EX-10.3 2 d486317dex103.htm EX-10.3 EX-10.3

Exhibit 10.3

Execution Copy

CREDIT AGREEMENT

CANADA GOOSE HOLDINGS INC.,

as Holdings,

- and -

CANADA GOOSE INC.,

as CGI Borrower and as the Borrower Representative,

- and -

CANADA GOOSE INTERNATIONAL AG,

as Swiss Borrower,

- and -

CANADIAN IMPERIAL BANK OF COMMERCE,

as the Administrative Agent, the Letter of Credit Issuer

and Swingline Lender,

- and -

THE LENDERS FROM TIME TO TIME PARTY

HERETO,

as Lenders

- and -

CANADIAN IMPERIAL BANK OF COMMERCE

THE TORONTO-DOMINION BANK

BANK OF MONTREAL

BARCLAYS BANK PLC

GOLDMAN SACHS BANK USA,

as Joint Lead Arrangers and Bookrunners

 

 

June 3, 2016

 

 


TABLE OF CONTENTS

 

ARTICLE 1 DEFINITIONS

     1  

1.1

 

DEFINED TERMS

     1  

1.2

 

OTHER INTERPRETIVE PROVISIONS

     108  

1.3

 

ACCOUNTING TERMS

     109  

1.4

 

ROUNDING

     109  

1.5

 

REFERENCES TO AGREEMENTS LAWS, ETC.

     109  

1.6

 

CURRENCY EQUIVALENTS GENERALLY

     110  

1.7

 

RATES

     110  

1.8

 

TIMES OF DAY

     111  

1.9

 

TIMING OF PAYMENT OR PERFORMANCE

     111  

1.10

 

CERTIFICATIONS

     111  

1.11

 

COMPLIANCE WITH CERTAIN SECTIONS

     111  

1.12

 

PRO FORMA AND OTHER CALCULATIONS

     112  

1.13

 

QUEBEC MATTERS

     115  

ARTICLE 2 AMOUNT AND TERMS OF CREDIT

     115  

2.1

 

COMMITMENTS

     115  

2.2

 

MINIMUM AMOUNT OF EACH BORROWING; MAXIMUM NUMBER OF BORROWINGS

     119  

2.3

 

NOTICE OF BORROWING

     120  

2.4

 

DISBURSEMENT OF FUNDS

     121  

2.5

 

REPAYMENT OF LOANS; EVIDENCE OF DEBT

     122  

2.6

 

CONVERSIONS AND CONTINUATIONS

     123  

2.7

 

PRO RATA BORROWINGS

     124  

2.8

 

INTEREST

     125  

2.9

 

INTEREST PERIODS

     127  

2.10

 

INCREASED COSTS, ILLEGALITY, ETC. OF LIBOR LOANS AND EURIBOR LOANS

     128  

2.11

 

COMPENSATION

     131  

2.12

 

CHANGE OF LENDING OFFICE

     132  

2.13

 

NOTICE OF CERTAIN COSTS

     133  

2.14

 

INCREMENTAL FACILITIES

     133  

2.15

 

EXTENDED FACILITIES

     135  

2.16

 

BORROWING IN OTHER CURRENCIES

     138  

2.17

 

DEFAULTING LENDERS

     139  

2.18

 

BORROWER REPRESENTATIVE

     141  

2.19

 

BORROWING BASE RESERVES; CHANGES TO BORROWING BASE RESERVES

     142  

ARTICLE 3 LETTERS OF CREDIT

     143  

3.1

 

LETTERS OF CREDIT

     143  

3.2

 

LETTER OF CREDIT REQUESTS

     145  

3.3

 

LETTER OF CREDIT PARTICIPATIONS

     147  

3.4

 

AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS

     149  

3.5

 

INCREASED COSTS

     151  

3.6

 

ROLE OF LETTER OF CREDIT ISSUER

     152  

3.7

 

CASH COLLATERAL

     153  

3.8

 

APPLICABILITY OF ISP AND UCP

     154  

3.9

 

CONFLICT WITH ISSUER DOCUMENTS

     155  

3.10

 

LETTERS OF CREDIT ISSUED FOR HOLDINGS AND RESTRICTED SUBSIDIARIES

     155  

3.11

 

PROVISIONS RELATED TO EXTENDED REVOLVING CREDIT COMMITMENTS

     155  

ARTICLE 4 FEES

     155  

4.1

 

FEES

     155  

 

-i-


4.2

 

VOLUNTARY REDUCTION OR TERMINATION OF COMMITMENTS

     157  

4.3

 

MANDATORY TERMINATION OF COMMITMENTS

     158  

ARTICLE 5 BANKER’S ACCEPTANCES

     158  

5.1

 

DRAFTS AND BA EQUIVALENT NOTES

     158  

5.2

 

BORROWINGS OF BANKERS ACCEPTANCES AND BA EQUIVALENT NOTES

     159  

5.3

 

FEES

     160  

5.4

 

REPAYMENT

     160  

5.5

 

MAJOR DISRUPTION

     161  

ARTICLE 6 PAYMENTS

     162  

6.1

 

VOLUNTARY PREPAYMENTS

     162  

6.2

 

MANDATORY PREPAYMENTS

     164  

6.3

 

METHOD AND PLACE OF PAYMENT

     165  

6.4

 

NET PAYMENTS

     165  

6.5

 

COMPUTATIONS OF INTEREST AND FEES

     169  

6.6

 

LIMIT ON RATE OF INTEREST

     169  

ARTICLE 7 CONDITIONS PRECEDENT TO INITIAL BORROWING

     170  

7.1

 

CREDIT DOCUMENTS

     170  

7.2

 

COLLATERAL

     171  

7.3

 

LEGAL OPINIONS

     171  

7.4

 

CLOSING CERTIFICATES

     172  

7.5

 

AUTHORIZATION OF PROCEEDINGS OF GUARANTORS AND THE BORROWERS; CORPORATE DOCUMENTS

     172  

7.6

 

FEES

     172  

7.7

 

REPRESENTATIONS AND WARRANTIES

     172  

7.8

 

ANTI-TERRORISM; PATRIOT ACT; ETC.

     173  

7.9

 

FINANCIAL STATEMENTS

     173  

7.10

 

NO MATERIAL ADVERSE EFFECT; NO DEFAULT OR EVENT OF DEFAULT

     173  

7.11

 

REFINANCING

     173  

7.12

 

INITIAL BORROWING BASE CERTIFICATE

     173  

7.13

 

NOTICE OF BORROWING; LETTER OF CREDIT REQUEST

     173  

7.14

 

COLLATERAL, CLOSING DATE EXCESS AVAILABILITY

     173  

ARTICLE 8 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS AFTER THE CLOSING DATE

     174  

8.1

 

NO DEFAULT; REPRESENTATIONS AND WARRANTIES

     174  

8.2

 

NOTICE OF BORROWING; LETTER OF CREDIT REQUEST

     174  

ARTICLE 9 REPRESENTATIONS AND WARRANTIES

     175  

9.1

 

CORPORATE STATUS AND STRUCTURE

     175  

9.2

 

CORPORATE POWER AND AUTHORITY

     175  

9.3

 

NO VIOLATION

     176  

9.4

 

LITIGATION

     176  

9.5

 

MARGIN REGULATIONS

     176  

9.6

 

GOVERNMENTAL APPROVALS

     176  

9.7

 

INVESTMENT COMPANY ACT

     177  

9.8

 

TRUE AND COMPLETE DISCLOSURE

     177  

9.9

 

FINANCIAL CONDITION; FINANCIAL STATEMENTS

     177  

9.10

 

COMPLIANCE WITH LAWS

     178  

9.11

 

TAX MATTERS

     178  

9.12

 

PENSION PLANS; COMPLIANCE WITH ERISA

     178  

9.13

 

INTELLECTUAL PROPERTY

     179  

9.14

 

ENVIRONMENTAL LAWS

     179  

 

-ii-


9.15

 

PROPERTIES

     180  

9.16

 

SOLVENCY

     180  

9.17

 

PATRIOT ACT; ANTI-TERRORISM LAWS

     180  

9.18

 

SECURITY INTEREST IN COLLATERAL

     181  

9.19

 

ANTI-TERRORISM LAWS

     182  

9.20

 

BORROWING BASE CERTIFICATES

     182  

9.21

 

NON-BANK RULES

     182  

ARTICLE 10 AFFIRMATIVE COVENANTS

     182  

10.1

 

INFORMATION COVENANTS

     183  

10.2

 

BOOKS, RECORDS, INSPECTIONS, AUDIT RIGHTS AND APPRAISALS

     188  

10.3

 

MAINTENANCE OF INSURANCE

     190  

10.4

 

PAYMENT OF TAXES

     191  

10.5

 

PRESERVATION OF EXISTENCE; CONSOLIDATED CORPORATE FRANCHISES

     191  

10.6

 

COMPLIANCE WITH STATUTES, REGULATIONS, ETC.

     191  

10.7

 

ERISA

     192  

10.8

 

MAINTENANCE OF PROPERTIES

     192  

10.9

 

MAINTENANCE OF CASH MANAGEMENT SYSTEMS

     192  

10.10

 

PHYSICAL INVENTORIES

     196  

10.11

 

ADDITIONAL GUARANTORS AND GRANTORS

     196  

10.12

 

PLEDGE OF ADDITIONAL STOCK AND EVIDENCE OF INDEBTEDNESS

     196  

10.13

 

USE OF PROCEEDS

     197  

10.14

 

FURTHER ASSURANCES

     197  

10.15

 

LINES OF BUSINESS

     199  

10.16

 

CANADIAN PENSION BENEFIT PLAN

     199  

ARTICLE 11 NEGATIVE COVENANTS

     200  

11.1

 

LIMITATION ON INDEBTEDNESS

     200  

11.2

 

LIMITATION ON LIENS

     209  

11.3

 

LIMITATION ON FUNDAMENTAL CHANGES

     209  

11.4

 

LIMITATION ON ASSET SALES

     211  

11.5

 

LIMITATION ON RESTRICTED PAYMENTS

     213  

11.6

 

LIMITATION ON SUBSIDIARY DISTRIBUTIONS

     220  

11.7

 

MODIFICATIONS OF ORGANIZATIONAL DOCUMENTS AND SUBORDINATED INDEBTEDNESS

     223  

11.8

 

PERMITTED ACTIVITIES

     223  

11.9

 

FISCAL YEARS

     224  

11.10

 

AFFILIATE TRANSACTIONS

     224  

11.11

 

FINANCIAL COVENANT

     227  

11.12

 

CANADIAN PENSION PLANS

     228  

11.13

 

NON-BANK RULE

     228  

ARTICLE 12 EVENTS OF DEFAULT

     228  

12.1

 

PAYMENTS

     228  

12.2

 

REPRESENTATIONS, ETC.

     228  

12.3

 

COVENANTS

     228  

12.4

 

DEFAULT UNDER OTHER AGREEMENTS

     229  

12.5

 

BANKRUPTCY, ETC.

     230  

12.6

 

ERISA; CANADIAN PENSION PLAN

     231  

12.7

 

GUARANTEE

     231  

12.8

 

SECURITY DOCUMENTS

     231  

12.9

 

SECURITY AGREEMENT

     232  

12.10

 

TERMINATION OF BUSINESS

     232  

12.11

 

JUDGMENTS

     232  

 

-iii-


12.12

 

CHANGE OF CONTROL

     232  

12.13

 

REMEDIES UPON EVENT OF DEFAULT

     232  

12.14

 

APPLICATION OF PROCEEDS

     233  

12.15

 

EQUITY CURE

     234  

ARTICLE 13 THE AGENTS

     236  

13.1

 

APPOINTMENT

     236  

13.2

 

LIABILITY OF AGENTS

     237  

13.3

 

NOTICE OF DEFAULT

     238  

13.4

 

NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS

     239  

13.5

 

REIMBURSEMENT AND INDEMNIFICATION

     239  

13.6

 

AGENTS IN THEIR INDIVIDUAL CAPACITIES

     240  

13.7

 

SUCCESSOR AGENTS

     240  

13.8

 

WITHHOLDING TAX

     241  

13.9

 

AGENTS UNDER SECURITY DOCUMENTS AND GUARANTEE

     242  

13.10

 

RIGHT TO REALIZE ON COLLATERAL AND ENFORCE GUARANTEE

     243  

13.11

 

ABL/TERM LOAN INTERCREDITOR AGREEMENT GOVERNS

     244  

ARTICLE 14 MISCELLANEOUS

     245  

14.1

 

AMENDMENTS, WAIVERS, AND RELEASES

     245  

14.2

 

NOTICES

     250  

14.3

 

NO WAIVER; CUMULATIVE REMEDIES

     251  

14.4

 

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

     251  

14.5

 

PAYMENT OF EXPENSES; INDEMNIFICATION

     251  

14.6

 

SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS

     254  

14.7

 

REPLACEMENTS OF LENDERS UNDER CERTAIN CIRCUMSTANCES

     260  

14.8

 

ADJUSTMENTS; SET-OFF

     262  

14.9

 

COUNTERPARTS

     262  

14.10

 

SEVERABILITY

     263  

14.11

 

INTEGRATION

     263  

14.12

 

GOVERNING LAW

     263  

14.13

 

SUBMISSION TO JURISDICTION; WAIVERS

     263  

14.14

 

ACKNOWLEDGMENTS

     264  

14.15

 

WAIVERS OF JURY TRIAL

     265  

14.16

 

CONFIDENTIALITY

     265  

14.17

 

DIRECT WEBSITE COMMUNICATIONS

     267  

14.18

 

USA PATRIOT ACT; PCAML; ETC.

     269  

14.19

 

JUDGMENT CURRENCY

     270  

14.20

 

PAYMENTS SET ASIDE

     270  

14.21

 

NO FIDUCIARY DUTY

     271  

14.22

 

DESIGNATED SECURED BANK PRODUCT/HEDGE AGREEMENTS

     271  

14.23

 

ACKNOWLEDGEMENT AND CONSENT TO BAIL-IN OF EEA FINANCIAL INSTITUTIONS

     272  

14.24

 

LOANS UNDER EXISTING CREDIT AGREEMENT

     273  

 

-iv-


SCHEDULES

 

Schedule 1.1(a)

   Revolving Credit Commitment

Schedule 1.1(b)

   Existing Letters of Credit and Existing Banker’s Acceptance

Schedule 1.1(c)

   Security Documents

Schedule 1.1(d)

   Account Debtors

Schedule 9.1

   Corporate Structure of Holdings and its Subsidiaries

Schedule 9.4

   Litigation

Schedule 9.12

   Benefit Plans and Pension Plans

Schedule 9.13

   Intellectual Property

Schedule 9.14

   Environmental

Schedule 9.15

   Real Property

Schedule 10.9

   Deposit and Securities Accounts

Schedule 10.14(d)

   Post-Closing Actions

Schedule 11.1

   Indebtedness

Schedule 11.2

   Closing Date Liens

Schedule 11.5

   Closing Date Investments

Schedule 11.10

   Affiliate Transactions

Schedule 14.2

   Notice Addresses

EXHIBITS

 

Exhibit A

   Assignment and Acceptance

Exhibit B-1

   Collateral Access Agreement – US Credit Parties

Exhibit B-2

   Collateral Access Agreement – Canadian Credit Parties

Exhibit C-1

   Customs Broker Agreement – US Credit Parties

Exhibit C-2

   Customs Broker Agreement – Canadian Credit Parties

Exhibit D

   Form of Intercompany Note

Exhibit E

   Joinder Agreement

Exhibit F

   Letter of Credit Request

Exhibit G

   Lender Promissory Note

Exhibit H

   Notice of Borrowing and Conversion or Continuation

Exhibit I

   Borrowing Base Certificate

Exhibit J

   Credit Card Notification

Exhibit K

   ABL/Term Loan Intercreditor Agreement

 

-v-


CREDIT AGREEMENT

CREDIT AGREEMENT, dated as of June 3, 2016, among CANADA GOOSE HOLDINGS INC., a corporation existing under the laws of British Columbia (“Holdings”), CANADA GOOSE INC., a corporation existing under the laws of Ontario (“CGI Borrower”), CANADA GOOSE INTERNATIONAL AG, a corporation (Aktiengesellschaft) incorporated and existing under the laws of Switzerland (“Swiss Borrower”), the lending institutions from time to time parties hereto as lenders (each a “Lender” and, collectively, the “Lenders”), and CANADIAN IMPERIAL BANK OF COMMERCE, as the administrative agent and collateral agent (in such capacities, the “Administrative Agent”), and as the Letter of Credit Issuer and Swingline Lender (such terms and each other capitalized term used but not defined in this preamble shall have the meaning provided in Section 1.1).

WHEREAS, CGI Borrower previously entered into that certain Credit Agreement dated as of December 9, 2013, among CGI Borrower (f.k.a. Canada Goose Products Inc.), Canadian Imperial Bank of Commerce, as administrative agent, and the other Persons party thereto from time to time (as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof prior to the date hereof, the “Existing Credit Agreement”);

WHEREAS, CGI Borrower and Swiss Borrower have requested that the Lenders, the Administrative Agent, the Letter of Credit Issuer and the Swingline Lender enter into this Agreement under which the Lenders, the Letter of Credit Issuer and the Swingline Lender agree to provide the Credit Facilities on the terms and conditions set forth in this Agreement;

WHEREAS, CGI Borrower intends to use the net proceeds from the Revolving Credit Loans and incurrences of Indebtedness under this Agreement on the Closing Date (i) to repay the Indebtedness and terminate commitments outstanding under the Existing Credit Agreement, it being understood that all letters of credit outstanding under the Existing Credit Agreement will remain outstanding and will be deemed to have been issued under this Agreement or otherwise Cash Collateralized or backstopped by a Letter of Credit on the Closing Date (such actions, the “Closing Refinancing”) and (ii) to pay Transaction Expenses; and the Borrowers intend to use the net proceeds from the Revolving Loans and incurrences of Indebtedness under this Agreement on the Closing Date and thereafter for other general corporate purposes;

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1    Defined Terms

As used herein, the following terms shall have the meanings specified in this Section 1.1 unless the context otherwise requires (it being understood that defined terms in this Agreement shall include in the singular number the plural and in the plural the singular):


10 Non-Bank Rule” means the rule that the aggregate number of Lenders under this Agreement which are not Qualifying Banks must not at any time exceed ten (10), all in accordance with the meaning of the Guidelines or legislation or explanatory notes addressing the same issues that are in force at such time;

20 Non-Bank Rule” means the rule that the aggregate number of creditors (including the Lenders), other than Qualifying Banks, of a Swiss Borrower under all its outstanding debts relevant for classification as debenture (Kassenobligation) must not at any time exceed twenty (20), all in accordance with the meaning of the Guidelines or legislation or explanatory notes addressing the same issues that are in force at such time;

ABL Priority Collateral” shall mean all present and after acquired, accounts receivable, credit card receivables, inventory, cash, cash equivalents, deposit accounts, securities and commodity accounts, general intangibles (other than Capital Stock and Intellectual Property), the Swiss Intercompany Indebtedness and the Swiss Intercompany Security, all books and records related to the foregoing and general intangibles evidencing, governing, securing or otherwise relating to the foregoing and, in each case, the proceeds thereof; provided, however, that upon execution and delivery of an ABL/Term Loan Intercreditor Agreement by the Administrative Agent, for all purposes under this Agreement, “ABL Priority Collateral” shall have the meaning set forth in such ABL/Term Loan Intercreditor Agreement;

ABL/Term Loan Intercreditor Agreement” shall mean an intercreditor agreement substantially in the form of Exhibit K (with such changes to such form as are (x) reasonably required by the Administrative Agent and are reasonably acceptable to CGI Borrower and (y) reasonably required by CGI Borrower and are reasonably acceptable to the Administrative Agent) among the Administrative Agent and the representatives for purposes thereof for holders of one or more other classes of Indebtedness (including any Term Loan Administrative Agent), and acknowledged by the Credit Parties that are party thereto;

ABR” shall mean for any day a fluctuating rate per annum equal to the highest of (i) the Federal Funds Effective Rate, plus 1/2 of 1%, (ii) the rate of interest in effect for such day as announced from time to time by Canadian Imperial Bank of Commerce as its “prime rate” at its principal office in New York City, and (iii) the rate per annum determined in the manner set forth in clause (a) of the definition of LIBO Rate for an Interest Period of one month as determined on the date of determination plus 1.00%. Any change in the ABR due to a change in the Federal Funds Effective Rate, Canadian Imperial Bank of Commerce’s “prime rate” or the LIBO Rate shall be effective on the effective date of such change in the Federal Funds Effective Rate, Canadian Imperial Bank of Commerce’s “prime rate” or the LIBO Rate, respectively;

ABR Loan” shall mean a Loan in U.S. Dollars made by the Lenders to a Borrower with respect to which such Borrower has specified that interest is to be calculated based on the ABR or is deemed to be calculated based on the ABR;

 

- 2 -


Accelerated Borrowing Base Delivery Period” shall mean either (a) any period commencing on the date that Excess Availability shall have been less than the greater of (x) $10,000,000 and (y) 12.5% of the Line Cap for five (5) consecutive Business Days and ending on the date thereafter that Excess Availability shall have been at least the greater of (i) $10,000,000 and (ii) 12.5% of the Line Cap for thirty (30) consecutive calendar days; provided, however, that during the period from the Closing Date until November 30, 2016, the applicable Excess Availability threshold for all purposes under this clause (a) shall be 5% of the Line Cap, with no fixed dollar amount, or (b) the period following the occurrence and during the continuation of any Specified Default;

Acceptable BOL” shall mean with respect to In-Transit Inventory, a negotiable bill of lading that (i) is issued by a common carrier which is not an Affiliate of the applicable vendor or Borrowing Base Party and which is in actual possession of such In-Transit Inventory or by an Eligible NVOCC; (ii) covers only such In-Transit Inventory; (iii) is issued to the order of a Borrowing Base Party or, while an Event of Default exists, if so requested by the Administrative Agent, to the order of the Administrative Agent; (iv) is subject to the Administrative Agent’s first priority Lien and no other Lien that is not a Permitted Lien; and (v) has not been identified by the Administrative Agent in writing to the Borrower Representative or the applicable Borrowing Base Party as being in form and content not reasonably acceptable to the Administrative Agent;

Account(s)” shall mean “accounts” as defined in the Uniform Commercial Code or in the PPSA (or to the extent governed by the Civil Code of Quebec, defined as “claims” for the purposes of the Civil Code of Quebec), as applicable, and, in each case, includes without limitation a right to payment of a monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (ii) for services rendered or to be rendered or (iii) arising out of the use of a credit or charge card or information contained on or for use with the card. The term “Account” does not include (a) commercial tort claims, (b) deposit accounts, (c) investment property or (d) letter-of-credit rights or letters of credit (with PPSA or UCC defined terms, as applicable, not otherwise defined in this Agreement having such defined meanings for the purposes of this sentence);

ACH” shall mean automated clearing house transfers;

Acquired Indebtedness” shall mean, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged, consolidated, or amalgamated with or into or became a Restricted Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in contemplation of, such other Person merging, consolidating, or amalgamating with or into or becoming a Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person;

 

- 3 -


Adjusted Total Revolving Credit Commitment” shall mean at any time the Total Revolving Credit Commitment less the aggregate Commitments of all Defaulting Lenders;

Adjustment Date” shall have the meaning provided in the definition of Applicable Margin;

Administrative Agent” shall mean Canadian Imperial Bank of Commerce, as the administrative agent and collateral agent for the Lenders under this Agreement and the other Credit Documents, or any successor administrative agent and collateral agent pursuant to Section 13.7;

Administrative Agent’s Office” shall mean the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 14.2 or such other address or account as the Administrative Agent may from time to time notify the Borrower Representative and the Lenders;

Administrative Questionnaire” shall have the meaning provided in Section 14.6(b)(ii)(D);

Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise;

Agent Parties” shall have the meaning provided in Section 14.17(b);

Agents” shall mean the Administrative Agent, and the Joint Lead Arrangers and Bookrunners;

Agreement” shall mean this Credit Agreement, as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms hereof;

Agreement Currency” shall have the meaning provided in Section 14.19;

AHYDO Payment” shall mean any mandatory prepayment or redemption pursuant to the terms of any Indebtedness that is intended or designed to cause such Indebtedness not to be treated as an “applicable high yield discount obligation” within the meaning of Code Section 163(i);

Alternative Currency” shall have the meaning provided in Section 2.16;

 

- 4 -


Applicable Indebtedness” shall have the meaning provided in the definition of Weighted Average Life to Maturity;

Applicable Margin” shall mean a percentage per annum equal to:

 

  (a) until delivery to the Administrative Agent and the Lenders of the financial statements required under Section 10.1(b) for the first full fiscal quarter of CGI Borrower completed following the Closing Date, the percentages per annum set forth in Pricing Level II in the table below;

 

  (b) on the first day of each fiscal quarter thereafter (each, an “Adjustment Date”), commencing with the fiscal quarter beginning on or about September 1, 2016, the Applicable Margin shall be determined from the pricing grid below based upon average daily Excess Availability for the most recently ended fiscal quarter immediately preceding such Adjustment Date, as calculated by the Administrative Agent as of the last day of such fiscal quarter;

 

Pricing
Level
   Average Excess Availability    ABR/Prime
Rate Loans
    LIBOR
Loans/ EURIBOR
Loans/European
Base Rate Loans/
BA Stamping Fee
Rate/Letter of
Credit Fee Rate
 

I

   Greater than or equal to 66% of the Line Cap      0.25     1.25

II

   Less than 66% of the Line Cap but greater than or equal to 33% of the Line Cap      0.50     1.50

III

   Less than 33% of the Line Cap      0.75     1.75

Notwithstanding the foregoing, the Applicable Margin in respect of any Class of Extended Revolving Credit Commitments or Revolving Loans made pursuant to any Extended Revolving Credit Commitments shall be the applicable percentages per annum set forth in the relevant Extension Amendment;

Appraisal Percentage” shall mean during the periods (a) commencing on December 1st of any calendar year and ending on and including May 31st of the immediately following calendar year, ninety percent (90%); and (b) commencing on June 1st of any calendar year and ending on and including November 30th of such calendar year, ninety two and one-half percent (92.5%);

 

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Appraised Value” shall mean the appraised orderly liquidation value (determined in a manner consistent with the “Conversion Scenario” described in the Appraisal of Canada Goose Inc. inventory appraisal by Hilco, dated as of January 26, 2016 or any subsequent appraisal in respect of Inventory; provided that for the initial Borrowing Base Certificate for May 2016 delivered in respect of the Closing Date, the appraised orderly liquidation value will utilize the “Conversion Scenario” under the “High Selling Period” liquidation values as stated in such Hilco appraisal), net of costs and expenses to be incurred in connection with any such liquidation, which value is expressed as a percentage of Cost of the Borrowing Base Parties’ Eligible Inventory (including Eligible In-Transit Inventory), or, if set forth separately in such appraisal, Eligible In-Transit Inventory, as applicable, in each case as set forth in the Borrowing Base Parties’ inventory stock ledger(s), which value shall be reasonably determined from time to time by reference to the most recent appraisal undertaken by an independent appraiser engaged by the Administrative Agent and reasonably satisfactory to the Borrower Representative;

Approved Fund” shall mean any Fund that is administered or managed by (i) a Lender, (ii) an Affiliate or branch of a Lender, or (iii) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

Asset Sale” shall mean:

 

  (i) the sale, conveyance, transfer, or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale Leaseback) (each a “disposition”) of CGI Borrower or any Restricted Subsidiary, or

 

  (ii) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than preferred Capital Stock of Restricted Subsidiaries issued in compliance with Section 11.1), whether in a single transaction or a series of related transactions,

 

  (iii) in each case under the foregoing clauses (i) and (ii), other than:

 

  (A) any disposition of Cash Equivalents or Investment Grade Securities or obsolete, worn out or surplus property or property (including leasehold property interests) that is no longer economically practical in its business or commercially desirable to maintain or no longer used or useful in the ordinary course of business or any disposition of inventory, immaterial assets, or goods (or other assets) in the ordinary course of business (including giveaway of products in connection with the conduct of any giving program of CGI Borrower and its Subsidiaries);

 

  (B)

the incurrence of Liens that are permitted to be incurred pursuant to Section 11.2, sales, transfers and other dispositions permitted by Section 11.3 or the making of any Restricted Payment or Permitted

 

