of the Disclosure Letter pursuant to which, among other things, certain Intellectual Property and other assets relating to the Diamonds Direct Business or the Watches Direct Business
and certain other personal assets are transferred out of the Business or the Target Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(yyy) "**Pre-Closing Tax Period**" means any Tax period (or
portion thereof) ending on or prior to the Closing Date, or, with respect to a Straddle Period, the portion of such Tax period ending immediately prior to the Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(zzz) "**Privacy Laws**" means all federal, provincial and territorial Laws and legal requirements
regulating (including the *Personal Information Protection and Electronic Documents Act* (Canada) and any applicable Laws in the jurisdictions where the Target Group conducts its Business) regulating the collection, use, storage, processing,
disclosure or other handling of Personal Information, and all Laws pertaining to data protection (including retention and destruction), data security, data breach or incident notification, and cross-border transfer of Personal Information, as
applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aaaa) "**Privacy Obligations**" means all Privacy Laws and legal requirements, Contractual
obligations, self-regulatory standards, codes of conduct, and written policies or terms of use of the Target or any Subsidiary that are related to privacy or security of Personal Information, or to the collection, use or disclosure of such
information or data or other handling of Personal Information.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bbbb) "**Pro Rata Share**" means, with respect to each Vendor, the percentage set out in
Section 3.3(2) of the Disclosure Letter, representing the portion of the Purchase Price payable to a Vendor relative to the Purchase Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cccc) "**Purchase Price**" has the meaning set forth in Section 2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dddd) "**Purchased Shares**" means all of the issued and outstanding shares of the Target and each
Holding Entity, as described in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(eeee) "**Purchaser**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ffff) "**Purchaser Debt**" means the senior debt of the Purchaser under (i) the credit facility
entered into by the Purchaser, as borrower, and Wells Fargo Capital Finance Corporation Canada, as administrative agent, (ii) the credit facility entered into by the Purchaser, as borrower, and Crystal Financial LLC (d/b/a SLR Capital
Partners), as administrative agent dated as of June 19, 2018, (iii) Loan Agreement between the Purchaser and Investissement Québec entered into on July 8, 2020, and (iv) Loan Agreement between Purchaser and Investissement
Québec entered into on August 24, 2021, in each case, as may be amended or restated from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gggg) "**Purchaser's Indemnified Persons**" has the meaning set forth in Section 8.1(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hhhh) "**Required Consents**" has the meaning set forth in Section 5.1(4).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iiii) "**Retirement Plan Liability**" means, in respect of the RCAs, any going concern unfunded
liability, solvency deficiency, actual or hypothetical wind-up funding deficiency or any other unfunded amounts (including RCAs trustee fees) whensoever arising that, in each case, are or could be required to
be funded by the Target and/or the Subsidiaries, in whole or in part, absolutely or contingently.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jjjj) "**RCAs**" means the Employee Plans listed in Section 1.1(jjjj) of the Disclosure Letter;
provided further that "RCAs" includes each trust or other funding Contract exclusively relating to one or more of the RCAs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kkkk) "**Second Maturity Date**" has the meaning set forth in Section 2.8(2)(i).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(llll) "**Second Vendors' Note**" means the unsecured, subordinated promissory note to be issued
at Closing by the Purchaser to the Vendors' Representative, as agent for the Vendors (each in accordance with such Vendor's Pro Rata Share), in the principal amount of $1,000,000, with principal and interest due and payable on the Second
Maturity Date, subject to the terms and conditions set forth in Section 2.7, a form of which is appended hereto as Exhibit F.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mmmm) "**Senior Employee**" means any employee of the Target Group who has annual base compensation
in excess of $100,000, excluding bonuses and other variable compensation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nnnn) "**Security Breach**" means any (i) loss or unauthorized acquisition, access, interruption
of access, misuse (by any means), alteration, modification, theft, corruption, disclosure or other unauthorized processing of Personal Information or other Sensitive Data (including as a result of denial-of-service or ransomware attacks); (ii) inadvertent, unauthorized or unlawful use, processing, sale, or rental of Personal Information or other Sensitive Data; (iii) other act or omission that
compromises the security, integrity, availability or confidentiality of Personal Information or other Sensitive Data; or (iv) other unauthorized access to, use of, or interruption of any Information Technology Systems, including any phishing,
ransomware or other cyberattack.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oooo) "**Sensitive Data**" means (i) all Personal Information; and (ii) other confidential
or proprietary business information or trade secret information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pppp) "**Straddle Period**" means any Tax period that begins before and ends after the Closing Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qqqq) "**Subsidiaries**" means, collectively, European & Co Inc., 985361 Ontario Limited and
1170760 Ontario Limited, and each is referred to as a "**Subsidiary** ".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(rrrr) "**Target**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ssss) "**Target Group**" means the Target and the Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(tttt) "**Target Intellectual Property**" has the meaning set forth in Section 3.3(22)(1).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(uuuu) "**Target Working Capital**" means $6,000,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vvvv) "**Tax Act**" means the *Income Tax Act* (Canada) and the regulations thereunder, as
amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(wwww) "**Tax Contest**" means any dispute, objection, appeal or other proceeding involving a
Governmental Authority relating to Taxes or Tax Returns of a Pre-Closing Tax Period of the Target Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxx) "**Tax Returns**" means any and all returns, reports, declarations, elections, notices, forms,
designations, filings, and other documents (including estimated tax returns and reports, withholding tax returns and reports, and information returns and reports) filed, required to be filed or required to be prepared and kept in file in respect of
Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(yyyy) "**Taxes**" means (i) any and all taxes, duties, fees, excises, premiums, assessments,
imposts, levies, rates, withholdings, dues, contributions, deemed overpayments or obligations to repay an amount in respect of CEWS, and other charges, collections or assessments of any kind whatsoever, imposed by any Governmental Authority;
(ii) all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Authority on or in respect of amounts of the type described in clause (i) above or this clause (ii); and (iii) any liability
for the payment of any amounts of the type described in clauses (i) or (ii) as a result of any express or implied obligation to indemnify any other Person or as a result of being a transferee or successor in interest to any party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(zzzz) "**Third Party Claim**" means any action, suit, proceeding, arbitration, claim or demand that
is instituted or asserted by a third party, including a Governmental Authority, against an Indemnified Person which entitles the Indemnified Person to make a claim for indemnification under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aaaaa) "**Transaction Expenses**" means, as determined as of immediately prior to the Closing Time,
any legal, accounting, financial advisory, finders' fee or other fees, costs, or expenses incurred and outstanding by the Target Group in connection with the transactions contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bbbbb) "**Travel Insurance**" means the Employee Plan listed in Section 1.1(bbbbb) of the
Disclosure Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ccccc) "**Vendor's Indemnified Persons**" has the meaning set forth in Section 8.2(1).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ddddd) "**Vendors**" has the meaning set forth in the Recitals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(eeeee) "**Vendors' Notes**" means the First Vendors' Note and the Second Vendors' Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(fffff) "**Vendors' Representative**" as the meaning set forth in Section 9.8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ggggg) "**Watches Direct Business**" means the business related to the operation of Watches Direct
within the Diamonds Direct Locations and any online business related thereto generated via european.ca or watchesdirect.ca.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hhhhh) "**Working Capital**" means, at any time, the amount determined in accordance with ASPE,
consistently applied, and with the illustrative calculation set out in Schedule2.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iiiii) "**Year-End Financial Statements**" means the audited
consolidated financial statements of the Target for the fiscal year ended June 30, 2024, a copy of which is included in Section 1.1(iiiii) of the Disclosure Letter.

**Section 1.2 Interpretation** 

For the purposes of this Agreement, except as otherwise expressly provided herein:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) "**Agreement**" means this share purchase agreement, including the Exhibits hereto, and the
Disclosure Letter, in each case as it may from time to time be supplemented or amended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) all references in this Agreement to a designated Article, Section, Subsection, paragraph, or other
subdivision, or to a Schedule or Exhibit, is to the designated Article, Section, Subsection, paragraph or other subdivision of or Schedule or Exhibit to this Agreement unless otherwise specifically stated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section, Subsection, clause, subclause or other subdivision, Schedule or Exhibit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the singular of any term includes the plural and vice versa and the use of any term is equally applicable to
any gender and where applicable to a body corporate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the word "or" is not exclusive and the word "including" is not limiting (whether or not non-limiting language such as "without limitation" or "but not limited to" or other words of similar import are used with reference thereto);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) all accounting terms not otherwise defined in this Agreement have the meanings given to them in accordance
with ASPE as applied by the Target Group;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) except as otherwise provided, any reference to a statute includes and is a reference to such statute and to
the regulations made pursuant thereto with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which have the effect of supplementing or superseding such statute or such regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) where the phrase "to the knowledge of" or phrases of similar import are used in this Agreement, it
will be a requirement that the person in respect of whom the phrase is used will have made such due inquiries as are reasonably necessary to enable such person to make the statement or disclosure;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) the headings to the Articles and clauses of this Agreement are inserted for convenience only and do not form
a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) the parties acknowledge that this Agreement is the product of arm's length negotiation between the
parties, each having obtained its own independent legal advice, and that this Agreement will be construed neither strictly for nor strictly against any party irrespective of which party was responsible for drafting this Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) unless otherwise specifically noted, all references to money in this Agreement and in the Financial
Statements are or will be to money in lawful money of Canada.

**Section 1.3 Schedules and Disclosure Letter** 

The Exhibits attached to this Agreement and the Disclosure Letter form an integral part of this Agreement for all purposes of it. The Disclosure Letter itself and all information in it is confidential information and may not be disclosed by either party unless it is required to be disclosed pursuant to applicable Law, including applicable securities Laws, unless such Law permits the Parties to refrain from disclosing the information for confidentiality or other purposes; provided that any such required disclosure shall be subject to compliance with Section 9.2.

**Article 2** 

**PURCHASE AND SALE** 

**Section 2.1 Purchase and Sale** 

Each Vendor hereby sells and transfers all of its, his or her right, title and interest in and to the Purchased Shares to the Purchaser, and the Purchaser hereby purchases the Purchased Shares held by each Vendor, as set out in Sections 3.2(2) and 3.3(2) of the Disclosure Letter, free and clear of all Encumbrances other than Permitted Encumbrances, effective as of the Closing Time, in accordance with and subject to the terms and conditions in this Agreement.

**Section 2.2 Purchase Price** 

The aggregate purchase price payable by the Purchaser to the Vendors for the Purchased Shares is the aggregate amount calculated as follows (the "**Purchase Price**"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) $9,000,000 (the "**Base Price** "); <u>plus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the amount (if any) of the Closing Date Cash; <u>minus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Closing Date Indebtedness; <u>plus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) if the Closing Date Working Capital is more than the Target Working Capital, the absolute value of such
difference (if any); <u>minus</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) if the Closing Date Working Capital is less than the Target Working Capital, the absolute value of such
difference (if any).

**Section 2.3 Closing Payments** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Purchaser shall pay or deliver, as at the Closing, the Purchase Price (subject to adjustment in accordance
with Section 2.4 and Section 2.6), as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) by issuing and delivering the Vendors' Notes to the Vendors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) by paying each of the Payoff Creditors by wire transfer of immediately available funds, the amount set forth
in each applicable Payoff Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) by paying the Vendors by wire transfer of immediately available funds, pursuant to each Vendor's Pro
Rata Share, an aggregate amount (the "**Closing Payment**") equal to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the Base Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) <u>minus</u> the Estimated Closing Date Indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) <u>plus</u> the Estimated Closing Date Cash;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) <u>plus</u> the positive amount, if any, by which the Estimated Closing Working Capital exceeds the Target
Working Capital, in accordance with Section 2.4(3); <u>and</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) <u>minus</u> the aggregate principal amount of the Vendors' Notes.

**Section 2.4 Estimated Closing Statement** 

(1) No later than five (5) Business Days prior to the Closing Date, the Vendors' Representative shall
deliver to the Purchaser a written statement setting forth a good faith estimate of the Working Capital prepared in accordance with Schedule 2.4 as of the close of business on the day immediately preceding the Closing Date (the
" **Estimated Closing Working Capital** "), the Closing Date Indebtedness (the "**Estimated Closing Date Indebtedness**") and the Closing Date Cash (the "**Estimated Closing Date Cash** "), in each case including
reasonable detail on the computation thereof.

(2) If the Estimated Closing Working Capital is less than the Target Working Capital, there shall be a
corresponding dollar-for-dollar set-off against the principal amount under the Second Vendors' Note (followed by the First
Vendors' Note to the extent any amount remains to be paid by the Vendors thereafter) in an amount equal to the amount by which the Estimated Closing Working Capital is less than the Target Working Capital.

(3) If the Estimated Closing Working Capital is greater than the Target Working Capital, there shall be a
corresponding dollar-for-dollar increase to the Closing Payment in an amount equal to the amount by which the Estimated Closing Working Capital is greater than the
Target Working Capital.

**Section 2.5 Preparation of Final Closing Statement** 

(1) As soon as reasonably practicable after the Closing Date, and in any event not later than ninety
(90) days thereafter, the Purchaser shall prepare, or cause to be prepared and deliver to the Vendors, a written statement (the "**Final Closing Statement**") setting forth a calculation of the Purchase Price based on the Working
Capital as of immediately prior to the Closing Time ()"**Closing Date Working Capital** "), the Closing Date Indebtedness and the Closing Date Cash. The Final Closing Statement will be calculated in accordance with ASPE, and to the extent
not inconsistent with ASPE, in accordance with the past practices of the Target Group.

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(2) The Vendors will be entitled to contest the contents of the Final Closing Statement within twenty
(20) Business Days of receipt thereof, by giving written notice to the Purchaser setting out the substance of the dispute (the "**Objection Notice** "). If the Vendors do not give an Objection Notice to the Purchaser within such
twenty (20) Business Day period, the Vendors are deemed to have accepted and approved the Final Closing Statement and such Final Closing Statement will be final, conclusive and binding upon the parties, and will not be subject to appeal, absent
manifest error. If the Vendors do give an Objection Notice to the Purchaser within such twenty (20) Business Day period, each of the Purchaser and the Vendors will use its reasonable efforts to settle any such dispute as soon as reasonably
practicable over the next twenty (20) Business Days, and upon such settlement being agreed to in writing, the Final Closing Statement and such Final Closing Statement will be final, conclusive and binding upon the Parties, and will not be
subject to appeal, absent manifest error. Failing the Parties reaching agreement within twenty (20) Business Days of delivery of the Objection Notice, such dispute will be referred as soon as possible thereafter by the Vendors and the Purchaser
to RSM Canada LLP or such other independent chartered professional accounting firm that the Vendors and the Purchaser mutually agree on (the "**Arbitrator Accounting Firm** "). The Arbitrator Accounting Firm shall be required to
determine the items in dispute that have been referred to it as soon as reasonably practicable but in any event not later than thirty (30) days after the date of referral of the dispute to it. In making its determination, the Arbitrator
Accounting Firm will only consider the issues in dispute placed before it. The Vendors and the Purchaser shall provide or make available all documents and information as are reasonably required by the Arbitrator Accounting Firm to make its
determination. The Vendors and the Purchaser shall instruct the Arbitrator Accounting Firm to render its determination in writing to the Purchaser and the Vendors. The determination of the Arbitrator Accounting Firm shall be final and binding on the
Parties (absent manifest error) and the Final Closing Statement shall be (or not be) adjusted in accordance with such determination. The Parties shall equally split the Arbitrator Accounting Firm's fees and expenses, but shall each bear their
own expenses in presenting their cases to the Arbitrator Accounting Firm.

**Section 2.6 Post-Closing Adjustment Payments** 

(1) Once the Final Closing Statement becomes final, conclusive, and binding upon the Parties under
Section 2.4, the following adjustment payments shall be made by the Parties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) If the Closing Date Working Capital is greater than the Estimated Closing Working Capital, the Purchaser
shall pay the absolute value of such difference to the Vendors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If the Closing Date Working Capital is less than the Estimated Closing Working Capital, the Vendors shall
pay to the Purchaser the absolute value of such difference;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If the Closing Date Cash is greater than the Estimated Closing Date Cash, the Purchaser shall pay the
absolute value of such difference to the Vendors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) If the Closing Date Cash is less than the Estimated Closing Date Cash, the Vendors shall pay the absolute
value of such difference to the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) If the Closing Date Indebtedness is greater than the Estimated Closing Date Indebtedness, the Vendors shall
pay the absolute value of such difference to the Purchaser; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) If the Closing Date Indebtedness is less than the Estimated Closing Date Indebtedness, the Purchaser shall
pay the absolute value of such difference to the Vendors.

(2) Any amount to be paid directly by the Purchaser under Section 2.6(1) will be paid to the Vendors'
Representative by wire transfer of immediately available funds within five (5) Business Days after the Final Closing Statement becomes final, conclusive and binding upon the Parties under Section 2.5.

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(3) Any amount to be paid directly by the Vendors under Section 2.6(1) will be set-off against the principal amount under the Second Vendors' Note (followed by the First Vendors' Note to the extent any amount remains to be paid by the Vendors thereafter), within five
(5) Business Days after the Final Closing Statement becomes final, conclusive and binding upon the Parties under Section 2.5.

(4) Any amounts paid under Section 2.6 shall be treated by the Parties as an adjustment to the Purchase
Price for Tax and other purposes, unless otherwise required by Law.

(5) For greater certainty, the Parties acknowledge and agree that certain Inventory as described in Schedule 2.4
(i) was not included in the calculation of Target Working Capital and shall not be included in the calculation of either Estimated Closing Working Capital or Closing Date Working Capital and (ii) is not subject to any adjustment under this
Agreement. For the avoidance of doubt and notwithstanding the foregoing, such Inventory described in Schedule 2.4 constitutes Assets of the Business which are being acquired by the Purchaser pursuant to the terms of this Agreement.

**Section 2.7 Repayment of Closing Date Indebtedness** 

(1) The Vendors shall have delivered to the Purchaser prior to the Closing Date the Payoff Letters from all
Payoff Creditors, in form and content reasonably satisfactory to Purchaser and as listed in Section 2.7(1) of the Disclosure Letter.

(2) If applicable, immediately prior to Closing, the Purchaser shall pay, for and on behalf of the Target Group
(as an advance by the Purchaser to the Target Group by way of demand loan, as applicable), such amounts which are necessary to discharge the Closing Date Indebtedness of such member of the Target Group in accordance with and subject to the terms and
conditions of the Payoff Letters.

**Section 2.8 Vendors' Notes** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) At the Closing Time, the Purchaser shall issue to the Vendors' Representative, as agent for the
Vendors, the First Vendors' Note on the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) one (1) year term commencing on the Closing Date and ending on the date that is the first anniversary
of the Closing Date (the "**First Maturity Date** "); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the principal amount of and all accrued interest on the First Vendors' Note is due and payable in full
on the First Maturity Date, without condition (subject only to Section 2.6(3) and Section 8.6).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) At the Closing Time, the Purchaser shall issue to the Vendors' Representative, as agent for the
Vendors, the Second Vendors' Note on the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) two (2) year term commencing in the Closing Date and ending on the date that is the second anniversary
of the Closing Date (the "**Second Maturity Date** "); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the principal amount of and all accrued interest on the Second Vendors' Note is due and payable in full
on the Second Maturity Date, without condition (subject only to Section 2.6(3) and Section 8.6).

**Section 2.9 Allocation of Purchase Price** 

The Parties agree that the Purchase Price shall be allocated among the Purchased Shares for all purposes (including Tax and financial accounting) in accordance with the Pro Rata Share of each Vendor and each of the Parties shall file all Tax returns (including amended returns and claims for refund) and elections required or desirable in a manner consistent with the Pro Rata Share of each Vendor. No Party shall take a contrary position with respect to such allocation in any Tax proceeding, audit, investigation, assessment, reassessment objection or appeal. Any adjustments to the Purchase Price shall be allocated in a manner consistent with the Pro Rata Share of each Vendor.

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**Article 3** 

**Representations and Warranties** 

**Section 3.1 Representations and Warranties of the Vendors** 

In order to induce the Purchaser to enter into and to consummate the transactions contemplated by this Agreement, each Vendor severally and not jointly represents and warrants to the Purchaser as follows, as of the date hereof, and acknowledges that the Purchaser is relying on such representations and warranties:

(1) Incorporation and Qualification—In the case of each Vendor that is a corporation, each Vendor is
organized and validly existing under the laws of its jurisdiction, and has the corporate power and authority to enter into and perform the obligations of such Vendor under this Agreement and each of the Ancillary Agreements to which it is a party.
In the case of each Vendor that is a trust, each Vendor is a trust duly formed, organized and validly existing under the laws of its jurisdiction of formation, and has the power, through its trustee, to enter into and to perform the obligations of
such Vendor under this Agreement and each of the Ancillary Agreements to which it is a party. In the case of each Vendor that is a natural person, he or she has full legal capacity to enter into and perform his or her obligations under this
Agreement and each of the Ancillary Agreement to which he or she is a party.

(2) Execution and Binding Obligation—This Agreement and the Ancillary Agreements have been duly executed
and delivered by such Vendor, as applicable, and (assuming due execution and delivery by the other parties thereto) each constitutes a legal, valid and binding obligation enforceable against the Vendor in accordance with their terms, subject only to
any limitation under applicable Laws relating to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) bankruptcy, winding-up, insolvency, arrangement, fraudulent
preference and conveyance, assignment and preference and other Laws of general application affecting the enforcement of creditors' rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the discretion that a court may exercise in the granting of equitable remedies such as specific performance
and injunction.

(3) No Conflicts—The execution and delivery by such Vendor of this Agreement and the Ancillary Agreements
to which such Vendor is party and the performance of such Vendor's obligations hereunder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) do not and, subject to receipt of the Contract Consents, will not (or would not with the giving of notice,
the lapse of time or the happening of any other event or condition) cause the termination or revocation of, any license, registration, Authorization, permit, approval or consent held by the Target or any Subsidiary or necessary to the ownership or
operation of the Business, except where it would not have a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) do not and, subject to receipt of the Contract Consents, will not (or would not with the giving of notice,
the lapse of time or the happening of any other event or condition) result in the creation or imposition of any Encumbrance upon any property or asset of such Vendor which relates to the Business;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) do not and will not result in a breach or violation of, or conflict with, any of the terms or provisions of
the constating documents of the Target or any Subsidiary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) will not result in the violation of any Law.

(4) Residency—Such Vendor is not a "non-resident" of
Canada within the meaning of the Tax Act.

(5) Title to Purchased Shares—Each Vendor owns and has good and marketable title to the Purchased Shares as
set forth in Sections 3.2(2) and 3.3(2) of the Disclosure Letter, as the legal owner thereof and such Vendor holds such Purchased Shares free of all Encumbrances other than Permitted Encumbrances. All such Purchased Shares have been duly and
validly issued in compliance with all applicable Laws, including securities Laws, and are outstanding as fully paid and non-assessable shares in the capital of the Target and the Holding Entities, as
applicable. Upon completion of the transactions as contemplated by this Agreement, the Purchaser will have good and valid title to Purchased Shares, free and clear of all Encumbrances other than Permitted Encumbrances.

(6) Indebtedness to Target or Subsidiary—Except as set out in Section 3.1(6) of the Disclosure Letter,
each Vendor is not indebted to the Target or any Subsidiary in respect of any amounts owing, including as a result of any shareholder loans or otherwise.

**Section 3.2 Representations and Warranties – Holding Entities** 

In order to induce the Purchaser to enter into and to consummate the transactions contemplated by this Agreement, each of Jordan Sutkiewicz and Michelle Ceresney, as Vendors, represents and warrants to the Purchaser as follows, as of the date hereof, and acknowledge that the Purchaser is relying on such representations and warranties:

(1) Incorporation and Qualification—Each Holding Entity is a corporation incorporated and existing under
the laws of the Province of Ontario and has the corporate power to own and operate their respective property and Assets. No proceedings have been taken or authorized by the Holding Entities or by any Person with respect to the bankruptcy,
insolvency, liquidation, dissolution or the winding-up of the Holding Entities.

(2) Authorized and Issued Capital—The authorized and issued capital of the Holding Entities is set out in
Section 3.2(2) of the Disclosure Letter.

(3) No Subsidiaries—The Holding Entities do not hold any shares or other ownership, equity or proprietary
interests in any Person, other than shares of the Target as set forth on Section 3.3(2) of the Disclosure Letter.

(4) Sole Purpose Entity—Except for holding the shares of the Target as set forth on Section 3.3(2) of
the Disclosure Letter or as disclosed in Section 3.2(4) of the Disclosure Letter, each Holding Entity (i) is a single purpose corporation formed solely for the purpose of owning shares of the Target and has never carried on any business,
never had any employees, has not held and does not own or hold any property or assets or any interests therein of any nature or kind whatsoever; (ii) has no obligation or liability of any nature or kind whatsoever (whether known or unknown,
liquidated or unliquidated, due or to become due and whether absolute, accrued, contingent or otherwise), including any liabilities in respect of any Taxes; and (iii) is not and had never been a party to any Contract of any nature or kind
whatsoever.

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**Section 3.3 Representations and Warranties – Target Group** 

In order to induce the Purchaser to enter into and to consummate the transactions contemplated by this Agreement, each Vendor jointly and severally represents and warrants to the Purchaser as follows, as of the date hereof, and acknowledges that the Purchaser is relying on such representations and warranties:

(1) Incorporation and Qualification—Each of the Target and the Subsidiaries is a corporation incorporated
and existing under the laws of the Province of Ontario and has the corporate power to own and operate their respective property and Assets, and carry on the Business. Except as set forth in Section 3.3(2) of the Disclosure Letter, each of the
Target and the Subsidiaries is duly qualified, licensed or registered to carry on business in all jurisdictions in which the nature of its Assets or the Business makes such qualification necessary. No proceedings have been taken or authorized by the
Target or by any Person with respect to the bankruptcy, insolvency, liquidation, dissolution or the winding-up of the Target or any Subsidiary.

(2) Authorized and Issued Capital—The authorized and issued capital of the Target and each Subsidiary is
set out in Section 3.3(2) of the Disclosure Letter.

(3) Absence of Options—Other than the Purchaser, no Person has any agreement, right or option, present or
future, contingent, absolute or capable of becoming an agreement, right or option or which with the passage of time or the occurrence of any event could become an agreement, right or option:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) to require the Target or any Subsidiary to issue or allot any shares in its capital or any other security
convertible or exchangeable into shares in its capital or to convert or exchange any securities into or for shares in the capital of the Target or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) to require the Target to purchase, redeem or otherwise acquire any of the Purchased Shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) to acquire all or any of the Purchased Shares; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to acquire any of the Assets of the Target or the Subsidiaries other than as such may exist with its
customers and suppliers for the sale of goods and services in the Ordinary Course or any right of repurchase of Assets by a supplier under its Contract with the Target Group.

(4) Absence of Other Interests—Other than the Subsidiaries, the Target does not own any shares in, or other
securities of, or have any interest in the Assets or business of, any Person.

(5) Books and Records—Except as set forth in Section 3.3(5) of the Disclosure Letter, all of the books
of account, Tax records and financial records forming part of the Books and Records (i) are complete and accurate in all material respects; (ii) have been maintained in all material respects in accordance with applicable Laws and
(iii) are the basis for the Financial Statements.

(6) Financial Statements— The Financial Statements have been prepared in accordance with ASPE applied on a
basis consistent with that of the prior fiscal year and present fairly in all material respects:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the assets, liabilities (whether accrued, absolute, contingent or otherwise) and financial position of the
Target Group as at the respective dates they were prepared; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the sales and earnings of the Target Group for the periods covered by the Financial Statements, subject to
any departure from ASPE set forth in the Year-End Financial Statements and, in the case of the Interim Financial Statements, to normal and recurring year-end adjustments
and the absence of notes.

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(7) No Undisclosed Liabilities—The Target Group does not have any material liabilities or obligations of
any nature (whether absolute, accrued, contingent or otherwise) except for: (i) those reflected or reserved against in the Financial Statements; (ii) those which are adequately reflected or reserved against in the applicable balance sheet
of the Interim Financial Statements; (iii) current liabilities incurred in the Ordinary Course since the most recent Interim Financial Statements, which current liabilities have not had a Material Adverse Effect on the financial condition of
the Target; and (iv) performance obligations pursuant to Contracts of the Target Group.

(8) Taxes— Except as set forth in Section 3.3(8) of the Disclosure Letter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Target and each of the Subsidiaries have filed or caused to be filed with the appropriate Governmental
Authority, within the times and in the manner prescribed by Law, all Tax Returns which are required to be filed by or with respect to them. The information contained in all Tax Returns are correct and complete such Tax Returns reflect accurately all
liability for Taxes of the Target and the Subsidiaries for the periods covered thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Each of the Target and the Subsidiaries has paid all Taxes which are due and payable within the time
required by applicable Law, has made adequate and timely instalments of Taxes and has paid all assessments and reassessments it has received in respect of Taxes. Each of the Target and the Subsidiaries has provided full and adequate provision in
accordance with ASPE in the Financial Statements, the Interim Financial Statements and the Books and Records for all Taxes for periods to which they relate which are not yet due and payable. Since the Last Financial Statement Date, no liability in
respect of Taxes has been incurred or accrued, other than in the ordinary course of business. None of the Target and the Subsidiaries has received any refund of Taxes to which it is not entitled.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) There are no outstanding agreements, arrangements, objections or waivers extending the statutory period or
otherwise providing for an extension of time with respect to the assessment or re-assessment of Tax against, or the filing of any Tax Return or the payment of any Tax by, the Target or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) No notice of assessment or reassessment has been received and no examination, audit or proposed assessment
or reassessment of any Tax Return of the Target or any Subsidiary is currently in progress. There are no claims, actions, suits or proceedings pending, or to the knowledge of the Vendor, threatened against the Target or any Subsidiary relating to
Taxes and the Vendor does not know of any valid basis for any such claim, action, suit, proceeding, or investigation. None of the Target and the Subsidiaries has received any indication from any Governmental Authority that an assessment or
reassessment is proposed or may be proposed in respect of any Taxes for any Pre-Closing Tax Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) The Target and each Subsidiary have withheld from each payment made by them the amount of all Taxes and
other deductions required to be withheld by them therefrom and have remitted same to the proper Governmental Authority within the time prescribed under any applicable Law. The Target and each Subsidiary have collected all Taxes required to be
collected by them and have remitted same to the proper Governmental Authority within the time prescribed under any applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) There are no circumstances existing which could result in the application to the Target or any Subsidiary of
Sections 15, 78 or 80 to 80.04 of the Tax Act. None of the Target and the Subsidiaries has claimed nor will it claim any reserve under any provision of the Tax Act in respect of their taxation year ending in connection with the Closing, except to
the extent it has claimed a similar reserve or applied a similar accounting policy that is taken into account in a manner that reduces the Purchase Price.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) None of the Target and the Subsidiaries is party to or bound by any Tax sharing agreement, Tax indemnity
obligation in favour of any Person or similar agreement in favour of any Person with respect to Taxes (including any advance pricing agreement or other similar agreement relating to Taxes with any Governmental Authority) or is otherwise liable for
Taxes of any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) None of the Target and the Subsidiaries has acquired property in circumstances that would result in the
Target or a Subsidiary becoming liable to pay Taxes of any Person under Subsection 160(1) of the Tax Act or any analogous provision of any comparable Law of any province or territory of Canada.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) Each of the Target and the Subsidiaries has: (i) duly and timely completed and filed all CEWS Returns
required under applicable Laws to be filed by it, or that it elected to file, and all CEWS Returns are complete, correct and accurate; (ii) not claimed CEWS to which it was not entitled; and (iii) not deferred any payroll Tax obligations
as permitted under applicable COVID-19 related measures enacted, promulgated or offered as an administrative relief by any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) No claim has ever been made by a Governmental Authority in respect of Taxes in a jurisdiction where the
Target and the Subsidiaries do not file Tax Returns that the Target or any Subsidiary is or may be required to file Tax Returns in or subject to Tax by that jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) None of the Target and the Subsidiaries has ever undertaken, participated in or been contractually obligated
to participate in any "reportable transaction" as defined in Subsection 237.3(1) of the Tax Act or any "notifiable transaction" as defined in Subsection 237.4(1) of the Tax Act or any similar transaction under any other
applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) None of the Target and the Subsidiaries has ever made an "excessive eligible dividend election" as
defined in Subsection 89(1) of the Tax Act in respect of any dividends paid or deemed to be paid on any class of shares of its capital. None of the Target and the Subsidiaries has ever made a capital dividend election under Subsection 83(2) of the
Tax Act in an amount which exceeds its capital dividend account at the time of such election.

(9) Conduct of Business in Ordinary Course—Except as expressly contemplated by the Agreement or as set
forth in Section 3.3(9) of the Disclosure Letter, since the Last Financial Statement Date until the date of this Agreement, the Target and each of the Subsidiaries has carried on the Business in the Ordinary Course in all material respects and
has not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) suffered any change that has resulted, or may reasonably be expected to result, in a Material Adverse
Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) ceased to carry on any material portion of the Business as carried on immediately before such date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) other than in connection with the Pre-Closing Reorganization, sold,
transferred or otherwise disposed of any Assets, except in the Ordinary Course and except for any assets having an aggregate value of less than $25,000;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) suffered any damage, destruction or loss not covered by insurance that has required, or would reasonably be
expected to require, expenditures in excess of $25,000 in the aggregate to repair or replace;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) made any capital expenditure or commitment therefor which individually or in the aggregate exceeds $25,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) increased its indebtedness for borrowed money or made any loan or advance, or assumed, guaranteed or
otherwise become liable with respect to the liabilities or obligations of any Person an aggregate amount exceeding $25,000, except unsecured current obligations, liabilities incurred in the Ordinary Course and any Closing Date Indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) split, combined or reclassified any of its shares, or issued, granted, repriced, redeemed, repurchased or
otherwise acquired shares in its capital, or granted any options, warrants or rights with respect to shares in its capital, or granted any options, warrants or rights with respect to shares in its capital or bonds, debentures, notes or other
securities, or reserved, declared, made or paid any dividend, or made any other distributions of profits or capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) entered into, amended or terminated any Material Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) terminated the employment of any Senior Employee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) removed or received a notice of resignation from any auditor or director or terminated any officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) materially altered the terms of employment of any Senior Employee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) granted any general increase in the rate of wages, salaries, bonuses or other remuneration of employees of
the Target or any Subsidiary other than as may be required by the terms of an Employment Contract;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) suffered any material shortage, cessation or interruption of Inventory shipments, supplies or ordinary
services that is material to the Business and not in the Ordinary Course;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) other than as required to effect the terminations of the Covered Plans as contemplated under
Section 4.11, as set forth in Section 3.3(9) of the Disclosure Letter or as required by applicable Laws, create, amend, modify, merge or terminate any Employee Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15) (i) made any settlement of or compromise with respect to any Tax liability, changed any Tax election or Tax
method of accounting or made any new Tax election, adopted any new Tax method of accounting or amended any Tax Return; (ii) surrendered any right to claim a refund of Taxes; (iii) consented to any extension or waiver of the limitation
period applicable to any Tax claim or assessment; or (iv) knowingly taken any other action that would have the effect of increasing the Tax liability of the Target or any Subsidiary for any Tax period (or portion thereof) beginning on or after
the Closing Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16) declared, made or committed itself to make any bonus, dividend or other distribution to the Vendors or to
any employee of the Target or any Subsidiary other than as may be required by the terms of an Employment Contract or otherwise in the Ordinary Course; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17) authorized, agreed or otherwise committed, whether or not in writing, to do any of the foregoing.

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(10) Compliance with Laws—The Target and each Subsidiary is conducting the Business in compliance with all
applicable Laws of each jurisdiction in which it carries on the Business, and has obtained, maintained, complied with and timely renewed in all material respects all Authorizations required in connection with the Business, in each case except where
the failure to do so would not have a Material Adverse Effect.

(11) Title to Assets—Except as set out in Section 3.3(11) of the Disclosure Letter, the Target and each
Subsidiary has good and marketable title to all of their respective Assets reflected in the balance sheet included in the Financial Statements and those acquired since the date of the balance sheet included in the Financial Statements (except as
since transferred, sold or otherwise disposed of in the Ordinary Course), free and clear of all Encumbrances other than Permitted Encumbrances.

(12) Sufficiency and Condition of Assets—Except as set out in Section 3.3(12) of the Disclosure Letter,
the Target and each Subsidiary (a) owns or leases or licenses all Assets reasonably necessary to conduct the Business, including the Diamonds Direct Business and the Watches Direct Business, and (b) all such material tangible Assets used
in the operation of the Business are in good operating condition and repair having regard to their use and age and are adequate and suitable for the uses to which they are being put except for normal wear and tear and ordinary routine maintenance
and repairs, provided that this clause (b) shall not apply in respect of any Inventory, Leased Premises or leasehold improvements.

(13) No Required Authorizations— There is no requirement of the Target nor any Subsidiary to make any filing
with, give any notice to, or obtain or maintain any Authorization of, any Governmental Authority as a condition to the lawful completion of the transactions contemplated by this Agreement, the Ancillary Agreements, or the Pre-Closing Reorganization.