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  Investment, that is permitted to be made, and is made, pursuant to Section 11.5;

 

  (C) any disposition of assets or issuance or sale of Equity Interests of any Restricted Subsidiary in any transaction or series of related transactions with an aggregate Fair Market Value of less than the greater of (x) $3,250,000 and (y) 7.5% of Consolidated EBITDA of CGI Borrower for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of such disposition;

 

  (D) any disposition of property or assets or issuance of securities (1) by a Restricted Subsidiary to CGI Borrower or (2) by CGI Borrower or a Restricted Subsidiary to a Restricted Subsidiary (so long as, with respect to dispositions of ABL Priority Collateral included in the Borrowing Base from a Credit Party to a Restricted Subsidiary that is not a Credit Party with a Fair Market Value in excess of $2,000,000, the Borrower Representative has delivered to the Administrative Agent an updated Borrowing Base Certificate giving Pro Forma Effect to such disposition);

 

  (E) any disposition in connection with a Permitted Reorganization;

 

  (F) any issuance, sale or pledge of Equity Interests in, or Indebtedness, or other securities of, an Unrestricted Subsidiary;

 

  (G) foreclosures, condemnation, expropriation, or any similar action on assets or casualty or insured damage to assets;

 

  (H) any financing transaction with respect to property built or acquired by CGI Borrower or any Restricted Subsidiary after the Closing Date, including Sale Leasebacks and asset securitizations permitted by this Agreement;

 

  (I)

CGI Borrower and any Restricted Subsidiary may (i) terminate or otherwise collapse its cost sharing agreements with CGI Borrower or any Subsidiary and settle any crossing payments in connection therewith, (ii) convert any intercompany Indebtedness to Equity Interests or any Equity Interests to intercompany Indebtedness, other than the Swiss Intercompany Indebtedness, (iii) transfer any intercompany Indebtedness to CGI Borrower or any Restricted Subsidiary, (iv) settle, discount, write off, forgive or cancel any intercompany Indebtedness or other obligation owing by CGI Borrower or any Restricted Subsidiary, other than the Swiss Intercompany Indebtedness, (v) settle, discount, write off, forgive or cancel any Indebtedness owing by any present or former consultants, managers, directors, officers or employees of any

 

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  Parent Entity, Holdings, CGI Borrower or any Subsidiary or any of their successors or assigns or (vi) surrender or waive contractual rights and settle or waive contractual or litigation claims;

 

  (J) the sale or discount of accounts receivable or notes receivable or the conversion of accounts receivable to notes receivable, in each case, in the ordinary course of business and relating only to accounts receivable which, if included in the Borrowing Base, the Credit Parties receive in any such sale, discount or conversion not less than the amounts borrowed or available to be borrowed under the Borrowing Base, so long as the Borrower Representative has delivered to the Administrative Agent an updated Borrowing Base Certificate giving Pro Forma Effect to such sale or discount;

 

  (K) (i) the sale, licensing, sub-licensing or other disposition of Intellectual Property or other general intangibles in the ordinary course of business; (ii) the sale, licensing, sub-licensing or other disposition of Intellectual Property or other general intangibles pursuant to any Intercompany License Agreement, and (iii) the expiration of any patent, trademark or copyright in accordance with its statutory term;

 

  (L) the unwinding of any Hedging Obligations or obligations in respect of Cash Management Services;

 

  (M) sales, transfers, and other dispositions of Investments in joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

  (N) the lapse or abandonment of Intellectual Property rights in the ordinary course of business, which in the reasonable business judgment of the Borrower Representative are not material to the conduct of the business of CGI Borrower and the Restricted Subsidiaries taken as a whole;

 

  (O) the issuance of directors’ qualifying shares and shares issued to foreign nationals as required by applicable law;

 

  (P) dispositions of property (other than ABL Priority Collateral) to the extent that (1) such property is exchanged for credit against the purchase price of similar replacement property that is promptly purchased or (2) the proceeds of such disposition are promptly applied to the purchase price of such replacement property (which replacement property is actually promptly purchased);

 

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  (Q) (i) leases, subleases, licenses, sublicenses, covenants not to sue, releases, consents and other forms of license (and terminations thereof), in each case in the ordinary course of business and which do not materially interfere with the business of CGI Borrower and the Restricted Subsidiaries, taken as a whole and (ii) Intercompany License Agreements;

 

  (R) dispositions of non-core assets acquired in connection with any Permitted Acquisition or Investment permitted hereunder;

 

  (S) any disposition of assets that do not constitute Collateral in any transaction or series of transactions with an aggregate Fair Market Value of less than $3,000,000;

 

  (T) (i) bulk sales or other dispositions of Inventory of CGI Borrower or a Restricted Subsidiary not in the ordinary course of business in connection with Store closings, at arm’s length so long as (A) the Payment Conditions are satisfied on a Pro Forma Basis and (B) the Borrower Representative has delivered to the Administrative Agent an updated Borrowing Base Certificate excluding such Inventory and (ii) sales or other dispositions by CGI Borrower or any Restricted Subsidiary of assets in connection with the closing or sale of a Store in the ordinary course of business of CGI Borrower and its Subsidiaries which consist of leasehold interests in the premises of such Store, the equipment and fixtures located at such premises and the books and records relating directly to the operations of such Store; provided that as to each and all such sales and closings, each such sale shall be on commercially reasonable prices and terms in a bona fide arm’s length transaction; and

 

  (U) licenses for the conduct of licensed departments within the Stores of CGI Borrower or any Restricted Subsidiary in the ordinary course of business;

Assignment and Acceptance” shall mean an assignment and acceptance substantially in the form of Exhibit A, or such other form as may be approved by the Administrative Agent and, to the extent Borrower Representative’s consent is required in connection with such assignment, the Borrower Representative;

Assignment Taxes” shall have the meaning provided in the definition of Other Taxes;

Authorized Officer” shall mean, with respect to any Person, any individual holding the position of chairman of the board (if an officer), the Chief Executive Officer, President, the Chief Financial Officer, the Chief Operating Officer, the Treasurer, the Controller, any Vice President, a Director, a Manager, or any other senior officer or agent with

 

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express authority to act on behalf of such Person designated as such by the board of directors or other managing authority of such Person;

Auto-Extension Letter of Credit” shall have the meaning provided in Section 3.2(d);

Availability Reserves” shall mean, without duplication of any other Borrowing Base Reserves or items that are otherwise addressed or excluded through eligibility criteria, and without duplication of any of the factors taken into account in determining Appraised Value, such reserves as the Administrative Agent from time to time determines or adjusts in its Permitted Discretion (in accordance with and subject to the limitations of Section 2.19) as reflecting (a) any impediments to the Administrative Agent’s ability to realize upon the Collateral included in a Borrowing Base, (b) claims and liabilities that the Administrative Agent determines in its Permitted Discretion will need to be satisfied in connection with the realization upon the Collateral included in a Borrowing Base, or (c) events, conditions, contingencies or risks (other than events, conditions, contingencies or risks known to the Administrative Agent as of the Closing Date, which shall not be the basis for establishment of any Availability Reserves unless (i) the Administrative Agent establishes such Availability Reserves on or before the Closing Date or (ii) such events, conditions, contingencies or risks shall have changed in an adverse manner to the Administrative Agent and the Lenders since the Closing Date) that adversely affect any component of a Borrowing Base, or the validity or enforceability of this Agreement or the other Credit Documents or any of the rights or remedies of the Secured Parties hereunder or thereunder. Without limiting the generality of the foregoing, by way of example and not limitation, Availability Reserves may include (but are not limited to), in the Administrative Agent’s Permitted Discretion, reserves based on: (i) rent and amounts payable to third party manufacturers in possession of Eligible Inventory; provided that the Availability Reserves in respect of leased and other locations described in the succeeding clauses (x) and (y) shall not be established in the Administrative Agent’s Permitted Discretion for a period of 90 days after the Closing Date (other than as set forth in the Borrowing Base Certificate delivered on the Closing Date) and shall be limited to an amount equal to the sum of, without duplication, (x) all past due rent for all of the Borrowing Base Parties’ leased locations plus (y) one month’s rent for (A) all of the Borrowing Base Parties’ leased locations in Landlord Lien States and (B) distribution centers or warehouses, plus (z) amounts due and payable by a Borrowing Base Party to third party manufacturers in possession of Eligible Inventory at third party manufacturing locations (other than, in each case, such locations, distribution centers or warehouses described in clauses (x) through (z) with respect to which the Administrative Agent has received a Collateral Access Agreement); provided, further, that (1) any reserve for any such location, distribution center or warehouse described in clauses (x) through (z) shall not exceed the amount advanced against Collateral consisting of Inventory located at such location, distribution center or warehouse, respectively, and (2) the reserves for amounts due and payable to third party manufacturers in possession of Eligible Inventory shall be limited from the Closing Date until November 30, 2016 to an amount up to 50% of the amount due and payable by the Borrowing Base Parties to such third party manufacturers and, commencing on and after December 1, 2016, shall be increased, in

 

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the Administrative Agent’s Permitted Discretion, to up to 100% of the amount due and payable by the Borrowing Base Parties to such third party manufacturers; (ii) customs duties, freight charges, taxes, tariffs, insurance charges and other charges that may reasonably be expected to become due with respect to any Eligible In-Transit Inventory or any Inventory associated with any Eligible Letter of Credit and other costs associated with Inventory of any Borrowing Base Party which is being imported into the United States, Canada, The Netherlands or Belgium; (iii) outstanding Taxes and other governmental charges due and owing by any Borrowing Base Party but unpaid, including, ad valorem, real estate, personal property, sales and other Taxes, and claims of the PBGC, FSCO and other Governmental Authorities in respect of Plans or Canadian Pension Plans, in the case of each of the foregoing items described in this clause (iii) that are secured by Liens that have priority over or are pari passu with the Liens of the Administrative Agent in the ABL Priority Collateral; (iv) salaries, wages, vacation pay and benefits due and owing to employees of any Credit Party but unpaid; (v) Canadian Priority Payable Reserves, Dutch Priority Payable Reserves, Swiss Priority Payable Reserves, UK Priority Payable Reserves and other Priority Payable Reserves; (vi) Customer Credit Liabilities; (vii) unpaid warehousemen’s or bailees’ charges due and owing by any Borrowing Base Party the Liens in respect of which may have priority over or are pari passu with the Liens of the Administrative Agent in the ABL Priority Collateral (other than for any location with respect to which the Administrative Agent has received a Collateral Access Agreement); (viii) Cash Management Services Reserves; (ix) Bank Product/Hedge Reserves; and (x) Dilution Reserves;

Available Commitment” shall mean an amount equal to the excess, if any, of (i) the amount of the aggregate Revolving Credit Commitments over (ii) the sum of the aggregate principal amount of (a) all Revolving Credit Loans (but not Swingline Loans) then outstanding and (b) the Revolving Credit Commitment Percentage of the aggregate Letters of Credit Outstanding at such time attributable to all Lenders with Revolving Credit Commitments at such time;

Average Revolver Debt” shall mean, as of any date, an amount equal to (a) the quotient obtained by dividing (i) the sum of each month-end balance of outstanding Revolving Loans reflected on a consolidated balance sheet of CGI Borrower (but excluding the notes thereto) prepared as of each such date on a consolidated basis in accordance with GAAP during the most recent Test Period ended on or prior to such date of determination, by (ii) twelve, minus (b) the average month-end balance of cash and Cash Equivalents (in each case, free and clear of all Liens other than Permitted Liens) reflected on a consolidated balance sheet of CGI Borrower (but excluding the notes thereto) prepared as of each such date on a consolidated basis in accordance with GAAP during the most recent Test Period ended on or prior to such date of determination;

Average Revolving Loan Utilization” shall mean, with respect to a given Class of Revolving Commitments, at any Adjustment Date, the average daily aggregate Revolving Credit Exposure (excluding any Revolving Credit Exposure resulting from outstanding Swingline Loans) of such Class for the three-month period immediately preceding such

 

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Adjustment Date (or, if less, the period from the Closing Date to such Adjustment Date), divided by the aggregate Commitments of such Class at such time;

BA Discount Proceeds” means, with respect to a particular Banker’s Acceptance or BA Equivalent Note, the following amount:

            F             

1+D x T

    365

where

F means the face amount of such Banker’s Acceptance or BA Equivalent Note;

D means the applicable discount BA Rate for such Banker’s Acceptance or BA Equivalent Note; and

T means the number of days to maturity of such Banker’s Acceptance or BA Equivalent Note,

with the amount as so determined being rounded up or down to the fifth decimal place and .000005 being rounded up;

BA Equivalent Note” has the meaning set forth in Section 5.1(a);

BA Lender” means any Lender which has not notified the Administrative Agent in writing that it is unwilling or unable to accept Drafts as provided for in Article 5;

BA Rate” means with respect to an issue of Banker’s Acceptances, (a) for a Lender which is a Bank Act (Canada) Schedule I bank (each, a “Schedule I Lender”), (i) the rate of interest per annum equal to the arithmetic average of the discount rates for Banker’s Acceptances having an identical or comparable term as the proposed Banker’s Acceptance, displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at or about 10:00 a.m. (Toronto time) of such day (or, if such day is not a Business Day, as of 10:00 a.m. (Toronto time) on the immediately preceding Business Day), or (ii) if such rates do not appear on the CDOR Page at such time and on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of 1/100 of 1.0%) as of 10:00 a.m. (Toronto time) on such day at which the Administrative Agent is then offering to purchase Banker’s Acceptances accepted by it having such specified term (or a term as closely as possible comparable to such specified term) and (b) for a Lender which is not a Schedule I Lender, for the proposed Banker’s Acceptance, the lesser of (i) the annual discount rate for Banker’s Acceptances or BA Equivalent Notes, as applicable, for such term quoted by such Lender at or about 10:00 a.m. (Toronto time) and (ii) the annual discount rate applicable to Banker’s Acceptances as

 

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determined for a Schedule I Lender in (a) above for the same Banker’s Acceptances issue plus 5 basis points;

BA Stamping Fee” means the amount calculated by multiplying the face amount of a Banker’s Acceptance or a BA Equivalent Note by the BA Stamping Fee Rate and then multiplying the result by a fraction, the numerator of which is the number of days to elapse from and including the date of acceptance of such Banker’s Acceptance or purchase of such BA Equivalent Note by a Lender up to but excluding the maturity date of such Banker’s Acceptance or BA Equivalent Note and the denominator of which is 365;

BA Stamping Fee Rate” means, with respect to a Banker’s Acceptance or a BA Equivalent Note, the applicable percentage rate per annum indicated below the reference to “BA Stamping Fee Rate” in the definition of “Applicable Margin” relevant to the period in respect of which a determination is being made;

Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution;

Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule;

Bank Product Agreement” shall mean any agreement or arrangement to provide Bank Products described in the definition thereof;

Bank Product Provider” shall mean (i) any Person that, at the time it enters into a Bank Product Agreement, is an Agent or a Lender or an Affiliate or branch of an Agent or a Lender or (ii) with respect to any Bank Product Agreement entered into prior to the Closing Date, any Person that is a Lender or an Affiliate or branch of a Lender on the Closing Date; provided that, if such Person is not a Lender, such Person executes and delivers to the Administrative Agent and the Borrower Representative a letter agreement in form and substance reasonably acceptable to the Administrative Agent pursuant to which such Person (a) appoints the Administrative Agent as its agent under the applicable Credit Documents and (b) agrees to be bound by the provisions of Article VI and Sections 7.1 and 8.13 of the Canadian Pledge Agreement, Sections 4.3, 6.6, 7.4, 7.6, 8.1 and 8.19 of the Canadian Security Agreement and corresponding or similar provisions in any other Security Document, in each case, as if it were a Lender;

Bank Product/Hedge Reserves” shall mean reserves in an amount equal to the then reasonably anticipated liabilities and obligations of the Credit Parties with respect to any Designated Secured Bank Product/Hedge Agreements, as calculated by the relevant Bank Product Provider or Hedge Bank and the Borrower Representative and provided to the Administrative Agent together with the supporting calculations therefor (a) on or prior to

 

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the date on which the applicable Secured Bank Product Agreement or Secured Hedge Agreement is designated as a Designated Secured Bank Product/Hedge Agreement and (b) thereafter promptly (but in any case not later than three Business Days or such later date as agreed by the Administrative Agent) following the date on which a request was made by the Administrative Agent to the Borrower Representative;

Bank Products” shall mean, collectively, any services or facilities (other than Cash Management Services or any Credit Event under this Agreement) on account of (i) credit and debit cards and (ii) purchase cards and other card payment products;

Banker’s Acceptance” means a depository bill, as defined in the Depository Bills and Notes Act (Canada), in Dollars that is in the form of a Draft signed by or on behalf of a Borrower and accepted by a BA Lender as contemplated under Article 5 or, for Lenders not participating in clearing services as contemplated in that Act, a draft or other bill of exchange in Dollars that is signed on behalf of a Borrower and accepted by a Lender, and each Existing Banker’s Acceptance;

Bankruptcy Code” shall have the meaning provided in Section 12.5;

Belgian Inventory” shall mean, as of the date of determination thereof, without duplication, all items of Eligible Inventory of a Swiss Borrowing Base Party located in Belgium; provided that (x) until the occurrence of a Belgian Security Event, the amount of Belgian Inventory included in the Swiss Borrowing Base shall be an amount not greater than $5,000,000 and (y) if a Belgian Security Event has not occurred on or prior to March 31, 2017, the amount of Belgian Inventory included in the Swiss Borrowing Base shall thereafter be zero;

Belgian Security Event” shall mean (x) the entry into force of the Belgian Act of 11 July 2013 on the modification of the Civil Code regarding security rights in rem on movable assets and on the abolition of various provisions in connection thereto and (y) compliance by the Borrowers with the requirements of item 3 on Schedule 10.14(d);

Benefited Lender” shall have the meaning provided in Section 14.8(a);

BIA” means the Bankruptcy and Insolvency Act (Canada);

Blocked Account Agreement” shall have the meaning provided in Section 10.9(c)(ii);

Blocked Account Banks” shall mean the banks with whom DDAs are maintained and with whom a Blocked Account Agreement has been, or is required to be, executed in accordance with the terms hereof;

Blocked Account Date” shall have the meaning provided in Section 10.9(c)(ii);

Blocked Accounts” shall have the meaning provided in Section 10.9(c)(ii);

 

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Board” shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor);

Bona Fide Debt Fund” shall mean any debt fund or other Person that is engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course and whose managers have fiduciary duties to the third-party investors in such fund or investment vehicle independent of their duties to Holdings or Bain Capital Partners, LLC; provided, however, in no event shall (x) any natural Person or (y) Holdings, CGI Borrower or any Subsidiary thereof be a “Bona Fide Debt Fund”;

Borrower” or “Borrowers” shall mean, individually or collectively, CGI Borrower, any Successor Borrower and/or Swiss Borrower as the context requires;

Borrower Materials” shall have the meaning provided in Section 14.17(b);

Borrower Representative” shall have the meaning provided in Section 2.18;

Borrowing” shall mean a borrowing by way of (i) a Loan of a Class and Type, made, converted, or continued on the same date and, in the case of a LIBOR Loan, or a EURIBOR Loan or an acceptance by a Lender of a draft or depository bill presented for acceptance as a Banker’s Acceptance or a BA Equivalent Note, in each case, as to which a single Interest Period is in effect, (ii) a Swingline Loan or (iii) a Protective Advance;

Borrowing Base” shall mean the aggregate of the CGI Borrowing Base and the Swiss Borrowing Base (the Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificates delivered to the Administrative Agent pursuant to Section 10.1(i), as adjusted to give effect to Borrowing Base Reserves (in accordance with and subject to the limitations of Section 2.19) following such delivery);

Borrowing Base Certificate” shall have the meaning provided in Section 10.1(i);

Borrowing Base Parties” shall mean, collectively, the CGI Borrowing Base Parties and the Swiss Borrowing Base Parties;

Borrowing Base Reserve” shall mean the sum (without duplication of any other reserve or items that are otherwise addressed or excluded through eligibility criteria, and without duplication of any of the factors taken into account in determining Appraised Value) of, without duplication, (a) the Availability Reserves; (b) the Inventory Reserves; (c) the Receivables Reserves; and (d) the aggregate amount of liabilities secured by Liens on Collateral included in the Borrowing Base, which Liens are senior in priority to the Administrative Agent’s Liens;

Broker-Dealer Subsidiary” shall mean any Subsidiary that is registered as a broker-dealer under the Exchange Act or any other applicable law requiring similar registration;

 

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Business Day” shall mean any day excluding Saturday, Sunday, and any other day on which banking institutions in Toronto, Ontario are authorized by law or other governmental actions to close, and, if such day relates to any interest rate settings as to a LIBOR Loan, EURIBOR Loan or European Base Rate Loan, any fundings, disbursements, settlements, and payments in respect of any such LIBOR Loan, EURIBOR Loan or European Base Rate Loan, or any other dealings to be carried out pursuant to this Agreement in respect of any such LIBOR Loan, EURIBOR Loan or European Base Rate Loan, such day shall be a day on which dealings in deposits in U.S. Dollars or Euros, as applicable, are conducted by and between banks in the applicable London interbank market;

Canadian Credit Party” shall mean CGI Borrower, Holdings and each other Credit Party organized, formed or incorporated under the laws of Canada or any province or territory thereof;

Canadian DB Plan” shall mean a Canadian Pension Plan that contains a “defined benefit provision” as such term is defined in the ITA;

Canadian Pension Plan” shall mean a “registered pension plan” as such term is defined in the ITA that is maintained, funded or sponsored by any Canadian Credit Party for its employees, but shall not include statutory plans, including the Canada and Quebec Pension Plans;

Canadian Pledge Agreement” shall mean the Share and Note Pledge Agreement, entered into by CGI Borrower, Holdings, each other pledgor from time to time party thereto and the Administrative Agent for the benefit of the Secured Parties;

Canadian Priority Payable Reserves” shall mean, without duplication of any other Borrowing Base Reserves with respect to the Canadian Credit Parties, such reserves as the Administrative Agent from time to time determines in its Permitted Discretion (in accordance with and subject to the limitations of Section 2.19) as being appropriate to reflect any amounts secured by any Liens on Collateral of any Canadian Credit Party included in the Borrowing Base, choate or inchoate, which rank or are capable of ranking in priority to, or pari passu with, the Liens of the Administrative Agent and/or any amounts which may represent costs relating to the enforcement of the Liens of the Administrative Agent on the Collateral of any Canadian Credit Party included in the Borrowing Base including, without limitation, any such amounts due and owing by any Canadian Credit Party and not paid for wages (including any amounts protected by the Wage Earner Protection Program Act (Canada)), amounts due and owing by any Canadian Credit Party and not paid for vacation pay, amounts due and owing by any Canadian Credit Party and not paid under any legislation relating to workers’ compensation or to employment insurance, all amounts deducted or withheld and not paid and remitted when due under the ITA, amounts currently due or past due and owing by any Canadian Credit Party and not paid for realty, municipal or similar Taxes (to the extent impacting personal or movable property) and all amounts currently due and past

 

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due and owing by a Credit Party in respect of any Canadian Pension Plan or pursuant to the Pension Benefit Act (Ontario) or any similar legislation;

Canadian Securities Laws” shall mean the Securities Act (Ontario) and the corresponding legislation in each of the provinces and territories of Canada, together with all regulations, instruments, rules and policies thereunder;

Canadian Security Agreement” shall mean the general security agreement entered into by CGI Borrower, Holdings, Canada Goose Trading Inc. and the Administrative Agent for the benefit of the Secured Parties on the Closing Date;

Canadian Subsidiary” shall mean any Subsidiary that is organized under the laws of Canada or any province or territory thereof;

Capital Expenditures” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities and including in all events all amounts expended or capitalized under Capital Leases) by CGI Borrower and the Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment reflected in the consolidated balance sheet of CGI Borrower and the Restricted Subsidiaries (including capitalized software expenditures, customer acquisition costs and incentive payments, conversion costs, and contract acquisition costs); provided that the term “Capital Expenditures” shall not include (i) any additions to property, plant and equipment and other capital expenditures made with the proceeds of any equity securities issued or capital contributions received by any Credit Party or any Subsidiary, (ii) expenditures made in connection with the replacement, substitution, restoration or repair of assets to the extent financed with (x) insurance proceeds paid on account of the loss of or damage to the assets being replaced, substituted, restored or repaired or (y) awards of compensation arising from the taking by eminent domain or condemnation or expropriation of the assets being replaced, (iii) the purchase price of property, plant and equipment that is purchased substantially concurrently with the trade-in of existing property, plant or equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such property, plant and equipment for the property, plant or equipment being traded in at such time, (iv) the purchase of plant, property or equipment to the extent financed with the proceeds of dispositions that are not required to be applied to prepay the Obligations or the Term Loan Obligations, (v) expenditures that are accounted for as capital expenditures by CGI Borrower or any Restricted Subsidiary and that actually are paid for by a Person other than CGI Borrower or any Restricted Subsidiary and for which none of CGI Borrower or any Restricted Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period) other than rent and similar or related obligations or (vi) expenditures that constitute Permitted Acquisitions or other Permitted Investments that involve the purchase or other acquisition for consideration of any other Person or of all or

 

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substantially all of the assets of another Person or assets constituting a business unit, line of business or division of another Person;

Capital Lease” shall mean, as applied to any Person, any lease of any property (whether real, personal, or mixed) by that Person as lessee that, in conformity with GAAP, is, or is required to be, accounted for as a capital lease on the balance sheet of that Person; provided that all leases of any Person that are or would be characterized as operating leases in accordance with GAAP immediately prior to the Closing Date (whether or not such operating leases were in effect on such date) shall continue to be accounted for as operating leases (and not as Capital Leases) for purposes of this Agreement (except that financial statements delivered pursuant to Section 10.1 shall reflect such operating leases in accordance with GAAP as in effect at the time of such delivery) regardless of any change in GAAP following the date that would otherwise require such leases to be recharacterized as Capital Leases;

Capital Stock” shall mean (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights, or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, unlimited liability company, partnership or membership interests (whether general or limited), and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person (it being understood and agreed, for the avoidance of doubt, that “cash-settled phantom appreciation programs” in connection with employee benefits that do not require a dividend or distribution shall not constitute Capital Stock);

Capitalized Lease Obligation” shall mean, at the time any determination thereof is to be made, the amount of the liability in respect of a Capital Lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) prepared in accordance with GAAP; provided that all obligations of any Person that are or would be characterized as operating lease obligations in accordance with GAAP immediately prior to the Closing Date (whether or not such operating lease obligations were in effect on such date) shall continue to be accounted for as operating lease obligations (and not as Capitalized Lease Obligations) for purposes of this Agreement (except that financial statements delivered pursuant to Section 10.1 shall reflect such operating leases in accordance with GAAP as in effect at the time of such delivery) regardless of any change in GAAP following the date that would otherwise require such obligations to be recharacterized as Capitalized Lease Obligations;

Captive Insurance Subsidiary” shall mean a Subsidiary of CGI Borrower or any of its Subsidiaries established for the purpose of, and to be engaged solely in the business of, insuring the businesses or facilities owned or operated by CGI Borrower or any of its Subsidiaries or joint ventures or to insure related or unrelated businesses;

 

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Cash Collateral Account” shall mean (i) any interest bearing account established by any Credit Party with the Administrative Agent, for its own benefit and the benefit of the other Secured Parties or (ii) any deposit account established by any Credit Party with any depository bank reasonably acceptable to the Administrative Agent that is subject to a control agreement in form and substance reasonably satisfactory to the Administrative Agent, in each case under the foregoing clause (i) and clause (ii), which account is under the sole and exclusive dominion and control of the Administrative Agent, in the name of the Administrative Agent or as the Administrative Agent shall otherwise direct and in which the Administrative Agent has a first priority perfected Lien;

Cash Collateralize” shall mean to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Letter of Credit Issuer or the Lenders, as collateral for L/C Obligations, obligations of the Lenders to fund participations in respect of L/C Obligations, obligations arising under Banker’s Acceptance or obligations under BA Equivalent Notes, cash or deposit account balances (including such deposits made into any Cash Collateral Account) or, if the Administrative Agent and the Letter of Credit Issuer shall agree in their sole discretion, other credit support or reimbursement agreements. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support;

Cash Dominion Period” shall mean either (a) the period following the occurrence and during the continuation of any Specified Default, or (b) any period commencing on the date that Excess Availability shall have been less than the greater of (x) $10,000,000 and (y) 12.5% of the Line Cap for five (5) consecutive Business Days and ending on the date thereafter that Excess Availability shall have been at least the greater of (i) $10,000,000 and (ii) 12.5% of the Line Cap for thirty (30) consecutive calendar days; provided, however, that during the period from the Closing Date until November 30, 2016, the applicable Excess Availability threshold for all purposes under this clause (b) shall be 5% of the Line Cap, with no fixed dollar amount;

Cash Equivalents” shall mean:

 

  (i) Dollars,

 

  (ii) U.S. Dollars, Euro or Pounds Sterling,

 

  (iii) securities issued or directly and fully and unconditionally guaranteed or insured by the United States or Canadian governments or any country that is a member state of the European Union, or any agency or instrumentality thereof the securities of which are unconditionally guaranteed as a full faith and credit obligation of such government,

 

  (iv)

certificates of deposit, time deposits, and Eurodollar time deposits with maturities of one year or less from the date of acquisition, demand deposits, banker’s acceptances with maturities not exceeding one year, and

 

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  overnight bank deposits, in each case with any commercial bank having capital and surplus of not less than $250,000,000 in the case of Canadian banks and $100,000,000 (or the Dollar equivalent as of the date of determination) in the case of foreign banks,

 

  (v) repurchase obligations for underlying securities of the types described in clauses (iii) and (iv) above and clause (ix) below entered into with any financial institution meeting the qualifications specified in clause (iv) above,

 

  (vi) commercial paper rated at least P-2 (or the equivalent thereof) by Moody’s or at least A-2 (or the equivalent thereof) by S&P and in each case maturing within 24 months after the date of creation thereof,

 

  (vii) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 (or, in either case, the equivalent thereof) from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized ratings agency) and in each case maturing within 24 months after the date of creation or acquisition thereof,

 

  (viii) readily marketable direct obligations issued by any province, state, commonwealth, or territory of Canada or the United States or any political subdivision or taxing authority thereof having one of the two highest rating categories obtainable from either Moody’s or S&P with maturities of 24 months or less from the date of acquisition,

 

  (ix) Indebtedness or preferred Capital Stock issued by Persons with a rating of “A” (or the equivalent thereof) or higher from S&P or “A2” (or the equivalent thereof) or higher from Moody’s with maturities of 24 months or less from the date of acquisition,

 

  (x)

solely with respect to any Foreign Subsidiary: (a) obligations of the national government of the country in which such Foreign Subsidiary maintains its chief executive office and principal place of business provided such country is a member of the Organization for Economic Cooperation and Development, in each case maturing within one year after the date of investment therein, (b) certificates of deposit of, banker’s acceptances of, or time deposits with, any commercial bank which is organized and existing under the laws of the country in which such Foreign Subsidiary maintains its chief executive office and principal place of business provided such country is a member of the Organization for Economic Cooperation and Development, and whose short-term commercial paper rating from S&P is at least “A-2” or the equivalent thereof or from Moody’s is at least “P-2” or the equivalent thereof (any

 

- 20 -


  such bank being an “Approved Foreign Bank”), and in each case with maturities of not more than 24 months from the date of acquisition, and (c) the equivalent of demand deposit accounts which are maintained with an Approved Foreign Bank, in each case, customarily used by corporations for cash management purposes in any jurisdiction outside Canada and the United States to the extent reasonably required in connection with any business conducted by such Foreign Subsidiary organized in such jurisdiction,

 

  (xi) in the case of investments by any Foreign Subsidiary or investments made in a country outside Canada and the United States, Cash Equivalents shall also include investments of the type and maturity described in clauses (i) through (ix) above of foreign obligors, which investments have ratings, described in such clauses or equivalent ratings from comparable foreign rating agencies, and

 

  (xii) investment funds investing all or substantially all of their assets in securities of the types described in clauses (i) through (ix) above.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clauses (i) and (ii) above; provided that such amounts are converted into any currency listed in clauses (i) and (ii) as promptly as practicable and in any event within ten Business Days following the receipt of such amounts;

Cash Management Agreement” shall mean any agreement or arrangement to provide Cash Management Services;

Cash Management Bank” shall mean (i) any Person that, at the time it enters into a Cash Management Agreement, is an Agent or a Lender or an Affiliate or branch of an Agent or a Lender or (ii) with respect to any Cash Management Agreement entered into prior to the Closing Date, any Person that is a Lender or an Affiliate or branch of a Lender on the Closing Date; provided that, if such Person is not a Lender, such Person executes and delivers to the Administrative Agent and the Borrower Representative a letter agreement in form and substance reasonably acceptable to the Administrative Agent pursuant to which such Person (a) appoints the Administrative Agent as its agent under the applicable Credit Documents and (b) agrees to be bound by the provisions of Article VI and Sections 7.1 and 8.13 of the Canadian Pledge Agreement, Sections 4.3, 6.6, 7.4, 7.6, 8.1 and 8.19 of the Canadian Security Agreement and corresponding or similar provisions in any other Security Document, in each case, as if it were a Lender;

Cash Management Services” shall mean any one or more of the following types of services or facilities: (a) ACH transactions, (b) treasury and/or cash management services, including, without limitation, controlled disbursement services, depository, overdraft and electronic funds transfer services, (c) foreign exchange facilities,

 

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(d) deposit and other accounts, and (e) merchant services (other than those constituting a line of credit). For the avoidance of doubt, Cash Management Services do not include Hedging Obligations;

Cash Management Services Reserve” shall mean such reserves as the Administrative Agent, from time to time after the occurrence and during the continuation of a Cash Dominion Period, determines in its Permitted Discretion as being appropriate to reflect the reasonably anticipated liabilities and obligations of the Credit Parties with respect to Secured Cash Management Obligations then outstanding. The amount of any Cash Management Services Reserve established by the Administrative Agent shall not be duplicative of other Borrowing Base Reserves then in effect;

Cash Receipts” shall have the meaning provided in Section 10.9(e);

CGI Borrower” shall have the meaning given to such term in the opening paragraph of this Agreement;

CGI Borrowing Base” shall mean, at any time of calculation, an amount in Dollars (or the Equivalent Amount in Dollars of any amount in a currency other than Dollars) equal to:

 

  (a) the face amount of Eligible Credit Card Receivables of the CGI Borrowing Base Parties multiplied by the Credit Card Advance Rate;

plus

 

  (b) the face amount of Eligible Trade Receivables and Credit Enhanced Eligible Trade Receivables of the CGI Borrowing Base Parties multiplied by the applicable Receivables Advance Rate;

plus

 

  (c) the Cost of Eligible Inventory (other than Eligible In-Transit Inventory) of the CGI Borrowing Base Parties, net of Inventory Reserves applicable thereto, multiplied by the Appraisal Percentage of the applicable Appraised Value of Eligible Inventory of the CGI Borrowing Base Parties;

plus

 

  (d) the Cost of Eligible In-Transit Inventory of the CGI Borrowing Base Parties, net of Inventory Reserves applicable thereto, multiplied by the Appraisal Percentage of the applicable Appraised Value of Eligible In-Transit Inventory of the CGI Borrowing Base Parties, up to the Maximum In-Transit Inventory Amount, less the amount of Eligible In-Transit Inventory included in the Swiss Borrowing Base;

 

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plus

 

  (e) with respect to any Eligible Letter of Credit, the Appraisal Percentage of the Appraised Value of the Inventory of the CGI Borrowing Base Parties supported by such Eligible Letter of Credit, multiplied by the Cost of such Inventory of the CGI Borrowing Base Parties when completed, net of Inventory Reserves applicable thereto;

minus

 

  (f) without duplication, the amount of all other Borrowing Base Reserves to the extent applicable to, and to the assets of, the CGI Borrowing Base Parties.

The CGI Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 10.1(i), in respect of the CGI Borrowing Base, as adjusted to give effect to Borrowing Base Reserves to the extent applicable to, and to the assets of, the CGI Borrowing Base Parties (in accordance with and subject to the limitations of Section 2.19) following such delivery.

Notwithstanding the foregoing, for purposes of this definition and the definition of “Pro Forma Availability Condition,” no Accounts or Inventory being acquired pursuant to a Permitted Acquisition or permitted Investment will be included in the CGI Borrowing Base unless (i) the Administrative Agent, in its Permitted Discretion, confirms that such Accounts or Inventory conform to standards of eligibility in accordance with this Agreement, and (ii) to the extent required by the Administrative Agent, an audit of such Accounts and an appraisal of such Inventory is conducted and then only so long as such Accounts or Inventory, as the case may be, would otherwise satisfy the applicable eligibility criteria (it being understood that such audit or appraisal shall be conducted at CGI Borrower’s expense and shall not be counted for purposes of Section 10.2); provided, that until the earlier of (x) 45 days following the date on which a Permitted Acquisition or other permitted Investment is consummated (or such longer period as agreed to by the Administrative Agent in its Permitted Discretion) and (y) the date on which the requirements of clauses (i) and (ii) above are satisfied with respect to Accounts and Inventory being acquired in such Permitted Acquisition or other permitted Investment, an amount of such Accounts not to exceed $5,000,000 in the aggregate and such Inventory not to exceed $5,000,000 in the aggregate, that would otherwise constitute Eligible Credit Card Receivables, Eligible Trade Receivables, Eligible Inventory, Eligible In-Transit Inventory or Eligible Letter of Credit Inventory as shall be agreed upon between the Borrower Representative and the Administrative Agent in its Permitted Discretion shall be included in the CGI Borrowing Base (including, with respect to the definition of “Pro Forma Availability Condition” for purposes of computing aggregate Excess Availability on a Pro Forma Basis as provided therein);

 

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CGI Borrowing Base Parties” shall mean, as of the date hereof, CGI Borrower and each other Guarantor as of the date hereof, other than Swiss Borrower and from time to time each additional Guarantor that the Borrower Representative and the Administrative Agent agree shall be a CGI Borrowing Base Party;

CGI Line Cap” shall mean, at any time of determination, the lesser of (a) the Total Revolving Credit Commitment and (b) the sum of the (i) CGI Borrowing Base and (ii) if, at such time, the Lenders’ aggregate Revolving Credit Exposures to CGI Borrower equal or exceed the amount of the CGI Line Cap under (b)(i) above, the CGI SBB Availability (which amount under this clause (b)(ii) shall never be less than zero);

CGI SBB Availability” shall mean, at any time of determination, an amount equal to the least of (a) the Swiss Borrowing Base excluding the value of any Belgian Inventory until the occurrence of a Belgian Security Event, (b) the aggregate amount of Swiss Intercompany Indebtedness that is subject to a first priority security interest in favour of CGI Borrower under the Swiss Intercompany Security, which in turn is collaterally assigned by CGI Borrower in favour of the Administrative Agent, and (c) $10,000,000;

Change in Law” shall mean (i) the adoption of any law, treaty, order, policy, rule, or regulation after the Closing Date, (ii) any change in any law, treaty, order, policy, rule, or regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (iii) compliance by any Lender with any guideline, request, directive, or order issued or made after the Closing Date by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law). For purposes of this definition, (a) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, or directives thereunder or issued in connection therewith and (b) all requests, rules, guidelines, requirements, or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority), or Canada, the United States or foreign regulatory authorities pursuant to Basel III, shall in each case described in clauses (a) and (b) above be deemed to be a Change in Law and have gone into effect after the date hereof, regardless of the date enacted, adopted, issued, or implemented;

Change of Control” shall mean and be deemed to have occurred if, at any time after the Closing Date,

 

  (a) at any time:

 

  (i) prior to the consummation of a Qualifying IPO, the Permitted Holders shall at any time not own, in the aggregate, directly or indirectly, beneficially, at least 50.0% of the aggregate voting power of the outstanding Voting Stock of Holdings, or

 

  (ii)

upon and after the consummation of a Qualifying IPO, (1) any Person other than a Permitted Holder or (2) Persons (other than one or more Permitted Holders) constituting a “group” (as such term is used in

 

- 24 -


  Section 13(d) and Section 14(d) of the Exchange Act) or acting “jointly” or “jointly, and in concert” for the purposes of Canadian Securities Laws becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act or for the purposes of Canadian Securities Laws), directly or indirectly, of Voting Stock representing more than 35.0% of the aggregate voting power of the outstanding Voting Stock of CGI Borrower and the percentage of aggregate voting power so held is greater than the percentage of the aggregate voting power represented by the Voting Stock of CGI Borrower beneficially owned, directly or indirectly, in the aggregate by the Permitted Holders, unless, in the case of clause (a)(i) or this clause (a)(ii) of this definition of “Change of Control”, the Permitted Holders have, at such time, the right or the ability by voting power, contract, or otherwise to elect or designate for election at least a majority of the board of managers (or analogous governing body) of CGI Borrower; or

 

  (b) at any time, prior to a Qualifying IPO, Holdings shall cease to beneficially own, directly or indirectly, 100.0% of the issued and outstanding Equity Interests of CGI Borrower;

CIBC Designated Secured Bank Product/Hedge Agreements” shall have the meaning given to such term in Section 14.22;

Claims” shall have the meaning provided in the definition of Environmental Claims;

Class” (i) when used in reference to any Loan or Borrowing, shall refer to whether such Loan, or the Loans comprising such Borrowing, are Revolving Credit Loans, Incremental Revolving Credit Loans, Extended Revolving Credit Loans (of the same Extension Series) or Swingline Loans and (ii) when used in reference to any Commitment, refers to whether such Commitment is a Revolving Credit Commitment, an Incremental Revolving Credit Commitment or an Extended Revolving Credit Commitment;

Closing Date” shall mean June 3, 2016;

Closing Refinancing” shall have the meaning provided in the preamble to this Agreement;

Code” shall mean the Internal Revenue Code of 1986;

Collateral” shall mean all property pledged or mortgaged or purported to be pledged or mortgaged pursuant to the Security Documents, excluding in all events Excluded Property;

Collateral Access Agreement” shall mean an agreement substantially in the form attached hereto as Exhibit B-1 (Collateral Access Agreement – U.S. Credit Parties) with respect to any U.S. Credit Party or as Exhibit B-2 (Collateral Access Agreement –

 

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Canadian Credit Parties) with respect to any Canadian Credit Party, or any other agreement reasonably satisfactory in form and substance to the Administrative Agent (it being understood and agreed that the form of Collateral Access Agreements in place under the Existing Credit Agreement are reasonably satisfactory to the Administrative Agent, but that new agreements in such form shall be obtained in respect of this Agreement) executed by (a) a bailee or other Person in possession of Collateral, including, without limitation, any warehouseman and (b) a landlord of Real Estate leased by any Credit Party (including, without limitation, any warehouse or distribution center), pursuant to which such Person, (i) acknowledges the Administrative Agent’s Lien on the Collateral, (ii) releases or subordinates such Person’s Liens in the Collateral held by such Person or located on such Real Estate, (iii) agrees to furnish the Administrative Agent with access to the Collateral in such Person’s possession or on the Real Estate for the purposes of conducting a liquidation, and (iv) makes such other agreements with the Administrative Agent as the Administrative Agent may reasonably require;

Commitment Fee” shall have the meaning provided in Section 4.1(a);

Commitment Fee Rate” shall mean (x) until delivery to the Administrative Agent and the Lenders of the financial statements required under Section 10.1(b) for the first full fiscal quarter of CGI Borrower completed following the Closing Date, a rate per annum equal to 0.375%, and (y) thereafter, a rate per annum set forth in the table below, based on the Average Revolving Loan Utilization as of the most recent Adjustment Date:

 

Average Revolving Loan Utilization

 

Commitment Fee Rate

<50%

  0.375%

>50%

  0.25%

Commitments” shall mean, with respect to each Lender (to the extent applicable), such Lender’s Revolving Credit Commitment, Incremental Revolving Credit Commitment or Extended Revolving Credit Commitment;

Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.);

Communications” shall have the meaning provided in Section 14.17;

Compliance Certificate” shall mean a certificate of an Authorized Officer of CGI Borrower delivered pursuant to Section 10.1(e) for the applicable Test Period;

Concentration Account” shall have the meaning provided in Section 10.9(e);

Confidential Information” shall have the meaning provided in Section 14.16;

 

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Consolidated Depreciation and Amortization Expense” shall mean with respect to any Person and its Restricted Subsidiaries for any period, the total amount of depreciation and amortization expense, including the amortization of deferred financing fees or costs, debt issuance costs, commissions, fees, and expenses, capitalized expenditures, customer acquisition costs, the amortization of original issue discount resulting from the issuance of Indebtedness at less than par and incentive payments, conversion costs, and contract acquisition costs of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP;

Consolidated EBITDA” shall mean, with respect to any Person for any period, the Consolidated Net Income of such Person and its Restricted Subsidiaries for such period:

 

  (i) increased by (without duplication):

 

  (a) (A) provision for taxes based on income or profits or capital, including, without limitation, U.S. federal, state, non-U.S., franchise, excise, value added, and similar taxes and foreign withholding taxes of such Person and its Restricted Subsidiaries paid or accrued during such period, including any penalties and interest related to such taxes or arising from any tax examinations, deducted (and not added back) in computing Consolidated Net Income and (B) amounts paid to Holdings or any direct or indirect parent company of Holdings in respect of taxes in accordance with Section 11.5(b)(xii)(B), solely to the extent such amounts were deducted in computing Consolidated Net Income, plus

 

  (b) Fixed Charges of such Person and its Restricted Subsidiaries for such period (including (1) net losses on Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk and (2) costs of surety bonds in connection with financing activities, in each case, to the extent included in Fixed Charges), together with items excluded from the definition of Consolidated Interest Expense and any non-cash interest expense, to the extent the same were deducted (and not added back) in calculating such Consolidated Net Income, plus

 

  (c) Consolidated Depreciation and Amortization Expense of such Person and its Restricted Subsidiaries for such period to the extent the same were deducted in computing Consolidated Net Income, plus

 

  (d) any non-cash increase in expenses resulting from the revaluation of inventory (including any impact of changes to inventory valuation policy methods including changes in capitalization of variances) or other inventory adjustments, plus

 

  (e)

any other non-cash charges, expenses or losses, including any non-cash expense relating to the vesting of warrants and any write offs, write downs, expenses, losses, or items to the extent the same were deducted (and not added back) in computing Consolidated Net Income (provided that if any such non-cash charges represent an accrual or reserve for potential cash items in any future period,

 

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  (1) CGI Borrower may determine not to add back such non-cash charge in the current period and (2) to the extent CGI Borrower does decide to add back such non-cash charge, the cash payment in respect thereof in such future period shall be deducted from Consolidated EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period), plus

 

  (f) the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly-Owned Subsidiary deducted (and not added back) in such period in calculating Consolidated Net Income, plus

 

  (g) the amount of management, monitoring, consulting, advisory and other fees (including termination and transaction fees) and indemnities and expenses paid or accrued in such period to the Sponsor or its respective Affiliates, plus

 

  (h) costs of surety bonds incurred in such period in connection with financing activities, plus

 

  (i) the amount of “run-rate” cost savings, operating expense reductions, and synergies (without duplication of any amounts added back pursuant to Section 1.12(c) in connection with Specified Transactions) that are projected by the Borrower Representative in good faith to result from actions taken or with respect to which substantial steps have been taken or are expected to be taken within 18 months of the determination to take such action, net of the amount of actual benefits realized prior to or during such period from such actions (which cost savings, operating expense reductions, and synergies shall be calculated on a pro forma basis as though such cost savings, operating expense reductions, or synergies had been realized on the first day of such period); provided that an Authorized Officer of the Borrower Representative shall have certified to the Administrative Agent that such cost savings are reasonably identifiable and factually supportable and it is understood and agreed that “run-rate” means the full recurring benefit for a period that is associated with any action either taken or with respect to which substantial steps have been taken or are expected to be taken within 18 months of the determination to take such action, plus

 

  (j) any net loss from disposed, abandoned, transferred, closed or discontinued operations (excluding held for sale discontinued operations until actually disposed of), plus

 

  (k)

any costs or expense incurred by CGI Borrower or a Restricted Subsidiary pursuant to any management equity plan or equity option plan or any other management or employee benefit plan or agreement or any equity subscription or equityholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of CGI Borrower or net cash proceeds of

 

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  an issuance of Equity Interests of CGI Borrower (other than Disqualified Stock), plus

 

  (l) the amount of expenses relating to payments made to option holders of any direct or indirect parent company of CGI Borrower or any of its direct or indirect parent companies in connection with, or as a result of, any distribution being made to equityholders of such Person or its direct or indirect parent companies, which payments are being made to compensate such option holders as though they were equityholders at the time of, and entitled to share in, such distribution, in each case to the extent permitted under this Agreement, plus

 

  (m) with respect to any joint venture that is not a Restricted Subsidiary, an amount equal to the proportion of those items described in clauses (a) and (c) above relating to such joint venture corresponding to CGI Borrower’s and the Restricted Subsidiaries’ proportionate share of such joint venture’s Consolidated Net Income (determined as if such joint venture were a Restricted Subsidiary), plus

 

  (n) costs associated with, or in anticipation of, or preparation for, compliance with the requirements of Canadian Securities Laws and the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith or other enhanced accounting functions and Public Company Costs, plus

 

  (o) cash receipts (or any netting arrangements resulting in reduced cash expenses) not included in Consolidated EBITDA in any period solely to the extent that the corresponding non-cash gains relating to such receipts were deducted in the calculation of Consolidated EBITDA pursuant to paragraph (ii) below for any previous period and not added back, plus

 

  (p) to the extent not already included in the Consolidated Net Income of such Person and its Restricted Subsidiaries, (1) any expenses and charges that are reimbursed by indemnification or other similar provisions in connection with any acquisition or investment or any sale, conveyance, transfer, or other Asset Sale of assets permitted hereunder and (2) to the extent covered by insurance and actually reimbursed, or, so long as the Borrower Representative has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (A) not denied by the applicable carrier in writing within 180 days and (B) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within such 365 days), expenses, charges or losses with respect to liability or casualty events or business interruption, plus

 

  (q) letter of credit fees; and

 

  (ii) decreased by (without duplication):

 

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  (r) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced Consolidated EBITDA in any prior period; provided that, to the extent non-cash gains are deducted pursuant to this clause (r) for any previous period and not otherwise added back to Consolidated EBITDA, Consolidated EBITDA shall be increased by the amount of any cash receipts (or any netting arrangements resulting in reduced cash expenses) in respect of such non-cash gains received in subsequent periods to the extent not already included therein, plus

 

  (s) any net income from disposed, abandoned, transferred, closed or discontinued operations (excluding held for sale discontinued operations until actually disposed of).

For the avoidance of doubt: (i) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA for any period any adjustments resulting from the application of ASC 815 and its related pronouncements and interpretations, or the equivalent accounting standard under GAAP or an alternative basis of accounting applied in lieu of GAAP, (ii) to the extent any add-backs or deductions are reflected in the calculation of Consolidated Net Income, such add-backs and deductions shall not be duplicated in determining Consolidated EBITDA and (iii) Consolidated EBITDA shall be calculated, including pro forma adjustments, in accordance with Section 1.12;

Notwithstanding the foregoing, for purposes of determining Consolidated EBITDA for any Test Period that includes any of the fiscal quarters ending March 31, 2015, June 30, 2015, September 30, 2015 or December 31, 2015, Consolidated EBITDA for such fiscal quarters shall equal $(9,608,556), $(2,449,420), $35,387,317, and $26,697,330 respectively (which amounts, for the avoidance of doubt, shall be subject to add backs and adjustments pursuant to the immediately preceding paragraph and shall give effect to calculations on a Pro Forma Basis in accordance with this Agreement in respect of Specified Transactions (including the cost savings and “run rate” adjustments described above or in Section 1.12, subject in each case to the applicable limitations set forth therein) that in each case may become applicable due to actions taken on or after the Closing Date);

Consolidated First Lien Secured Debt” shall mean Consolidated Total Debt as of such date that is not Subordinated Indebtedness and is secured by a Lien on the Collateral on an equal priority basis (but without regard to the control of remedies) with Liens on the Collateral securing the Obligations and/or the Term Loan Obligations that are secured by Term Priority Collateral on a senior secured basis to the security on such Collateral securing the Obligations;

Consolidated Interest Expense” shall mean, with respect to any Person and its Restricted Subsidiaries for any period, the sum, without duplication, of:

 

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  (a) consolidated cash interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including (i) all commissions, discounts, and other fees and charges owed with respect to letters of credit or banker’s acceptances, (ii) capitalized interest to the extent paid in cash, and (iii) net payments (over payments received), if any, made pursuant to interest rate Hedging Obligations with respect to Indebtedness); plus

 

  (b) any cash payments made during such period in respect of the accretion or accrual of discounted liabilities referred to in clause (ix) below relating to Funded Debt that were amortized or accrued in a previous period; less

 

  (c) cash interest income for such period;

provided, the following shall in all cases be excluded from Consolidated Interest Expense:

 

  (i) any one-time cash costs associated with breakage in respect of Hedge Agreements to the extent such costs would be otherwise included in Consolidated Interest Expense;

 

  (ii) all non-recurring cash interest expense consisting of liquidated damages for failure to timely comply with registration rights obligations, all as calculated on a consolidated basis in accordance with GAAP;

 

  (iii) any “additional interest” owing pursuant to a registration rights agreement;

 

  (iv) non-cash interest expense attributable to a parent entity resulting from push-down accounting, but solely to the extent not reducing consolidated cash interest expense in any prior period;

 

  (v) any non-cash expensing of bridge, commitment, and other financing fees that have been previously paid in cash, but solely to the extent not reducing consolidated cash interest expense in any prior period;

 

  (vi) deferred financing costs, debt issuance costs, commissions, fees (including amendment and contract fees) and expenses and, in each case, the amortization thereof, and any amounts of non-cash interest;

 

  (vii) annual agency fees paid to any administrative agent or collateral agent under any credit facilities or other debt instruments or documents;

 

  (viii) costs associated with obtaining Hedge Agreements;

 

  (ix) the accretion or accrual of discounted liabilities and any prepayment premium or penalty during such period;

 

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  (x) non-cash interest expense attributable to the movement of the mark-to-market valuation of obligations under Hedge Agreements or other derivative instruments;

 

  (xi) any non-cash expense resulting from the discounting of any Indebtedness in connection with the application of recapitalization accounting or, if applicable, purchase accounting in connection with the Transactions or any acquisition; and

 

  (d) cash interest expense of CGI Borrower in respect of Holdings Subordinate Debt.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP;

Consolidated Net Income” shall mean, with respect to any Person and its Restricted Subsidiaries for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided that, without duplication,

 

  (i) (a) any after-tax effect of extraordinary, non-recurring, or unusual gains or losses (less all fees and expenses relating thereto), charges or expenses (including relating to the Transactions), (b) severance, recruiting, retention and relocation costs, (c) curtailments or modifications to pension and post-retirement employee benefits plans, (d) start-up, transition, strategic initiative (including any multi-year strategic initiative) and integration costs, charges or expenses, (e) restructuring costs, charges, reserves or expenses (including related to acquisitions after the Closing Date and to the start-up, pre-opening, opening, closure, and/or consolidation of Stores, distribution centers, offices and facilities), (f) business optimization costs, charges or expenses, (g) costs, charges and expenses incurred in connection with new product design, development and introductions, (h) costs and expenses incurred in connection with intellectual property development and new systems design, (i) costs and expenses incurred in connection with implementation, replacement, development or upgrade of operational, reporting and information technology systems and technology initiatives, and (j) one-time compensation charges, shall be excluded,

 

  (ii) the Net Income for such period shall not include the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period,

 

  (iii) any net after-tax gains or losses on disposal of disposed, abandoned, transferred, closed, or discontinued operations shall be excluded,

 

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  (iv) any after-tax effect of gains or losses (less all fees and expenses relating thereto) attributable to asset dispositions or abandonments other than in the ordinary course of business, as determined in good faith by the board of directors (or analogous governing body) of CGI Borrower, shall be excluded,

 

  (v) the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of CGI Borrower shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash (or to the extent converted into cash or Cash Equivalents) to the referent Person or a Restricted Subsidiary thereof in respect of such period,

 

  (vi) any store and facility opening, pre-opening, construction, closing and consolidation costs, including any charges and losses related to any de novo store and start-up charges and losses until such store has been open and operating for a period of 18 consecutive months, shall be excluded.