(14) Top Suppliers—Section 3.3(14) of the Disclosure Letter contains a list of the top ten
(10) suppliers of the Target (determined on the basis of revenues calculated in aggregate during the two year period from April 30, 2023 to April 30, 2025) (the "**Top Suppliers** "). Each agreement with a Top Supplier (a
" **Top Supplier Agreement**") is listed in Section 3.3(16) of the Disclosure Letter. Except as disclosed in Section 3.3(14) of the Disclosure Letter, in the last twelve (12) months prior to the date of this Agreement,
none of the Top Suppliers has ceased to do business with Target or any Subsidiary other than in the Ordinary Course or as a result of business project completion. To the knowledge of the Vendors, in the last 12 months prior to the date of this
Agreement, no such Top Supplier has expressed a definitive intention to definitely terminate or materially modify its Top Supplier Agreement. Each of the Material Top Supplier Agreements set forth in Section 3.3(14) of the Disclosure Letter
(a) contains a defined term under which such agreement is valid for at least 12 months after the date hereof and (b) does not permit termination by convenience by the Top Supplier within 12 months from the date hereof.

(15) Contract Consents—There is no requirement to obtain any consent, approval or waiver of, or give any
notice to, a party under any Material Contract made by or in favour of the Target or any Subsidiary to consummate any of the transactions contemplated by this Agreement or the Ancillary Agreements or the Pre-Closing Reorganization, except for the consents, approvals, waivers and notices described in Section 3.3(15) of the Disclosure Letter (the "**Contract Consents** ").

(16) Material Contracts—Except for the Contracts described in Section 3.3(16) of the Disclosure Letter
(the "**Material Contracts** "), true, correct and complete copies of which have been provided to the Purchaser, none of the Target or any Subsidiaries is a party to or bound by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any Top Supplier Agreement;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) any agreement not otherwise described in Section 3.3(16) of the Disclosure Letter, the termination of
which would have a Material Adverse Effect on the Target and the Subsidiaries taken as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) any Lease, or to the knowledge of the Vendors, any verbal arrangement in respect of any Lease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) any agreement for capital expenditures by the Target or any Subsidiary in excess of $25,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any agreement for the purchase of materials, supplies, equipment or services (other than agreements for the
purchase of Inventory, employment agreements or other Contracts in the Ordinary Course of operations) involving the payment by the Target Group of more than $25,000 in any 12-month period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) any agreement with any Person with whom the Target or any Subsidiary does not deal at arm's length;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) any material agreement containing a non-competition, non-solicitation or exclusivity covenant or similar agreement limiting the freedom of the Target or any Subsidiary to engage in any line of business, compete with any other Person or otherwise conduct the Business;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) any agreement containing "most favoured nations" pricing provisions or otherwise limiting the
freedom of the Target or any Subsidiary to set prices for the Business.

(17) No Breach of Material Contracts—The Target and each Subsidiary has performed all of their material
obligations required to be performed by them and are entitled to all material benefits under and are not alleged to the knowledge of the Vendors to be in material default of any Material Contract. Each Material Contract is in full force and effect,
unamended and to the knowledge of the Vendors there exists no material default or event of default or event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or condition, would
become a material default or material event of default under any Material Contract. With respect to Contracts to which the Target or any Subsidiary is a party that are not Material Contracts, to the knowledge of the Vendors no party to any such
Contracts is in breach of such contract in any manner which could have a Material Adverse Effect on the Target Group. Except as set forth in Section 3.3(17)of the Disclosure Letter, neither the Target nor any Subsidiary has received written
notice terminating, canceling, reducing the volume under, or renegotiating the pricing terms or any other material terms of any Material Contract with the Target or any Subsidiary or threatening to take any of such actions.

(18) Owned Property—Neither the Target nor any Subsidiary owns, directly or indirectly, any real property,
nor is the Target nor any Subsidiary subject to any agreement or option to directly or indirectly acquire the ownership of a legal or beneficial interest in any real property.

(19) Leases—Section 3.3(19) of the Disclosure Letter sets out a true and complete list of all of the
Leases of the Target or any Subsidiary and a description of the Leased Premises (by municipal address and proper legal description). Except as set out in Section 3.3(19) of the Disclosure Letter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) neither the Target nor any Subsidiary is a party to, or under any agreement to become a party to, any leases
with respect to real property which is used or to be used in the Business other than the Leases;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) to the knowledge of the Vendors, each Lease is in good standing, creates a valid and enforceable leasehold
interest in the demised Leased Premises, and is in full force and effect without amendment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) with respect to each Lease, (i) all rents and additional rents have been paid when due, (ii) as of
the date of this Agreement, no waiver, indulgence or postponement of the lessee's obligations has been granted by the lessor, (iii) as of the date of this Agreement, and to the knowledge of the Vendors, there exists no event of default or
event, occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default under the Lease or permit termination, modification or acceleration thereunder,
(iv) the Target and the Subsidiaries have not subleased, licensed or otherwise entered into a Contract granting any Person the right to use or occupy the Leased Premises subject to the Lease, or any portion thereof, (v) the Target and the
Subsidiaries have not otherwise transferred or disposed of any of its interest under the Lease, and (vi) to the knowledge of the Vendors, all of the covenants required to be performed as of the date of the Agreement by any other party under the
Lease have been performed in all material respects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the Target and the Subsidiaries, as applicable, have adequate rights of ingress and egress into each of the
Leased Premises for the operation of the Business in the Ordinary Course, in each case subject to the terms of the applicable Lease;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the Leased Premises constitute all the real property used to conduct the Business of the Target and the
Subsidiaries during the past twelve (12) months prior to the date of the Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) the possession and quiet enjoyment of the Leased Premises by Target and the Subsidiaries, as applicable,
have never been disturbed in any material respect since the Last Financial Statement Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) the Target and the Subsidiaries owe no material amounts to any contractor or subcontractor for work
performed at the Leased Premises, and there are no written or, to the knowledge of the Vendor, oral disputes between the Target and the Subsidiaries and any contractor or subcontractor relating to such work performed or to be performed at the Leased
Premises.

(20) Inventory—Except as set out Section 3.3(20) of the Disclosure Letter, (i) there has been no
material change to the Inventory taken as a whole since November 30, 2024 other than changes in the Ordinary Course; (ii) the Inventory levels are currently maintained in the Ordinary Course in all material respects; (iii) all
Inventory (other than Inventory in transit or at repair centers) is located at one of the Leased Premises, and no Inventory (other than Inventory in transit or at repair centers) is stored at any other location except at the Leased Premises;
(iv) the Target has good, marketable and valid title to all Inventory and no Inventory is subject to any Encumbrance except Permitted Encumbrances (other than Inventory in transit from a supplier, delivered to the Target Group on consignment,
or subject to a right of repurchase by a supplier under its Contract with the Target Group); and (v) the Inventory is not subject to any agreement with any third parties which would require any consent of any third party upon sale or
disposition of that Inventory (other than a right of repurchase by a supplier under its Contract with the Target Group) except where the failure to comply would have a Material Adverse Effect.

(21) Return of Merchandise—Section 3.3(21)of the Disclosure Letter sets out the policy of the Business
regarding return of any merchandise for credit or refund.

(22) Intellectual Property—

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Except for the Excluded IP and as set out in Section 3.3(22) of the Disclosure Letter, the Target and
each Subsidiary owns or has a right to use all of the Intellectual Property used by the Target and any such Subsidiary in its conduct of the Business (collectively, the "**Target Intellectual Property** "), free and clear of all
Encumbrances other than Permitted Encumbrances. As used herein, that portion of the Target Intellectual Property which is owned by the Target or any Subsidiary, but excluding the Excluded IP, shall be referred to as the "**Owned Intellectual Property**" and that portion of the Target Intellectual Property which is licensed to the Target or any Subsidiary shall be referred to as the "**Licensed Intellectual Property** ". The Owned Intellectual
Property and Licensed Intellectual Property together comprise all the Intellectual Property used by the Target Group in the conduct of the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Section 3.3(22) of the Disclosure Letter contains a complete and accurate list of the Owned
Intellectual Property that is registered or the subject of an application for registration filed by the Target or any Subsidiary, domain names, and material unregistered trademarks. With respect to each item of Owned Intellectual Property which is
registered or the subject of an application for registration, the Target or the Subsidiaries, as applicable, are the sole owner of the entire right, title and interest in and to such Owned Intellectual Property and is entitled to use such Owned
Intellectual Property in the continued operation of the Business as it is currently used. No action is pending, or, to the knowledge of the Vendors, threatened, that challenges the rights of the Target and the Subsidiaries in respect of any Owned
Intellectual Property or the scope of the Owned Intellectual Property. None of the Owned Intellectual Property has been developed with the use of funding from any Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Section 3.3(22) of the Disclosure Letter contains a complete and accurate list of the material Licensed
Intellectual Property that is used by the Target Group in the conduct of the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) Except as set out in Section 3.3(22) of the Disclosure Letter, (i) to the knowledge of the
Vendors, there is no, and there has not been in the five (5) years prior to the date of this Agreement, to the knowledge of the Vendors, any infringement, dilution, misappropriation, or other violation by any third party of any registered Owned
Intellectual Property; (ii) to the knowledge of the Vendors, the conduct of the Business by the Target Group has not infringed, misappropriated, or otherwise violated in any material respects the Intellectual Property rights of any Person; and
(iii) there are no, and there has not been in the five (5) years prior to the date of this Agreement any, action pending or, to the knowledge of the Vendors, threatened, against any of the Target or any Subsidiary alleging that the
Business is, or has been, infringing, misappropriating, or otherwise violating the Intellectual Property rights of any Person. The Owned Intellectual Property and Licensed Intellectual Property as currently owned, licensed, or used by the Target
Group, constitutes all Intellectual Property necessary for the conduct of the Business as presently conducted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) Except as set out in Section 3.3(22) of the Disclosure Letter, the Target and the Subsidiaries have not
licensed or otherwise granted any right to any third party to use any Target Intellectual Property or have otherwise agreed not to assert any right in or to any Owned Intellectual Property against any third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) Each of the Target and each Subsidiary has obtained and possesses valid licenses to use all of the software
programs present on the computers and other software-enabled electronic devices that it owns or leases or that it has otherwise provided to its Employees for their use in connection with the Business.

(23) Data Privacy and Security—

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) In the three (3) years prior to the date of this Agreement, no claims have been asserted or threatened
against the Target Group by any Person alleging a violation of any Data Security and Privacy Requirements; and none of the Target or the Subsidiaries has discovered or been made aware of any unauthorized access to or breach of any information
technology asset, including any incident that (A) either constitutes (1) a breach of Personal Information or a confidentiality incident under any Data Security and Privacy Requirements (2) a Security Breach or (B) compromises
(individually or in the aggregate) the confidentiality, security or integrity of any Personal Information, Sensitive Data or any of Target Group's Information Technology Systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) To the knowledge of the Vendors, neither the execution nor delivery of this Agreement, the contemplated
transactions, nor the performance of the Target Group's obligations hereunder will violate any Data Security and Privacy Requirements or require notice to or consent of any Person for the continued processing of Personal Information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) None of the Target or the Subsidiaries has in the five (5) years prior to the date of this Agreement
(A) received any communications or claims from any Person alleging that the Target or any Subsidiary has violated applicable Data Security and Privacy Requirements, (B) been subject to any order or proceeding with respect to any actual or
alleged non-compliance with any Data Security and Privacy Requirements from any privacy commission or other data protection Governmental Authority.

(24) Employees—Within five (5) Business Days following the date of this Agreement, the Target shall
provide the Purchaser with a complete and accurate list (the "**Census**") of (i) each employee of the Target and its Subsidiaries, whether actively at work or not, showing without names their salaries, wage rates, commissions,
bonus arrangements, pension, benefits, positions, status as full-time or part-time employees, active or nonactive status, medical or paid leave, work permit status, location of employment, employing entity, approximate start date with any the Target
or any Subsidiary, whether they are subject to a written employment Contract ()"**Employment Contracts** "), their annual vacation entitlement in days (if longer than that provided under applicable employment standards legislation) and
their accrued and unused vacation days, and any other annual paid time off entitlement in days and their accrued and unused days of such other paid time off; and (ii) each independent contractor or consultant engaged by the Target or any
Subsidiary including their names, consulting fees, location of engagement, engaging entity, any other forms of compensation or benefits, and whether they are subject to a written Contract ()"**Consultant Contracts** "). Current and
complete copies of the most recently executed version of all Employment Contracts with current employees and Consultant Contracts with current independent contractors and current consultants have been, or will prior to Closing be, delivered or made
available to the Purchaser. Each independent contractor or consultant who will have been disclosed in the Census has, to the knowledge of the Vendors, been properly classified by the Target or the applicable Subsidiary as an independent contractor
under applicable Law and neither the Target or any Subsidiary has received any notice from any Governmental Authority disputing such classification. Except as disclosed in Section 3.3(24) of the Disclosure Letter, no employee of the Target or
any Subsidiary has any agreement as to length of notice or severance payment required to terminate his or her employment, other than as contained in an Employment Contract or such as results by Law from the employment of an employee without an
agreement as to notice or severance. Except as disclosed in Section 3.3(24) of the Disclosure Letter, there are no severance, compensation, change of control, employment, retention or other Contracts or benefit plans with current or former
employees providing for cash or other compensation, benefits or acceleration of benefits upon the consummation of, or relating to, the transactions contemplated by this Agreement, including a change of control of the Target or any Subsidiary. Except
as set out in Section 3.3(24) of the Disclosure Letter, the Target and each of the Subsidiaries, as applicable:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) is in all materials respects in compliance with all Laws respecting employment and employment practices,
terms and conditions of employment, pay equity and wages and hours of work;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) has not, in the five (5) years prior to the date of this Agreement or currently, engaged in any unfair
labour practice;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) is not engaged with any personnel agency, and there are no outstanding, pending or to the knowledge of
Vendor, threatened claims, complaints, investigations or orders relating to the employment of any personnel agency employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) has, in the three (3) years prior to the date of this Agreement, paid all amounts due and has properly
accrued all amounts accruing due in respect of salary, wages, bonuses, commissions, vacation pay, sick pay, pension benefits or other employee benefits;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) has, in the three (3) years prior to the date of this Agreement, remitted all deductions from its
employee payroll for income taxes, Canada Pension Plan, Employment Insurance and workers' compensation premiums and all other statutory deductions which are currently due for remittance;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) are not currently negotiating any Collective Agreement, no Collective Agreements are in force with respect
to such Employees, and no affiliated bargaining agent holds bargaining rights with respect to any of the Employees by way of certification, interim certification, voluntary recognition, or succession rights, or has applied or, to the knowledge of
the Vendors, threatened to apply to be certified as the bargaining agent of any of the Employees. To the knowledge of the Vendor, there are no threatened or pending union organizing activities involving any Employees and no such event has occurred
within the five (5) years prior to the date of this Agreement. There is no labour strike, dispute, work slowdown or work stoppage pending or involving or threatened against the Target Group and no such event has occurred in the five
(5) years prior to the date of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) has not been subject to an application to be declared a common or related employer pursuant to applicable
Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) has not, in the three (3) years prior to the date of this Agreement, received any notice of any
complaint filed by any of its Employees claiming that it has violated applicable employment standards legislation or human rights legislation in jurisdictions in which it conducts or carries on the Business or operates or of any complaints or
proceedings of any kind before any labour relations board or other similar authority that has not been subsequently resolved and any applicable time to file litigation has passed;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) has no outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing
pursuant to any workplace safety and insurance legislation and has not been reassessed in any material respect under such legislation during the three (3) years prior to the date of this Agreement and, to the knowledge of the Vendor, no audit
of the Target or any Subsidiary is currently being performed pursuant to any applicable workplace safety and insurance legislation. There are no claims or potential claims which may materially adversely affect the Target or any Subsidiary's
accident cost experience in respect of the Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) does not have any pending or outstanding orders or charges under any applicable health and safety
legislation ()"**OHS**") in the jurisdictions in which the Business is conducted. The Target and its Subsidiaries have complied in all material respects with any orders issued under OHS and there are no appeals of any orders under OHS
currently outstanding. All orders and inspection reports under applicable OHS have been provided to the Purchaser;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) except as disclosed in Section 3.3(27) of the Disclosure Letter, is not currently the subject of any
litigation by any of its Employees or past employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) is not subject to any work permit or labour market impact assessment opinion confirmation, and employs no
foreign workers. No audit by a Governmental Authority is being conducted, or to the knowledge of the Vendor pending, in respect of any foreign workers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) is in compliance with all terms and conditions of employment and all Laws respecting employment and labour
matters, including relating to wages, vacation time and vacation pay, overtime, pay equity, occupational health and safety, worker's compensation, and there are no outstanding claims, complaints, and investigations under any such Laws; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14) there are no outstanding actions alleging workplace harassment (including sexual harassment) or workplace
violence, and, to the knowledge of the Vendor, in the three (3) years prior to the date of this Agreement, there have been no actions, complaints, claims, threats of actions, or allegations made, commenced or initiated in respect of workplace
harassment (including sexual harassment) or workplace violence, in each case against any current or former Employee of the Target or any Subsidiaries.

(25) Employee Plans—Section 3.3(25) of the Disclosure Letter lists and describes all Employee benefit,
fringe benefit, supplemental unemployment benefit, bonus, incentive, profit sharing, termination, change of control, pension (including for clarity the Covered Plans and the RCAs), retirement, stock option, health, welfare, medical, disability
(including the Medical Leave Benefits), life insurance and similar plans, programs, Contracts or arrangements of the Target and the Subsidiaries, as applicable, except as provided under the Employment Contracts (the "**Employee Plans**") and except as set out in Section 3.3(25) of the Disclosure Letter in respect of the Employee Plans:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) (A) the Vendor has furnished the Purchaser with true, correct and complete copies of all the Employee Plans
as amended as of the date hereof, including all plan texts, member booklets, funding arrangements, insurance policies, actuarial reports, financial statements or asset statements, letters of credit, current service provider agreements, all material, non-routine correspondence with all Governmental Authorities and all documents relating to the terminations of the Covered Plans as contemplated under Section 4.11 and (B) the Target and the
Subsidiaries do not have any liability under, any registered pension plan as defined in the Tax Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) no changes have occurred or are expected to occur which would materially affect the information contained in
the documents required to be provided to the Purchaser pursuant to Section 3.3(25)(1);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) all obligations regarding the Employee Plans have been satisfied, there are no outstanding material defaults
or violations by any party to any Employee Plan and there are no taxes, penalties, or fees are owing or exigible under or in respect of any of the Employee Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) other than as required to effect the terminations of the Covered Plans as contemplated under
Section 4.11 no commitments to improve or otherwise amend any Employee Plan have been made except as required by applicable Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) no insurance policy or any other agreement affecting any Employee Plan requires or permits a retroactive
increase in contributions, premiums or other payments due thereunder;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) no Employee Plan provides or promises health and welfare benefits beyond retirement or other termination of
service (including pursuant to individual Contracts of employment or severance), except to the minimum extent required by applicable employment standards legislation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) the consummation of the transactions contemplated by this Agreement will not constitute an event under any
Employee Plan or individual agreement with an Employee or former employee that will or may result in any severance or other payment or in the acceleration, vesting or increase in benefits (including to create or increase a Retirement Plan Liability)
with respect to any Employee or former employee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) As of April 14, 2021 and since that date, the IPPs have at all times been exempt from registration
under the *Pension Benefits Act* (Ontario) and similar pension minimum standards legislation of Canada or a province thereof; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) No Employee Plans permit contributions or other participation by an employer other than the Target and the
Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10) Other than the IPPs and RCAs, no Employee Plan is, and none of the Target and its Subsidiaries (or its
predecessors in the current year and previous six (6) years), have historically contributed to or otherwise had any obligations under a "registered pension plan", a "retirement compensation arrangement" or a "deferred
profit sharing plan", as each of those terms is defined in the Tax Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11) In the three (3) years prior the date of this Agreement, the Target or any Subsidiaries have made all
contributions and paid all premiums or other amounts owing in respect of each Employee Plan in a timely fashion in accordance with the terms of each Employee Plan and applicable Laws. Without limiting the generality of the foregoing, no Retirement
Plan Liability exists as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12) All payments and obligations of the Target or any Subsidiaries in respect of the RCAs have been satisfied in
full in accordance with the terms thereof, and no further payments to any beneficiary of the RCAs are accrued but unsatisfied thereunder, including, for clarity, in respect of any Retirement Plan Liability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) None of the Target nor any Subsidiaries have made any loans to employees that have not been repaid prior to
the date of this Agreement.