 

  (vii) effects of adjustments (including the effects of such adjustments pushed down to CGI Borrower and the Restricted Subsidiaries) in any line item in such Person’s consolidated financial statements required or permitted by GAAP resulting from the application of purchase accounting, including in relation to the Transactions and any acquisition or investment that is consummated prior to or after the Closing Date or the amortization or write-off of any amounts thereof, in either case net of taxes, shall be excluded,

 

  (viii) (a) any after-tax effect of any income (loss) from the early extinguishment or conversion of Indebtedness or Hedging Obligations or other derivative instruments (including deferred financing costs written off and premiums paid), (b) any non-cash income (or loss) related to currency gains or losses related to Indebtedness, intercompany balances, and other balance sheet items and any net gain or loss resulting in such period from Hedging Obligations pursuant to GAAP or an alternative basis of accounting applied in lieu of GAAP, and (c) any non-cash expense, income, or loss attributable to the movement in mark to market valuation of foreign currencies, Indebtedness, or derivative instruments pursuant to GAAP, shall be excluded,

 

  (ix)

any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation or in connection with any

 

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  disposition of assets, in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP, shall be excluded,

 

  (x) (a) any non-cash compensation expense recorded from grants of equity appreciation or similar rights, phantom equity, equity options units, restricted equity, or other rights to officers, directors, managers, or employees, (b) non-cash income (loss) attributable to deferred compensation plans or trusts and (c) any non-cash compensation expense resulting from equity-based payments to non-employees, in each case, shall be excluded,

 

  (xi) any fees, charges, losses, costs and expenses incurred during such period, or any amortization thereof for such period, in connection with or related to any acquisition (including any Permitted Acquisition), Restricted Payment, Investment, recapitalization, asset sale, issuance, registration or repayment or modification of Indebtedness, issuance or offering of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (in the case of each such transaction described in this clause (xi), including any such transaction consummated prior to the Closing Date, the Transactions and any such transaction undertaken but not completed and including, for the avoidance of doubt, (1) the effects of expensing all transaction related expenses in accordance with GAAP, (2) such fees, expenses, or charges related to the incurrence of the Permitted Term Loans and the Loans hereunder and all Transaction Expenses, (3) such fees, expenses, or charges related to the entering into or offering of the Credit Documents and any other credit facilities or debt issuances or the entering into of any Hedge Agreement, and (4) any amendment or other modification of the Term Loan Credit Documents or the Permitted Term Loans thereunder, any Credit Facility or the Loans thereunder, or any other Indebtedness) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, shall be excluded,

 

  (xii) (a) accruals and reserves (including contingent liabilities) that are (1) established or adjusted within twelve months after the Closing Date that are so required to be established as a result of the Transactions or (2) established or adjusted within twelve months after the closing of any Permitted Acquisition or any other acquisition (other than any such other acquisition in the ordinary course of business) that are so required to be established or adjusted as a result of such Permitted Acquisition or such other acquisition, in each case in accordance with GAAP, or (b) charges, accruals, expenses and reserves as a result of adoption or modification of accounting policies, shall be excluded,

 

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  (xiii) to the extent covered by insurance or indemnification and actually reimbursed, or, so long as, in the case of reimbursements or indemnifications not yet received, the Borrower Representative has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer or indemnifying party and only to the extent that such amount is (a) not denied by the applicable carrier or indemnifying party in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such determination (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), losses, charges and expenses, shall be excluded,

 

  (xiv) any deferred tax expense associated with tax deductions or net operating losses arising as a result of the Transactions, or the release of any valuation allowance related to such items, shall be excluded,

 

  (xv) any costs or expenses incurred during such period relating to environmental remediation, any litigation, or other disputes in respect of events and exposures that occurred prior to the Closing Date and any costs or expenses incurred in connection with any governmental investigations shall be excluded,

 

  (xvi) any net pension or other post-employment benefit costs representing amortization of unrecognized prior service costs, actuarial losses, including amortization of such amounts arising in prior periods, amortization of the unrecognized net obligation (and loss or cost) and any other items of a similar nature, shall be excluded,

 

  (xvii) any non-cash adjustments resulting from the application of Accounting Standards Codification Topic No. 460, Guarantees, under U.S. generally accepted accounting principles or any comparable regulation under GAAP, shall be excluded, and

 

  (xviii) earn-out obligations and other contingent consideration obligations (including to the extent accounted for as bonuses, compensation or otherwise (and including deferred performance incentives in connection with Permitted Acquisitions whether or not a service component is required from the transferor or its related party)) and adjustments thereof and purchase price adjustments, shall be excluded.

In addition, to the extent not already included in the Consolidated Net Income of such Person and its Restricted Subsidiaries in any period, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall include the amount of proceeds received from business interruption insurance;

Consolidated Total Assets” shall mean, as of any date of determination, the amount that would, in conformity with GAAP, be set forth opposite the caption “total assets” (or

 

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any like caption) on the most recent consolidated balance sheet of CGI Borrower and its Restricted Subsidiaries at such date (and, in the case of any determination relating to any Specified Transaction, on a Pro Forma Basis including any property or assets being acquired and excluding any assets being disposed of in connection therewith);

Consolidated Total Debt” shall mean, as at any date of determination, an amount equal to the sum of (a) the aggregate principal amount of all outstanding Indebtedness (excluding any Revolving Loans outstanding under this Agreement) of CGI Borrower and the Restricted Subsidiaries that would be reflected on a consolidated balance sheet (but excluding the notes thereto) prepared as of such date on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any Permitted Acquisition or any other acquisition permitted under this Agreement) consisting only of Indebtedness for borrowed money, Capitalized Lease Obligations and debt obligations evidenced by promissory notes and similar instruments (and excluding, for the avoidance of doubt, Hedging Obligations); plus (b) the Average Revolver Debt; provided that Consolidated Total Debt shall not include (x) Letters of Credit or any other letter of credit, except, solely with respect to any standby Letter of Credit or other standby letter of credit, to the extent of unreimbursed obligations in respect of any such drawn standby Letter of Credit or other standby letter of credit; provided that any unreimbursed obligations in respect of any such drawn standby Letter of Credit or other standby letter of credit shall not be included as Consolidated Total Debt until one (1) Business Day after such amount is drawn and solely to the extent that a reimbursement obligation is then due and payable or (y) any Holdings Subordinate Debt;

Contingent Obligations” shall mean, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends, or other obligations that do not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (a) for the purchase or payment of any such primary obligation or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, or (iii) to purchase property, securities, or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof;

Contractual Requirement” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound;

Cost” shall mean the cost of manufacturing or acquiring the Credit Parties’ Inventory as determined in accordance with CGI Borrower’s accounting policies as in effect on the Closing Date and as reported on the Credit Parties’ stock ledger, as such policy may be

 

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modified with the consent of the Administrative Agent, whose consent will not be unreasonably withheld;

Credit Card Advance Rate” shall mean ninety percent (90%);

Credit Card Notification” shall have the meaning provided in Section 10.9(c)(i);

Credit Card Receivables” shall mean each Account, together with all income, payments and proceeds thereof, owed by a major credit or debit card issuer or processor (including, but not limited to, JCB, VISA, Mastercard, American Express, Diners Club, DiscoverCard, Interlink, NYCE, Star/Mac, Tyme, Pulse, Accel, AFF, Shazam, CU244, Alaska Option and Maestro and such other issuers or processors approved by the Administrative Agent (such approval not to be unreasonably withheld)) to a Borrowing Base Party resulting from charges by a customer of a Borrowing Base Party on credit or debit cards in connection with the sale of goods by a Borrowing Base Party, or services performed by a Borrowing Base Party, in each case in the ordinary course of its business;

Credit Documents” shall mean this Agreement, each Joinder Agreement, the Guarantees, the Security Documents, and any promissory notes issued by a Borrower pursuant hereto and any other document, agreement or letter agreed in writing by the Borrower Representative and the Administrative Agent to be a Credit Document;

Credit Enhanced Eligible Trade Receivables” shall mean any Eligible Trade Receivable owing to a Borrowing Base Party that (A) is insured by a Person reasonably acceptable to the Administrative Agent or (B) that is due from an account debtor whose long-term unsecured indebtedness has an Investment Grade Rating and, if requested by the Administrative Agent, evidence reasonably acceptable to the Administrative Agent of such rating has been provided to the Administrative Agent by the Borrower Representative; provided that Credit Enhanced Eligible Trade Receivables of a Borrowing Base Party under clause (B) shall include investment grade Eligible Trade Receivables from (x) account debtors located in Canada, the United States and the United Kingdom, (y) specific account debtors as are consented to by the Administrative Agent (such consent not to be unreasonably withheld, delayed or conditioned), located outside Canada, the United States and the United Kingdom, and (z) account debtors located in such jurisdictions (other than Canada, the United States and the United Kingdom) as are consented to by the Administrative Agent (such consent not to be unreasonably withheld, delayed or conditioned);

Credit Event” shall mean and include the making (but not the conversion or continuation) of a Loan and the issuance of a Letter of Credit;

Credit Facilities” shall mean, collectively, each category of Commitments and each extension of credit hereunder;

Credit Facility” shall mean a category of Commitments and extensions of credit thereunder;

 

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Credit Party” shall mean Holdings, the Borrowers, and the other Guarantors;

Cure Amount” shall have the meaning provided in Section 12.15;

Cure Expiration Date” shall have the meaning provided in Section 12.15;

Cure Right” shall have the meaning provided in Section 12.15;

Customer Credit Liabilities” shall mean, at any time, the aggregate remaining balance reflected on the books and records of the Borrowing Base Parties at such time of (a) outstanding gift certificates and gift cards of the Borrowing Base Parties entitling the holder thereof to use all or a portion of the gift certificate or gift card to pay all or a portion of the purchase price for any Inventory, and (b) outstanding merchandise credits and customer deposits of the Borrowing Base Parties;

Customs Broker Agreement” shall mean an agreement substantially in the form attached hereto as Exhibit C-1 (Customs Broker Agreement – U.S. Credit Parties) with respect to any U.S. Credit Party or as Exhibit C-2 (Customs Broker Agreement – Canadian Credit Parties) with respect to any Canadian Credit Party, or any other agreement otherwise in form and substance reasonably satisfactory to the Administrative Agent, among a Borrowing Base Party, a customs broker, NVOCC or carrier, and the Administrative Agent, in which the customs broker, NVOCC or carrier acknowledges that it has control over and holds the documents evidencing ownership of the subject Inventory or other property for the benefit of the Administrative Agent, and agrees, upon notice from the Administrative Agent (which notice shall be delivered only upon the occurrence and during the continuance of an Event of Default), to hold and dispose of the subject Inventory and other property solely as directed by the Administrative Agent;

DDAs” shall mean any checking, savings or other deposit account maintained by the Credit Parties;

Debt Service Charges” shall mean, with respect to any Person and its Restricted Subsidiaries for any period, the sum of (a) Consolidated Interest Expense of such Person and its Restricted Subsidiaries paid or required to be paid in cash during such period, plus (b) scheduled amortization payments of principal made or required to be made (after giving effect to any prepayments paid in cash prior to the applicable Test Period that reduce the amount of such required payments) on account of Indebtedness for borrowed money (excluding the Obligations, any such obligations with respect to the Holdings Subordinate Debt, payments to reimburse any drawings under any commercial letters of credit, and any payments on Indebtedness required to be made on the final maturity date thereof, but including Capitalized Lease Obligations) for such period, plus (c) scheduled mandatory payments on account of Disqualified Stock (whether in the nature of dividends, redemption, repurchase or otherwise) required to be made in cash during such period;

 

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Default” shall mean any event, act, or condition set forth in Article 12 that with notice or lapse of time, or both, as set forth in such Article 12 would constitute an Event of Default; provided that any Default that results solely from the taking of an action that would have been permitted but for the continuation of a previous Default will be deemed to be cured if such previous Default is cured prior to becoming an Event of Default;

Default Rate” shall have the meaning provided in Section 2.8(f);

Defaulting Lender” shall mean any Lender whose acts or failure to act, whether directly or indirectly, cause it to meet any part of the definition of Lender Default;

Designated Account” shall have the meaning provided in Section 10.9(e);

Designated Non-Cash Consideration” shall mean the Fair Market Value of non-cash consideration received by CGI Borrower or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to a certificate of an Authorized Officer of the Borrower Representative, setting forth the basis of such valuation, executed by either a senior vice president or the principal financial officer of the Borrower Representative, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of, or collection on, or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration will no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with Section 11.4;

Designated Secured Bank Product/Hedge Agreements” shall mean any Secured Bank Product Agreements and Secured Hedge Agreements designated as a “Designated Secured Bank Product/Hedge Agreement” as contemplated by Section 14.22 until such time as the Borrower Representative has removed such designation in accordance with Section 14.22;

disposition” shall have the meaning assigned such term in clause (i) of the definition of Asset Sale;

Dilution Percent” shall mean, for any period, that percentage reasonably determined by the Administrative Agent in its Permitted Discretion by dividing (a) the amount of charge-offs, returns of goods purchased from the Borrowing Base Parties and any other non-cash reductions to trade receivables during such period which had, at the time of sale, resulted in the creation of a trade receivable, by (b) the amount of sales (exclusive of sales and other similar taxes) of the Borrowing Base Parties during such period;

Dilution Reserves” shall mean a Borrowing Base Reserve in amounts established by the Administrative Agent from time to time in its Permitted Discretion as being appropriate to reflect that the Dilution Percent is or is reasonably anticipated to be greater than five percent (5%);

 

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Disqualified Lenders” shall mean (i) those banks, financial institutions or other Persons separately identified in writing by CGI Borrower, the Sponsor or any of their respective Affiliates to the Agents prior to the Closing Date or as otherwise agreed by the Borrower Representative and the Administrative Agent after the Closing Date, and any Affiliates of such banks, financial institutions or other Persons; provided that no such identification after the Closing Date shall apply retroactively to disqualify any Person that has previously acquired an assignment or participation interest in any of the Loans with respect to such previously acquired participation interest or Loans, (ii) competitors (or Affiliates thereof) of CGI Borrower or any of its Subsidiaries, and (iii) Excluded Affiliates;

Disqualified Stock” shall mean, with respect to any Person, any Capital Stock of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely for Qualified Stock), other than as a result of a change of control, asset sale, or similar event, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely for Qualified Stock), other than as a result of a change of control, asset sale, or similar event, in whole or in part, in each case, prior to the date that is 91 days after the Revolving Credit Maturity Date hereunder; provided that if such Capital Stock is issued to any plan for the benefit of employees of CGI Borrower or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by CGI Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death, or disability;

Distressed Person” shall have the meaning assigned such term in the definition of Lender-Related Distress Event;

Dollars” and “$” shall mean Canadian dollars;

Draft” has the meaning set forth in Section 5.1(a);

Dutch Priority Payable Reserve” shall mean, without duplication of any other Borrowing Base Reserves with respect to any Collateral located in The Netherlands, such reserves as the Administrative Agent from time to time determines in its Permitted Discretion (in accordance with and subject to the limitations of Section 2.19) as being appropriate to reflect any amounts secured by any Liens on Collateral located in The Netherlands included in the Borrowing Base, choate, or inchoate, which rank or are capable of ranking in priority to, or pari passu with, the Liens of the Administrative Agent (including, as the case may be, the Administrative Agent’s estimate of amounts owed with respect to an asset which is subject to a conditional sale or hire purchase agreement, Lien or retention of title arrangement) and/or any amounts which may represent costs relating to the enforcement of the Administrative Agent’s Liens;

 

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EBA Participant” shall have the meaning provided in Section 2.7;

EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway;

EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution;

Eligible Credit Card Receivables” shall mean, at the time of any determination thereof, each Credit Card Receivable that is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (h) below (without duplication of any Borrowing Base Reserves established by the Administrative Agent). None of the following shall constitute an Eligible Credit Card Receivable, unless otherwise agreed by the Administrative Agent:

 

  (a) Credit Card Receivables that have been outstanding for more than five (5) Business Days from the date of sale giving rise to such Credit Card Receivable;

 

  (b) Credit Card Receivables with respect to which a Borrowing Base Party does not have good and valid title, free and clear of any Lien (other than any Permitted Liens);

 

  (c) Credit Card Receivables that are not subject to a first priority Lien in favor of the Administrative Agent pursuant to the Security Documents (other than Permitted Liens having priority by operation of law and Permitted Liens not having priority over, or that are pari passu with, the Lien of the Administrative Agent under applicable law; the foregoing not being intended to limit the ability of the Administrative Agent to change, establish or eliminate any Borrowing Base Reserves in its Permitted Discretion on account of any such Liens); provided, however, that chargebacks in the ordinary course by credit card or debit card issuers or processors shall not be deemed violative of this clause (c);

 

  (d) Credit Card Receivables which are disputed, or with respect to which a claim, counterclaim, offset or chargeback (other than chargebacks in the ordinary course by the credit card or debit card issuers or processors) has been asserted, by the applicable credit card or debit card processor (but only to the extent of such disputed amount, claim, counterclaim, offset or chargeback);

 

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  (e) Credit Card Receivables as to which a credit card or debit card issuer or processor has the right under certain circumstances to require a Borrowing Base Party to repurchase the Accounts from such credit card or debit card issuer or processor;

 

  (f) Credit Card Receivables due from an issuer or payment processor of the applicable credit or debit card which is subject to an event of the type described in Section 12.5;

 

  (g) Credit Card Receivables which are evidenced by chattel paper or an instrument of any kind unless such chattel paper or instrument is in the possession of the Administrative Agent, and to the extent necessary or appropriate, endorsed to the Administrative Agent; or

 

  (h) Credit Card Receivables from major credit and debit card processors which the Administrative Agent determines in its Permitted Discretion (and upon notice to the Borrower Representative in the same manner as set forth in Section 2.19 with respect to adjustments to Borrowing Base Reserves) to be uncertain of collection;

Eligible In-Transit Inventory” shall mean, as of any date of determination thereof, without duplication of other Eligible Inventory, In-Transit Inventory of a Borrowing Base Party:

 

  (a) which satisfies all of the requirements for Eligible Inventory other than the requirement that it be located in Canada or the United States (with respect to In-Transit Inventory of a Canadian Credit Party or a U.S. Credit Party) that is a Borrowing Base Party;

 

  (b) which has been fully paid for by the applicable Borrowing Base Party, or, alternatively, for which the full purchase price thereof is secured by a commercial Letter of Credit issued under this Agreement;

 

  (c) for which title to such In-Transit Inventory has passed to such Borrowing Base Party;

 

  (d) for which the purchase order is in the name of such Borrowing Base Party;

 

  (e) which is scheduled for delivery within 60 days or less from the date of shipment;

 

  (f) for which an Acceptable BOL (or other document of title acceptable to the Administrative Agent in its Permitted Discretion) has been issued and in each case as to which the Administrative Agent has possession of the Acceptable BOL (or other document of title acceptable to the Administrative Agent in its Permitted Discretion) which evidences ownership of the subject In-Transit Inventory (which possession requirement can be satisfied by the delivery of a Customs Broker Agreement from any third party with possession over such Acceptable BOL);

 

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  (g) which is in the possession of a common carrier or Eligible NVOCC which issued the Acceptable BOL in respect of such In-Transit Inventory;

 

  (h) the common carrier (to the extent an NVOCC has not engaged such common carrier), NVOCC and customs broker (as applicable) with respect to such In-Transit Inventory has entered into a Customs Broker Agreement which is then in effect; and

 

  (i) which is fully insured by marine cargo and other insurance in accordance with Section 10.3;

in each case, unless otherwise agreed by the Administrative Agent in its Permitted Discretion; provided, that Eligible In-Transit Inventory shall not include Inventory accounted for as “in-transit” by the Borrowers by virtue of such Inventory’s being in-transit between the Credit Parties’ locations or in storage trailers at the Credit Parties’ locations;

Eligible Inventory” shall mean, as of the date of determination thereof, without duplication, (i) Eligible In-Transit Inventory, and (ii) items of Inventory of a Borrowing Base Party (other than Eligible In-Transit Inventory) that are raw materials or work-in-process or are finished goods, merchantable and readily saleable to the public in the ordinary course, in each case that, except as otherwise agreed by the Administrative Agent, (x) comply in all material respects with each of the representations and warranties respecting Inventory made by a Borrowing Base Party in the Credit Documents and (y) are not excluded as ineligible by virtue of one or more of the criteria set forth in clauses (a) through (i) below (without duplication of any Borrowing Base Reserves established by the Administrative Agent). Except as otherwise agreed by the Administrative Agent, the following items of Inventory shall not be included in Eligible Inventory:

 

  (a) Inventory that is not solely owned by one or more Borrowing Base Parties or a Borrowing Base Party does not have good and valid title thereto;

 

  (b) Inventory that is leased by or is on consignment to a Borrowing Base Party or that is consigned by a Borrowing Base Party to a Person which is not a Credit Party;

 

  (c)

Inventory (other than Eligible In-Transit Inventory) that (i) is not located in Canada, the United States (excluding territories or possessions thereof) or England and Wales in the case of Inventory of a CGI Borrowing Base Party or that is not located in Belgium, only with respect to Belgian Inventory, or in The Netherlands in case of Inventory of a Swiss Borrowing Base Party or another Relevant Jurisdiction; provided, however, that this clause (c)(i) shall not apply to any Inventory that otherwise meets the criteria to be Eligible Inventory and is insured by a Person reasonably acceptable to the Administrative Agent or (ii) is in-transit (excluding, for greater certainty, in the case of clauses (i) and (ii) above,

 

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  Inventory described in the proviso at the end of the definition of “Eligible In-Transit Inventory”);

 

  (d) Inventory that is comprised of goods which (i) are damaged, defective, “seconds,” or otherwise unmerchantable, (ii) are to be returned to the vendor, (iii) are obsolete or slow moving, or custom items (other than special makeup units produced in the ordinary course of business and intended for sale), or that constitute spare parts, display, packaging and shipping materials or supplies used or consumed in a Borrowing Base Party’s business (for the avoidance of doubt, excluding raw materials), (iv) are not in compliance in all material respects with all standards imposed by any Governmental Authority having regulatory authority over such Inventory, its use or sale, (v) are bill and hold goods, or (vi) are of a type which is not held for sale by the Borrowing Base Parties in the ordinary course of their business, including Inventory used for marketing, promotion or gifts;

 

  (e) Inventory that is not subject to a perfected first-priority security interest and valid Lien in favor of the Administrative Agent pursuant to the Security Documents (other than Permitted Liens having priority by operation of law, Permitted Liens not having priority over, or that are pari passu with the Lien of the Administrative Agent under applicable law and Permitted Liens described in clause (l) of the definition thereof; the foregoing not being intended to limit the ability of the Administrative Agent to change, establish or eliminate any Borrowing Base Reserves in its Permitted Discretion on account of any such Liens);

 

  (f) Inventory that consists of samples, labels, bags, and other similar non-merchandise categories (for greater clarity, display models are not deemed a non-merchandise category);

 

  (g) Inventory that is not insured in compliance with the provisions of Section 10.3 hereof;

 

  (h) Inventory that has been sold but not yet delivered or as to which a Borrowing Base Party has accepted a deposit and which is no longer reflected in a Borrower’s or a Guarantor’s stock ledger; or

 

  (i) in the case of Inventory of a Swiss Borrowing Base Party located in The Netherlands, which constitutes movable assets as set out in section 21 paragraph 2 in conjunction with section 22 paragraph 3 of the Dutch Tax Collection Act (Invorderingswet 1990);

Eligible Letter of Credit” shall mean, as of any date of determination thereof, a commercial Letter of Credit which supports the full purchase price of Inventory (other than In-Transit Inventory), (a) which Inventory does not constitute Eligible In-Transit Inventory and for which no Acceptable BOL or other documents of title have then been issued; (b) which commercial Letter of Credit (i) has an expiry, subject to the proviso

 

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hereto, that is 90 days or fewer from the date of determination, provided that ninety percent (90%) of the maximum Stated Amount of all such commercial Letters of Credit shall not, at any time, have an expiry greater than 90 days after the original date of issuance of such commercial Letter of Credit, and (ii) provides that such commercial Letter of Credit may be drawn only after the Inventory is completed and after an Acceptable BOL (or other document of title acceptable to the Administrative Agent in its Permitted Discretion) has been issued for such Inventory; and (c) with respect to the Inventory to be purchased with such commercial Letter of Credit, such Inventory would satisfy all of the requirements for Eligible In-Transit Inventory other than the requirement set forth in clause (e) of the definition of the term herein;

Eligible NVOCC” shall mean, with respect to any In-Transit Inventory, an NVOCC for such In-Transit Inventory that (i) is not an Affiliate of a Borrowing Base Party or the applicable vendor and is otherwise reasonably acceptable to the Administrative Agent; (ii) is engaged by a Borrowing Base Party as freight forwarder with respect to such In-Transit Inventory; (iii) has received from the carrier a tangible bill of lading with respect to such In-Transit Inventory that names such NVOCC as consignee; (iv) has issued an Acceptable BOL to the order of a Borrowing Base Party in respect of such In-Transit Inventory; and (v) has entered into a Customs Broker Agreement which is then in effect;

Eligible Trade Receivables” shall mean, as of any date of determination thereof, Accounts arising from the sale of a Borrowing Base Party’s Inventory (other than those consisting of Credit Card Receivables) or other goods, or rendition of services by a Borrowing Base Party, that satisfy the following criteria: such Account (i) represents the bona fide amounts due to a Borrowing Base Party from an account debtor, and in each case originated in the ordinary course of business of such Borrowing Base Party, and (ii) is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (s) below (without duplication of any Borrowing Base Reserves established by the Administrative Agent). None of the following shall constitute an Eligible Trade Receivable, unless otherwise agreed by the Administrative Agent:

 

  (a) Accounts that are not evidenced by an invoice;

 

  (b) Accounts that, to the knowledge of the Borrower Representative, do not constitute valid and legally enforceable obligations of the account debtor;

 

  (c) Accounts (i) that are due more than 120 days from the original invoice date or that have been outstanding for more than 120 days from the original invoice date or (ii) that are more than 60 days past the due date;

 

  (d)

Accounts due from any account debtor if fifty percent (50%) or more of Accounts due from such account debtor are ineligible under the provisions of clause (c) above unless CGI Borrower can demonstrate to the satisfaction of the Administrative Agent that the amount unpaid is subject to a legitimate dispute and

 

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  such dispute does not and will not impact on the likelihood that such account debtor will pay subsequent or other existing Accounts;

 

  (e) Accounts with respect to which a Borrowing Base Party does not have good and valid title thereto, free and clear of any Lien (other than any Permitted Liens);

 

  (f) Accounts that are not subject to a first priority security interest and valid Lien in favor of the Administrative Agent pursuant to the Security Documents (other than Permitted Liens having priority by operation of law and Permitted Liens not having priority over, or that are pari passu with, the Lien of the Administrative Agent under applicable law; the foregoing not being intended to limit the ability of the Administrative Agent to change, establish or eliminate any Borrowing Base Reserves in its Permitted Discretion on account of any such Liens);

 

  (g) Accounts which are disputed or with respect to which a claim, counterclaim, offset or chargeback has been asserted, but only to the extent of such dispute, claim, counterclaim, offset or chargeback;

 

  (h) Accounts which are owed by any Affiliate (including Holdings, CGI Borrower, Swiss Borrower and the other Restricted Subsidiaries, but excluding any other portfolio company of the Sponsor (subject to Section 11.10));

 

  (i) Accounts due from an account debtor which is subject to an event of the type described in Section 12.5;

 

  (j) Accounts due from (i) the federal government of the United States of America unless such Accounts have been assigned by the applicable Borrowing Base Party to the Administrative Agent in accordance with the Federal Assignment of Claims Act of 1940, (ii) the federal government of Canada or a political subdivision thereof, or any province or territory, or any municipality or department or agency or instrumentality thereof unless the provisions of the Financial Administration Act (Canada) or any applicable provincial, territorial or municipal law of similar purpose and effect restricting the assignment thereof, as the case may be, have been complied with or (iii) any other Governmental Authority except to the extent reasonably acceptable to the Administrative Agent (provided that such Accounts described in this clause (j)(iii) shall not exceed $3,000,000 at any time outstanding);

 

  (k) Accounts (i) owing from any Person that is also a supplier to or creditor of a Credit Party or any of its Subsidiaries unless such Person has waived any right of setoff in a manner reasonably acceptable to the Administrative Agent, or (ii) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling a Credit Party or any of its Subsidiaries to discounts on future purchase therefrom (but in each case under clauses (k)(i) and (ii), ineligibility shall be limited to the amount thereof);

 

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  (l) Accounts arising out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return;

 

  (m) Accounts arising out of sales to account debtors that have a principal place of business, are organized and have their principal assets outside Canada, the United States and the United Kingdom; provided that Accounts (w) arising out of sales to account debtors in all other jurisdictions (for certainty excluding Canada, the United States and the United Kingdom) in an amount up to $5,000,000 in aggregate, (x) that are fully backed by an irrevocable letter of credit on terms, and issued by a financial institution reasonably acceptable to the Administrative Agent, (y) that are insured by a Person reasonably acceptable to the Administrative Agent or (z) (I) from specific account debtors as are consented to by the Administrative Agent (such consent not to be unreasonably withheld, delayed or conditioned), located outside Canada, the United States and the United Kingdom, or (II) from account debtors located in such jurisdictions (other than Canada, the United States and the United Kingdom) as are consented to by the Administrative Agent (such consent not to be unreasonably withheld, delayed or conditioned), shall, in the cases of (w), (x), (y) and (z), constitute “Eligible Trade Receivables”;

 

  (n) Accounts payable other than in Dollars, U.S. Dollars, Euros, Pounds Sterling or Swedish krona;

 

  (o) Accounts evidenced by a judgment, chattel paper, promissory note or other instrument;

 

  (p) Accounts consisting of amounts due from vendors as rebates or allowances, or as finance or interest charges (but in each case, ineligibility shall be limited to the amount thereof);

 

  (q) Accounts for which, to the knowledge of the Borrower Representative, the assignment thereof are restricted or prohibited by the terms of such Account or by applicable law except to the extent such restriction or prohibition does not prevent the collection thereof by the applicable Borrowing Base Party or affect or impair the validity or perfection of the Liens in favour of the Administrative Agent therein;

 

  (r) Accounts which are in excess of the credit limit for such account debtor established by a Borrowing Base Party in the ordinary course of business (but in each case, ineligibility shall be limited to the amount of such excess); or

 

  (s)

Accounts due from an account debtor and its Affiliates (other than any account debtors identified on Schedule 1.1(d) (as account debtors may be added to such Schedule 1.1(d) by the Borrower Representative from time to time with the consent of the Administrative Agent in its Permitted Discretion and removed from such Schedule 1.1(d) in the Administrative Agent’s Permitted Discretion based

 

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  upon the creditworthiness of such account debtor from time to time upon reasonable prior written notice to the Borrower Representative)), where the aggregate amount due on such Accounts to the Borrowing Base Parties at any time exceeds fifteen percent (15%) of the total Eligible Trade Receivables then due to the Borrowing Base Parties, only to the extent of such amount in excess of fifteen percent (15%) of the total Eligible Trade Receivables due to the Borrowing Base Parties;

Environmental Claims” shall mean any and all actions, suits, orders, decrees, demand letters, claims, notices of noncompliance or potential responsibility or violation, or proceedings pursuant to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereinafter, “Claims”), including, without limitation, (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial, or other actions or damages pursuant to any Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation, or injunctive relief relating to the presence Release or threatened Release of Hazardous Materials or arising from alleged injury or threat of injury to health or safety (to the extent relating to human exposure to Hazardous Materials), or the environment including, without limitation, ambient air, indoor air, surface water, groundwater, soil, land surface and subsurface strata, and natural resources such as wetlands;

Environmental Law” shall mean any applicable federal, state, provincial, foreign, municipal or local statute, law, rule, regulation, ordinance, code, and rule of common law now or hereafter in effect, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree, or judgment, relating to pollution or protection of the environment, including, without limitation, ambient air, indoor air, surface water, groundwater, soil, land surface and subsurface strata and natural resources such as flora, fauna, or wetlands, or protection of human health or safety (to the extent relating to human exposure to Hazardous Materials) and including those relating to the generation, storage, treatment, transport, Release, or threat of Release of Hazardous Materials;

Equity Interest” shall mean Capital Stock and all warrants, options, or other rights to acquire Capital Stock, but excluding any debt security that is convertible into, or exchangeable for, Capital Stock;

Equivalent Amount” means with respect to any two currencies, the amount obtained in one such currency when an amount in the other currency is translated into the first currency using the Bank of Canada noon spot rate on the Business Day with respect to which such computation is required for the purpose of this Agreement;

ERISA” shall mean the Employee Retirement Income Security Act of 1974;

 

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ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that, together with any Credit Party, is treated as a single employer under Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code);

ERISA Event” shall mean (i) the failure of any Plan to comply with any provisions of ERISA and/or the Code or with the terms of such Plan; (ii) any Reportable Event; (iii) the existence with respect to any Plan of a non-exempt Prohibited Transaction; (iv) any failure by any U.S. Pension Plan to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section 302 of ERISA) applicable to such U.S. Pension Plan, whether or not waived; (v) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any U.S. Pension Plan; (vi) the occurrence of any event or condition which would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any U.S. Pension Plan or the incurrence by any Credit Party or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any U.S. Pension Plan, including but not limited to the imposition of any Lien in favor of the PBGC or any U.S. Pension Plan; (vii) the receipt by any Credit Party or any of its ERISA Affiliates from the PBGC or a plan administrator of any written notice to terminate any U.S. Pension Plan or to appoint a trustee to administer any U.S. Pension Plan under Section 4042 of ERISA; (viii) the incurrence by any Credit Party or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any U.S. Pension Plan (or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA) or Multiemployer Plan; or (ix) the receipt by any Credit Party or any of its ERISA Affiliates of any notice concerning the imposition on it of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, Insolvent or in Reorganization, or terminated (within the meaning of Section 4041A of ERISA);

EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time;

EURIBOR” shall mean, for any Interest Period in relation to a EURIBOR Loan, a rate of interest per annum reasonably determined by the Administrative Agent equal to:

 

  (a) the applicable Screen Rate; or

 

  (b) if no Screen Rate is available for the Interest Period of that EURIBOR Loan, the Interpolated Screen Rate for that EURIBOR Loan; or

 

  (c)

if no Screen Rate is available for the Interest Period of that EURIBOR Loan and it is not possible to calculate the Interpolated Screen Rate for that EURIBOR Loan, the Administrative Agent shall, subject to paragraphs (i) and (ii) below, request

 

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  the Reference Banks to quote the rate at which deposits in Euros in a comparable amount are offered by each of them as at approximately 11:30 a.m. (Brussels time) on the Rate Fixing Day to leading banks in the eurozone interbank market for a period equal to the Interest Period, and:

 

  (i) if at least two quotations are provided from Reference Banks, the rate for that Rate Fixing Day will be the arithmetic mean of the quotations; or

 

  (ii) if fewer than two quotations are provided as requested, the rate for that Rate Fixing Day will be the arithmetic mean of the rates quoted by major banks in the eurozone, selected by Administrative Agent at approximately 11:30 a.m. (Brussels time) on the day which falls two TARGET Days after the Rate Fixing Day, for loans in Euros in a comparable amount to leading European banks for a period equal to the Interest Period.

If any of the foregoing produce rate per annum for EURIBOR that is less than zero, EURIBOR shall be deemed zero;

EURIBOR Loan” means a Loan made by a Lender to Swiss Borrower in Euros in accordance with the provisions hereof, bearing interest by reference to the EURIBOR;

Euro” or “” means the single currency of Participating Member States;

European Base Rate” shall mean, with respect to Euros funded outside of the United States, the LIBO Rate as of 11:00 a.m. (London time) on the first Business Day in each month for a one (1) month period, provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent. Any change in such rate shall take effect at the opening of business on the day of such change. If such European Base Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement;

European Base Rate Loan” shall mean a Loan made to Swiss Borrower denominated in Euros and bearing interest at a rate based on the European Base Rate;

Event of Default” shall have the meaning provided in Article 12;

Excess Availability” shall mean, at any time, an amount equal to (a) the Line Cap plus (b) cash and Cash Equivalents on deposit in any Blocked Account plus (c) the amount, if any, by which the Borrowing Base exceeds the aggregate Revolving Credit Commitment in effect at such time minus (d) the aggregate amount of the Lenders’ Revolving Credit Exposure;

Exchange Act” shall mean the Securities Exchange Act of 1934;

 

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Excluded Affiliate” shall mean any Affiliate of any Agent that is engaged as a principal primarily in private equity, mezzanine financing or venture capital;

Excluded Contribution” shall mean net cash proceeds, the Fair Market Value of marketable securities, or the Fair Market Value of Qualified Proceeds received by CGI Borrower from (i) contributions to its common equity capital, and (ii) the sale (other than to a Subsidiary of CGI Borrower or to any management equity plan or equity option plan or any other management or employee benefit plan or agreement of CGI Borrower) of Capital Stock (other than Disqualified Stock) of CGI Borrower, in each case designated as Excluded Contributions pursuant to an officer’s certificate executed by either a senior vice president or the principal financial officer of the Borrower Representative on the date such capital contributions are made or the date such Equity Interests are sold, as the case may be;

Excluded DDAs” shall have the meaning provided in Section 10.9(e);

Excluded Property” shall have the meaning set forth in each Security Document containing a definition of “Excluded Property” solely with respect to the property of each Credit Party that is a party thereto;

Excluded Stock and Stock Equivalents” shall mean (i) any Capital Stock or Stock Equivalents with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower Representative, the burden or cost or other consequences of pledging such Capital Stock or Stock Equivalents in favor of the Secured Parties under the Security Documents shall be excessive in view of the benefits to be obtained by the Lenders therefrom, (ii) any Capital Stock or Stock Equivalents to the extent the pledge thereof would violate any applicable Requirement of Law or any Contractual Requirement (including any legally effective requirement to obtain the consent or approval of, or a license from, any Governmental Authority or any other third party unless such consent, approval or license has been obtained (it being understood that the foregoing shall not be deemed to obligate CGI Borrower or any Subsidiary to obtain any such consent, approval or license)), (iii) in the case of (A) any Capital Stock or Stock Equivalents of any Subsidiary to the extent such Capital Stock or Stock Equivalents are subject to a Lien permitted by clause (h) or (i) of the definition of Permitted Lien or (B) any Capital Stock or Stock Equivalents of any Subsidiary that is not Wholly-Owned by CGI Borrower and its Restricted Subsidiaries, any Capital Stock or Stock Equivalents of each such Subsidiary described in clause (A) or (B) to the extent (I) that a pledge thereof to secure the Obligations is prohibited by any applicable Contractual Requirement (other than customary non-assignment provisions which are ineffective under the Uniform Commercial Code or other applicable law), (II) any Contractual Requirement prohibits such a pledge without the consent of any other party; provided that this clause (II) shall not apply if (x) such other party is a Credit Party or Wholly-Owned Subsidiary or (y) consent has been obtained to consummate such pledge (it being understood that the foregoing shall not be deemed to obligate CGI Borrower or any Subsidiary to obtain any such consent) and for so long as such Contractual Requirement

 

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or replacement or renewal thereof is in effect, or (III) a pledge thereof to secure the Obligations would give any other party (other than a Credit Party or Wholly-Owned Subsidiary) to any contract, agreement, instrument, or indenture governing such Capital Stock or Stock Equivalents the right to terminate its obligations thereunder (other than customary non-assignment provisions which are ineffective under the Uniform Commercial Code or other applicable law), (iv) any Capital Stock or Stock Equivalents of any Subsidiary to the extent that the pledge of such Capital Stock or Stock Equivalents would result in materially adverse tax consequences to CGI Borrower or any Subsidiary as reasonably determined by the Borrower Representative in consultation with the Administrative Agent, (v) any Capital Stock or Stock Equivalents that are margin stock, and (vi) any Capital Stock and Stock Equivalents of any Subsidiary that is not a Material Subsidiary or is an Unrestricted Subsidiary, a Captive Insurance Subsidiary, a Broker-Dealer Subsidiary, a not-for-profit Subsidiary, an SPV, or any special purpose entity; provided that Excluded Stock and Stock Equivalents shall not include proceeds of the foregoing property to the extent otherwise constituting Collateral;

Excluded Subsidiary” shall mean (i) each Subsidiary, in each case, for so long as any such Subsidiary does not constitute a Material Subsidiary, (ii) each Subsidiary that is not a Wholly-Owned Subsidiary on any date such Subsidiary would otherwise be required to become a Guarantor pursuant to the requirements of Section 10.11 (for so long as such Subsidiary remains a non-Wholly-Owned Restricted Subsidiary), (iii) any Foreign Subsidiary formed in any jurisdiction other than in Switzerland or the United Kingdom; (iv) each Subsidiary that is prohibited by any applicable Contractual Requirement (so long as, with respect to any Subsidiary acquired after the Closing Date, the prohibition is not created in contemplation of such transaction) or Requirement of Law (for the avoidance of doubt, including any such prohibition due to any approval, consent, license or authorization of any Governmental Authority not being obtained) from guaranteeing or granting Liens to secure the Obligations at the time such Subsidiary becomes a Restricted Subsidiary (and for so long as such restriction or any replacement or renewal thereof is in effect), (v) each Subsidiary with respect to which, as reasonably determined by CGI Borrower, the consequence of providing a Guarantee of the Obligations would adversely affect the ability of CGI Borrower and its Subsidiaries to satisfy applicable Requirements of Law, (vi) any other Subsidiary with respect to which, (a) in the reasonable judgment of the Administrative Agent and Borrower Representative, the burden or cost or other consequences of providing a Guarantee of the Obligations shall be excessive in view of the benefits to be obtained by the Lenders therefrom or (b) providing such a Guarantee would result in material adverse tax consequences as reasonably determined by the Borrower Representative in consultation with the Administrative Agent, (vii) each Unrestricted Subsidiary, (viii) each other Subsidiary acquired pursuant to a Permitted Acquisition or other Investment permitted hereunder and financed with assumed secured Indebtedness, and each Restricted Subsidiary acquired in such Permitted Acquisition or other Investment permitted hereunder that guarantees such Indebtedness, in each case to the extent that, and for so long as, the documentation relating to such Indebtedness to which such Subsidiary is a party prohibits such Subsidiary from guaranteeing the Obligations and such prohibition was not created in contemplation of such Permitted

 

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Acquisition or other Investment permitted hereunder, (ix) any special-purpose entities and/or joint ventures, (x) any not-for-profit Subsidiary, (xi) any Captive Insurance Subsidiary, (xii) any Broker-Dealer Subsidiary and (xiii) each other Subsidiary designated as an Excluded Subsidiary by the Borrower Representative and the Administrative Agent in writing;

Excluded Swap Obligation” shall mean, with respect to any Credit Party, (i) any Swap Obligation if, and to the extent that, all or a portion of the Obligations of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any Obligations thereof) is or becomes illegal or unlawful 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) or (ii) any other Swap Obligation designated as an “Excluded Swap Obligation” of such Credit Party as specified in any agreement between the relevant Credit Parties and Hedge Bank counterparty 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 Obligation or security interest is or becomes illegal or unlawful;

Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of any Credit Party hereunder or under any other Credit Document, (i) Taxes imposed on or measured by its overall net income, net profits, or branch profits (however denominated, and including (for the avoidance of doubt) any backup withholding in respect thereof under Section 3406 of the Code), and franchise (and similar) Taxes imposed on it (in lieu of net income Taxes), in each case by a jurisdiction (including any political subdivision thereof) as a result of such recipient being organized in, having its principal office in, or in the case of any Lender, having its applicable lending office in, such jurisdiction, or as a result of any other present or former connection with such jurisdiction (other than any such connection arising solely from this Agreement or any other Credit Documents or any transactions contemplated thereunder), or (ii) any withholding Taxes attributable to a recipient’s failure to comply with Section 6.4(e);

Existing Banker’s Acceptance” shall mean each of the banker’s acceptances issued or deemed issued under the Existing Credit Agreement and listed on Schedule 1.1(b) hereto;

Existing Class” shall have the meaning provided in Section 2.15(a);

Existing Credit Agreement” shall have the meaning provided in the preamble to this Agreement;

Existing Letter of Credit” shall mean each of the letters of credit issued or deemed issued under the Existing Credit Agreement (including, without limitation, the Existing Letters of Credit set forth on Schedule 1.1(b) hereto);

 

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Existing Revolving Credit Commitment” shall have the meaning provided in Section 2.15(a);

Existing Revolving Credit Loans” shall have the meaning provided in Section 2.15(a);

Expiring Credit Commitment” shall have the meaning provided in Section 2.1(d);

Extended Revolving Credit Commitments” shall have the meaning provided in Section 2.15(a);

Extended Revolving Credit Loans” shall have the meaning provided in Section 2.15(a);

Extended Revolving Loan Maturity Date” shall mean the date on which any Class of Extended Revolving Credit Loans matures;

Extending Lender” shall have the meaning provided in Section 2.15(b);

Extension” shall mean the establishment of an Extension Series by amending a Loan or Commitment pursuant to Section 2.15 and the applicable Extension Amendment;

Extension Amendment” shall have the meaning provided in Section 2.15(c);

Extension Date” shall have the meaning provided in Section 2.15(d);

Extension Election” shall have the meaning provided in Section 2.15(b);

Extension Minimum Condition” shall mean a condition to consummating any Extension that a minimum amount (to be determined and specified in the relevant Extension Request, in the Borrower Representative’s sole discretion) of any or all applicable Classes be submitted for Extension;

Extension Request” shall have the meaning provided in Section 2.15(a);

Extension Series” shall mean all Extended Revolving Credit Commitments that are established pursuant to the same Extension Amendment (or any subsequent Extension Amendment to the extent such Extension Amendment expressly provides that the Extended Revolving Credit Commitments provided for therein are intended to be a part of any previously established Extension Series);

Fair Market Value” shall mean with respect to any asset or group of assets on any date of determination, the value of the consideration obtainable in a sale of such asset at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, as determined in good faith by the Borrower Representative;

 

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FATCA” shall mean (a) Sections 1471 through 1474 of the Code, as of the date of this 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, (b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the United States and any other jurisdiction with the purpose (in either case) of facilitating the implementation of clause (a) above, or (c) any agreement pursuant to the implementation of clause (a) or clause (b) above with the United States Internal Revenue Service, the United States government or any governmental or taxation authority in the United States;

Federal Funds Effective Rate” shall mean, for any day, the weighted average of the per annum rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published on the next succeeding Business Day by the Federal Reserve Bank of New York; provided that (i) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate charged to Canadian Imperial Bank of Commerce on such day on such transactions as determined by the Administrative Agent;

Fees” shall mean all amounts payable pursuant to, or referred to in, Section 4.1;

Financial Covenant Trigger Event” shall have the meaning provided in Section 11.11;

Financial Officer” shall mean, with respect to any Credit Party, the Chief Financial Officer, Chief Operating Officer, the Vice President of Finance, Treasurer, Assistant Treasurer, Controller or Assistant Controller of such Credit Party;

First Lien Net Leverage Ratio” shall mean, as of any date of determination, the ratio of (i) Consolidated First Lien Secured Debt as of such date of determination, minus cash and Cash Equivalents (in each case, free and clear of all Liens other than Permitted Liens) of CGI Borrower and the Restricted Subsidiaries (other than the proceeds of any Indebtedness then being incurred and giving rise to the need to calculate the First Lien Net Leverage Ratio) to (ii) Consolidated EBITDA of CGI Borrower for the Test Period then last ended;

Fixed Amounts” shall have the meaning provided in Section 1.11(b).

Fixed Charge Coverage Ratio” shall mean, as of any date of determination, the ratio of (i)(x) Consolidated EBITDA of CGI Borrower and its Restricted Subsidiaries minus (y) Capital Expenditures paid in cash during such period and which are not financed with Indebtedness borrowed (excluding Borrowings under this Agreement) by any Credit Party or any Subsidiary in connection with such Capital Expenditures minus (z) federal, state and foreign income Taxes paid in cash (net of refunds received during such Test

 

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Period) by CGI Borrower and its Restricted Subsidiaries, in each case, for the Test Period then last ended to (ii) Debt Service Charges of CGI Borrower and its Restricted Subsidiaries payable in cash for such Test Period;

Fixed Charges” shall mean, with respect to any Person and its Restricted Subsidiaries for any period, the sum of:

 

  (a) Consolidated Interest Expense of such Person and its Restricted Subsidiaries for such period,

 

  (b) all cash dividend payments (excluding items eliminated in consolidation) on any series of preferred Capital Stock of such Person and its Restricted Subsidiaries made during such period, and

 

  (c) all cash dividend payments (excluding items eliminated in consolidation) on any series of Disqualified Stock made during such period;

Foreign Guarantor” shall mean each Credit Party that is not existing under the laws of Canada or any province or territory thereof or under the laws of the Unites States or any state therein;

Foreign Guarantor Release Event” shall mean, as to any Foreign Guarantor and any other Guarantor that is a Foreign Subsidiary, satisfaction of each of the following conditions: (i) the Guarantee provided by the applicable Foreign Guarantor or such other Guarantor that is a Foreign Subsidiary (x) is prohibited by applicable law, rule or regulation or (y) would result in an adverse tax consequence to any Borrower or any of its Subsidiaries; (ii) the Borrower Representative shall have provided the Administrative Agent at least five (5) Business Days’ notice that an event under clause (i) above has occurred and the Borrowers desire to have such Guarantor released as a Guarantor; and (iii) the Payment Conditions shall be satisfied immediately after giving effect to such release on a Pro Forma Basis;

Foreign Plan” shall mean any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by a Credit Party or any of its Subsidiaries with respect to employees employed outside of the United States or Canada, other than any state social security arrangements or other benefits required to be provided under applicable law;

Foreign Plan Event” shall mean, with respect to any Foreign Plan, (i) substantial non- compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders; (ii) failure to be maintained, where required, in good standing with applicable regulatory authorities; (iii) any obligation of any Credit Party or its Subsidiaries in connection with the termination or partial termination of, or withdrawal from, any such Foreign Plan; (iv) any Lien on the property of any Credit Party or its Subsidiaries in favor of a Governmental Authority as a result of any action or inaction regarding such a Foreign Plan; (v) for each such Foreign Plan which is a funded

 

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or insured plan, failure to be funded or insured on an ongoing basis to the extent required by applicable non-U.S. law (using actuarial methods and assumptions which are consistent with the valuations last filed with the applicable Governmental Authorities) or (vi) failure to make all contributions in a timely manner to the extent required by applicable law;

Foreign Subsidiary” shall mean each Subsidiary of CGI Borrower that is not a Canadian Subsidiary or a U.S. Subsidiary;

Fronting Exposure” shall mean, at any time there is a Defaulting Lender, (i) with respect to the Letter of Credit Issuer, such Defaulting Lender’s Revolving Credit Commitment Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (ii) with respect to the Swingline Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof;

Fronting Fee” shall have the meaning provided in Section 4.1(d);

FSCO” shall mean the Financial Services Commission of Ontario and any Person succeeding to the functions thereof and includes the Superintendent under such statute and any other Governmental Authority empowered or created by the Supplemental Pension Plans Act (Quebec) or the Pension Benefits Act (Ontario) or any Governmental Authority of any other Canadian jurisdiction exercising similar functions in respect of any Canadian Pension Plan of any Canadian Credit Party and any Governmental Authority succeeding to the functions thereof;

Fund” shall mean any Person (other than a natural Person) that is engaged or advises funds or other investment vehicles that are engaged in making, purchasing, holding, or investing in commercial loans and similar extensions of credit in the ordinary course;

Funded Debt” shall mean all Indebtedness of CGI Borrower and the Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of CGI Borrower or any Restricted Subsidiary, to a date more than one year from the date of its creation or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one year from such date (including all amounts of such Funded Debt required to be paid or prepaid within one year from the date of its creation), and, in the case of the Credit Parties, Indebtedness in respect of the Loans;

GAAP” shall mean generally accepted accounting principles in Canada, as in effect from time to time; provided, however, that if the Borrower Representative notifies the Administrative Agent that the Borrower Representative requests an amendment to any

 

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provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision, regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Furthermore, at any time after the Closing Date, CGI Borrower may elect to apply International Financial Reporting Standards (“IFRS”) accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP and GAAP concepts shall thereafter be construed to refer to IFRS and corresponding IFRS concepts (except as otherwise provided in this Agreement); provided any such election, once made, shall be irrevocable; provided, further, that any calculation or determination in this Agreement that requires the application of GAAP for periods that include fiscal quarters ended prior to CGI Borrower’s election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP. The Borrower Representative shall give written notice of any such election made in accordance with this definition to the Administrative Agent. For the avoidance of doubt, solely making an election (without any other action) referred to in this definition will not be treated as an incurrence of Indebtedness. Notwithstanding any other provision contained herein, the amount of any Indebtedness under GAAP with respect to Capitalized Lease Obligations shall be determined in accordance with the definition of Capitalized Lease Obligations;

Governmental Authority” shall mean any nation, sovereign, or government, any state, province, territory, or other political subdivision thereof, and any entity or authority exercising executive, legislative, judicial, taxing, regulatory, or administrative functions of or pertaining to government, including a central bank or stock exchange;

Granting Lender” shall have the meaning provided in Section 14.6(g);

Guarantees” shall mean, collectively, (i) the Guarantee made by Holdings and each other Credit Party on the Closing Date in favor of the Administrative Agent for the benefit of the Secured Parties and (ii) any other guarantee of the Obligations made by a Restricted Subsidiary in form and substance reasonably acceptable to the Administrative Agent and the Borrower Representative;

guarantee obligations” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any primary obligor in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (a) for the purchase or payment of any such Indebtedness or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities, or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness, or (iv) otherwise to assure or hold harmless the owner of

 

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such Indebtedness against loss in respect thereof; provided, however, that the term guarantee obligations shall not include endorsements of instruments for deposit or collection in the ordinary course of business or customary and reasonable indemnity obligations or product warranties in effect on the Closing Date or entered into in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any guarantee obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such guarantee obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith;

Guarantors” shall mean (i) each Subsidiary of CGI Borrower that is party to the Guarantee on the Closing Date, (ii) each Subsidiary of CGI Borrower that becomes a party to the Guarantee after the Closing Date pursuant to Section 10.11 or otherwise, and (iii) Holdings; provided, for the avoidance of doubt, (x) no Excluded Subsidiary shall be a Guarantor until and unless it ceases to be an Excluded Subsidiary, and (y) the Borrower Representative may cause any Restricted Subsidiary that is not a Guarantor to guarantee the Obligations by causing such Restricted Subsidiary to become a Guarantor under the Guarantee and a grantor under the applicable Security Documents in accordance with Section 10.11, and any such Restricted Subsidiary shall be a Guarantor hereunder and under the other Credit Documents for all purposes;

Guidelines” means, together, guideline S-02.123 in relation to interbank loans of 22 September 1986 (Merkblatt “Verrechnungssteuer auf Zinsen von Bankguthaben, deren Gläubiger Banken sind (lnterbankguthaben)” vom 22. September 1986), guideline S-02.122.1 in relation to bonds of April 1999 (Merkblatt “Obligationen” vom April 1999), guideline S-02.130.1 in relation to money market instruments and book claims of April 1999 (Merkblatt vom April 1999 betreffend Geldmarktpapiere und Buchforderungen inländischer Schuldner), guideline S-02.128 in relation to syndicated credit facilities of January 2000 (Merkblatt “Steuerliche Behandlung von Konsortialdarlehen, Schuldscheindarlehen, Wechseln und Unterbeteiligungen” vom Januar 2000), circular letter No. 34 of 26 July 2011 (1-034-V-2011) in relation to deposits (Kreisschreiben Nr. 34 “Kundenguthaben” vom 26. Juli 2011) and the circular letter No. 15 of 7 February 2007 (1-015-DVS-2007) in relation to bonds and derivative financial instruments as subject matter of taxation of Swiss federal income tax, Swiss withholding tax and Swiss stamp taxes (Kreisschreiben Nr. 15 “Obligationen und derivative Finanzinstrumente als Gegenstand der direkten Bundessteuer, der Verrechnungssteuer und der Stempelabgaben” vom 7. Februar 2007), in each case as issued, amended or replaced from time to time, by the Swiss Federal Tax Administration or as substituted or superseded and overruled by any law, statute, ordinance, court decision, regulation or the like as in force from time to time;

Hazardous Materials” shall mean (i) any petroleum or petroleum products, radioactive materials, asbestos and asbestos containing material, polychlorinated biphenyls, and