(26) Insurance—Section 3.3(26) of the Disclosure Letter lists all insurance policies (specifying the
insurer, the amount of coverage, the type of insurance, the beneficiary, the policy number and any pending claims thereunder) maintained by the Target and the Subsidiaries in respect of their Assets, property, affairs or personnel, and none of the
Target or any Subsidiary is in material default under any of the provisions contained in any such insurance policies and has not failed to give notice or present any claim under any such insurance policy in a due and timely fashion. Such insurance
policies include fire and casualty insurance policies, with extended coverage, sufficient in amount (subject to reasonable deductibles) to allow the Target or the Subsidiaries to replace any of Inventory, leasehold improvements and related Assets of
the Business that might be damaged or destroyed.

(27) Litigation—Except as disclosed in Section 3.3(27) of the Disclosure Letter, there is no action,
suit, litigation, arbitration proceeding, governmental proceeding, investigation or claim, including appeals and applications for review, in progress, threatened or pending against, or relating to the Target or any Subsidiary or affecting their
respective Assets or the Business which could reasonably be expected to materially and adversely affect the Assets, Business or financial condition of the Target Group, and there is no judgment, decree, injunction, rule or order of any Governmental
Authority outstanding against the Target or any Subsidiaries.

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(28) Sanctions—In the three (3) years prior the date of this Agreement, none of the Target or any
Subsidiary, nor any of their representatives or other Persons acting on their behalf has, in the course of their actions, (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity, (ii) unlawfully offered or provided, directly or indirectly, anything of value to, or received anything of value from, any foreign or domestic, government employee, official or any other Person, or (iii) directly or
indirectly, taken any action in violation of any anti-corruption Laws, anti-bribery Laws, Economic Sanctions Laws, export restrictions, anti-boycott regulations, embargo regulations or other similar applicable Laws. No customer, supplier or broker
of the Target or any Subsidiary, or any other Person has made (or offered or agreed to make) any payments not in accordance with applicable Laws on behalf of the Target or any Subsidiary in connection with the purchase, sale, and distribution of any
of the products of the Business. None of the Target or any Subsidiary has received any notice that it, or any of its representatives and other Persons associated with or acting on its behalf, is or has been the subject of any action by any
Governmental Authority with respect to any actual, alleged or potential violation or breach of any anti-corruption Laws, anti-bribery Laws or Economic Sanctions Laws.

(29) Environment—

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) None of the Target or any Subsidiaries has been required by any Governmental Authority to (i) alter any
of the Leased Premises in a material way in order to be in compliance with environmental Laws, or (ii) perform any environmental closure, decommissioning, rehabilitation, restoration or post-remedial investigations, on, about, or in connection
with any real property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) None of the Target or any Subsidiary, and to the knowledge of the Vendor, no other Person, has released,
spilled or otherwise discharged any pollutants, contaminants or hazardous substances in, on, at or from any Leased Premises in conditions or amounts reasonably likely to result in a claim pursuant to or liability under environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) All material environmental reports, data, studies, and investigations by Governmental Authorities relating
to the Business or any Leased Premises have been made available to the Purchaser.

(30) Non-Arm's Length Transactions— Except as disclosed in
Section 3.3(30) of the Disclosure Letter or as otherwise provided for in this Agreement and any applicable Ancillary Agreement, none of the Vendors nor any affiliate or direct family member of the Vendors, or any other Person not dealing at
arm's length with the Vendor: (i) is engaged in any transaction or arrangement with or is a party to a Contract with, or has any liability or obligation to or is owed any liability or obligation from, the Target; or (ii) owns or holds
the rights to, directly or indirectly, any Contracts, permits, rights or assets that are held by the Target or used in the conduct of the Business.

(31) No Brokers—Except as disclosed in Section 3.3(31) of the Disclosure Letter, none of the Target or
any Subsidiary nor any of their representatives has incurred any liability or obligation to any broker, agent, investment bank or other intermediary for any fee, commission or other similar payment in connection with the transactions contemplated by
this Agreement.

**Section 3.4 Representations and Warranties of the Purchaser** 

In order to induce the Vendors to enter into and to consummate the transactions contemplated by this Agreement the Purchaser represents and warrants to the Vendors that, as of the Closing Date:

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(1) Incorporation and Corporate Power—The Purchaser is an entity that is duly formed and validly existing
under the laws of the jurisdiction of its organization. The Purchaser has the corporate power and authority to enter into and perform its obligations under this Agreement and each of the Ancillary Agreements to which it is a party.

(2) Execution and Enforceability—The execution and delivery of this Agreement has been duly authorized by
all necessary corporate action on the part of the Purchaser and this Agreement has been duly executed and delivered by the Purchaser, and constitutes a valid and binding obligation enforceable against the Purchaser in accordance with its terms;
subject only to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any limitation under applicable Laws relating to bankruptcy, winding-up, insolvency, arrangement; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) other Laws of general application affecting the enforcement of creditors' rights and the discretion
that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

(3) No Conflicts—The execution and delivery by the Purchaser of this Agreement and the Ancillary Agreements
to which the Purchaser is party and the performance of the Purchaser's obligations under this Agreement and the Ancillary Agreements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) do not and will not (or would not with the giving of notice, the lapse of time or the happening of any other
event or condition) constitute or result in a breach or violation of, or conflict with or allow any other Person to exercise any rights under, any of the terms or provisions of any Contracts or to which it is a party, except where it would not have
a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) do not and, except as contemplated by this Agreement, will not (or would not with the giving of notice, the
lapse of time or the happening of any other event or condition) result in the creation or imposition of any material Encumbrance upon any property or asset of the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) do not and will not result in a breach or violation of, or conflict with, or allow any other Person to
exercise any termination or other rights under, any of the terms or provisions of the constating documents of the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) will not result in the violation of any Law; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) do not require the Purchaser, on its own behalf or in respect of the Target Group, to make any filing with
any Governmental Authority, obtain any consent, waiver, license, certification or approval from, give any notice to, or obtain or maintain any Authorization from any Person, or result in a breach of, or cause the termination or revocation of, any
Authorization currently held by it and necessary to the completion of the transaction contemplated by this Agreement.<sup></sup>

(4) No Brokers—None of the Purchaser nor any of its representatives has incurred any liability or
obligation to any broker, agent, investment bank or other intermediary for any fee, commission or other similar payment in connection with the transactions contemplated by this Agreement.

(5) Sufficiency of Funds—The Purchaser has sufficient cash on hand or other sources of immediately
available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement and the Ancillary Agreements.

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(6) Legal Proceedings—There are no actions, suits, claims, investigations or other legal proceedings
pending or, to the Purchaser's knowledge, threatened against or by the Purchaser or any affiliate of the Purchaser that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement or any Ancillary
Agreement.

(7) No Other Representations – The Purchaser acknowledges and agrees that in making its decision to enter
into this Agreement and to consummate the transactions contemplated hereby, the Purchaser is relying solely upon its own investigation and the express representations and warranties of the Vendors contained in Sections 3.1 and 3.2 of this Agreement.

**Article 4** 

**PRE-CLOSING COVENANTS OF THE PARTIES** 

**Section 4.1 Conduct of Business Prior to Closing** 

(1) During the Interim Period, except (A) as otherwise required or permitted by this Agreement, (B) as
required by Laws, or (C) with the prior written consent of the Purchaser (such consent not to be unreasonably withheld, conditioned, or delayed), the Vendors shall cause the Target and each of the Subsidiaries (i) to conduct the Business
in the Ordinary Course and (ii) not to take any of the actions set forth in Sections 3.2(9)(1)-(3), (5)-(9), (10) (but only as it relates to the removal or termination of any such Person), (11)-(12), and (14)-(17).

**Section 4.2 Access by Purchaser** 

(1) Subject to applicable Law, during the Interim Period, the Vendors shall (i) upon reasonable notice to
the Vendors from the Purchaser, permit the Purchaser and its employees, agents, counsel, accountants or other representatives, and lenders, to have reasonable access during normal business hours to (A) the Leased Premises, (B) the Assets,
including all Books and Records whether retained by the Vendors, the Target, any Subsidiary or otherwise, and (C) all Contracts, including the Leases, in each case, so long as the access does not unduly interfere with the ordinary conduct of
the Business; (ii) furnish to the Purchaser or its employees, agents, counsel, accountants or other representatives, and lenders, such financial and operating data and other information with respect to the Assets and the Target Group as the
Purchaser from time to time reasonably requests; and (iii) co-operate, or cause the co-operation, with the Purchaser and its representatives in the arrangement of
any financing in connection with the transactions contemplated by the Agreement, as the Purchaser may reasonably request from time to time. All requests by the Purchaser for access under this Section 4.2 shall be submitted or directed
exclusively to the Vendors' Representative or such other individuals as the Vendors' Representative may designate in writing from time to time. Notwithstanding anything to the contrary in this Agreement, neither the Vendors, the Target
Group, nor the Holding Entities shall be required to disclose any information to the Purchaser if such disclosure would, in the sole discretion of the Vendors' Representative, acting reasonably: (i) cause significant competitive harm to
any of the Vendors, the Target Group, the Holding Entities and their respective businesses if the transactions contemplated by this Agreement are not consummated; (ii) jeopardize any solicitor-client, litigation or other privilege; or
(iii) contravene any applicable Law, fiduciary duty or binding agreement entered into before the date of this Agreement. Before the Closing, without the prior written consent of the Vendors' Representative, which may be withheld for any
reason, the Purchaser shall not contact any suppliers to, or customers of, the Target Group. The Purchaser shall, and shall cause its representatives to, abide by the terms of the Confidentiality Agreement with respect to any access or information
provided under this Section 4.2.

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**Section 4.3 Actions to Satisfy Closing Conditions** 

(1) The Vendors shall use commercially reasonable efforts to take or cause to be taken all such actions so as to
ensure compliance with all of the conditions set forth in Section 6.2.

(2) The Purchaser shall use commercially reasonable efforts to take or cause to be taken all such actions so as
to ensure compliance with all of the conditions set forth in Section 6.3.

**Section 4.4 Contract Consents** 

The Purchaser and the Vendors shall each use their respective commercially reasonable efforts, and reasonably cooperate with each other, to give, or seek to obtain the Contract Consents prior to Closing; provided that (i) the Vendors will not be obligated to pay any amounts, provide other consideration or otherwise grant any accommodations in connection with giving, obtaining or seeking to obtain any such Contract Consents and (ii) in the event that any Contract Consents are not obtained from the counterparty under such Contract prior to the Closing, then the Closing shall proceed in accordance with this Agreement and the Purchaser shall pay the full Purchase Price at the Closing unless the failure to obtain such Contract Consent has caused the failure of the condition set forth in Section 5.1(4) to be satisfied, in which case the Closing shall proceed only if the failed condition is waived by the Purchaser.

**Section 4.5 Supplement to Disclosure Letter** 

From time to time before the Closing, the Vendors shall have the right (but not the obligation) to supplement or amend the Disclosure Letter with respect to any matter hereafter arising or of which it becomes aware after the date hereof (each, a "**Disclosure Supplement**"). Any disclosure in any such Disclosure Supplement shall not be deemed to have cured any inaccuracy in or breach of any representation or warranty set out in this Agreement, including for purposes of the indemnification or termination rights contained in this Agreement or of determining whether or not the conditions set forth in Section 5.1 have been satisfied; provided that, if the Purchaser has the right to, but does not elect to, terminate this Agreement within five (5) Business Days of its receipt of such Disclosure Supplement, then the Purchaser shall be deemed to have irrevocably waived any right to terminate this Agreement with respect to such matter and, further, shall have irrevocably waived its right to indemnification under Section 8.1 with respect to such matter.

**Section 4.6 Inventory Count** 

The Purchaser and representatives designated by the Vendors may arrange to jointly conduct a physical sample count of the Inventory of all retail store locations and the head office of the Business at any time during the period commencing at least three (3) days prior to the Closing Date and up to and including the Closing Date.

**Section 4.7 Director and Officer Indemnification, Advancement of Expenses and Exculpation.** 

(1) The Purchaser agrees that all rights to indemnification, advancement of expenses and exculpation by each of
the Target, its Subsidiaries and the Holding Entities now existing in favour of each Person who is now, or has been at any time before the date hereof or who becomes before the Closing Date, an officer or director of the Target, any of its
Subsidiaries or any of the Holding Entities, as provided in the articles or by-laws of the Target, its Subsidiaries or any of the Holding Entities, in each case as in effect on the date of this Agreement, or
under any other agreements in effect on the date hereof, shall survive the Closing Date and shall continue in full force and effect in accordance with their respective terms.

(2) The obligations of Purchaser under this Section 4.5 shall not be terminated or modified in such a
manner as to adversely affect any director or officer to whom this Section 4.5 applies without the consent of such affected director or officer (it being expressly agreed that the directors and officers to whom this Section 4.5 applies
shall be third-party beneficiaries of this Section 4.5, each of whom may enforce the provisions of this Section 4.5).

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(3) If the Purchaser, the Target Group, the Holding Entities or any of their respective successors or assigns
transfers all or substantially all its properties to any Person, then proper provision shall be made so that the successors and assigns of the Purchaser, the Target Group or the Holding Entities, as the case may be, shall assume all of the
obligations set forth in this Section 4.5.

**Section 4.8 Confidentiality.** 

The Purchaser acknowledges and agrees that the Confidentiality Agreement remains in full force and effect and, in addition, covenants and agrees to keep confidential, in accordance with the provisions of the Confidentiality Agreement, information provided to the Purchaser under this Agreement. If this Agreement is, for any reason, terminated before the Closing Date, the Confidentiality Agreement and the provisions of this Section 4.8 shall nonetheless continue in full force and effect.

**Section 4.9 Personal Information Privacy.** 

The Purchaser shall, at all times, comply with all Laws governing the protection of personal information with respect to Personal Information disclosed or otherwise provided to the Purchaser by the Vendors, the Target Group or the Holding Entities under this Agreement specifically including any obligation to notify affected individuals that personal information was disclosed in the course of the sale and that the sale has closed. The Purchaser shall only collect, use or disclose such Personal Information for the purposes of investigating the Target Group and the Business as contemplated in this Agreement and completing the transactions contemplated in this Agreement. The Purchaser shall safeguard all Personal Information collected from the Vendors, the Target Group or the Holding Entities in a manner consistent with the degree of sensitivity of the Personal Information and maintain, at all times, the security and integrity of the Personal Information. The Purchaser shall not make copies of the Personal Information or any excerpts thereof or in any way recreate the substance or contents of the Personal Information if the purchase of the Purchased Shares is not completed for any reason and shall return all Personal Information to the Vendors or, at the Vendors' Representative's request, destroy such Personal Information.

**Section 4.10 Books and Records.** 

(1) To facilitate (i) the resolution of any claims made against or incurred by the Vendors before the
Closing Date, (ii) ongoing matters related to either or both of the Diamonds Direct Business and the Watches Direct Business, and (iii) for any other reasonable purpose, in each case, for a period of seven (7) years after the Closing
Date, the Purchaser shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) retain the Books and Records (including personnel files) of the Target Group and the Holding Entities
relating to periods before the Closing Date in a manner reasonably consistent with the prior practices of the Target Group and the Holding Entities, as applicable; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) upon reasonable notice, afford the representatives of any of the Vendors reasonable access (including the
right to make, at such Vendor's expense, photocopies), during normal business hours, to such Books and Records.

(2) To facilitate the resolution of any claims made by or against or incurred by the Purchaser or the Target
Group or any Holding Entities after the Closing Date, or for any other reasonable purpose, for a period of seven (7) years (or, in the case of Books and Records related to Taxes, until the expiration of the statute of limitations of the
respective Tax periods, whichever is later) following the Closing Date, the Vendor shall:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) retain the Books and Records (including personnel files) of the Vendors which relate to the Holding Entities
and the Target Group and their operations for periods before the Closing Date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) upon reasonable notice, afford the representatives of the Purchaser, the Target Group or the Holding
Entities reasonable access (including the right to make, at the Purchaser's expense, photocopies), during normal business hours, to such Books and Records.

(3) Neither the Purchaser nor the Vendors shall be obligated to provide the other Parties with access to any
Books and Records (including personnel files) under this Section 4.10 where such access would violate any Law.

(4) The Vendors may retain and maintain a duplicate copy of Books and Records in respect of the Target Group and
the Holding Entities, in each case, with regards to the periods on or prior to the Closing Date in connection with (i) the resolution of any claims made against or incurred by the Vendors before the Closing Date, (ii) the Diamonds Direct
Business and the Watches Direct Business, and (iii) other reasonable business purposes relating to the Vendors' ownership and operation of the Business prior to the Closing Date.

**Section 4.11 Termination of the Covered Plans** 

The Vendors will:

(1) except with regards to the IPPs, have terminated, or have caused the Target and the Subsidiaries, as
applicable, to terminate the Covered Plans, in each case with an effective termination date that is prior to the Closing Date and without further liability to the Target and the Subsidiaries;

(2) terminate the IPPs, in each case as soon as reasonably possible following the Closing Date and without
further liability to the Target and the Subsidiaries;

(3) have delivered to the Purchaser (A) executed resolutions of the Target and the Subsidiaries, as
applicable, terminating the Covered Plans, that provide for, among other things, termination of Covered Plans without further liability to the Target and the Subsidiaries and cessation of any further accruals under the Covered Plans as of the
termination date; and (B) executed releases from each member and beneficiary of the Covered Plans releasing and holding the Target and the Subsidiaries, the Purchaser and the Purchasers' affiliates (which for clarity shall include the
Target Group as of the Closing) harmless in respect of any obligations or liabilities arising under or in respect of the Covered Plans, including any liability to fund, whether on an immediate or amortized basis, and going concern unfunded
liability, solvency deficiency or wind-up funding deficiency in respect of the Covered Plans as of and preceding the effective date of termination and any other amounts relating to the Covered Plans;

(4) except with regards to the IPPs, have filed, or will have caused the Target and the Subsidiaries to have
file, as applicable, prior to the Closing Date all documents with each Governmental Authority having jurisdiction over the Covered Plans that is necessary to effect the foregoing; and

(5) with regards to the IPPs, file as soon as reasonably possible following the Closing Date all documents with
each Governmental Authority having jurisdiction over the IPPs that is necessary to effect the foregoing.