 

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radon gas; (ii) any chemicals, materials, or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous waste,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any Environmental Law; and (iii) any other chemical, material, or substance, which is prohibited, limited, or regulated due to its dangerous or deleterious properties or characteristics by, any Environmental Law;

Hedge Agreements” shall mean (i) 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 (ii) 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 (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement;

Hedge Bank” shall mean (i) any Person that, at the time it enters into a Hedge Agreement, is a Lender, the Administrative Agent or an Affiliate or branch of a Lender or the Administrative Agent and (ii) with respect to any Hedge Agreement entered into prior to the Closing Date, any Person that is a Lender, the Administrative Agent or an Affiliate or branch of a Lender or the Administrative Agent on the Closing Date; provided that, if such Person is not a Lender, such Person executes and delivers to the Administrative Agent and the Borrower Representative a letter agreement in form and substance reasonably acceptable to the Administrative Agent pursuant to which such Person (a) appoints the Administrative Agent as its agent under the applicable Credit Documents and (b) agrees to be bound by the provisions of Article VI and Sections 7.1 and 8.13 of the Canadian Pledge Agreement, Sections 4.3, 6.6, 7.4, 7.6, 8.1 and 8.19 of the Canadian Security Agreement and corresponding or similar provisions in any other Security Document, in each case, as if it were a Lender;

Hedging Obligations” shall mean, with respect to any Person, the obligations of such Person under any Hedge Agreements;

Historical Financial Statements” shall mean the unaudited financial statements of CGI Borrower and the Restricted Subsidiaries for the fiscal quarter ended December 31, 2015;

 

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Holdings” shall mean (i) Holdings (as defined in the preamble to this Agreement) or (ii) after the Closing Date any other Person or Persons (“New Holdings”) that is a Subsidiary of (or are Subsidiaries of) Holdings or of any Parent Entity of Holdings (or the previous New Holdings, as the case may be) but not CGI Borrower (“Previous Holdings”); provided that (a) such New Holdings directly owns (i) 100.0% of the Equity Interests of CGI Borrower and (ii) 100.0% of the Equity Interests of each other direct Subsidiary of Previous Holdings which were owned by Previous Holdings immediately prior thereto, (b) New Holdings shall expressly assume all the obligations of Previous Holdings under this Agreement and the other Credit Documents pursuant to a supplement hereto or thereto in form and substance reasonably satisfactory to the Administrative Agent, (c) if reasonably requested by the Administrative Agent, an opinion of counsel shall be delivered by the Borrower Representative to the Administrative Agent, (d) all Capital Stock of CGI Borrower and substantially all of the other assets of Previous Holdings are contributed or otherwise transferred, directly or indirectly, to such New Holdings and pledged to secure the Obligations, (e)(i) no Event of Default has occurred and is continuing at the time of such substitution and such substitution does not result in any Event of Default, (ii) such substitution does not result in any material adverse tax consequences to any Credit Party and (iii) such substitution does not result in any adverse tax consequences to any Lender (unless reimbursed hereunder) or to the Administrative Agent (unless reimbursed hereunder), (f) no Change of Control shall occur, (g) the Administrative Agent shall have received at least five (5) Business Days’ prior written notice of the proposed transaction and Previous Holdings, New Holdings and the Borrowers shall promptly and in any event at least two (2) Business Days’ prior to the consummation of the transaction provide all information any Lender or any Agent may reasonably request to satisfy its “know your customer” and other similar requirements necessary for such Person to comply with its internal compliance and regulatory requirements with respect to the proposed successor New Holdings, (h) if reasonably requested by the Administrative Agent, the Credit Parties shall execute and deliver amendments, supplements and other modifications to all Credit Documents and instruments and agreements executed in connection therewith necessary to perfect and protect the liens and security interests in the Collateral of New Holdings, in each case in form and substance reasonably satisfactory to the Administrative Agent, and (i) the Borrower Representative delivers a certificate of an Authorized Officer with respect to the satisfaction of the conditions set forth in clauses (a), (e)(i) and (ii) and (f) of this definition; provided, further, that if each of the foregoing is satisfied, Previous Holdings shall be automatically released of all its obligations under the Credit Documents and any reference to Holdings in the Credit Documents shall be meant to refer to New Holdings;

Holdings Loan Agreement” shall mean, collectively, that certain (i) senior subordinated grid note, dated as of December 9, 2013, issued by CGI Borrower in favor of Holdings and (ii) any unsecured subordinated promissory notes issued from time to time by CGI Borrower in favor of Holdings in connection with the reinvestment by Holdings of a portion of the interest paid by CGI Borrower on the Holdings Subordinate Debt in accordance with the Holdings Subordination Agreement, in the case of each of the notes described in the foregoing clauses (i) and (ii), as such agreement may be

 

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amended, revised, replaced, supplemented or restated from time to time in accordance with the terms of the Holdings Subordination Agreement, including increases to the principal amount outstanding thereunder as set forth therein;

Holdings Subordinate Debt” shall mean all amounts owing by CGI Borrower to Holdings pursuant to the Holdings Loan Agreement;

Holdings Subordination Agreement” shall mean the subordination and postponement agreement, dated as of the date hereof, among Holdings, CGI Borrower and the Administrative Agent, as such agreement may be amended, revised, replaced, supplemented or restated from time to time;

ICC” shall have the meaning provided in the definition of UCP;

IFRS” shall have the meaning given such term in the definition of GAAP;

Impacted Loans” shall have the meaning provided in Section 2.10(a);

Increased Amount Date” shall have the meaning provided in Section 2.14(a);

Incremental Revolving Credit Commitments” shall have the meaning provided in Section 2.14(a);

Incremental Revolving Credit Loan” shall have the meaning provided in Section 2.14(b);

Incremental Revolving Loan Lender” shall have the meaning provided in Section 2.14(b);

Incurrence-Based Amounts” shall have the meaning provided in Section 1.11(b);

Indebtedness” shall mean, with respect to any Person, (i) any indebtedness (including principal and premium) of such Person, whether or not contingent (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures, or similar instruments or letters of credit or banker’s acceptances (or, without double counting, reimbursement agreements in respect thereof), (c) representing the balance deferred and unpaid of the purchase price of any property (including Capitalized Lease Obligations), or (d) representing any Hedging Obligations, if and to the extent that any of the foregoing Indebtedness (other than letters of credit and Hedging Obligations) would appear as a net liability upon a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; provided that Indebtedness of any direct or indirect parent company appearing upon the balance sheet of CGI Borrower solely by reason of push down accounting under GAAP shall be excluded, (ii) to the extent not otherwise included, any obligation by such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of the type referred to in clause (i) of another Person (whether or not such items would appear upon the balance sheet of such obligor or

 

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guarantor), other than by endorsement of negotiable instruments for collection in the ordinary course of business, and (iii) to the extent not otherwise included, the obligations of the type referred to in clause (i) of another Person secured by a Lien on any asset owned by such Person, whether or not such Indebtedness is assumed by such Person; provided that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business, (2) prepaid or deferred revenue arising in the ordinary course of business, (3) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warrants or other unperformed obligations of the seller of such asset, (4) trade accounts and accrued expenses payable in the ordinary course of business and accruals for payroll and other operating expenses accrued in the ordinary course of business or (5) any earn-out obligation until such obligation, within 60 days of becoming due and payable, has not been paid and such obligation is reflected as a liability on the balance sheet of such Person in accordance with GAAP;

The amount of Indebtedness of any Person for purposes of clause (iii) above shall (unless such Indebtedness has been assumed by such Person) be deemed to be equal to the lesser of (x) the aggregate unpaid amount of such Indebtedness and (y) the Fair Market Value of the property encumbered thereby as determined by such Person in good faith;

For all purposes hereof, the Indebtedness of CGI Borrower and the Restricted Subsidiaries, shall exclude all intercompany Indebtedness having a term not exceeding 365 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business or consistent with past practice;

Indemnified Liabilities” shall have the meaning provided in Section 14.5;

Indemnified Persons” shall have the meaning provided in Section 14.5;

Indemnified Taxes” shall mean all Taxes imposed on or with respect to any payment by or on account of any obligation of any Credit Party hereunder or under any other Credit Document, other than Excluded Taxes or Other Taxes;

Independent Financial Advisor” shall mean an accounting firm, appraisal firm, investment banking firm or consultant of nationally recognized standing that is, in the good faith judgment of CGI Borrower, qualified to perform the task for which it has been engaged and that is disinterested with respect to the applicable transaction;

Initial Permitted Term Loan Closing Date” shall have the meaning provided in Section 11.1(u);

Insolvency Laws” shall mean the Companies’ Creditors Arrangement Act (Canada), the BIA, the Bankruptcy Code, the Winding-Up and Restructuring Act (Canada) or any other bankruptcy, insolvency or analogous legislation applicable to any Credit Party, any of their respective Subsidiaries or any jurisdiction in which Collateral is located;

 

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Insolvent” shall mean, with respect to any Multiemployer Plan, the condition that such Multiemployer Plan is insolvent within the meaning of Section 4245 of ERISA;

Intellectual Property” shall mean Canadian and foreign intellectual property, including all (i) (a) patents, inventions, processes, developments, technology, and know-how; (b) copyrights and works of authorship in any media, including graphics, advertising materials, labels, package designs, and photographs; (c) trademarks, service marks, trade names, brand names, corporate names, domain names, logos, trade dress, and other source indicators, and the goodwill of any business symbolized thereby; and (d) trade secrets, confidential, proprietary, or non-public information and (ii) all registrations, issuances, applications, renewals, extensions, substitutions, continuations, continuations-in-part, divisions, re-issues, re-examinations, foreign counterparts, or similar legal protections related to the foregoing;

Intercompany License Agreement” shall mean any cost sharing agreement, commission or royalty agreement, license or sub-license agreement, distribution agreement, services agreement, Intellectual Property rights transfer agreement or any related agreements, in each case where all the parties to such agreement are one or more of CGI Borrower and any Subsidiary;

Intercompany Note” shall mean any intercompany note substantially in the form of Exhibit D;

Interest Coverage Ratio” shall mean, as of any date of determination, the ratio of (i) Consolidated EBITDA of CGI Borrower and its Restricted Subsidiaries for the Test Period then last ended to (ii) Consolidated Interest Expense of CGI Borrower and its Restricted Subsidiaries for such Test Period;

Interest Period” shall mean, with respect to any Loan, the interest period applicable thereto, as determined pursuant to Section 2.9;

Interpolated Screen Rate” means in relation to EURIBOR for any Loan, the rate (rounded to the same number of decimal places as to the two relevant Screen Rates) which results from interpolating on a linear basis between:

 

  (a) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period for that Loan; and

 

  (b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period for that Loan,

each as of 11:00 a.m. on the Rate Fixing Day for that Loan;

In-Transit Inventory” shall mean Inventory of a Borrowing Base Party that is in the possession of a common carrier and is in-transit from a foreign location to a location of

 

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such Borrowing Base Party (or a location designated by such Borrowing Base Party) that is either in the United States or Canada;

Inventory” shall have the meaning provided in the Canadian Security Agreement;

Inventory Reserves” shall mean, without duplication of any other Borrowing Base Reserves or items that are otherwise addressed or excluded through eligibility criteria, and without duplication of any of the factors taken into account in determining Appraised Value, such reserves as may be established from time to time by the Administrative Agent in its Permitted Discretion with respect to changes in the determination of the saleability, at retail or wholesale, of the Eligible Inventory or which reflect such other factors as negatively affect the market value of the Eligible Inventory. Without limiting the generality of the foregoing, Inventory Reserves may, in the Permitted Discretion of the Administrative Agent include reserves based on: (i) Shrink and (ii) seller’s reclamation or repossession rights under the Bankruptcy Code;

Investment” shall mean, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances, or capital contributions (excluding accounts receivable, credit card and debit card receivables, trade credit, advances to customers, commission, travel, and similar advances to officers, directors, managers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests, or other securities issued by any other Person; provided that Investments shall not include, in the case of a Borrower and the Restricted Subsidiaries, intercompany loans, advances, or Indebtedness made to or owing by a Borrower or a Restricted Subsidiary having a term not exceeding 365 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business; provided, further, that, in the event that any Investment is made by Holdings, CGI Borrower or any Restricted Subsidiary in any Person through substantially concurrent interim transfers of any amount through CGI Borrower or any Restricted Subsidiaries, then such other substantially concurrent interim transfers shall be disregarded for purposes of Section 11.5;

For purposes of the definition of Unrestricted Subsidiary and Section 11.5,

 

  (a) Investments shall include the portion (proportionate to CGI Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of CGI Borrower at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided that upon a redesignation of such Subsidiary as a Restricted Subsidiary, CGI Borrower shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to (a) CGI Borrower’s Investment in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to CGI Borrower’s equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and

 

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  (b) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer;

The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any dividend, distribution, interest payment, return of capital, repayment, or other amount received by CGI Borrower or a Restricted Subsidiary in respect of such Investment (provided that, with respect to amounts received other than in the form of cash or Cash Equivalents, such amount shall be equal to the Fair Market Value of such consideration);

Investment Grade Rating” shall mean a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, or an equivalent rating by any other rating agency;

Investment Grade Securities” shall mean:

 

  (a) securities issued or directly and fully guaranteed or insured by the Canadian government or the United States government or, in each case, any agency or instrumentality thereof (other than Cash Equivalents),

 

  (b) debt securities or debt instruments with an Investment Grade Rating, but excluding any debt securities or instruments constituting loans or advances among CGI Borrower and its Subsidiaries,

 

  (c) investments in any fund that invests all or substantially all of its assets in investments of the type described in clauses (i) and (ii) which fund may also hold immaterial amounts of cash pending investment or distribution, and

 

  (d) corresponding instruments in countries other than Canada and the United States customarily utilized for high-quality investments;

ISP” shall mean, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance);

Issuer Documents” shall mean with respect to any Letter of Credit, the Letter of Credit Request, and any other document, agreement, and instrument entered into by the Letter of Credit Issuer and CGI Borrower (or any Restricted Subsidiary) or in favor of the Letter of Credit Issuer and relating to such Letter of Credit;

ITA” means the Income Tax Act (Canada) as amended from time to time (or any successor statute);

Joinder Agreement” shall mean an agreement substantially in the form of Exhibit E;

 

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Joint Lead Arrangers and Bookrunners” shall mean Canadian Imperial Bank of Commerce, The Toronto-Dominion Bank, Bank of Montreal, Barclays Bank PLC and Goldman Sachs Bank USA;

Judgment Currency” shall have the meaning provided in Section 14.19;

Landlord Lien State” shall mean any jurisdiction in which, at any time, a landlord’s claim for rent has priority by operation of applicable law notwithstanding any contractual provision to the contrary over the Lien of the Administrative Agent on any of the Collateral;

L/C Borrowing” shall mean an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing. All L/C Borrowings shall be denominated in Dollars or U.S. Dollars, and, with respect to Swiss Borrower, Euros (and such Alternative Currencies as a Borrower and the Administrative Agent may agree);

L/C Facility Maturity Date” shall mean the date that is five (5) Business Days prior to the scheduled Maturity Date then in effect for the applicable Class of Commitments (or, if such day is not a Business Day, the next preceding Business Day); provided that the L/C Facility Maturity Date may be extended beyond such date with the consent of the Letter of Credit Issuer;

L/C Obligations” shall mean, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unpaid Drawings, including all L/C Borrowings. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Stated Amount of such Letter of Credit in effect at such time;

L/C Participant” shall have the meaning provided in Section 3.3(a);

L/C Participation” shall have the meaning provided in Section 3.3(a);

LCT Election” shall have the meaning provided in Section 1.12(f);

LCT Test Date” shall have the meaning provided in Section 1.12(f);

Lender” shall have the meaning provided in the preamble to this Agreement, and in any event, shall include the Swingline Lender;

Lender BA Suspension Notice” shall have the meaning provided in Section 5.5(a)(iii);

 

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Lender Default” shall mean (i) the refusal (which shall be given verbally or in writing and has not been retracted) or failure of any Lender to make available its portion of any incurrence of Loans or Reimbursement Obligations, which refusal or failure is not cured within one (1) Business Day after the date of such refusal or failure, unless such Lender notifies the Administrative Agent in writing that such refusal or failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in writing) has not been satisfied, (ii) the failure of any Lender to pay over to the Administrative Agent, the Swingline Lender, the Letter of Credit Issuer or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless the subject of a good faith dispute, (iii) a Lender has notified the Borrower Representative or the Administrative Agent that it does not intend to comply with its funding obligations under this Agreement or has stated publicly that it will generally not comply with its funding obligations under any loan agreements, credit agreements, and other similar agreements, (iv) a Lender has failed to confirm in a manner reasonably satisfactory to the Administrative Agent that it will comply with its funding obligations under this Agreement, (v) a Distressed Person has admitted in writing that it is insolvent or such Distressed Person becomes subject to a Lender-Related Distress Event; or (vi) a Lender has become the subject of a Bail-In Action;

Lender-Related Distress Event” shall mean, with respect to any Lender, (a)(i) that such Lender or any other Person that directly or indirectly controls such Lender (each, a “Distressed Person”) is or becomes subject to a voluntary or involuntary case with respect to such Distressed Person under any debt relief law, (b) a custodian, conservator, receiver, interim receiver, trustee, monitor or similar official is appointed for such Distressed Person or any substantial part of such Distressed Person’s assets or (c) such Distressed Person is subject to a forced liquidation, makes a general assignment for the benefit of creditors or is otherwise adjudicated as, or determined by any governmental authority having regulatory authority over such Distressed Person to be, insolvent or bankrupt; provided that a Lender-Related Distress Event shall not be deemed to have occurred solely by virtue of the ownership or acquisition of any equity interests in any Lender or any Person that directly or indirectly controls such Lender by a governmental authority or an instrumentality thereof;

Letter of Credit” shall mean each letter of credit issued pursuant to Section 3.1 and each Existing Letter of Credit;

Letter of Credit Commitment” shall mean $25,000,000 or the Equivalent Amount in Dollars of any other any currency, as the same may be reduced from time to time pursuant to Section 3.1;

Letter of Credit Exposure” shall mean, with respect to any Lender, at any time, the sum of (i) the amount of the principal amount of any Unpaid Drawings in respect of which such Lender has made (or is required to have made) payments to the Letter of

 

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Credit Issuer pursuant to Section 3.4(a) at such time and (ii) such Lender’s Revolving Credit Commitment Percentage of the Letters of Credit Outstanding at such time (excluding the portion thereof consisting of Unpaid Drawings in respect of which the Lenders have made (or are required to have made) payments to the Letter of Credit Issuer pursuant to Section 3.4(a));

Letter of Credit Fee” shall have the meaning provided in Section 4.1(b);

Letter of Credit Fee Rate” means, with respect to a Letter of Credit, the annual percentage per annum indicated below the reference to “Letters of Credit Fee Rate” in the pricing grid in the definition of “Applicable Margin” relevant to the period in respect of which the determination is being made;

Letter of Credit Issuer” shall mean (i) in the case of standby Letters of Credit, trade letters of credit and bank guarantees, Canadian Imperial Bank of Commerce or any other Lender reasonably satisfactory to the Borrower Representative and the Administrative Agent, (ii) any of their respective Affiliates or branches or (iii) any replacement, additional issuer, or successor pursuant to Section 3.6. In the event that there is more than one Letter of Credit Issuer at any time, references herein and in the other Credit Documents to the Letter of Credit Issuer shall be deemed to refer to the Letter of Credit Issuer in respect of the applicable Letter of Credit or to all Letter of Credit Issuers, as the context requires;

Letter of Credit Request” shall mean a notice executed and delivered by the Borrower Representative pursuant to Section 3.2, and substantially in the form of Exhibit F or another form which is acceptable to the Letter of Credit Issuer in its reasonable discretion;

Letter of Credit Sub-Commitment” shall mean, in respect of Letters of Credit issued in a currency other than Dollars, U.S. Dollars or Euros, the Equivalent Amount of $5,000,000, in the aggregate, in such Alternative Currencies;

Letters of Credit Outstanding” shall mean, at any time the sum of, without duplication, (i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of the principal amount of all Unpaid Drawings;

LIBOR” shall have the meaning provided in the definition of LIBO Rate;

LIBOR Loan” shall mean any Loan bearing interest at a rate determined by reference to the LIBO Rate;

LIBO Rate” shall mean, for any Interest Period with respect to a LIBOR Loan,

 

  (a)

the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time), on the date that is two (2) Business Days prior to the commencement of such Interest Period by reference to the rate set by ICE

 

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  Benchmark Administration (or any display substituted therefor or any successor thereto) for deposits in Euros or U.S. Dollars, as applicable (in each case, as set forth by any service reasonably selected by the Administrative Agent that has been nominated by ICE Benchmark Administration (or any display substituted therefor or any successor thereto) as an authorized information vendor for the purpose of displaying such rates) for a period equal to such Interest Period and in an amount comparable to the amount of the LIBOR Loan to be outstanding during such Interest Period; provided, however, that, to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “LIBO Rate” shall be the interest rate per annum reasonably determined by the Administrative Agent to be the average of the rates per annum at which deposits in Euros or U.S. Dollars, as applicable, are offered for such relevant Interest Period to major banks in the London interbank market in London, England by the Administrative Agent at approximately 11:00 a.m. (London time) on the date that is two (2) Business Days prior to the beginning of such Interest Period for a period comparable to the Interest Period and in an amount comparable to the amount of the LIBOR Loan to be outstanding during such Interest Period; or

 

  (b) if the rate is not determinable pursuant to clause (a) of this definition at the relevant time in respect of the relevant period, Section 2.10 shall apply.

The LIBO Rate calculated pursuant to (a) above shall be no less than 0%;

Lien” shall mean with respect to any asset, any mortgage, lien, pledge, assignment by way of security, hypothecation, charge, security interest, preference, priority or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, and any lease in the nature thereof; provided that in no event shall an operating lease or a license to Intellectual Property be deemed to constitute a Lien;

Limited Condition Transaction” shall mean (i) any Permitted Acquisition or other permitted acquisition whose consummation is not conditioned on the availability of, or on obtaining, third party financing and (ii) any redemption, repurchase, defeasance, satisfaction and discharge or repayment of Indebtedness requiring irrevocable notice in advance of such redemption, repurchase, defeasance, satisfaction and discharge or repayment;

Line Cap” shall mean, at any time of determination, the lesser of (a) the Total Revolving Credit Commitment and (b) the Borrowing Base;

Loan” shall mean any Revolving Loan, Swingline Loan or any other loan made by any Lender hereunder;

Management Equityholders” shall mean any of (i) Daniel Reiss, (ii) any other current or former director, officer, employee or member of management of Holdings or any of its Subsidiaries or any direct or indirect parent company thereof who, on the Closing Date, is

 

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an equityholder in Holdings or any direct or indirect parent company thereof, (iii) any trust, partnership, limited liability company, corporate body or other entity established by Daniel Reiss, any such director, officer, employee or member of management of Holdings or any of its Subsidiaries or any direct or indirect parent company thereof or any Person described in the succeeding clauses (iv) and (v), as applicable, to hold an investment in Holdings or any direct or indirect parent company thereof in connection with such Person’s estate or tax planning, (iv) any spouse, parents or grandparents of Daniel Reiss or any such director, officer, employee or member of management of Holdings or any of its Subsidiaries or any direct or indirect parent company thereof, and any and all descendants (including adopted children and step-children) of the foregoing, together with any spouse of any of the foregoing Persons, who are transferred an investment in Holdings or any direct or indirect parent company thereof by Daniel Reiss or any such director, officer, employee or member of management of Holdings or any of its Subsidiaries or any direct or indirect parent company thereof in connection with such Person’s estate or tax planning and (v) any Person who acquires an investment in Holdings or any direct or indirect parent company thereof by will or by the laws of intestate succession as a result of the death of Daniel Reiss or any such director, officer, employee or member of management of Holdings or any of its Subsidiaries or any direct or indirect parent company thereof;

Mandatory Borrowing” shall have the meaning provided in Section 2.1(c);

Master Agreement” shall have the meaning provided in the definition of Hedge Agreements;

Material Adverse Effect” shall mean a material and adverse effect on (i) the business, results of operations or financial condition of CGI Borrower and its Restricted Subsidiaries, taken as a whole, or (ii) the material rights and remedies (taken as a whole) of the Administrative Agent and the Lenders under the Credit Documents;

Material Subsidiary” shall mean, at any date of determination, each Wholly-Owned Restricted Subsidiary (together with its Subsidiaries) (i) whose total assets at the last day of the Test Period ending on the last day of the most recent fiscal period for which Section 10.1 Financials have been delivered were equal to or greater than 5.0% of the Consolidated Total Assets of CGI Borrower and the Restricted Subsidiaries at such date or (ii) whose revenues during such Test Period were equal to or greater than 5.0% of the consolidated revenues of CGI Borrower and the Restricted Subsidiaries for such period (in the case of any determination relating to any Specified Transaction, on a Pro Forma Basis including the revenues of any Person being acquired in connection therewith), in each case determined in accordance with GAAP; provided that if, at any time and from time to time after the Closing Date, Restricted Subsidiaries that are not Material Subsidiaries (other than Restricted Subsidiaries that are Excluded Subsidiaries other than by virtue of clause (i) of the definition of Excluded Subsidiary) have, in the aggregate, (a) total assets at the last day of such Test Period equal to or greater than 7.50% of the Consolidated Total Assets of CGI Borrower and the Restricted Subsidiaries at such date

 

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or (b) revenues during such Test Period equal to or greater than 7.50% of the consolidated revenues of CGI Borrower and the Restricted Subsidiaries for such period, in each case determined in accordance with GAAP, then CGI Borrower shall, on or prior to the date on which financial statements for the last quarter of such Test Period are delivered pursuant to this Agreement, designate in writing to the Administrative Agent one or more of such Restricted Subsidiaries as Material Subsidiaries for each fiscal period until this proviso is no longer applicable; provided that each Subsidiary which is a Borrowing Base Party shall be a Material Subsidiary;

Maturity Date” shall mean the Revolving Credit Maturity Date, or the maturity date of an Extended Revolving Credit Loan, as applicable;

Maximum In-Transit Inventory Amount” shall mean, in aggregate for CGI Borrower and Swiss Borrower, an amount up to $50,000,000;

Maximum Incremental Facilities Amount” shall mean, at any date of determination, (i) $100,000,000 minus (ii) the aggregate principal amount of Incremental Revolving Credit Commitments incurred pursuant to Section 2.14(a) prior to such date;

Maximum Rate” shall have the meaning provided in Section 6.6(c);

Minimum Borrowing Amount” shall mean (i) in the case of Prime Rate Loans, a minimum principal amount of $100,000 (or, if less, the entire remaining applicable Commitments at the time of such Borrowing) and in each case whole multiples of $100,000; (ii) in the case of Banker’s Acceptances, a minimum face amount of $100,000 and in whole multiples of $100,000; (iii) in the case of ABR Loans, a minimum principal amount of U.S.$100,000 (or, if less, the entire remaining applicable Commitments at the time of such Borrowing) and in whole multiples of U.S.$100,000; (iv) in the case of LIBOR Loans, a minimum principal amount of U.S.$100,000 and in whole multiples of U.S.$100,000; (v) in the case of EURIBOR Loans, a minimum principal amount of €100,000 and in whole multiples of €100,000, and (vi) in the case of European Base Rate Loans, a minimum principal amount of €100,000 (or, if less, the entire remaining applicable Commitments at the time of such Borrowing) and in whole multiples of €100,000;

Minimum Collateral Amount” shall mean, at any time, (i) with respect to Cash Collateral consisting of cash or Cash Equivalents or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 103% of the Fronting Exposure of the Letter of Credit Issuer with respect to Letters of Credit issued and outstanding at such time and (ii) with respect to Cash Collateral consisting of cash or Cash Equivalents or deposit account balances provided in accordance with the provisions of Section 3.7(a), an amount equal to 103% of the outstanding amount of all L/C Obligations or the face amount of the outstanding Banker’s Acceptances and BA Equivalent Notes, as applicable;

 

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MNPI” shall mean, with respect to any Person, information and documentation that is (a) of a type that would not be publicly available (and could not be derived from publicly available information) if such Person and its Subsidiaries were public reporting companies and (b) material with respect to such Person, its Subsidiaries or the respective securities of such Person and its Subsidiaries for purposes of Canadian Securities Laws or United States federal and state securities laws, in each case, assuming such laws were applicable to such Person and its Subsidiaries;

Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business;

Mortgage” shall mean a mortgage, deed of trust, deed to secure debt, trust deed, or other security document entered into by the owner of a Mortgaged Property and the Administrative Agent for the benefit of the Secured Parties in respect of that Mortgaged Property to secure the Obligations, in form and substance reasonably acceptable to the Administrative Agent and the Borrower Representative, together with such terms and provisions as may be required by local laws;

Mortgaged Property” shall mean each parcel of fee-owned real property located in Canada or the United States and improvements thereto with respect to which a Mortgage is granted pursuant to Section 10.14, if any;

Multiemployer Plan” shall mean a multiemployer plan as defined in and subject to Section 4001(a)(3) of ERISA to which any Credit Party or any of its ERISA Affiliates makes or is obligated to make contributions, or during the five preceding calendar years, has made or been obligated to make contributions;

Net Cash Proceeds” shall mean, with respect to any event, (i) the gross cash proceeds (including payments from time to time in respect of installment obligations, if applicable, but only as and when received) received by or on behalf of CGI Borrower or any of the Restricted Subsidiaries in respect of such event, as the case may be, less (ii) the sum of:

 

  (a) the amount, if any, of all taxes and permitted tax distributions described in Section 11.5(b)(xii) (including, in each case, in connection with any repatriation of funds) paid or estimated to be payable by CGI Borrower or any of the Restricted Subsidiaries in connection with such event,

 

  (b) the amount of any reasonable reserve established in accordance with GAAP against any liabilities (other than any taxes deducted pursuant to clause (a) above) (1) associated with the assets that are the subject of such event and (2) retained by CGI Borrower or any of the Restricted Subsidiaries; provided that the amount of any subsequent reduction of such reserve (other than in connection with a payment in respect of any such liability) shall be deemed to be Net Cash Proceeds of such an event occurring on the date of such reduction,

 

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  (c) the amount of any Indebtedness secured by a Lien on the assets that are the subject of such event to the extent that the instrument creating or evidencing such Indebtedness requires that such Indebtedness be repaid upon consummation of such event,

 

  (d) in the case of any sale or other disposition of an asset by a non-Wholly-Owned Restricted Subsidiary, the pro rata portion of the Net Cash Proceeds thereof (calculated without regard to this clause (d)) attributable to minority interests and not available for distribution to or for the account of CGI Borrower or a Wholly-Owned Restricted Subsidiary as a result thereof,

 

  (e) in the case of any sale or other disposition of an asset, any funded escrow established pursuant to the documents evidencing any such sale or disposition to secure any indemnification obligations or adjustments to the purchase price associated with any such sale or disposition; provided that the amount of any subsequent reduction of such escrow (other than in connection with a payment in respect of any such liability) shall be deemed to be Net Cash Proceeds of such an event occurring on the date of such reduction solely to the extent that CGI Borrower and/or any Restricted Subsidiaries receives cash in an amount equal to the amount of such reduction, and

 

  (f) all fees and out of pocket expenses paid by CGI Borrower or a Restricted Subsidiary in connection with any of the foregoing (for the avoidance of doubt, including, (1) in the case of the issuance of indebtedness, any fees, underwriting discounts, premiums, and other costs and expenses incurred in connection with such issuance and (2) attorney’s fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, underwriting discounts and commissions, other customary expenses, and brokerage, consultant, accountant, and other customary fees),

in each case only to the extent not already deducted in arriving at the amount referred to in clause (i) above;

Net Income” shall mean, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred Capital Stock dividends;

New Holdings” shall have the meaning provided in the definition of Holdings;

Non BA Lender” means any Lender which is not a BA Lender;

Non-Bank Rules” means, together, the 10 Non-Bank Rule and the 20 Non-Bank Rule;

Non-Consenting Lender” shall have the meaning provided in Section 14.7(b);

 

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Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting Lender;

Non-Expiring Credit Commitments” shall have the meaning provided in Section 2.1(d);

Non-Extension Notice Date” shall have the meaning provided in Section 3.2(d);

Notice of Borrowing” shall have the meaning provided in Section 2.3(a);

Notice of Conversion or Continuation” shall have the meaning provided in Section 2.6(a);

Notice of Intent to Cure” shall have the meaning provided in Section 12.15;

NVOCC” shall mean, with respect to any In-Transit Inventory, a non-vessel operating common carrier engaged as a freight forwarder or otherwise to assist in the importation of In-Transit Inventory;

Obligations” shall mean all advances to, and debts, liabilities, obligations, covenants, and duties of, any Credit Party arising under any Credit Document or otherwise with respect to any Commitment, Loan or Letter of Credit or under any Secured Cash Management Agreement, Secured Hedge Agreement or Secured Bank Product Agreement (other than with respect to any Credit Party’s obligations that constitute Excluded Swap Obligations solely with respect to such Credit Party), in each case, entered into with CGI Borrower or any of the Restricted Subsidiaries, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Credit Party or any Affiliate thereof of any proceeding under any Insolvency Law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the generality of the foregoing, the Obligations of the Credit Parties under the Credit Documents (and any of their Subsidiaries to the extent they have obligations under the Credit Documents) include the obligation (including guarantee obligations) to pay principal, premium, interest, charges, expenses, fees, attorney costs, indemnities, and other amounts payable by any Credit Party under any Credit Document;

OFAC” shall have the meaning set forth in Section 9.19(c);

Organizational Documents” shall mean, with respect to any Person, such Person’s charter, memorandum and articles of association, articles or certificate of organization or incorporation and bylaws or other organizational or governing or constitutive documents of such Person;

 

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Original Revolving Credit Commitments” shall mean all Revolving Credit Commitments, Existing Revolving Credit Commitments and Extended Revolving Credit Commitments;

Other Personal Property Collateral” shall mean all other present and after acquired personal property of the Credit Parties, including, without limitation, investment property (other than any investment property included in ABL Priority Collateral), contracts (other than any investment property included in ABL Priority Collateral), Intellectual Property, and proceeds of the foregoing, but excluding, in each case, the ABL Priority Collateral, the Pledged Collateral and the PP&E Collateral;

Other Taxes” shall mean all present or future stamp, registration, or documentary Taxes or any other excise, property, intangible, mortgage recording, or similar Taxes arising from any payment made hereunder or under any other Credit Document or from the execution, delivery, or enforcement of, or otherwise with respect to, this Agreement or any other Credit Document; provided that such term shall not include (i) any Taxes that result from an assignment, grant of a participation pursuant to Section 14.6(c) or transfer or assignment to or designation of a new lending office or other office for receiving payments under any Credit Document (“Assignment Taxes”) to the extent such Assignment Taxes are imposed as a result of a connection between the assignor/participating Lender and/or the assignee/Participant and the taxing jurisdiction (other than a connection arising solely from any Credit Documents or any transactions contemplated thereunder), except to the extent that any such action described in this proviso is requested or required by the Borrowers or Borrower Representative or (ii) Excluded Taxes;

Overnight Rate” shall mean, for any day, with respect to any amount, an overnight rate determined by the Administrative Agent, the Letter of Credit Issuer, or the Swingline Lender, as the case may be, in accordance with banking industry rules on interbank compensation;

Parent Entity” shall mean any Person that is a direct or indirect parent company (which may be organized as, among other things, a partnership) of Holdings and/or CGI Borrower, as applicable;

Participant” shall have the meaning provided in Section 14.6(c)(i);

Participant Register” shall have the meaning provided in Section 14.6(c)(ii);

Participating Member State” shall mean any member state of the European Union that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Union relating to economic and monetary union;

Patriot Act” shall have the meaning provided in Section 14.18;

 

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Payment Conditions” shall mean, at the time of determination with respect to a specified transaction or payment, that (a) no Specified Default then exists or would arise as a result of the entering into of such transaction or the making of such payment, (b) after giving effect to such transaction or payment, the Pro Forma Availability Condition has been satisfied, and (c) prior to undertaking any such transaction or payment which is subject to the Payment Conditions in excess of $5,000,000 (or on such later date as the Administrative Agent may agree), the Borrower Representative shall deliver to the Administrative Agent a certificate of an Authorized Officer of the Borrower Representative confirming clause (a) and evidence reasonably satisfactory to the Administrative Agent of satisfaction of the condition in clause (b) above; provided that (x) with respect to any such transaction or payment which is subject to the Payment Conditions less than $5,000,000 such evidence may be delivered by the Borrower Representative to the Administrative Agent promptly after consummation thereof and (y) with respect to any such transaction or payment which is subject to the Payment Conditions less than $1,000,000 such evidence need not be delivered;

PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions;

Permitted Acquisition” shall have the meaning provided in clause (c) of the definition of Permitted Investments;

Permitted Asset Swap” shall mean the concurrent purchase and sale or exchange of Related Business Assets or a combination of Related Business Assets and cash or Cash Equivalents between CGI Borrower or a Restricted Subsidiary and another Person;

Permitted Discretion” shall mean a determination made by the Administrative Agent in good faith in the exercise of its reasonable (from the perspective of a secured asset-based lender) business judgment;

Permitted Equity Issuance” means any sale or issuance of any Capital Stock (other than Disqualified Stock) of CGI Borrower to the extent permitted hereunder (including any capital contribution);

Permitted Holder” shall mean any of (i) the Sponsor, the Sponsor’s respective Affiliates, the Management Equityholders and any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the foregoing are members; provided that, in the case of such group and without giving effect to the existence of such group or any other group, the Sponsor, the Sponsor’s respective Affiliates and the Management Equityholders, collectively, have beneficial ownership of more than 50.0% of the aggregate ordinary voting power of the outstanding Voting Stock of Holdings or any other direct or indirect parent company of Holdings and (ii) any direct or indirect parent company of CGI Borrower not formed in connection with, or in contemplation of, a transaction (other than the Transactions) that,

 

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assuming such parent was not formed, after giving effect thereto would constitute a Change of Control;

Permitted Investments” shall mean:

 

  (a) any Investment in CGI Borrower or any Restricted Subsidiary;

 

  (b) any Investment in cash, Cash Equivalents, or Investment Grade Securities at the time such Investment is made;

 

  (c) any Investment by CGI Borrower or any Restricted Subsidiary in a Person that is engaged in a Similar Business if as a result of such Investment under this clause (c) (each, a “Permitted Acquisition”), (x) on the date the definitive agreement for such Permitted Acquisition is executed, after giving Pro Forma Effect to such Permitted Acquisition as if it occurred on such signing date, no Event of Default shall have occurred and be continuing, (y) (1) such Person becomes a Guarantor hereunder or (2) such Person, in one transaction or a series of related transactions, is merged, consolidated, or amalgamated with or into, or transfers or conveys all or substantially all of its assets, or transfers or conveys assets constituting a business unit, line of business or division of such Person, to, or is liquidated into, CGI Borrower or a Restricted Subsidiary that is a Guarantor hereunder, failing which the Payment Conditions are satisfied immediately after giving effect to such Permitted Acquisition on a Pro Forma Basis and (z)(1) such Person becomes a Restricted Subsidiary or (2) such Person, in one transaction or a series of related transactions, is merged, consolidated, or amalgamated with or into, or transfers or conveys all or substantially all of its assets, or transfers or conveys assets constituting a business unit, line of business or division of such Person, to, or is liquidated into, CGI Borrower or a Restricted Subsidiary, and, in each case, any Investment held by such Person; provided, that such Investment was not acquired by such Person in contemplation of such acquisition, merger, amalgamation, consolidation, or transfer;

 

  (d) any Investment in securities or other assets not constituting cash, Cash Equivalents, or Investment Grade Securities and received in connection with an Asset Sale made pursuant to Section 11.4 or any other disposition of assets not constituting an Asset Sale;

 

  (e)

(i) any Investment existing or contemplated on the Closing Date and, in each case, listed on Schedule 11.5 and (ii) Investments consisting of any modification, replacement, renewal, reinvestment, or extension of any such Investment; provided that the amount of any such Investment is not increased from the amount of such Investment on the Closing Date except (x) pursuant to the terms of such Investment (including in respect of any unused commitment), plus any accrued but unpaid interest (including any portion thereof which is payable in kind in accordance with the terms of such modified, extended, renewed, or replaced

 

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  Investment) and premium payable by the terms of such Investment thereon and fees and expenses associated therewith as in existence on the Closing Date and/or (y) as permitted under Section 11.5 or any other clause of this definition of Permitted Investments;

 

  (f) any Investment acquired by CGI Borrower or any Restricted Subsidiary (i) in exchange for any other Investment or accounts receivable held by CGI Borrower or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization, or recapitalization, or settlement of delinquent accounts or disputes with or judgments against, the issuer of such original Investment or accounts receivable, (ii) as a result of a foreclosure by CGI Borrower or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default or (iii) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Persons who are not Affiliates;

 

  (g) Bank Products, Hedging Obligations permitted under Section 11.1(i) and Cash Management Services;

 

  (h) any Investment in a Similar Business having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (h) that are at that time outstanding, not to exceed the greater of (i) $12,000,000 and (ii) 25.0% of Consolidated EBITDA of CGI Borrower for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (h) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (a) above and shall cease to have been made pursuant to this clause (h) for so long as such Person continues to be a Restricted Subsidiary;

 

  (i) Investments the payment for which consists of Equity Interests of CGI Borrower or any direct or indirect parent company of CGI Borrower (exclusive of Disqualified Stock); provided that such Equity Interests are not used as a Cure Amount, and are not used to incur Indebtedness permitted by Section 11.1 or to make any Restricted Payment permitted by Section 11.5(b);

 

  (j) guarantees of Indebtedness permitted under Section 11.1 and Investments resulting from, or constituting, Liens permitted under Section 11.2;

 

  (k) any transaction to the extent it constitutes an Investment that is permitted and made in accordance with the provisions of Section 11.10 (other than Section 11.10(b));

 

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  (l) Investments consisting of purchases and acquisitions of inventory, supplies, material, equipment, or other similar assets, or of services, in the ordinary course of business;

 

  (m) additional Investments having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (m) that are at that time outstanding (without giving effect to the sale of an Unrestricted Subsidiary to the extent the proceeds of such sale do not consist of, or have not been subsequently sold or transferred for, cash or marketable securities), not to exceed the greater of (i) $9,000,000 and (ii) 20.0% of Consolidated EBITDA of CGI Borrower for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (m) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (a) above and shall cease to have been made pursuant to this clause (m) for so long as such Person continues to be a Restricted Subsidiary;

 

  (n) loans and advances to, or guarantees of Indebtedness of, officers, directors, managers and employees in an aggregate principal amount at any time outstanding under this clause (n) not in excess of the greater of (i) $3,000,000 and (ii) 7.5% of Consolidated EBITDA of CGI Borrower for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of such Investment;

 

  (o) (i) loans and advances to officers, directors, managers, and employees for business-related travel expenses, payroll advances, moving expenses, and other similar expenses, in each case incurred in the ordinary course of business or consistent with past practices or to fund such Person’s purchase of Equity Interests of CGI Borrower or any direct or indirect parent company thereof and (ii) promissory notes received from equityholders of CGI Borrower, any direct or indirect parent company of CGI Borrower or any Subsidiary in connection with the exercise of stock or other options in respect of the Equity Interests of CGI Borrower, any direct or indirect parent company of CGI Borrower and the Subsidiaries;

 

  (p) Investments consisting of extensions of trade credit in the ordinary course of business;

 

  (q) Investments in the ordinary course of business consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers consistent with past practices;

 

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  (r) non-cash Investments in connection with Permitted Reorganizations;

 

  (s) the licensing and contribution of Intellectual Property in the ordinary course of business;

 

  (t) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers compensation, performance and similar deposits entered into as a result of the operations of the business in the ordinary course of business;

 

  (u) guarantees by CGI Borrower or any of its Restricted Subsidiaries of leases (other than Capital Leases) or of other obligations of CGI Borrower or any Restricted Subsidiary that do not constitute Indebtedness, in each case entered into in the ordinary course of business; and

 

  (v) any Investment to the extent at the time such Investment is made, the Payment Conditions have been satisfied on a Pro Forma Basis;

Permitted Liens” shall mean, with respect to any Person:

 

  (a) pledges or deposits by such Person under workmen’s compensation laws, health, disability or unemployment insurance laws, other employee benefit legislation, unemployment insurance legislation and similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness), leases or other obligations of a like nature to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety, stay, customs, performance or appeal bonds to which such Person is a party, or deposits as security for the payment of rent or deposits made to secure obligations arising from contractual or warranty refunds, in each case incurred in the ordinary course of business or consistent with past practice or industry practice;

 

  (b) (1) Liens imposed by statutory or common law, such as carriers’, warehousemen’s, materialmen’s, landlord’s, construction contractor’s, repairmen’s, and mechanics’ Liens and (2) customary Liens (other than in respect of borrowed money) in favor of landlords, so long as, in the cases of clauses (1) and (2), such Liens only secure sums not overdue for a period of more than 60 days or sums being contested in good faith by appropriate actions and (3) other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other actions for review; provided, in the case of clauses (1) through (3), adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP;

 

  (c)

Liens for taxes, assessments, or other governmental charges not yet overdue for a period of more than 60 days or which are being contested in good faith by appropriate actions diligently conducted, if adequate reserves with respect thereto are maintained on the books of such Person in accordance with GAAP or are not

 

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  required to be paid pursuant to Section 9.11, or for property taxes on property CGI Borrower or one of its Subsidiaries has determined to abandon if the sole recourse for such tax, assessment, charge, levy, or claim is to such property;

 

  (d) Liens in favor of issuers of performance, surety, bid, indemnity, warranty, release, appeal, or similar bonds or with respect to other regulatory requirements or letters of credit or banker’s acceptances issued, and completion guarantees provided for, in each case pursuant to the request of and for the account of such Person in the ordinary course of its business;

 

  (e) minor survey exceptions, minor encumbrances, ground leases, easements, or reservations of, or rights of others for, licenses, rights-of-way, servitudes, sewers, electric lines, drains, telegraph and telephone and cable television lines, gas and oil pipelines, and other similar purposes, or zoning, building codes, or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental, to the conduct of the business of such Person or to the ownership of its properties which were not incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person, and Liens disclosed as exceptions to coverage in the final title policies and endorsements issued to the Administrative Agent with respect to any Mortgaged Properties;

 

  (f) Liens securing Indebtedness and obligations (and any guarantees in respect thereof) permitted to be incurred pursuant to clause (a), (c), k(ii) (m), (q), or (u) (so long as such Liens securing Indebtedness or obligations (or any guarantees in respect thereof) of any Person that is both a Credit Party under this Agreement and a Credit Party under, and as defined in, the Term Loan Credit Documents are subject to the ABL/Term Loan Intercreditor Agreement) of Section 11.1 or Indebtedness permitted pursuant to the first paragraph of Section 11.1; provided that, (i) in the case of clause (c) of Section 11.1, such Lien may not extend to any property or equipment (or assets affixed or appurtenant thereto) other than the property or equipment being financed or refinanced under such clause (c) of Section 11.1, replacements of such property, equipment or assets, and additions and accessions and in the case of multiple financings of equipment provided by any lender, other equipment financed by such lender; (ii) in the case of clause (q) of Section 11.1, such Lien may not extend to any assets other than the assets owned by the Restricted Subsidiaries that are not Guarantors incurring such Indebtedness, and (iii) in the case of any such Indebtedness for borrowed money incurred pursuant to the first paragraph of Section 11.1 or Section 11.1(k)(ii) that is secured by a Lien on the ABL Priority Collateral, such Liens are subordinated to the Liens on the ABL Priority Collateral securing the Obligations pursuant to, or in a manner substantially consistent with, the ABL/Term Loan Intercreditor Agreement;

 

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  (g) subject to Section 10.14, other than with respect to Mortgaged Property (if any), Liens existing on the Closing Date that (i) secure Indebtedness or other obligations not in excess of (x) $2,750,000 individually or (y) $5,000,000 in the aggregate (when taken together with all other Liens securing obligations outstanding in reliance on this clause (g)(i)(y)) or (ii) are set forth on Schedule 11.2 (including, in the case of each of the foregoing clauses (i) and (ii), any modifications, replacements, renewals, refinancings or extensions of the Indebtedness or other obligations secured by such Liens); provided, that none of the Liens that secure Indebtedness referred to in clause (i) above shall constitute a Lien on any ABL Priority Collateral;

 

  (h) Liens on property or Equity Interests of a Person at the time such Person becomes a Subsidiary; provided such Liens are not created or incurred in connection with, or in contemplation of, such other Person becoming a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by CGI Borrower or any Restricted Subsidiary (other than, with respect to such Person, any replacements of such property or assets and additions and accessions thereto, after-acquired property subject to a Lien securing Indebtedness and other obligations incurred prior to such time and which Indebtedness and other obligations are permitted hereunder that require, pursuant to their terms at such time, a pledge of after-acquired property of such Person, and the proceeds and the products thereof and customary security deposits in respect thereof and in the case of multiple financings of equipment provided by any lender, other equipment financed by such lender, it being understood that such requirement shall not be permitted to apply to any property to which such requirement would not have applied but for such acquisition);

 

  (i) Liens on property at the time CGI Borrower or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger, consolidation or amalgamation with or into CGI Borrower or any Restricted Subsidiary or the designation of an Unrestricted Subsidiary as a Restricted Subsidiary; provided that such Liens are not created or incurred in connection with, or in contemplation of, such acquisition, merger, consolidation, amalgamation or designation; provided, further, however, that such Liens may not extend to any other property owned by CGI Borrower or any Restricted Subsidiary (other than, with respect to such property, any replacements of such property or assets and additions and accessions thereto, after-acquired property subject to a Lien securing Indebtedness and other obligations incurred prior to such time and which Indebtedness and other obligations are permitted hereunder that require, pursuant to their terms at such time, a pledge of after-acquired property, and the proceeds and the products thereof and customary security deposits in respect thereof and in the case of multiple financings of equipment provided by any lender, other equipment financed by such lender, it being understood that such requirement shall not be permitted to apply to any property to which such requirement would not have applied but for such acquisition);

 

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  (j) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to CGI Borrower or any Restricted Subsidiary permitted to be incurred in accordance with Section 11.1;

 

  (k) Liens securing Secured Bank Product Obligations, Secured Cash Management Obligations and Secured Hedge Obligations;

 

  (l) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of banker’s acceptances, bank guarantee or letters of credit issued or created for the account of such Person to facilitate the purchase, shipment, or storage of such inventory or other goods;

 

  (m) leases, franchises, grants, subleases, licenses, sublicenses, covenants not to sue, releases, consents and other forms of license (including of Intellectual Property) granted to others in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of CGI Borrower or any Restricted Subsidiary and do not secure any Indebtedness;

 

  (n) Liens arising from Uniform Commercial Code, PPSA or any similar financing statement filings (or similar public filings in other applicable jurisdictions) regarding operating leases or consignments entered into by CGI Borrower or any Restricted Subsidiary in the ordinary course of business;

 

  (o) Liens in favor of a Borrower or any Guarantor;

 

  (p) Liens or rights of set-off against credit balances of CGI Borrower or any of the Restricted Subsidiaries with credit card issuers or credit card processors or amounts owing by such credit card issuers or credit card processors to CGI Borrower or any of its Restricted Subsidiaries in the ordinary course of business to secure the obligations of CGI Borrower or any of its Subsidiaries to the credit card issuers or credit card processors as a result of fees and charges;

 

  (q) Liens to secure any refinancing, refunding, extension, renewal, or replacement (or successive refinancing, refunding, extensions, renewals, or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in this clause (q) and clauses (f), (g), (h), (i), (j), (o) and (pp) of this definition of Permitted Liens; provided that (i) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements on such property, replacements of such property, additions and accessions thereto, after acquired property and the proceeds and the products of the foregoing and customary security deposits in respect thereof and, in the case of multiple financings of equipment provided by any lender, other equipment financed by such lender), (ii) the aggregate principal amount of the Indebtedness that was originally secured by such Lien under any of clauses (f), (g), (h), (i), (j), and (o) of this definition of Permitted Liens is not increased to an amount greater than the sum of the aggregate outstanding principal amount (plus the amount of any

 

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  unused commitments thereunder) of the Indebtedness being refinanced, refunded, extended, renewed, or replaced, plus accrued interest, fees, defeasance costs and premium (including call and tender premiums) if any, under such refinanced Indebtedness, plus underwriting discounts, fees, commissions and expenses (including original issue discount, upfront fees and similar items) in connection with the refinancing of such Indebtedness and the incurrence or issuance of such refinancing Indebtedness, and (iii) in the case of any such Lien on the ABL Priority Collateral, such Lien is subordinated to the Liens securing the Obligations at least to the same extent as the Indebtedness being refinanced, refunded, extended, renewed, or replaced;

 

  (r) deposits made or other security provided to secure liabilities to insurance carriers under insurance or self-insurance arrangements, including Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto, in the ordinary course of business;

 

  (s) other Liens securing obligations which do not exceed the greater of (i) $25,000,000 and (ii) 50.0% of Consolidated EBITDA of CGI Borrower for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of the incurrence of such Lien; provided, that in the case of any such Lien securing Indebtedness for borrowed money on the ABL Priority Collateral, such Liens are subordinated to the Liens on the ABL Priority Collateral securing the Obligations pursuant to, or in a manner consistent with, the ABL/Term Loan Intercreditor Agreement;

 

  (t) Liens securing judgments for the payment of money not constituting an Event of Default under Section 12.11;

 

  (u) 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 in the ordinary course of business;

 

  (v) Liens (i) of a collection bank arising under Section 4-208 of the New York Uniform Commercial Code or any comparable or successor provision on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business and (iii) in favor of banking or other financial institutions or other electronic payment service providers arising as a matter of law or customary contract encumbering deposits, including deposits in “pooled deposit” or “sweep” accounts (including the right of set-off) and which are within the general parameters customary in the banking or finance industry;

 

  (w) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 11.5; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

 

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  (x) Liens that are contractual rights of set-off relating to purchase orders and other agreements entered into by a Borrower or any of the Restricted Subsidiaries in the ordinary course of business;

 

  (y) Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes;

 

  (z) Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts of CGI Borrower or any of the Restricted Subsidiaries to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of CGI Borrower and the Restricted Subsidiaries, or (iii) relating to purchase orders and other agreements entered into by CGI Borrower or any of the Restricted Subsidiaries in the ordinary course of business;

 

  (aa) Liens (i) on any cash earnest money deposits made by CGI Borrower or any of the Restricted Subsidiaries in connection with any letter of intent or purchase agreement permitted under this Agreement, (ii) on other cash advances in favor of the seller of any property to be acquired in an Investment or other acquisition permitted hereunder to be applied against the purchase price for such Investment or other acquisition or (iii) consisting of an agreement to dispose of any property pursuant to a disposition permitted hereunder (or reasonably expected to be so permitted by CGI Borrower at the time such Lien was granted);

 

  (bb) rights reserved or vested in any Person by the terms of any lease, license, franchise, grant, or permit held by CGI Borrower or any of the Restricted Subsidiaries or by a statutory provision, to terminate any such lease, license, franchise, grant, or permit, or to require annual or periodic payments as a condition to the continuance thereof;

 

  (cc) restrictive covenants affecting the use to which real property may be put; provided that the covenants are complied with;

 

  (dd) security given to a public utility or any municipality or governmental authority when required by such utility or authority in connection with the operations of that Person in the ordinary course of business;

 

  (ee) zoning by-laws and other land use restrictions, including, without limitation, site plan agreements, development agreements, and contract zoning agreements;

 

  (ff) Liens arising out of conditional sale, title retention/retention of title arrangement, consignment, or similar arrangements for sale of goods entered into by CGI Borrower or any Restricted Subsidiary in the ordinary course of business;

 

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  (gg) Liens arising under the Security Documents;

 

  (hh) Liens on goods purchased in the ordinary course of business the purchase price of which is financed by a documentary letter of credit issued for the account of CGI Borrower or any of its Subsidiaries;

 

  (ii) (i) Liens on Equity Interests in joint ventures; provided that any such Lien is in favor of a creditor of such joint venture and such creditor is not an Affiliate of any partner to such joint venture and (ii) purchase options, call, and similar rights of, and restrictions for the benefit of, a third party with respect to Equity Interests held by CGI Borrower or any Restricted Subsidiary in joint ventures;

 