**Section 4.12 Retirement and Resignation from the RCAs** 

Prior to Closing, the Vendors will have caused the plan members of the RCAs to retire and resign from employment which will constitute a "Retirement" under the RCAs.

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**Section 4.13 Outstanding Litigation** 

The Parties agree that in the event that the litigation claim described in Section 3.3(27) of the Disclosure Letter remains unresolved as of the Closing Date, and a court of competent jurisdiction thereafter finds the Target Group liable for damages, the Vendors will indemnify and hold harmless the Purchaser for an amount up to $10,000.

**Article 5** 

**CONDITIONS OF CLOSING** 

**Section 5.1 Conditions for the Benefit of the Purchaser** 

The purchase and sale of the Purchased Shares is subject to the following conditions being satisfied on or prior to the Closing Date, which conditions are for the exclusive benefit of the Purchaser and may be waived, in whole or in part, by the Purchaser in its sole discretion.

(1) The Fundamental Representations contained in this Agreement were true and correct as of the date of this
Agreement and are true and correct as of the Closing Date.

(2) The representations and warranties of the Vendors contained in this Agreement were true and correct as of
the date of this Agreement and are true and correct in all material respects as of the Closing Date, provided that in respect of the Closing Date, to the extent any such representations and warranties address matters only as of a specified date,
such representations and warranties are accurate in all material respects as of that specified date and each Vendor shall have executed and delivered a certificate to that effect.

(3) Each Vendor shall have fulfilled or complied in all material respects with all covenants contained in this
Agreement required to be fulfilled or complied with by it at or prior to the Closing, and such Vendor shall have executed and delivered a certificate to that effect.

(4) Each of the Contract Consents described on Section 5.1(4) of the Disclosure Letter (collectively, the
" **Required Consents**") will have been obtained on terms acceptable to the Purchaser, acting reasonably. Expect as expressly provided for in Section 4.4, all such Required Consents will be in force and will not have been modified
or rescinded.

**Section 5.2 Conditions for the Benefit of the Vendors** 

The purchase and sale of the Purchased Shares is subject to the following conditions being satisfied on or prior to the Closing Date, which conditions are for the exclusive benefit of the Vendors and may be waived, in whole or in part, by each Vendor in its sole discretion.

(1) The representations and warranties of the Purchaser contained in this Agreement were true and correct as of
the date of this Agreement and are true and correct in all material respects as of the Closing Date with the same force and effect as if such representations and warranties had been made on and as of such date, and the Purchaser shall have executed
and delivered a certificate of a senior officer to that effect. Upon delivery of such certificate, the representations and warranties of the Purchaser in Article 3 will be deemed to have been made on and as of the Closing Date with the same
force and effect as if made on and as of such date.

(2) The Purchaser shall have fulfilled or complied in all material respects with all covenants contained in this
Agreement required to be fulfilled or complied with by it at or prior to Closing and the Purchaser shall have executed and delivered a certificate of a senior officer to that effect.

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(3) Each of the Required Consents will have been obtained on terms acceptable to the Vendors Representative,
acting reasonably. Expect as expressly provided for in Section 4.4, all such Required Consents will be in force and will not have been modified or rescinded.

**Article 6** 

**CLOSING TRANSACTIONS** 

**Section 6.1 Closing Time and Location** 

Subject to the terms and conditions of this Agreement, the purchase and sale of the Purchased Shares contemplated hereby shall take place at a closing (the "**Closing**") to be by electronic exchange of documents and signatures or at a location as may be mutually agreed upon in writing by the Vendors' Representative and the Purchaser at the Closing Time, no later than two (2) Business Days after the last of the conditions to Closing set forth in Article 5 have been satisfied or waived (other than conditions which, by their nature, are to be satisfied on the Closing Date with the day on which the Closing takes place being the "**Closing Date**").

**Section 6.2 Closing Deliveries by the Vendors** 

At the Closing, the Vendors will deliver or cause to be delivered the following to the Purchaser, in forms acceptable to the Purchaser, acting reasonably.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the following closing documentation dated on the Closing Date (if applicable), except as otherwise noted:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) certificate of good standing (or equivalent) of the Target and each Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the certificates referred to in Section 5.1(2) and Section 5.1(3);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) share certificates representing the Purchased Shares issued in the name of the Vendors, duly endorsed for
transfer to the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) all Required Consents set forth in Section 5.1(4);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) certified copies of resolutions of the directors of the Target authorizing the transfer of the Purchased
Shares to the Purchaser and the other transactions contemplated by this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the corporate records of the Target and each Subsidiary, including (i) all of its constating documents;
(ii) all minutes of meetings and resolutions of directors and shareholders (and any committees); (iii) the share certificate book, securities register, register of transfers and register of directors; and (iv) the corporate seal (if
applicable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) resignations and releases effective at Closing duly executed by each director and officer of the Target and
each Subsidiary, as specified by the Purchaser in writing prior to Closing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) releases to be effective at Closing and duly executed by each Vendor in favour of the Purchaser, in
customary form reasonably acceptable to the Purchaser;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) the License Agreement duly executed by the parties thereto (other than the Purchaser);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) the Consulting Agreements, which shall include (or be accompanied by) the resignation and release from
employment of Eric Sutkiewicz, Jordan Sutkiewicz and Michelle Ceresney with the Target or any Subsidiary (as applicable), duly executed by Eric Sutkiewicz, Jordan Sutkiewicz and Michelle Ceresney;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) the Payoff Letters related to all Closing Date Indebtedness as set forth in Section 2.7(1) of the
Disclosure Letter;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) a non-competition, non-solicitation, non-disparagement and confidentiality agreement duly executed by each of Eric Sutkiewicz, Jordan Sutkiewicz and Michelle Ceresney, in each case in the
form attached as Exhibit G;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) evidence of the completion of the terminations of the Covered Plans as contemplated under Section 4.11
to the reasonable satisfaction of the Purchaser (other than in respect of the termination of the IPPs, as contemplated in Sections 4.11(2) and 4.11(5)); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) evidence of the completion of the Pre-Closing Reorganization to the
reasonable satisfaction of the Purchaser.

**Section 6.3 Closing Deliveries by the Purchaser** 

At the Closing, the Purchaser will deliver or cause to be delivered the following to the Vendors, each in forms acceptable to the Vendors, acting reasonably:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) certificate of good standing (or equivalent) of the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the certificates referred to Section 5.2(1) and Section 5.2(2);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Closing Payment in accordance with Section 2.3;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the Vendors' Notes duly executed by the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) release to be effective at Closing and duly executed by the Purchaser in favour of the Vendors, in customary
form reasonably acceptable to the Vendors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) the License Agreement duly executed by the Purchaser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7) the Consulting Agreements duly executed by the Purchaser; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8) the evidence of satisfactory insurance policy for the conduct of the Business.

**Article 7** 

**TERMINATION** 

**Section 7.1 Termination Rights** 

This Agreement may, by notice in writing given on or prior to the Closing Date, be terminated:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) by mutual consent of the Vendors' Representative and the Purchaser;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) by the Purchaser, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) there has been a material breach of this Agreement by any of the Vendors and such breach has not been waived
by the Purchaser in writing or cured within 30 days following written notice of such breach by the Purchaser and such breach has not been so waived or cured on or before the Outside Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any of the conditions in Section 5.1 or obligations to make deliveries in Section 6.2 have not
been satisfied or it becomes reasonably apparent that any of such conditions or obligations will not be satisfied by the Outside Date (other than as result of the failure of the Purchaser to perform any of its material obligations) and the Purchaser
has not waived such condition in writing at or prior to Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) by the Vendors' Representative, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) there has been a material breach of this Agreement by the Purchaser and such breach has not been waived by
the Vendors' Representative in writing or cured within 30 days following written notice of such breach by the Purchaser; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any of the conditions in Section 5.1 or obligations to make deliveries in Section 6.3 have not
been satisfied or it becomes reasonably apparent that any of such conditions or obligations will not be satisfied by the Outside Date (other than as result of the failure of one or more of the Vendors to perform any of its material obligations) and
the Vendors' Representative has not waived such condition in writing at or prior to Closing.

**Section 7.2 Effect of Termination** 

Each Vendor's right of termination under Section 7.1 and the Purchaser's rights of termination under Section 7.1 are each in addition to any other rights each may have under this Agreement or otherwise, and the exercise of a right of termination by a Party will not constitute an election of remedies. If this Agreement is terminated pursuant to Section 7.1, this Agreement will be of no further force or effect; provided, however, that (i) Section 4.8, Section 4.9, this Section 7.2 and Article 9 and additional provisions that by their nature should survive, will survive the termination of this Agreement, and (ii) the termination of this Agreement will not relieve any Party from any liability for any breach of this Agreement occurring prior to termination.

**Article 8** 

**POST-CLOSING COVENANTS** 

**Section 8.1 Indemnification of Purchaser by the Vendors** 

(1) Subject to Section 8.3, each Vendor severally and not jointly indemnifies and saves each of the
Purchaser, the Target and each of their respective shareholders, officers, directors, employees, agents, successors and assigns (collectively, the "**Purchaser ' s Indemnified Persons**") harmless of and from, and shall
pay for, any loss, liability, claim, damage or expense (whether or not involving a third party claim) including legal expenses (collectively, "**Damages**") suffered by, imposed upon or asserted against any of the Purchaser's
Indemnified Persons as a result of, in respect of, connected with, or arising out of, under, or pursuant to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any failure of a Vendor to perform or fulfil any covenant or agreement of the Vendor under this Agreement;
and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) any breach or inaccuracy of any representation or warranty of the Vendors contained in Section 3.1,
Section 3.2 or Section 3.3 of this Agreement;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) all matters relating to the sponsorship and administration of the Covered Plans and the termination thereof,
including all funding and investment obligations and any other liabilities whatsoever in respect of the Covered Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) any income or sales Taxes of the Target Group for any Pre-Closing Tax Period (to the extent not included in Working Capital), and any Taxes arising in connection with the Pre-Closing Reorganization;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) any liabilities or obligations whatsoever in respect of the Holding Entities arising in respect of any
period prior to Closing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6) all matters relating to the sponsorship, administration and termination of the RCAs, including all
Retirement Plan Liability, trustee fees and any other liabilities or obligations whatsoever in respect of the RCAs.

**Section 8.2 Indemnification of the Vendors by the Purchaser** 

Subject to Section 8.3 and Section 8.4, the Purchaser indemnifies and saves each Vendor, and each of their respective shareholders, officers, directors, employees, agents, successors and assigns (collectively, the "**Vendors' Indemnified Persons**") harmless of and from any Damages suffered by, imposed upon or asserted against the Vendors as a result of, in respect of, connected with, or arising out of, under, or pursuant to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) any failure of the Purchaser to perform or fulfil any covenant or agreement of the Purchaser under this
Agreement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) any breach or inaccuracy of any representation or warranty given by the Purchaser contained in
Section 3.4 of this Agreement.

**Section 8.3 Time Limitations** 

The representations and warranties of the Vendors and the Purchaser contained in this Agreement will survive the Closing and, notwithstanding the Closing or any investigation made by or on behalf of the Vendors or the Purchaser, will continue:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) for a period of eighteen (18) months after the Closing Date in respect of the representations and
warranties of the Vendors in Section 3.1, Section 3.2 and Section 3.3 of this Agreement save and except for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the representations and warranties in Section 3.3(8) *(Taxes)* (the "**Tax Representations** "), which shall survive until the date that is 90 days after the expiration of the period (having regard to any consent, waiver, agreement or other document that extends the period) during which any Tax assessment may be
issued by a Governmental Authority in respect of any matters to which the Tax Representations extend; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the representations and warranties in Section 3.1(1) *(Capacity and Authority),* Section 3.1(2) *(Execution and Binding Obligation)*, Section 3.1(5) *(Title to Purchased Shares)*, *Section 3.1(4) (Residency),* Section 3.2 *,* Section 3.3(1) *(Incorporation and Qualification),* Section 3.3(2) *(Authorized and Issued Capital)*, Section 3.3(3) *(Absence of Options)* (collectively, the "**Fundamental Representations** "), each of which will survive indefinitely; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) for a period of eighteen (18) months after the Closing Date in respect of the representations and
warranties of the Purchaser in Section 3.4 of this Agreement,

and any claim in respect thereof will be made in writing prior to the expiry of such time period, as applicable. Subject to the foregoing, if no claim for Damages will have been made under this Agreement against a party for any incorrectness in or any breach of any representation or warranty made in this Agreement prior to the expiry of the foregoing survival periods (where applicable), such party will have no further liability under this Agreement with respect to such representation or warranty.

**Section 8.4 Other Limitations** 

(1) Subject to Section 8.5, the Vendors have no obligation to make any payment for Damages for a breach of
a representation or warranty pursuant to Section 8.1(1)(2) (with the exception of the Fundamental Representations and the Tax Representations) until the total of all Damages arising from such indemnification obligation exceeds $100,000 (the
" **Deductible** "), in which event the Vendors shall only be liable for such Damages in excess of the Deductible. With respect to any Damages as to which the Purchaser Indemnified Persons may be entitled to indemnification under
Section 8.1(1)(2) (with the exception of the Fundamental Representations and the Tax Representations), the Vendors shall not be liable for any individual or series of related claims which do not exceed $25,000 (which Damages shall not be
counted toward the Deductible).

(2) Subject to Section 8.5, the maximum aggregate liability of the Vendors for the payment of Damages
pursuant to or in connection with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Section 8.1(1)(1) and Section 8.1(1)(2) shall not exceed 100% of the Base Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a breach of the Fundamental Representations and the Tax Representations pursuant to Section 8.1(1)(2)
shall not exceed 100% of the Base Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) a breach of the representations and warranties pursuant to Section 8.1(1)(2), other than in respect of
a breach of the Fundamental Representations and the Tax Representations, shall not exceed $2,000,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) for purposes of calculating Damages pursuant to this Section 8.1, the representations and warranties
given by Vendors will be deemed to have been made without the inclusion of limitations or qualifications as to materiality, such as the words or expressions "material", "materially", "material adverse effect",
"immaterial", "in all material respects" or words or expressions of similar import.

(3) Payments by any Party under Section 8.1 or Section 8.2 in respect of any Damages shall be limited
to the amount of any liability that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received or reasonably expected to be received by the Party entitled to indemnification in respect
of any such claim. Each Party shall use its commercially reasonable efforts to recover under insurance policies or indemnity, contribution or other similar agreements for any before seeking indemnification under this Agreement.

(4) Payments by any Party under Section 8.1 or Section 8.2 in respect of any Damages shall be reduced
by an amount equal to any Tax benefit actually arising or obtained by the Party entitled to indemnification as a reduction of Taxes (through refunds or credits) as a result of the payment of such Damages.

(5) In no event shall any Party be liable to any other Party for any punitive, exemplary, incidental,
consequential, special or indirect damages, including loss of future revenue or income, loss of business reputation or opportunity relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of
multiple.

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(6) Each Party shall take, and cause its affiliates to take, all reasonable steps to mitigate any Damages upon
becoming aware of any event or circumstance that would be reasonably expected to, or does, give rise thereto, including incurring costs only to the minimum extent necessary to remedy the breach that gives rise to such Damages.

(7) The indemnity in Section 8.1(1)(4) shall not apply to the extent any Pre-Closing Tax Period in respect of which Taxes are the direct result of a breach of Section 8.8(9) of this Agreement by the Purchaser.

**Section 8.5 Exclusions to Limitations to Liability.** 

Notwithstanding any provision in this Agreement, nothing herein will limit the time to make a claim or the liability of the Vendors or the Purchaser for any claim involving fraud or willful misconduct occurring on or prior to the Closing Date.

**Section 8.6 Set-Off** 

Each Party shall be entitled to set-off the amount of any Damages subject to indemnification under this Agreement against any other amounts payable by another Party under this Agreement or the Vendors' Notes; provided that, for greater clarity, in the event that the Purchaser is entitled to indemnification or reimbursement of any kind or nature under this Agreement prior to full repayment by the Purchaser of the Vendors' Notes, the amount payable by the Vendors shall be set-off against the principal amount under the Vendors' Note (initially the Second Vendors' Note followed by the First Vendors' Note).

**Section 8.7 Indemnification Procedures** 

(1) In the event that a Party hereunder has a right to assert a Direct Claim, such Party shall serve written
notice thereof to the Indemnifying Party promptly upon becoming aware of the existence of such right, which notice shall set forth in reasonable detail the nature of such Direct Claim and supporting information sufficient to enable the Indemnifying
Party to investigate the Direct Claim.

(2) Following receipt of notice of a Direct Claim, the Indemnifying Person shall have sixty (60) days to
investigate the Direct Claim and respond in writing. For purposes of the investigation, the Indemnified Person shall make available to the Indemnifying Party the information relied upon by the Indemnified Person to substantiate the Direct Claim,
together with such other information as the Indemnifying Person may reasonably request.

(3) If the Indemnifying Person disputes the validity or amount of the Direct Claim, the Indemnifying Person
shall provide written notice of the dispute to the Indemnified Person within the sixty (60) day period specified in Section 8.7(1). The dispute notice must describe in reasonable detail the nature of the Indemnifying Person's dispute.
During the thirty (30) day period immediately following receipt of a dispute notice by the Indemnified Person, the Indemnifying Person and the Indemnified Person shall attempt in good faith to resolve the dispute. If the Indemnifying Person and
the Indemnified Person fail to resolve the dispute within that thirty (30) day time period, the Indemnified Person is free to pursue all rights and remedies available to it, subject only to this Agreement. If the Indemnifying Person fails to
respond in writing to the Direct Claim within the sixty (60) day period specified in Section 8.7(1), the Indemnifying Person is deemed to have agreed to the validity and amount of the Direct Claim and shall promptly pay in full the amount
of the Direct Claim to the Indemnified Person.

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(4) If a Third Party Claim is instituted or asserted against an Indemnified Person, the Indemnified Person shall
promptly notify the Indemnifying Person in writing of the Third Party Claim.

(5) The omission to timely notify the Indemnifying Person of a Third Party Claim shall not relieve the
Indemnifying Person from any obligation to indemnify the Indemnified Person, unless the notification occurs after the expiration of the specified period set out in Section 8.3 or (and only to that extent that) the omission to notify materially
prejudices the ability of the Indemnifying Person to exercise its right to defend provided in this Section 8.7.

(6) Upon receiving notice of a Third Party Claim, the Indemnifying Person may participate in the investigation
and defence of the Third Party Claim and may also elect to assume the investigation and defence of the Third Party Claim.

(7) The Indemnifying Person may not assume the investigation and defence of a Third Party Claim if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Indemnifying Person is also a party to the Third Party Claim and the Indemnified Person determines in
good faith that joint representation would be inappropriate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Indemnifying Person fails to provide reasonable assurance to the Indemnified Person of its financial
capacity to defend the Third Party Claim and provide indemnification with respect to the Third Party Claim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) in the reasonable judgement of the Indemnified Person, the estimated amount of likely Damages in connection
with such claim is greater than the unused portion of the maximum liability the Indemnifying Person is liable for as set out in Section 8.4;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) the Indemnifying Person does not unconditionally acknowledge in writing its obligation to indemnify and hold
the Indemnified Person harmless with respect to the Third Party Claim; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the Third Party Claim seeks relief against the Indemnified Person other than monetary damages or the
Indemnified Person determines in good faith that there is a reasonable probability that the Third Party Claim may adversely affect it or its Affiliates and the Indemnified Person has notified the Indemnifying Person that it will exercise its
exclusive right to defend, compromise or settle the Third Party Claim.

(8) In order to assume the investigation and defence of a Third Party Claim, the Indemnifying Person must give
the Indemnified Person written notice of its election within fifteen (15) Business Days of Indemnifying Person's receipt of notice of the Third Party Claim and shall comply with the procedures set out in Schedule 8.7(7) to this Agreement.

(9) For the avoidance of doubt and notwithstanding this Section 8.7, the provisions of Section 8.8(8)
shall govern any Tax Contest.

(10) In the event of any Direct Claim or any Third Party Claim which relates to one or more joint and several
representations and warranties in Section 3.2 in respect of which more than one Indemnifying Party may be subject to indemnification obligations under this Agreement, the Purchaser shall pursue separate Direct Claims and separate Third Party
Claims, as applicable, against each applicable Indemnifying Person separately and only to the extent of the Pro Rata Share of each such Indemnifying Person (together, "**Joint and Several Claims** "). In the event any Indemnifying Person
fails to satisfy its obligations to make payment in accordance with this Agreement in respect of any Joint and Several Claim (an "**Unpaid Amount**") and if the Indemnified Person provides not less than forty-five (45) days notice
of such failure to pay to all Indemnifying Persons in respect of such Joint and Several Claim, then thereafter such Indemnified Person may pursue an additional separate supplemental Direct Claim or Third Party Claim, as applicable, against each
Indemnifying Person, as applicable, for the Pro Rata Share of the Unpaid Amount that is applicable to such Indemnifying Person.

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**Section 8.8 Covenants Regarding Tax Matters** 

(1) Income Tax Returns required to be prepared by the Target Group and the Holding Entities for periods ending
on or before the Closing Date (the "**Pre-Closing Tax Returns** "), shall be prepared by the Vendors' Representative and submitted in draft form to the Purchaser at least ten
(10) Business Days before the date on which such Pre-Closing Tax Returns are required by Law to be filed with the relevant Governmental Authority. The Purchaser shall have the right to incorporate
reasonable changes and shall notify the Vendors' Representative of such changes. The Purchaser shall file, or cause to be filed, all Pre-Closing Tax Returns on or before the date on which they are
required to be filed with the relevant Governmental Authority. It is understood that no deduction shall be claimed on any Pre-Closing Tax Returns in respect of any expenses described in the definition of
"Transaction Expenses". To the extent Taxes shown on the Tax Returns have not reduced the Purchase Price, the Vendors shall pay to the Purchaser all such Taxes as an adjustment to the Purchase Price.

(2) For the purposes of this Agreement, in the case of any Straddle Period, the amount of Taxes allocable to the
portion of the Straddle Period that ends immediately prior to the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) in the case of Taxes imposed on a periodic basis (such as real or personal property Taxes), the amount of
such Taxes for the entire period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied by a fraction, the numerator of which is the number of calendar days in the
Straddle Period up to and including the day immediately preceding the Closing Date and the denominator of which is the number of calendar days in the entire relevant Straddle Period; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) in the case of Taxes not described in clause (i) (such as franchise Taxes, Taxes that are based upon or
related to income or receipts, or Taxes that are based upon occupancy or imposed in connection with any sale or other transfer or assignment of property), the amount of any such Taxes shall be determined as if such taxable period ended immediately
prior to the Closing.

(3) If it is determined that a member of the Target Group or any Holding Entity has made an election under
subsection 83(2) of the Tax Act in respect of the full amount of any dividend payable by it on shares of any class of its capital stock, and the full amount of such dividend exceeded the amount of the "capital dividend account" (as defined
in the Tax Act) of such member immediately before the dividend became payable, the Vendors hereby concur to (or shall cause the recipient of the relevant dividend to concur to) the making of an election under subsection 184(3) of the Tax Act in
respect of the dividend, and the election shall be made by such member of the Target Group or such Holding Entity, as applicable, in the manner and within the time prescribed by applicable Laws.

(4) If it is determined that a member of the Target Group or any Holding Entity has made an "excessive
eligible dividend designation", within the meaning of subsection 89(1) of the Tax Act, the Vendors hereby concur to (or shall cause the recipient of the relevant dividend to concur to) the making of an election under subsection 185.1(2) of the
Tax Act in respect of the full amount thereof, and the election shall be made by such a member of the Target Group or such Holding Entity, as applicable, in the manner and within the time prescribed by applicable Laws.

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(5) The Parties agree that no amount is payable by the Purchaser in consideration of any "restrictive
covenant" (as such term is defined in the Tax Act) contained in this Agreement or any Ancillary Agreement and that no part of the Purchase Price has been allocated to such "restrictive covenants". The Parties agree that any
"restrictive covenant" contained in this Agreement or other Ancillary Agreement has been granted to maintain or preserve the fair market value of the Purchased Shares. The Parties hereto intend that the conditions set forth in section
56.4(7) of the Tax Act have been satisfied such that section 56.4(5) of the Tax Act applies to any "restrictive covenants" (as defined in section 56.4(1) of the Tax Act) granted by the Vendors under this Agreement with respect to the
Business. Accordingly, the Parties hereto acknowledge and agree that no proceeds shall be received or receivable by the Vendors for granting any restrictive covenant for purposes of section 56.4(7)(d) of the Tax Act.

(6) The Target Group, the Holding Entities, the Purchaser, the Vendors, and the Vendors' Representative
shall (and shall cause their respective affiliates to) use commercially reasonable efforts to (a) assist in the preparation and timely filing of any Tax Return of the Target Group and any Holding Entity for a Pre-Closing Tax Period or Straddle Period; (b) assist in any audit or other legal proceeding with respect to Taxes or Tax Returns of the Target Group and any Holding Entity for a Pre-Closing Tax Period or Straddle Period; and (c) make available any information, records, or other documents relating to any Taxes or Tax Returns of the Target Group (including copies of Tax Returns and
related work papers) for a Pre-Closing Tax Period.

(7) If the Target Group or any Holding Entity receives from a Governmental Authority after Closing any amount in
respect of an income Tax refund (in cash or as a reduction of income Taxes otherwise due) relating to a Pre-Closing Tax Period that is not included in the Final Closing Statement and does not result from the
carryback of a Tax attribute of the Target or a Subsidiary or any Holding Entity relating to a Tax period ending after the Closing (a "**Pre-Closing Tax Refund** "), then the Purchaser shall
promptly pay to the Vendors as an increase of the Purchase Price the amount of such Pre-Closing Tax Refund received, net of (i) any costs incurred in connection with the recovery of such Pre-Closing Tax Refund, and (ii) any Taxes incurred in respect of such Pre-Closing Tax Refund (regardless of the period in which such Taxes arise and determined without
taking into account any Tax attribute that may be available to reduce such Taxes). If the Target or a Subsidiary or a Holding Entity is subsequently required to repay to a Governmental Authority after Closing any amount in respect of a Pre-Closing Tax Refund that was previously paid to the Vendors under this Section 8.8(7), then the Vendors shall promptly reimburse the Purchaser for the amount of such repayment, plus any interest or penalties
imposed thereon.

(8) **Tax Contests** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Purchaser shall notify the Vendors' Representative of any Tax Contest promptly and, in any event,
within five (5) Business Days.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If the Tax Contest relates solely to the Tax Returns of one or more Pre-Closing Tax Periods and is not reasonably expected to have a material adverse impact upon any Tax period other than a Pre-Closing Tax Period, the Vendors'
Representative may assume the defence of such Tax Contest, provided that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the Vendors' Representative shall provide to the Purchaser in a timely manner (x) any proposed
written communications and other documents to be submitted to the relevant Governmental Authority or filed with a court in respect of any assessment or reassessment for review by the Purchaser; and (y) copies of any correspondence received from
the Governmental Authority relating to such Tax Contest. The Vendors' Representative shall consult with the Purchaser with respect to the materials provided pursuant to (x) above prior to the submission or filing thereof;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the Vendors' Representative shall not settle the Tax Contest without the consent of the Purchaser,
which consent may not be unreasonably withheld or delayed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the right of the Vendors' Representative at any time to defend any Tax Contest shall only apply after
payment to the applicable Governmental Authority of the amount of Tax (x) subject at that time to collection measures by the applicable Governmental Authority, or (y) required to be paid in order to be entitled to contest the Tax Contest
(the "**Prepaid Amount** ");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) in the event such Tax Contest is subsequently settled in accordance with the terms of a settlement or final
nonappealable judgment, the Purchaser shall promptly reimburse to the Vendors' Representative the lesser of: (i) the Prepaid Amount and any interest received from the Governmental Authority thereon (net after Tax); and (ii) the
Prepaid Amount less the final amount of Tax due pursuant to such Tax claim in accordance with the terms of such settlement or final nonappealable judgment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E) within ten (10) Business Days of a final determination of such Tax Contest in respect of Taxes, the
Vendors' Representative shall pay to the Purchaser the full amount owing to the Purchaser, to the extent that such amounts have not been previously paid to the Purchaser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If the Vendors' Representative (i) is not entitled to assume the defence of a Tax Contest,
(ii) does not elect to assume the defence of a Tax Contest, or (iii) assumes the defence of a Tax Contest but fails to diligently pursue such defence, the Purchaser has the sole right (but not the obligation) to undertake the defence of
the Tax Contest.

(9) Unless required by applicable Law, the Purchaser shall not amend, refile or otherwise modify any Tax Return
of any member of the Target Group or any Holding Entity with respect to any Pre-Closing Tax Period, or make a voluntary disclosure in respect of Taxes of any member of the Target Group or any Holding Entity
which solely relates to a Pre-Closing Tax Period or otherwise requires that any Governmental Authority review any Tax Return of any member of the Target Group or any Holding Entity for any Pre-Closing Tax Period that would increase Taxes or decrease Tax refunds of any such Pre-Closing Tax Period.

**Article 9** 

**General** 

**Section 9.1 Vendors Confidentiality** 

After the Closing, each Vendor shall keep confidential all information in its possession or under its control relating to the Target Group and the Business, unless such information is or becomes generally available to the public other than as a result of a disclosure by such Vendor in violation of this Agreement.

**Section 9.2 Public Announcements** 

From the date hereof until the Closing Date, and unless compelled by law, no Party shall make any public statement regarding the existence or contents of this Agreement or the transactions contemplated hereunder, whether through the medium of a press release or otherwise, without the prior written consent of the other Party and the Parties shall be in agreement as to the text of any such statement. Notwithstanding the foregoing, the Purchaser may be required to issue a press release or file a copy of this Agreement, or other documents required by applicable securities Laws or stock exchange policies due to its status as a reporting issuer in the United States. The Purchaser shall provide the Vendors a copy of such press release or filing prior to issuing or filing same and the Vendors shall be consulted and consent as to the content of any such press release or the description of the transaction within any required press release or filing, and such consent shall not be unreasonably withheld, conditioned or delayed. The restrictions set forth in this Section 9.2 shall not apply to any public disclosure issued or made, or proposed to be issued or made, that is consistent in all material respects with previous public disclosure made by a Party in accordance with this Section 9.2.

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**Section 9.3 Expenses** 

Unless otherwise specified in this Agreement, all costs and expenses incurred in connection with the preparation of this Agreement and the transactions contemplated by this Agreement will be paid by the party incurring such expenses. For clarity, all such costs and expenses of the Target shall be the sole responsibility of the Vendors.

**Section 9.4 Amendment** 

This Agreement may only be amended, supplemented or otherwise modified by written agreement signed by each of the Vendors and the Purchaser.

**Section 9.5 Time** 

Time will be of the essence of this Agreement and every part hereof and no extension or variation of this Agreement will operate as a waiver of this provision. When calculating the period of time within which or following which any act is to be done or step taken pursuant to this Agreement and the last day of such period is not a Business Day, the period in question will end on the next Business Day.

**Section 9.6 Notices** 

Any notice or other writing required or permitted to be given hereunder or for the purposes hereof will be sufficiently given if delivered or sent by facsimile to the party to whom it is given or, if mailed, by prepaid registered mail addressed to such party at:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) if to the Purchaser:

2020 Robert-Bourassa Blvd.

Suite 200

Montréal, Québec H3A 2A5

Attention: Miranda Melfi, Vice-President, Human Resources, Chief Legal Officer and Corporate Secretary

Email: mmelfi@birksgroup.com

with a copy, which shall not constitute notice, to:

Stikeman Elliott LLP

1155 René-Lévesque Blvd., West

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41<sup>st</sup> Floor

Montréal, Québec H3B 3V2

Attention: Pierre-Yves Leduc

Email: pyleduc@stikeman.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) if to the Vendors or the Vendors' Representative:

Jordan Sutkiewicz

c/o Fasken Martineau DuMoulin LLP

Suite 2400

333 Bay Street

Toronto, Ontario M5H 2T6

Attention: W. Ian Palm

Email: jordan@diamondsdirect.ca

with a copy, which shall not constitute notice, to:

Fasken Martineau DuMoulin LLP

Suite 2400

333 Bay Street

Toronto, Ontario M5H 2T6

Attention: W. Ian Palm

Email: <u>ipalm@fasken.com</u>

A notice is deemed to be given and received (i) if sent by personal delivery or courier, on the date of delivery if it is a Business Day and the delivery was made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the next Business Day, or (ii) if sent by email (with confirmation of transmission) on the date of transmission if it is a Business Day and transmission was made prior to 4:00 p.m. (local time in place of receipt) and otherwise on the next Business Day. A Party may change its address for service from time to time by providing a notice in accordance with the foregoing. Any subsequent notice must be sent to the Party at its changed address. Any element of a Party's address that is not specifically changed in a notice will be assumed not to be changed.

**Section 9.7 Governing Law** 

This Agreement will be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

**Section 9.8 Appointment of the Vendors' Representative** 

(1) Each Vendor hereby irrevocably appoints Jordan Sutkiewicz as its representative, agent, proxy and attorney
in fact (the "**Vendors ' Representative**") for such Vendor and in such Vendor's name, place and stead for all purposes of this Agreement.

(2) In order to administer efficiently the determination of certain matters under this Agreement, each Vendor
hereby agrees that the Purchaser will be entitled to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) rely on the Vendors' Representative as having full power, authority and discretion to make all
decisions and take all actions relating to the Vendors' respective rights, obligations and remedies under this Agreement including to receive and make payments, to receive and send notices, to receive and deliver documents, to exercise, enforce
or waive rights or conditions, to give releases and discharges, to seek indemnification on behalf of the Vendors and to defend against indemnification claims of the Purchaser; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) deal only with the Vendors' Representative in respect of all matters arising under this Agreement
including to receive and make payments, to receive and send notices (including notices of termination), to receive and deliver documents, to exercise, enforce or waive rights or conditions, to give releases and discharges, to seek indemnification
against the Vendors or any one of them and to defend against indemnification claims of the Vendors.

(3) All references in this Agreement to decisions and actions to be taken by the Vendors or any one of them, as
the case may be, shall be deemed taken by the Vendors or any one of them, as the case may be, if such decisions or actions are taken by the Vendors' Representative. All references in this Agreement to decisions and actions to be taken by the
Purchaser and directed to the Vendors or any one of them, as the case may be, shall be deemed directed to the Vendors or any one of them, as the case may be, if such decisions or actions are directed by the Purchaser to the Vendors'
Representative.

(4) In no event shall the Purchaser be held responsible or liable for the application or allocation of any
monies paid to the Vendors' Representative by the Purchaser, and the Purchaser shall be entitled to rely upon any notice provided to the Purchaser by the Vendors' Representative or action taken by the Vendors' Representative acting
within the scope of their authority.

(5) Notwithstanding the foregoing, no payment, notice, receipt or delivery of documents, exercise, enforcement
or waiver of rights or conditions, indemnification claim or indemnification defence shall be ineffective by reason only of it having been made or given to or by a Vendor directly if the Purchaser and such Vendor consent by virtue of not objecting to
such dealings without the intermediary of the Vendors' Representative.

**Section 9.9 Severability** 

If any one or more of the provisions contained in this Agreement is declared or found to be invalid, illegal or unenforceable, in whole or in part, it will be severable from this Agreement to the extent of such invalidity, illegality or unenforceability and the remainder of this Agreement will be construed as if such invalid, illegal or unenforceable provision has been deleted from this Agreement.

**Section 9.10 Entire Agreement** 

This Agreement, including the Exhibits attached hereto and the Disclosure Letter, and any document or instrument referred to in the Disclosure Letter, constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, oral or written, by and between any of the parties with respect to the subject matter hereof.

**Section 9.11 Assignment** 

None of the Parties hereto may assign any of their respective benefits, obligations or liabilities under or in respect of this Agreement without the prior written consent of the other Parties. No assignment shall relieve the assigning party of any of its obligations hereunder. Notwithstanding the foregoing in this Section 9.11, the Purchaser may, without the consent of the other Parties but without release from any of its obligations under this Agreement, pledge or assign this Agreement as security for the Debt Financing.

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**Section 9.12 Further Assurances** 

The Parties will with reasonable diligence, do all such things and provide all such reasonable assurances as may be required to consummate the transactions contemplated by this Agreement, and each Party will provide such further documents or instruments required by each other Party as may be reasonably necessary or desirable to give effect to the purpose of this Agreement and carry out its provisions whether before or after the Closing Date.

**Section 9.13 Enurement** 

This Agreement and each of the terms and provisions hereof will enure to the benefit of and be binding upon the Parties and their respective heirs, executors, administrators, personal representatives, successors and permitted assigns.

**Section 9.14 No Third Party Beneficiaries** 

Except as provided in Section 4.5, Section 8.1 and Section 8.2, this Agreement is for the sole benefit of the Parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

**Section 9.15 Specific Performance** 

The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at Law or in equity.

**Section 9.16 Legal Advisors** 

The Purchaser acknowledges and accepts the following regarding the solicitor-client privilege of the Target Group, the Holding Entities and the Vendors. Northview Law LLP and Fasken Martineau DuMoulin LLP represented the Target Group and the Holding Entities in connection with this Agreement and the transactions contemplated hereby and thereby. Following the Closing, all communications which primarily related to this Agreement and the transactions contemplated hereby and thereby between any of Northview Law LLP and Fasken Martineau DuMoulin LLP and the Target Group and the Holding Entities that are otherwise protected by solicitor-client privilege, including solicitor work-product (the "**Transaction Communications**"), shall be deemed to be solicitor-client privileged communications of the Vendors and the Vendors' Representative, and not the Target Group or the Holding Entities, as applicable, and such solicitor client privilege (including any solicitors duties of confidentiality and loyalty) is not waived by the completion of the transactions contemplated by this Agreement and will remain in effect, and is irrevocably assigned from the Target Group and the Holding Entities to the Vendors, and this privilege may be waived as against the Target Group, the Holding Entities or the Purchaser only by the written agreement of the Vendors' Representative. Absent such agreement by the Vendors' Representative, neither the Purchaser, nor the Target Group or the Holding Entities shall have a right of access to the Transaction Communications. In addition, following the Closing, all such Transaction Communications are deemed protected by common interest privilege as against the Purchaser, the Target Group and the Holding Entities, which privilege may be waived only by the Vendors' Representative. After the Closing, neither the Purchaser nor the Target Group or the Holding Entities shall seek to have either Northview Law LLP or Fasken Martineau DuMoulin LLP disqualified from representing the Vendors' Representative, or the Vendors individually or as a group in any dispute of any kind that may arise between the Vendors or any of them, on the one hand, and the Purchaser or, from and after the Closing, the Target Group, the Holding Entities or any of their affiliates, on the other, based upon, arising out of or related in any way to this Agreement, documents contemplated hereunder or the transactions contemplated hereby and thereby.

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Each Vendor acknowledges and agrees that each of Northview Law LLP and Fasken Martineau DuMoulin LLP have acted as counsel only to the Target Group and the Holding Entities and that such counsel are not protecting the interests of any other party to this Agreement. Each Vendor acknowledges, confirms and agrees, in favor of the Purchaser, the Target Group and the Holding Entities, that such Vendor had the opportunity to seek and was not prevented nor discouraged by any party hereto from seeking independent legal advice prior to the execution and delivery of this Agreement and that, in the event that such Vendor did not avail himself, herself or itself with that opportunity prior to becoming bound by this Agreement, such Vendor did so voluntarily without any undue pressure and agrees that his, her or its failure to obtain independent legal advice should not be used by such Vendor as a defense to the enforcement of obligations under this Agreement.

**Section 9.17 Counterparts** 

This Agreement may be executed in as many counterparts as may be necessary by electronic transmission. Each such counterpart will be deemed to be original and all such counterparts together will constitute one and the same instrument.

**Section 9.18 Debt Financing** 

The Parties agree that (a) no lender providing debt financing in connection with the transactions contemplated herein (the "**Debt Financing**") nor such lender's or its Affiliates' former, current and future equityholders, members, partners, employees, officers, directors, managers, controlling persons, attorneys, agents, advisors or other representatives or the heir, executor, successor or assign of any of the foregoing (in each case, other than to the extent any such Person is the Purchaser or any of its Affiliates) (collectively, the "**Debt Financing Sources**") shall have any liability (whether in contract or in tort, in law or in equity, or granted by statute) for any claims, causes of action, obligations or losses arising under, out of, in connection with or related in any manner to this Agreement or based on, in respect of or by reason of this Agreement or its negotiation, execution, performance or breach (provided that nothing in this Section 9.18 shall limit the liability or obligations of such Debt Financing Sources under any debt commitment letter, the fee letter related thereto, any credit agreement or any other documents governing or evidencing the debt facility, any credit facilities or other financing provided by any Debt Financing Source), (b) except as may be set forth in any debt commitment letter, the fee letter related thereto, any credit agreement or any other documents governing or evidencing the debt facility, any credit facilities or other financing provided by any Debt Financing Source, any Action of any kind or description (whether at law, in equity, in contract, in tort or otherwise) involving any Debt Financing Source arising out of, in connection with, or relating to the Debt Financing, or the performance of services thereunder shall be subject to the exclusive jurisdiction of a state or federal court sitting in the City of New York (Borough of Manhattan), State of New York (and any appellate court thereof), (c) any interpretation of any agreements related to the Debt Financing will be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without regard to principles of conflict of laws, (d) no party hereto will bring, permit any of their respective controlled Affiliates to bring, or support anyone else in bringing, any such Action in any other court, (e) THE PARTIES EACH HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY SUCH LEGAL PROCEEDING, (f) only the Purchaser (including its permitted successors and assigns) and the other parties to any debt commitment letter, the fee letter related thereto, any credit agreement or any other agreements governing the Debt Financing at their own direction shall be permitted to bring any claim against a Debt Financing Source for failing to satisfy any obligation to fund the Debt Financing pursuant to the terms of any such agreement, (g) no amendment or waiver of this Section 9.18 or Section 9.11 or any of the defined terms used herein or therein including, but not limited to, the definitions of "Debt Financing," or "Debt Financing Sources," that is materially adverse to the Debt Financing Sources in their capacity as such shall be effective without the prior written consent of the lenders party to the agreements governing the Debt Financing to which such amendment is materially adverse, and (h) the Debt Financing Sources are express and intended third party beneficiaries of this Section 9.18 and Section 9.11.

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*[Signature page follows]* 

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**IN WITNESS WHEREOF** the parties have executed this Agreement as of the date first written above.

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| | |
|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| By: | /s/ Jean-Christophe Bédos |
|  | Name: Jean-Christophe Bédos |
|  | Title: President and Chief Executive Officer |
| By: | /s/ Marco Pasteris |
|  | Name: Marco Pasteris |
|  | Title: Vice-President, Finance |
| **SUTKIEWICZ CHILDREN'S TRUST** | **SUTKIEWICZ CHILDREN'S TRUST** |
| By: | /s/ Eric Sutkiewicz |
|  | Authorized Trustee |

---

---

| | |
|:---|:---|
| /s/ Eric Sutkiewicz | /s/ Lynn Sutkiewicz |
| Eric Sutkiewicz | Lynn Sutkiewicz |
| /s/ Michelle Ceresney | /s/ Jordan Sutkiewicz |
| Michelle Ceresney | Jordan Sutkiewicz |
|  | /s/ Jordan Sutkiewicz |
|  | Jordan Sutkiewicz, as Vendors' Representative |

---

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**EXHIBIT A** 

**Vendors** 

• Lynn Sutkiewicz

• Eric Sutkiewicz

• Sutkiewicz Children's Trust

• Jordan Sutkiewicz

• Michelle Ceresney

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**EXHIBIT B** 

**Form of Consulting Agreement with each of Jordan Sutkiewicz and Michelle Ceresney** 

See attached.

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**EXHIBIT C** 

**Form of Consulting Agreement with Eric Sutkiewicz** 

See attached.

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**EXHIBIT D** 

**Form of First Vendors' Note** 

See attached.

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**EXHIBIT E** 

**Form of License Agreement** 

See attached.

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**EXHIBIT F** 

**Form of Second Vendors' Note** 

See attached.

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**EXHIBIT G** 

**Form of Restrictive Covenants Agreement** 

See attached.

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**SCHEDULE 2.4** 

**Illustrative Calculation of Working Capital** 

See attached.

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**SCHEDULE 8.7(6)** 

**Third Party Claim Procedure** 

(1) If the Indemnifying Person assumes the investigation and defence of a Third Party Claim:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) the Indemnifying Person shall pay for all reasonable costs and expenses of the investigation and defence of
the Third Party Claim except that the Indemnifying Person shall not, so long as it diligently conducts such defence, be liable to the Indemnified Person for any fees of other counsel or any other expenses with respect to the defence of the Third
Party Claim, incurred by the Indemnified Person after the date the Indemnifying Person validly exercised its right to assume the investigation and defence of the Third Party Claim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) the Indemnifying Person shall reimburse the Indemnified Person for all reasonable costs and expenses
incurred by the Indemnified Person in connection with the investigation and defence of the Third Party Claim prior to the date the Indemnifying Person validly exercised its right to assume the investigation and defence of the Third Party Claim;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) the Indemnified Person shall not contact or communicate with the Person making the Third Party Claim without
the prior written consent of the Indemnifying Person, unless required by applicable Law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) legal counsel chosen by the Indemnifying Person to defend the Third Party Claim must be satisfactory to the
Indemnified Person, acting reasonably; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5) the Indemnifying Person may not compromise and settle or remedy, or cause a compromise and settlement or
remedy, of a Third Party Claim without the prior written consent of the Indemnified Person, which consent may not be unreasonably withheld or delayed.

(2) If the Indemnifying Person (i) is not entitled to assume the investigation and defence of a Third Party
Claim under Section 8.7(7) of the Agreement, (ii) does not elect to assume the investigation and defence of a Third Party Claim, or (iii) assumes the investigation and defence of a Third Party Claim but fails to diligently pursue such
defence, the Indemnified Person has the right (but not the obligation) to undertake the defence of the Third Party Claim. In the case where the Indemnifying Person fails to diligently pursue the defence of the Third Party Claim, the Indemnified
Person may not assume the defence of the Third Party Claim unless the Indemnified Person gives the Indemnifying Person written demand to diligently pursue the defence and the Indemnifying Person fails to do so within fourteen (14) days after
receipt of the demand, or such shorter period as may be required to respond to any deadline imposed by a court, arbitrator or other tribunal.<sup></sup>

The Indemnified Person and the Indemnifying Person agree to keep each other fully informed of the status of any Third Party Claim and any related proceedings and to use their reasonable efforts to minimize Damages with respect to any Third Party Claim. If the Indemnifying Person assumes the investigation and defence of a Third Party Claim, the Indemnified Person shall, at the request and expense of the Indemnifying Party, use its reasonable efforts to make available to the Indemnifying Person, on a timely basis, those employees whose assistance, testimony or presence is necessary to assist the Indemnifying Person in investigating and defending the Third Party Claim. The Indemnified Person shall, at the request and expense of the Indemnifying Person, make available to the Indemnifying Person, or its representatives, on a timely basis all documents, records and other materials in the possession, control or power of the Indemnified Person, reasonably required by the Indemnifying Person for its use solely in defending any Third Party Claim which it has elected to assume the investigation and defence of. The Indemnified Person shall cooperate on a timely basis with the Indemnifying Person in the defence of any Third Party Claim.

## Exhibit 4.42

**Exhibit 4.42** 

**CERTAIN CONFIDENTIAL INFORMATION (INDICATED BY "[\*\*\*]") CONTAINED IN THIS AGREEMENT HAS BEEN REDACTED BECAUSE (I) THE COMPANY CUSTOMARILY AND ACTUALLY TREATS THE REDACTED INFORMATION AS PRIVATE OR CONFIDENTIAL AND (II) THE OMITTED INFORMATION IS NOT MATERIAL.** 

**AMENDMENT NO. 1 TO THE** 

**SHARE PURCHASE AGREEMENT** 

**THIS AMENDMENT NO. 1 TO THE SHARE PURCHASE AGREEMENT** (this "**Amendment**") is made as of June 28, 2025 between Birks Group Inc., a corporation existing under the federal laws of Canada (the "**Purchaser**"), Eric Sutkiewicz, Lynn Sutkiewicz, Sutkiewicz Children's Trust, Jordan Sutkiewicz and Michelle Ceresney (collectively, the "**Vendors**"), and Jordan Sutkiewicz, as the Vendors' representative (the "**Vendors' Representative**").

**WHEREAS:** 

1. The Purchaser, the Vendors and the Vendors' Representative entered into a share purchase agreement
dated as of June 6, 2025 (the "**Share Purchase Agreement** ").

2. Pursuant to Section 9.4 of the Share Purchase Agreement, the Share Purchase Agreement can be amended
upon the approval, in writing, executed by each of the Vendors and the Purchaser.

3. The Purchaser and the Vendors wish to amend certain terms of the Share Purchase Agreement as provided for
herein.

4. The Vendors' Representative wishes to acknowledge his agreement to this Amendment as representative of
the Vendors pursuant to Section 9.8 of the Share Purchase Agreement.

5. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Share Purchase
Agreement.

**NOW THEREFORE**, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the Share Purchase Agreement is hereby amended as follows:

1. <u>Recital C</u> 

Recital C of the Share Purchase Agreement is hereby deleted and replaced with the following:

*The Vendors are, as applicable and as listed in Schedule 3.3(2) and 3.2(2) of the Disclosure Letter, the legal and beneficial owners of (i) all of the issued and outstanding shares of the Holdings Entities and (ii) all of the issued and outstanding shares of the Target, other than shares of the Target which are legally and beneficially owned by the Holding Entities (collectively, the "****Purchased Shares****").* 

2. <u>Section</u> <u>1.1(dddd)</u> 

Section 1.1(dddd) of the Share Purchase Agreement is hereby deleted and replaced with the following:

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"***Purchased Shares***" has the meaning set forth in the Recitals.

3. <u>Section</u> <u>5.3</u> 

The following Section 5.3 is added to the Share Purchase Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***5.3 Waiver Regarding Required Consent for [\*\*\*]***

[\*\*\*]

4. <u>Section</u> <u>5.4</u> 

The following Section 5.4 is added to the Share Purchase Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***5.4 Waiver Regarding Required Consent for [\*\*\*]***

[\*\*\*]

5. <u>Section</u> <u>8.1(1)</u> 

Section 8.1(1) of the Share Purchase Agreement is amended by (i) deleting "and" at the end of Section 8.1(1)(5), (ii) deleting the period at the end of Section 8.1(1)(6) and replacing it with "; and", and (iii) adding the following as a new Section 8.1(1)(7):

[\*\*\*]

6. <u>Entire Agreement</u> 

The Share Purchase Agreement, as amended by this Amendment, contains the entire agreement between the parties as to its subject matter and supersede all prior contracts, obligations, representations, conduct and understandings between the parties with respect to the subject matter herein. Except with respect to the modifications expressly implemented in accordance with this Amendment, the content of this Amendment shall not in any way be interpreted as modifying other terms and conditions of the Share Purchase Agreement and it contains no other modification, whether implicit or ancillary, and no other change in any other respect, and the Share Purchase Agreement remains in full force and effect and is hereby ratified and confirmed by the Parties. On and after the date of this Amendment, each reference in the Share Purchase Agreement or in any other agreements, documents, or instruments executed and delivered pursuant to, or in connection with the Share Purchase Agreement, will mean and be a reference to the Share Purchase Agreement as amended by this Amendment.

7. <u>Severance</u> 

If a provision of this Amendment would, but for this clause, be void, unenforceable or illegal in a jurisdiction, the provision will be read down to the extent necessary to avoid that result (and if the provision cannot be read down, to that extent, it will be severed in that jurisdiction), without affecting the validity and enforceability of that provision in any other jurisdiction or any other provisions of this Amendment.

8. <u>Titles and Subtitles</u>.

The titles and subtitles used in this Amendment are used for convenience only and are not to be considered in construing or interpreting this Amendment.

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9. <u>Variation</u> 

This Amendment can only be varied by an instrument in writing signed by the Purchaser and the Vendors' Representative.

10. <u>Governing Law</u> 

This Amendment will be governed by and construed in accordance with the laws of the Province of Ontario.

11. <u>Counterparts</u> 

This Amendment may be executed and delivered in counterparts and all of which, when taken together, will be deemed to constitute one and the same agreement. A signed copy of this Amendment delivered by facsimile, email or other means of electronic transmission, including electronic signatures, will be deemed to have the same legal effect as delivery of an original signed copy of this Amendment. Each person who executes this Amendment on behalf of a party under a power of attorney or otherwise declares and warrants that he or she is not aware of any fact or circumstance that might affect his or her authority to do so under that power.

[*Remainder of this page intentionally left blank*]

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**IN WITNESS WHEREOF** the parties have executed this Amendment as of the date first written above.

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| | | |
|:---|:---|:---|
|  | **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
|  | By: | /s/ Jean-Christophe Bédos |
|  |  | Name: Jean-Christophe Bédos |
|  |  | Title: President and Chief Executive Officer |
|  | By: | /s/ Marco Pasteris |
|  |  | Name: Marco Pasteris |
|  |  | Title: Vice-President, Finance |
|  | **Sutkiewicz Children's Trust** | **Sutkiewicz Children's Trust** |
|  | By: | /s/ Eric Sutkiewicz |
|  |  | Authorized Trustee |
| /s/ Eric Sutkiewicz |  | /s/ Lynn Sutkiewicz |
| **Eric Sutkiewicz** |  | **Lynn Sutkiewicz** |
| /s/ Michelle Ceresney |  | /s/ Jordan Sutkiewicz |
| **Michelle Ceresney** |  | **Jordan Sutkiewicz** |
|  |  | /s/ Jordan Sutkiewicz |
|  |  | **Jordan Sutkiewicz,** as Vendors' Representative |

---

## Exhibit 4.43

**Exhibit 4.43** 

**CONFIDENTIAL** 

July 21, 2025

To the Board of Directors of Birks Group Inc.:

We write this letter in our capacity as majority shareholder (along with the shares owned with our related entity Montel S.à.r.l) of Birks Group Inc. (the "**Company**") for the purposes of providing financial support to the Company.

This letter is intended to demonstrate Mangrove Holding S.A.'s willingness to provide additional financial support to the Company up to an aggregate amount of $1,348,227 to assist the Company in satisfying the Company's obligations and debt service requirements as they come due in the normal course of operations, or in meeting its financial covenant requirements of maintaining minimum excess availability levels of $8.5 million at all times, as defined in the credit facility arrangements provided by Wells Fargo Capital Finance Corporation Canada and SLR Credit Solutions (the "**Financial Covenants**"), until at least July 31, 2026.

Such financial support will be in the form of (i) a deferral of interest payments (the "**Interest Payment Deferrals**") up to a maximum of $813,227 which is otherwise due to Mangrove Holding S.A by the Company, effective immediately and through to July 31, 2026 (the "**Moratorium Period**") pursuant to the Loan Agreement with Mangrove Holdings S.A. of $3,750,000 and the Loan Agreement with Montel S.à.r.l of $2,051,400 (the "**Existing Loan Agreements**")**,** (ii) if necessary, additional advances up to a maximum aggregate amount of $500,000 in the form of subordinated debt (collectively, the "**Additional Advances**"), (iii) a deferral of the Closing Fee (as hereinafter defined), representing an amount of up to $10,000 and (iv) a deferral of the Committed Capital Charge (as hereinafter defined), representing an aggregate amount of $25,000. The Company shall ensure that it obtains all necessary third-party approvals and consents as may be required in connection with the Additional Advances, the Interest Payment Deferrals, the Additional Advance Interest Payment Deferral (as hereinafter defined), the Closing Fee and the Committed Capital Charge, including from its senior lenders.

Subject in all respects to the aforementioned $1,348,227 aggregate limit and it being understood that in no event shall the financial support and liability of the undersigned pursuant to (i) the Interest Payment Deferrals in any circumstances exceed $813,227, (ii) the Additional Advances in any circumstances exceed $500,000**,** (iii) the Closing Fee in any circumstances exceed $10,000, and (iv) the Committed Capital Charge in any circumstances exceed $25,000, Mangrove Holding S.A. confirms that, as long as we, together with the shares owned by Montel S.à.r.l, will remain majority shareholders of the Company, we will continue to provide financial support to assist the Company in (i) avoiding any breach of the Financial Covenants at any time until July 31, 2026, and (ii) satisfying, on a timely basis, all of the Company's liabilities and obligations that it is unable to satisfy when due until July 31, 2026. The Company shall provide a reasonable delay for any Additional Advances to be disbursed.

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The Additional Advances will bear interest at a rate of 15% per annum, but no interest payment or principal repayment shall be made prior to the earlier of July 31, 2026 and the date of the occurrence of one of the Termination Conditions (as hereinafter defined) (**"Additional Advance Interest Payment Deferral**"), and the Additional Advances will be subject to any other terms and conditions mutually acceptable to the Company and Mangrove Holding S.A., taking into account the financial situation in which the Company will then find itself, but in any event such terms and conditions shall be no less favourable to Mangrove Holding S.A. than those in the Existing Loan Agreements.

In addition and subject to the terms and conditions herein, the undersigned represents that Mangrove Holding S.A. has the intent and ability to provide the financial support outlined in this letter to the Company and to provide Additional Advances to the extent and when deemed necessary by the Company, upon request by the Company's Board of Directors, and that there are no restrictions on Mangrove Holding S.A. to provide such financial support in the form of Interest Payment Deferrals of up to $813,227**,** Additional Advances of up to $500,000, the Additional Advance Interest Payment Deferral of up to $75,000**,** the Closing Fee amount of up to $10,000, and the Committed Capital Charge of $25,000 as set forth herein. During the Moratorium Period, interest under the Existing Loan Agreements and the Additional Advances will continue to accrue at the rates set out therein or herein, as applicable, and the total amount of the Interest Payment Deferrals, the Additional Advance Interest Payment Deferral will become payable on the earlier of (i) the end of the Moratorium Period and (ii) the date on which one of the Termination Events (as hereinafter defined) occurs, subject in all respects to any subordination agreements between Mangrove Holding S.A and/or Montel S.à.r.l and the Company's other creditors, respectively.

------

The Company shall pay a reasonable closing fee capped at a maximum of $10,000 to cover for legal and administrative costs (the "**Closing Fee**"). The Closing Fee shall be fully earned as of the date hereof but the payment of the Closing Fee shall be deferred until the earlier of July 31, 2026 or the date of the occurrence of one of the Termination Conditions. In addition, a committed capital charge of 5% per annum (the "**Committed Capital Charge**") will be charged to the Company upon execution of this agreement and will be fully earned as of the date hereof but the payment of the Committed Capital Charge shall be deferred until the earlier of July 31, 2026 or the date of the occurrence of one of the Termination Conditions. The amount and payment of the Closing Fee and the Committed Capital Charge will be subject to the Company's senior lenders' approval.

Any request by the Company's Board of Directors addressed to Mangrove Holding S.A. for Additional Advances shall be accompanied by a current business plan and projected cash flows of the Company for information purposes.

This undertaking will be valid from the date of this letter through July 31, 2026 and will become null and void prior to July 31, 2026 upon the occurrence of the first of the following events (the "**Termination Conditions**"): (i) in the case of a change of control of the Company, where Mangrove Holding S.A. (or its related entities) lose its majority shareholding, (ii) upon a closing of a sale of assets that results in an updated Board approved F26-F27 Forecast with projected excess availability of over $10 million and a reduction in cash management of $3 million (as compared to the June 2025 actual amounts) for both thresholds to be demonstrated monthly and with the expectation that such improvements will exist at all times, (iii) a significant form of equity investment and/or equity recapitalization of the Company, or (iv) in the case of bankruptcy or insolvency of the Company.

[Signature pages follow]

------

**Signed** this <u>21</u> day of July, 2025.

---

| | |
|:---|:---|
| **MANGROVE HOLDING S.A.** | **MANGROVE HOLDING S.A.** |
| by  | /s/ Christian Reiser |
|  | Name: Christian Reiser |
|  | Title: Director<br> (with the capacity to bind Mangrove Holding S.A.) |

---

The undersigned acknowledges and agrees to the Interest Payment Deferrals referred to herein as it relates to Montel S.à.r.l.

**Signed** this <u>21</u> day of July, 2025.

---

| | |
|:---|:---|
| **MONTEL S.à.r.l.** | **MONTEL S.à.r.l.** |
| by  | /s/ Jorrit Crompvoets<br> /s/ Natela Portshidze |
|  | Name: Jorrit Crompvoets<br> Name: Natela Portshidze |
|  | Title:<br> (with the capacity to bind Montel S.à.r.l.) |

---

------

**Acknowledged and agreed to** by the Company this <u>21</u> day of July, 2025.

---

| | |
|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| by  | /s/ Jean-Christophe Bédos |
|  | Name: Jean-Christophe Bédos |
|  | Title: President and CEO |

---

## Exhibit 4.44

**Exhibit 4.44** 

**CONFIDENTIAL** 

July 21, 2025

To the Board of Directors of Birks Group Inc.:

The undersigned, Davide Barberis Canonico, writes this letter in his personal capacity for the purposes of providing financial support to the Company.

This letter is intended to demonstrate the undersigned's willingness to provide financial support to the Company up to an aggregate amount of $850,000 to assist the Company in satisfying the Company's obligations and debt service requirements as they come due in the normal course of operations, or in meeting its financial covenant requirements of maintaining minimum excess availability levels of $8.5 million at all times, as defined in the credit facility arrangements provided by Wells Fargo Capital Finance Corporation Canada and SLR Credit Solutions (the "**Financial Covenants**"), until at least July 31, 2026.

Such financial support will be in the form of (i) advances up to a maximum aggregate amount of $800,000 in the form of subordinated debt (collectively, the "**Advances**"), (ii) a deferral of the Closing Fee (as hereinafter defined), representing an amount of up to $10,000, and (iii) a deferral of the Committed Capital Charge (as hereinafter defined), representing an aggregate amount of $40,000. The Company shall ensure that it obtains all necessary third-party approvals and consents as may be required in connection with the Advances, the Advance Interest Payment Deferral (as hereinafter defined), the Closing Fee and the Committed Capital Charge, including from its senior lenders.

Subject in all respects to the aforementioned $850,000 aggregate limit and it being understood that in no event shall the financial support and liability of the undersigned pursuant to (i) the Advances in any circumstances exceed $800,000, (ii) the Closing Fee in any circumstances exceed $10,000, and (iii) the Committed Capital Charge in any circumstances exceed $40,000, the undersigned confirms that, as long as Mangrove Holding S.A. and Montel S.à.r.l remain majority shareholders of the Company, the undersigned will continue to provide financial support to assist the Company in (i) avoiding any breach of the Financial Covenants at any time until July 31, 2026, and (ii) satisfying, on a timely basis, all of the Company's liabilities and obligations that it is unable to satisfy when due until July 31, 2026. The Company shall provide a reasonable delay for any

------

Advances to be disbursed.

The Advances upon funding will bear interest at a rate of 15% per annum, but no interest payment or principal repayment shall be made prior to the earlier of July 31, 2026 and the date of the occurrence of one of the Termination Conditions (as hereinafter defined) ("**Advance Interest Payment Deferral**"), and the Advances will be subject to any other terms and conditions mutually acceptable to the Company and the undersigned, taking into account the financial situation in which the Company will then find itself.

In addition and subject to the terms and conditions herein, the undersigned represents that he has the intent and ability to provide the financial support outlined in this letter to the Company and to provide Advances to the extent and when deemed necessary by the Company, upon request by the Company's Board of Directors, and that there are no restrictions on the undersigned to provide such financial support in the form of Advances of up to $800,000, Advances Interest Payment Deferral of up to $120,000, the Closing Fee of up to $10,000, and the Committed Capital Charge of $40,000 set forth herein. From the date hereof and until July 31, 2026 (the "**Moratorium Period**"), interest under the Advances will accrue at the rate set out herein and the total amount of the Advance Interest Payment Deferral will become payable on the earlier of (i) the end of the Moratorium Period, and (ii) the date on which one of the Termination Events (as hereinafter defined) occurs, subject in all respects to any subordination agreements between the undersigned and the Company's other creditors.

The Company shall pay a reasonable closing fee capped at a maximum of $10,000 to cover for legal and administrative costs (the "**Closing Fee**"). The Closing Fee shall be fully earned as of the date hereof, but the payment of the Closing Fee shall be deferred until the earlier of July 31, 2026 or the date of the occurrence of one of the Termination Conditions (as hereinafter defined). In addition, a committed capital charge of 5% per annum (the "**Committed Capital Charge**") will be charged to the Company upon execution of this agreement and will be fully earned as of the date hereof but the payment of the Committed Capital Charge shall be deferred until the earlier of July 31, 2026 or the date of the occurrence of one of the Termination Conditions (as hereinafter defined). The amount and payment of the Closing Fee and the Committed Capital Charge will be subject to the Company's senior lenders' approval.

------

Any request by the Company's Board of Directors addressed to the undersigned for Advances shall be accompanied by a current business plan and projected cash flows of the Company for information purposes.

This undertaking will be valid from the date of this letter through July 31, 2026 and will become null and void prior to July 31, 2026 upon the occurrence of the first of the following events (the "**Termination Conditions**"): (i) in the case of a change of control of the Company, where Mangrove Holding S.A. (or its related entities) lose its majority shareholding, (ii) upon a closing of a sale of assets that results in an updated Board approved F26-F27 Forecast with projected excess availability of over $10 million and a reduction in cash management of $3 million (as compared to the June 2025 actual amounts) for both thresholds to be demonstrated monthly and with the expectation that such improvements will exist at all times, (iii) a significant form of equity investment and/or equity recapitalization of the Company, or (iv) in the case of bankruptcy or insolvency of the Company.

*[Signature pages follow]*

------

**Signed** this 21st day of July, 2025.

---

| |
|:---|
| /s/ Davide Barberis Canonico |
| Davide Barberis Canonico |

---

------

**Acknowledged and agreed to** by the Company this 21st day of July, 2025.

---

| | |
|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| by  | /s/ Jean-Christophe Bédos |
|  | Name: Jean-Christophe Bédos |
|  | Title: President and CEO |

---

## Exhibit 4.45

**Exhibit 4.45** 

**CONFIDENTIAL**

July 21, 2025

To the Board of Directors of Birks Group Inc.:

The undersigned, Marco Pasteris, writes this letter in his personal capacity for the purposes of providing financial support to the Company.

This letter is intended to demonstrate the undersigned's willingness to provide financial support to the Company up to an aggregate amount of $215,000 to assist the Company in satisfying the Company's obligations and debt service requirements as they come due in the normal course of operations, or in meeting its financial covenant requirements of maintaining minimum excess availability levels of $8.5 million at all times, as defined in the credit facility arrangements provided by Wells Fargo Capital Finance Corporation Canada and SLR Credit Solutions (the "**Financial Covenants**"), until at least July 31, 2026.

Such financial support will be in the form of (i) advances up to a maximum aggregate amount of $200,000 in the form of subordinated debt (collectively, the "**Advances**"), (ii) a deferral of the Closing Fee (as hereinafter defined), representing an amount of up to $5,000, and (iii) a deferral of the Committed Capital Charge (as hereinafter defined), representing an aggregate amount of $10,000. The Company shall ensure that it obtains all necessary third-party approvals and consents as may be required in connection with the Advances, the Advance Interest Payment Deferral (as hereinafter defined), the Closing Fee and the Committed Capital Charge, including from its senior lenders.

Subject in all respects to the aforementioned $215,000 aggregate limit and it being understood that in no event shall the financial support and liability of the undersigned pursuant to (i) the Advances in any circumstances exceed $200,000, (ii) the Closing Fee in any circumstances exceed $5,000, and (iii) the Committed Capital Charge in any circumstances exceed $10,000, the undersigned confirms that, as long as Mangrove Holding S.A. and Montel S.à.r.l remain majority shareholders of the Company, the undersigned will continue to provide financial support to assist the Company in (i) avoiding any breach of the Financial Covenants at any time until July 31, 2026, and (ii) satisfying, on a timely basis, all of the Company's liabilities and obligations that it is unable to satisfy when due until July 31, 2026. The Company shall provide a reasonable delay for any Advances to be disbursed.

------

The Advances upon funding will bear interest at a rate of 15% per annum, but no interest payment or principal repayment shall be made prior to the earlier of July 31, 2026 and the date of the occurrence of one of the Termination Conditions (as hereinafter defined) ("**Advance Interest Payment Deferral**"), and the Advances will be subject to any other terms and conditions mutually acceptable to the Company and the undersigned, taking into account the financial situation in which the Company will then find itself.

In addition and subject to the terms and conditions herein, the undersigned represents that he has the intent and ability to provide the financial support outlined in this letter to the Company and to provide Advances to the extent and when deemed necessary by the Company, upon request by the Company's Board of Directors, and that there are no restrictions on the undersigned to provide such financial support in the form of Advances of up to $200,000, Advances Interest Payment Deferral of up to $30,000, the Closing Fee of up to $5,000, and the Committed Capital Charge of $10,000 set forth herein. From the date hereof and until July 31, 2026 (the "**Moratorium Period**"), interest under the Advances will accrue at the rate set out herein and the total amount of the Advance Interest Payment Deferral will become payable on the earlier of (i) the end of the Moratorium Period, and (ii) the date on which one of the Termination Events (as hereinafter defined) occurs, subject in all respects to any subordination agreements between the undersigned and the Company's other creditors.

The Company shall pay a reasonable closing fee capped at a maximum of $5,000 to cover for legal and administrative costs (the "**Closing Fee**"). The Closing Fee shall be fully earned as of the date hereof, but the payment of the Closing Fee shall be deferred until the earlier of July 31, 2026 or the date of the occurrence of one of the Termination Conditions (as hereinafter defined). In addition, a committed capital charge of 5% per annum (the "**Committed Capital Charge**") will be charged to the Company upon execution of this agreement and will be fully earned as of the date hereof but the payment of the Committed Capital Charge shall be deferred until the earlier of July 31, 2026 or the date of the occurrence of one of the Termination Conditions (as hereinafter defined). The amount and payment of the Closing Fee and the Committed Capital Charge will be subject to the Company's senior lenders' approval.

------

Any request by the Company's Board of Directors addressed to the undersigned for Advances shall be accompanied by a current business plan and projected cash flows of the Company for information purposes.

This undertaking will be valid from the date of this letter through July 31, 2026 and will become null and void prior to July 31, 2026 upon the occurrence of the first of the following events (the "**Termination Conditions**"): (i) in the case of a change of control of the Company, where Mangrove Holding S.A. (or its related entities) lose its majority shareholding, (ii) upon a closing of a sale of assets that results in an updated Board approved F26-F27 Forecast with projected excess availability of over $10 million and a reduction in cash management of $3 million (as compared to the June 2025 actual amounts) for both thresholds to be demonstrated monthly and with the expectation that such improvements will exist at all times, (iii) a significant form of equity investment and/or equity recapitalization of the Company, or (iv) in the case of bankruptcy or insolvency of the Company.

*[Signature pages follow]* 

------

**Signed** this 21st day of July, 2025.

---

| |
|:---|
| /s/ Marco Pasteris |
| Marco Pasteris |

---

------

**Acknowledged and agreed to** by the Company this 21st day of July, 2025.

---

| | |
|:---|:---|
| **BIRKS GROUP INC.** | **BIRKS GROUP INC.** |
| by  | /s/ Jean-Christophe Bédos |
|  | Name: Jean-Christophe Bédos |
|  | Title: President and CEO |

---

## Exhibit 8.1

**Exhibit 8.1** 

**<u>LIST OF SUBSIDIARIES OF BIRKS GROUP INC.</u>**

---

| | |
|:---|:---|
| **Name** | **Jurisdiction of Incorporation** |
|  Birks USA, Inc. (formerly Cash, Gold & Silver USA, Inc.) | Delaware |
|  Cash, Gold & Silver Inc. | Canada |
|  Birks Jewellers Limited | Hong Kong |
|  Birks Investments Inc. | Canada |
|  1000012146 Ontario Inc. | Ontario, Canada |
|  1000012167 Ontario Inc. | Ontario, Canada |
|  1067830 Ontario Limited | Ontario, Canada |
|  European & Co Inc. | Ontario, Canada |
|  985361 Ontario Limited | Ontario, Canada |
|  1170760 Ontario Limited | Ontario, Canada |

---

## Exhibit 12.1

**Exhibit 12.1** 

**Certification of Chief Executive Officer** 

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** 

I, Jean-Christophe Bédos, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual Report on Form 20-F of Birks Group Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: July 25, 2025 | /s/ Jean-Christophe Bédos |
|  | **Jean-Christophe Bédos,** |
|  | *President and Chief Executive Officer* |

---

## Exhibit 12.2

**Exhibit 12.2** 

**Certification of Chief Financial Officer** 

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002** 

I, Katia Fontana, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Annual Report on Form 20-F of Birks Group Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: July 25, 2025 | /s/ Katia Fontana |
|  | **Katia Fontana,** |
|  | ***Vice President and Chief Financial Officer*** |

---

## Exhibit 13.1

**Exhibit 13.1** 

**CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Annual Report of Birks Group Inc. (the "Company") on Form 20-F for the year ended March 29, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jean-Christophe Bédos, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.

---

| | |
|:---|:---|
| Date: July 25, 2025 | /s/ Jean-Christophe Bédos |
|  | **Jean-Christophe Bédos,** |
|  | *President and Chief Executive Office****r*** |

---

## Exhibit 13.2

**Exhibit 13.2** 

**CERTIFICATION PURSUANT TO** 

**18 U.S.C. SECTION 1350** 

**AS ADOPTED PURSUANT TO** 

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Annual Report of Birks Group Inc. (the "Company") on Form 20-F for the year ended March 29, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Katia Fontana, Vice President, Chief Financial & Administrative Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: July 25, 2025 | /s/ Katia Fontana |
|  | **Katia Fontana** |
|  | ***Vice President and Chief Financial Officer*** |

---

## Exhibit 15.1

**Exhibit 15.1** 

**Consent of Independent Registered Public Accounting Firm** 

We consent to the incorporation by reference in the registration statements on Form S-8 (Nos. 333-218932 and 333-273259) of Birks Group Inc. of our report dated July 25, 2025, with respect to the consolidated balance sheets of Birks Group Inc. as of March 29, 2025 and March 30, 2024, and the related consolidated statements of operations, other comprehensive income (loss), changes to stockholders' equity (deficiency) and cash flows for the years ended March 29, 2025, March 30, 2024, and March 25, 2023, and the related notes.

/s/ KPMG LLP

July 25, 2025

Montreal, Canada