  (jj) Liens on cash and Cash Equivalents that are earmarked to be used to satisfy or discharge Indebtedness; provided (i) such cash and/or Cash Equivalents are deposited into an account from which payment is to be made, directly or indirectly, to the Person or Persons holding the Indebtedness that is to be satisfied or discharged, (ii) such Liens extend solely to the account in which such cash and/or Cash Equivalents are deposited and are solely in favor of the Person or Persons holding the Indebtedness (or any agent or trustee for such Person or Persons) that is to be satisfied or discharged, and (iii) the satisfaction or discharge of such Indebtedness is expressly permitted hereunder;

 

  (kk) with respect to any Foreign Subsidiary, other Liens and privileges arising mandatorily by any Requirement of Law;

 

  (ll) purported Liens (other than Liens securing Indebtedness for borrowed money) evidenced by the filing of precautionary Uniform Commercial Code or PPSA (or equivalent statutes) financing statements or similar public filings;

 

  (mm) Liens on Equity Interests of an Unrestricted Subsidiary that secure Indebtedness or other obligations of such Unrestricted Subsidiary;

 

  (nn) any Lien over bank accounts held in The Netherlands arising under clause 24 or clause 25 of the general terms and conditions (algemene bankvoorwaarden) of Dutch Bankers’ Association (Nederlandse Vereniging van Banken) and the Consumers Union (Consumentenbond) or arising under equivalent clauses in other general terms and conditions used by, or arrangement with, a bank to substantially the same effect;

 

  (oo) Liens on property of any Restricted Subsidiary that is not a Credit Party, which Liens secure Indebtedness permitted under Section 11.1 (or other obligations not constituting Indebtedness) of any Restricted Subsidiary that is not a Credit Party;

 

  (pp)

additional Liens, so long as (i)(x) with respect to Indebtedness that is secured on a first lien basis by the Term Priority Collateral and a junior lien basis by the ABL Priority Collateral (without regard to control of remedies), immediately after the

 

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  incurrence thereof, on a Pro Forma Basis, the First Lien Net Leverage Ratio is no greater than 5.00 to 1.00 as of the most recently ended Test Period and (y) with respect to Indebtedness that is secured by Liens (I) on the ABL Priority Collateral that are junior in right of security to the Liens on the ABL Priority Collateral securing the Obligations and (II) on the Term Priority Collateral that are junior in right of security to the Liens on the Term Priority Collateral securing other Indebtedness that is secured by the Term Priority Collateral on a first lien basis, immediately after the incurrence thereof, on a Pro Forma Basis, the Total Net Leverage Ratio is no greater than 6.00 to 1.00 as of the most recently ended Test Period and (ii) the holder(s) of such Liens (or a representative thereof) shall have entered into the ABL/Term Loan Intercreditor Agreement; provided that any cash proceeds of any new Indebtedness then being incurred shall not be netted from the numerator in the First Lien Net Leverage Ratio or Total Net Leverage Ratio, as applicable, for purposes of calculating the First Lien Net Leverage Ratio or Total Net Leverage Ratio, as applicable, under this clause (pp) for purposes of determining whether such Liens can be incurred;

For purposes of this definition, the term Indebtedness shall be deemed to include interest, premiums (if any), fees, expenses and other obligations on such Indebtedness. For all purposes under this Agreement and the other Credit Documents, references to any “Permitted Lien” shall include reference to Liens permitted under Section 11.2(a)(ii);

Permitted Reorganization” shall mean re-organizations and other activities related to tax planning and re-organization, so long as, after giving effect thereto, the security interest of the Lenders in the Collateral, taken as a whole, is not materially impaired;

Permitted Sale Leaseback” shall mean any Sale Leaseback consummated by CGI Borrower or any of the Restricted Subsidiaries after the Closing Date; provided that any such Sale Leaseback not between CGI Borrower and a Restricted Subsidiary or between Restricted Subsidiaries is consummated for fair value as determined at the time of consummation in good faith by (i) CGI Borrower or such Restricted Subsidiary or (ii) in the case of any Sale Leaseback (or series of related Sale Leasebacks) the aggregate proceeds of which exceed the greater of (a) $15,000,000 and (b) 30.0% of Consolidated EBITDA of CGI Borrower for the most recently ended Test Period (calculated on a Pro Forma Basis) at the time of the consummation of such Sale Leaseback, the board of directors (or analogous governing body) of CGI Borrower or such Restricted Subsidiary (which such determination may take into account any retained interest or other Investment of CGI Borrower or such Restricted Subsidiary in connection with, and any other material economic terms of, such Sale Leaseback);

Permitted Term Loans” shall have the meaning provided in Section 11.1(u);

Person” shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, unlimited liability company, association, trust, or other enterprise or any Governmental Authority;

 

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Plan” shall mean, in respect of the U.S. Credit Parties, other than any Multiemployer Plan, any employee benefit plan (as defined in and subject to Section 3(3) of ERISA), including any employee welfare benefit plan (as defined in and subject to Section 3(1) of ERISA), any employee pension benefit plan (as defined in and subject to Section 3(2) of ERISA), and any plan which is both an employee welfare benefit plan and an employee pension benefit plan, and in respect of which any Credit Party or ERISA Affiliate is (or, if such Plan were terminated, would under Section 4062 or Section 4069 of ERISA be reasonably likely to be deemed to be) an “employer” as defined in Section 3(5) of ERISA;

Pledged Collateral” shall mean all Capital Stock in Material Subsidiaries directly held by a Borrower or any Guarantor, including all the Capital Stock of the Swiss Borrower;

Platform” shall have the meaning provided in Section 14.17(a);

Pounds Sterling” shall mean British Pounds Sterling or any successor currency in the United Kingdom;

PP&E Collateral” shall mean all present and after acquired Real Estate owned in fee simple and equipment of the Credit Parties;

PPSA” shall mean the Personal Property Security Act (Ontario) as in effect from time to time; provided, however, that, if by reason of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, of a security interest in any Collateral or the availability of any remedy hereunder is governed by the personal property security laws as in effect in a Canadian jurisdiction other than Ontario, “PPSA” shall mean the personal property security laws (including the Civil Code of Quebec) as in effect in such other jurisdiction from time to time for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be;

Previous Holdings” shall have the meaning provided in the definition of Holdings;

primary obligor” shall have the meaning provided such term in the definition of Contingent Obligations;

Prime Rate” means, for any day, the rate of interest per annum equal to the greater of (i) the per annum rate of interest quoted or established as the “prime rate” of the Administrative Agent which it quotes or establishes for such day as its reference rate of interest in order to determine interest rates for commercial loans in Dollars in Canada to its Canadian borrowers; and (ii) the rate of interest per annum equal to the arithmetic average of the discount rates for Banker’s Acceptances having a one month term, displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at or about 10:00 a.m. (Toronto time), plus 100 basis points;

 

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Prime Rate Loan” means a Loan in Dollars made by the Lenders to a Borrower with respect to which such Borrower has specified that interest is to be calculated by reference to the Prime Rate or is deemed to be calculated by reference to the Prime Rate;

Priority Payable Reserves” shall mean the Canadian Priority Payable Reserves, UK Priority Payable Reserves, Dutch Priority Payable Reserves and Swiss Priority Payable Reserves and without duplication of any other Borrowing Base Reserves with respect to any Borrowing Base Party, such reserves as the Administrative Agent from time to time determines in its Permitted Discretion as being appropriate to reflect any amounts of any claims against the Collateral of any other Borrowing Base Party included in the Borrowing Base and located in any Relevant Jurisdiction not listed on Schedule 9.1, choate or inchoate, (whether unsecured or secured by any Liens against the Collateral and including by way of retention of title) which rank or are capable of ranking in priority to, or pari passu with, the Liens of the Administrative Agent and/or any amounts which may represent costs relating to the enforcement of the Liens of the Administrative Agent on the Collateral of any other Borrowing Base Party included in the Borrowing Base;

Pro Forma Availability” shall mean, for any date of calculation with respect to any transaction or payment, Excess Availability after giving effect to such transaction or payment on Pro Forma Basis;

Pro Forma Availability Condition” shall mean, for any date of calculation with respect to any transaction or payment, that either (i)(a) the (x) Pro Forma Availability on such date and (y) average daily Excess Availability for a period of thirty (30) consecutive days immediately preceding such transaction or payment on a Pro Forma Basis is greater than or equal to the greater of (x) $10,000,000 and (y) 15% of the Line Cap and (b) the Fixed Charge Coverage Ratio for the most recently ended Test Period, after giving effect to such transaction or payment on a Pro Forma Basis, is no less than 1.00:1.00 or (ii) the (x) Pro Forma Availability on such date and (y) average daily Excess Availability for a period of thirty (30) consecutive days immediately preceding such transaction or payment on a Pro Forma Basis is greater than the greater of (x) $10,000,000 and (y) 20% of the Line Cap;

Pro Forma Basis,” “Pro Forma Compliance,” and “Pro Forma Effect” shall mean, with respect to compliance with any test or covenant or calculation of any ratio hereunder, the determination or calculation of such test, covenant or ratio (including in connection with Specified Transactions) in accordance with Section 1.12;

Prohibited Transaction” shall have the meaning assigned to such term in Section 406 of ERISA and Section 4975(c) of the Code;

Projections” shall have the meaning provided in Section 10.1(d);

Protective Advances” shall have the meaning set forth in Section 2.1(e);

 

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Public Company Costs” shall mean costs relating to compliance with the provisions of Canadian Securities Laws, the Sarbanes-Oxley Act of 2002, the Securities Act of 1933, and the Exchange Act, as applicable to companies with equity or debt securities held by the public, the rules of national securities exchange companies with listed equity or debt securities, directors’ or managers’ compensation, fees and expense reimbursement, costs relating to investor relations, shareholder meetings and reports to shareholders or debtholders, directors’ and officers’ insurance and other executive costs, legal and other professional fees, listing fees and other expenses arising out of or incidental to an entity’s status as a reporting company;

Qualified Proceeds” shall mean assets that are used or useful in, or Capital Stock of any Person engaged in, a Similar Business;

Qualified Stock” of any Person shall mean Capital Stock of such Person other than Disqualified Stock of such Person;

Qualifying Bank” means:

 

  (a) any bank as defined in the Swiss Federal Code for Banks and Savings Banks dated 8 November 1934 (Bundesgesetz über die Banken und Sparkassen); or

 

  (b) a Person which effectively conducts banking activities with its own infrastructure and staff as its principal purpose and which has a banking license in full force and effect issued in accordance with the banking laws in force in its jurisdiction of incorporation, or if acting through a branch, issued in accordance with the banking laws in the jurisdiction of such branch, all and in each case within the meaning of the Guidelines;

Qualifying IPO” shall mean the issuance by CGI Borrower or any Parent Entity of its common Equity Interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act or a prospectus filed pursuant to any Canadian Securities Laws (whether alone or in connection with a secondary public offering) or in a firm commitment underwritten offering (or series of related offerings of securities to the public pursuant to a final prospectus) made pursuant to the Securities Act;

Rate Fixing Day” means the second TARGET Day before the first day of an Interest Period for a Loan denominated in Euro;

Real Estate” shall have the meaning provided in Section 10.1(g);

Receivables Advance Rate” shall mean (i) ninety percent (90%) in respect of Credit Enhanced Eligible Trade Receivables and (ii) otherwise, eighty-five percent (85%);

 

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Receivables Reserves” shall mean, without duplication of any other Borrowing Base Reserves or items that are otherwise addressed or excluded through eligibility criteria, such Borrowing Base Reserves as may be established from time to time by the Administrative Agent in its Permitted Discretion with respect to the determination of the collectability in the ordinary course of Eligible Trade Receivables;

Reference Banks” means the principal offices of Canadian Imperial Bank of Commerce, The Toronto-Dominion Bank, Bank of Montreal and Goldman Sachs Bank USA or such other banks as may be appointed by the Administrative Agent in consultation with the Borrowers and with the prior written approval of the bank or financial institution which shall act as Reference Bank;

Refinancing Indebtedness” shall have the meaning provided in Section 11.1(l);

Refunding Capital Stock” shall have the meaning provided in Section 11.5(b)(ii);

Register” shall have the meaning provided in Section 14.6(b)(iv);

Regulation T” shall mean Regulation T of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements;

Regulation U” shall mean Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements;

Regulation X” shall mean Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements;

Reimbursement Date” shall have the meaning provided in Section 3.4(a);

Reimbursement Obligations” shall mean the Borrowers’ obligations to reimburse Unpaid Drawings pursuant to Section 3.4(a);

Related Business Assets” shall mean assets (other than cash or Cash Equivalents) used or useful in a Similar Business; provided that any assets received by CGI Borrower or the Restricted Subsidiaries in exchange for assets transferred by CGI Borrower or a Restricted Subsidiary shall not be deemed to be Related Business Assets if they consist of securities of a Person, unless upon receipt of the securities of such Person, such Person would become a Restricted Subsidiary;

Related Fund” shall mean, with respect to any Lender that is a Fund, any other Fund that is advised or managed by (a) such Lender, (b) an Affiliate or branch of such Lender or (c) an entity or an Affiliate of such entity that administers, advises or manages such Lender;

Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees, and advisors of such

 

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Person and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise;

Release” shall mean any release, spill, emission, discharge, disposal, escaping, leaking, pumping, pouring, dumping, emptying, injection, or leaching into the environment;

Relevant Jurisdiction” shall mean, from time to time, Canada, any province or territory of Canada, the United States or any state thereof, the United Kingdom, Switzerland, and solely to the extent Collateral included in the Borrowing Base is located in such jurisdictions, The Netherlands, Belgium and any other jurisdiction requested by the Borrower Representative and consented to by the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed);

Reorganization” shall mean, with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA;

Reportable Event” shall mean any “reportable event”, as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a U.S. Pension Plan (other than a U.S. Pension Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code), other than those events as to which notice is waived pursuant to PBGC regulations or other applicable guidance;

Required Facility Lenders” shall mean, at any date, with respect to one or more Credit Facilities, Non-Defaulting Lenders holding a majority of the Commitments in respect of such Credit Facility or Credit Facilities at such date (excluding any Commitments of Defaulting Lenders under such Credit Facility or Credit Facilities) (or, if the applicable Commitments have been terminated at such time, a majority of the aggregate Revolving Credit Exposure of all Lenders (excluding Revolving Credit Exposure of Defaulting Lenders) under such Credit Facility or Credit Facilities at such time);

Required Lenders” shall mean, at any date, Non-Defaulting Lenders holding a majority of the Adjusted Total Revolving Credit Commitment at such date (or, if the Total Revolving Credit Commitment has been terminated at such time, a majority of the aggregate Revolving Credit Exposure of all Lenders (excluding Revolving Credit Exposure of Defaulting Lenders) at such time);

Requirement of Law” shall mean, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule, or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or assets or to which such Person or any of its property or assets is subject;

Restricted Investment” shall mean an Investment other than a Permitted Investment;

 

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Restricted Payments” shall have the meaning provided in Section 11.5(a);

Restricted Persons” shall have the meaning provided in Section 14.16;

Restricted Subsidiary” shall mean any Subsidiary of CGI Borrower other than an Unrestricted Subsidiary;

Retired Capital Stock” shall have the meaning provided in Section 11.5(b)(ii);

Revolving Credit Commitment” shall mean, as to each Lender, its obligation to make Revolving Credit Loans to the Borrowers pursuant to Section 2.1(a), in an aggregate principal amount at any one time outstanding not to exceed the amount set forth, and opposite such Lender’s name on Schedule 1.1(a) under the caption Revolving Credit Commitment (Peak Season) during the period from June 1 through November 30 in each calendar year and otherwise the amount under the caption Revolving Credit Commitment or in the Assignment and Acceptance pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement (including Section 2.14 and Section 2.15). The aggregate Revolving Credit Commitments of all Lenders on the Closing Date shall be $150,000,000 and the aggregate Revolving Credit Commitment (Peak Season) of all Lenders on the Closing Date shall be $200,000,000, in each case, as such amount may be adjusted from time to time in accordance with the terms of this Agreement;

Revolving Credit Commitment Percentage” shall mean at any time, for each Lender, the percentage obtained by dividing (i) such Lender’s Commitments (or, to the extent referring to any single Class of Commitments, such Lender’s Commitments in respect of such Class) at such time by (ii) the amount of the Total Revolving Credit Commitment (or, to the extent referring to any single Class of Commitments, the aggregate Commitments of all Lenders in respect of such Class) at such time; provided that at any time when the Total Revolving Credit Commitment (or, to the extent referring to any single Class of Commitments, the aggregate Commitments in respect of such Class) shall have been terminated, each Lender’s Revolving Credit Commitment Percentage shall be the percentage obtained by dividing (a) such Lender’s Revolving Credit Exposure (or, to the extent referring to any single Class of Revolving Loans, such Lender’s Revolving Credit Exposure in respect of such Class) at such time by (b) the Revolving Credit Exposure of all Lenders at such time (or, to the extent referring to any single Class of Revolving Loans, the Revolving Credit Exposure of all Lender’s in respect of such Class);

Revolving Credit Exposure” shall mean, with respect to any Lender at any time, the sum of (i) the aggregate amount in Dollars and the Equivalent Amount in Dollars of an amount in any other currency of the principal amount of Revolving Loans of such Lender then outstanding (or, to the extent referring to any single Class of Revolving Loans, the aggregate amount in Dollars and the Equivalent Amount in Dollars of an amount in any other currency of the principal amount of Revolving Loans of such Class of such Lender

 

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then outstanding), (ii) such Lender’s Letter of Credit Exposure at such time, and (iii) such Lender’s Revolving Credit Commitment Percentage of the aggregate principal amount of all outstanding Swingline Loans at such time;

Revolving Credit Loan” shall have the meaning provided in Section 2.1(a);

Revolving Credit Maturity Date” shall mean June 3, 2021, or, if such date is not a Business Day, the next preceding Business Day;

Revolving Credit Termination Date” shall mean the date on which the Revolving Credit Commitments shall have terminated, no Revolving Credit Loans, Swingline Loans or Protective Advances shall be outstanding and the Letters of Credit Outstanding and any Banker’s Acceptances or BA Equivalent Notes shall have been reduced to zero or Cash Collateralized;

Revolving Loan” shall mean, collectively or individually as the context may require, any (i) Revolving Credit Loan (including any Protective Advance), (ii) Extended Revolving Credit Loan and (iii) Incremental Revolving Credit Loan, in each case made pursuant to and in accordance with the terms and conditions of this Agreement;

S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger or consolidation to its business;

Sale Leaseback” shall mean any arrangement with any Person providing for the leasing by CGI Borrower or any Restricted Subsidiary of any real or tangible personal property, which property has been or is to be sold or transferred by CGI Borrower or such Restricted Subsidiary to such Person in contemplation of such leasing;

Same Day Funds” shall mean (a) with respect to disbursements and payments in Dollars, U.S. Dollars or Euros, immediately available funds, and (b) with respect to disbursements and payments in an Alternative Currency, same day funds as may be reasonably determined by the Administrative Agent or the Letter of Credit Issuer, as the case may be, to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Alternative Currency;

Schedule I Lender” shall have the meaning given to such term in the definition of “BA Rate”;

Screen Rate” means the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the Reuters screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters in each case as published at 11:00 a.m. on the Rate Fixing Day. If such page or service ceases to be available, the Administrative Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers;

 

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SEC” shall mean the United States Securities and Exchange Commission or any successor thereto;

Section 2.15 Additional Amendment” shall have the meaning provided in Section 2.15(c);

Section 10.1 Financials” shall mean the financial statements delivered, or required to be delivered, pursuant to Section 10.1(a) or (b) together with the accompanying Compliance Certificate;

Secured Bank Product Agreement” shall mean any Bank Product Agreement that is entered into by and between Holdings, CGI Borrower or any of the Restricted Subsidiaries and any Bank Product Provider, which is specified in writing by the Borrower Representative to the Administrative Agent as constituting a Secured Bank Product Agreement hereunder (all Bank Product Agreements by and between Holdings, CGI Borrower or any Restricted Subsidiary and Canadian Imperial Bank of Commerce are designated as Secured Bank Product Agreements as of the Closing Date);

Secured Bank Product Obligations” shall mean Obligations under any Secured Bank Product Agreement;

Secured Cash Management Agreement” shall mean any Cash Management Agreement that is entered into by and between Holdings, CGI Borrower or any of the Restricted Subsidiaries and any Cash Management Bank, which is specified in writing by the Borrower Representative to the Administrative Agent as constituting a Secured Cash Management Agreement hereunder (all Cash Management Agreements by and between Holdings, CGI Borrower or any Restricted Subsidiary and Canadian Imperial Bank of Commerce are designated as Secured Cash Management Agreements as of the Closing Date);

Secured Cash Management Obligations” shall mean Obligations under Secured Cash Management Agreements;

Secured Hedge Agreement” shall mean any Hedge Agreement that is entered into by and between Holdings, CGI Borrower or any Restricted Subsidiary and any Hedge Bank, which is specified in writing by the Borrower Representative to the Administrative Agent as constituting a Secured Hedge Agreement hereunder. For purposes of the preceding sentence, the Borrower Representative may deliver one notice designating all Hedge Agreements entered into pursuant to a specified Master Agreement as Secured Hedge Agreements;

Secured Hedge Obligations” shall mean Obligations under Secured Hedge Agreements;

Secured Parties” shall mean the Administrative Agent, the Letter of Credit Issuer, and each Lender, in each case with respect to the Credit Facilities, each Hedge Bank that is

 

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party to any Secured Hedge Agreement, each Bank Product Provider that is party to any Secured Bank Product Agreement, each Cash Management Bank that is party to a Secured Cash Management Agreement and each sub-agent pursuant to Article 13 appointed by the Administrative Agent with respect to matters relating to the Credit Facilities or the Administrative Agent with respect to matters relating to any Security Document;

Security Documents” shall mean, (i) as of the Closing Date, each of the documents listed on Schedule 1.1(c), (ii) as of the date executed and delivered, each of the security agreements, pledge agreements, assignments and other agreements and instruments creating a Lien in favour of the Administrative Agent or any Lender set forth on Schedule 10.14(d) and (iii) each other security agreement or other instrument or document executed and delivered pursuant to Sections 10.11, 10.12, or 10.14 or pursuant to any other Security Document to secure the Obligations;

Shareholder” shall mean Brent (BC) Finco S.à r.l., a Luxembourg société à responsabilité limitée, and includes its successors by amalgamation or otherwise;

Shareholder Loan Agreement” shall mean collectively, that certain (i) senior convertible subordinated note, dated as of December 9, 2013, issued by Holdings in favour of the Shareholder and (ii) any unsecured junior convertible subordinated promissory grid notes issued from time to time by Holdings in favour of the Shareholder in connection with the reinvestment by the Shareholder of a portion of the interest paid by Holdings on the Shareholder Subordinate Debt in accordance with the Shareholder Subordination Agreement, in the case of each of the notes described in the foregoing clauses (i) and (ii), as such agreement may be amended, revised, replaced, supplemented or restated from time to time in accordance with the terms of the Shareholder Subordination Agreement, including increases to the principal amount outstanding thereunder as set forth therein;

Shareholder Subordinate Debt” shall mean all indebtedness owing by Holdings to the Shareholder pursuant to the Shareholder Loan Agreement;

Shareholder Subordination Agreement” shall mean the subordination and postponement agreement, dated as of the date hereof, among the Shareholder, Holdings, and the Administrative Agent, as such agreement may be amended, revised, replaced, supplemented or restated from time to time;

Shrink” means Inventory of the Borrowing Base Parties which has been lost, misplaced, stolen, or is otherwise unaccounted for;

Similar Business” shall mean any business conducted or proposed to be conducted by CGI Borrower and the Restricted Subsidiaries, taken as a whole, on the Closing Date or any other business activities which are reasonable extensions thereof or otherwise similar, incidental, complementary, synergistic, reasonably related, or ancillary to any of the foregoing (including non-core incidental businesses acquired in connection with any

 

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Permitted Acquisition or permitted Investment), in each case as determined by CGI Borrower in good faith;

Solvent” shall mean, after giving effect to the consummation of the Transactions, that (i) the fair value of the assets (on a going concern basis) of CGI Borrower and its Restricted Subsidiaries, on a consolidated basis, exceeds, on a consolidated basis, their debts and liabilities, subordinated, contingent or otherwise, (ii) the present fair saleable value of the property (on a going concern basis) of CGI Borrower and its Restricted Subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability, on a consolidated basis, of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured in the ordinary course of business, (iii) CGI Borrower and its Restricted Subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, as such liabilities become absolute and matured in the ordinary course of business and (iv) CGI Borrower and its Restricted Subsidiaries, on a consolidated basis, are not engaged in, and are not about to engage in, business contemplated as of the date hereof for which they have unreasonably small capital. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability;

Specified Default” shall mean the occurrence of any Event of Default specified in Section 12.1, Section 12.2 (solely with respect to any representation and warranty made or deemed made by any Credit Party in any Borrowing Base Certificate), Section 12.3(a) (solely as it relates to the Borrowers’ failure to comply with the covenants set forth in Section 10.9 and, when in effect, Section 11.11), Section 12.3(b) (solely as it relates to the Borrowers’ failure to deliver the Borrowing Base Certificate in accordance with Section 10.1(i); provided, that the grace period specified in Section 12.3(b) with respect to delivery of weekly Borrowing Base Certificates shall be three (3) Business Days for purposes of this definition), or Section 12.5;

Specified Existing Revolving Credit Commitment” shall have the meaning provided in Section 2.15(a);

Specified Transaction” shall mean, with respect to any period, (i) any Investment that results in a Person becoming a Restricted Subsidiary, (ii) any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary, (iii) any Permitted Acquisition, (iv) any disposition that results in a Restricted Subsidiary ceasing to be a Subsidiary, (v) any Investment in, acquisition of or disposition of assets constituting a business unit, line of business or division of, or all or substantially all of the assets of, another Person, (vi) any Restricted Payment, (vii) any establishment of any Incremental Revolving Credit Commitment, or (viii) any other event that by the terms of this Agreement requires Pro Forma Compliance with a test or covenant hereunder or requires such test or covenant to be calculated on a Pro Forma Basis or giving Pro Forma Effect to any such transaction or event;

 

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Sponsor” shall mean Bain Capital Partners, LLC and/or its Affiliates that are controlled directly or indirectly by Bain Capital Partners, LLC (including, as applicable, related funds, general partners thereof and limited partners thereof, but solely to the extent any such limited partners are directly or indirectly participating as investors pursuant to a side-by-side investing arrangement, but not including, however, any portfolio company of any of the foregoing);

Sponsor Management Agreement” shall mean the Management Agreement dated as of December 9, 2013 between Holdings, CGI Borrower and the Sponsor.

SPV” shall have the meaning provided in Section 14.6(g);

Stated Amount” of any Letter of Credit shall mean the maximum amount from time to time available to be drawn thereunder, determined without regard to whether any conditions to drawing could then be met; provided, however, that with respect to any Letter of Credit that by its terms or the terms of any Issuer Document provides for one or more automatic increases in the stated amount thereof, the Stated Amount shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time;

Stock Equivalents” shall mean all securities convertible into or exchangeable for Capital Stock and all warrants, options, or other rights to purchase or subscribe for any Capital Stock, whether or not presently convertible, exchangeable, or exercisable, excluding from the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock, until any such conversion;

Store” shall mean any retail store (which includes any real property, fixtures, equipment, Inventory and other property related thereto) operated, or to be operated, by CGI Borrower or any Restricted Subsidiary;

Subject Lien” shall have the meaning provided in Section 11.2(a);

Subordinated Indebtedness” shall mean Indebtedness of CGI Borrower or any other Credit Party that is by its terms subordinated in right of payment to the obligations of CGI Borrower or such other Credit Party, as applicable, under this Agreement or the Guarantees, as applicable;

Subsequent Transaction” shall have the meaning provided in Section 1.12(f);

Subsidiary” of any Person shall mean a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries,

 

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or both, by such Person. Unless otherwise expressly provided, all references herein to a Subsidiary shall mean a Subsidiary of CGI Borrower;

Successor Borrower” shall have the meaning provided in Section 11.3(a);

Supermajority Lenders” shall mean, at any time, Lenders (other than Defaulting Lenders) having Commitments aggregating more than 66 2/3% of the Total Revolving Credit Commitment, or if the Commitments have been terminated, Lenders (other than Defaulting Lenders) whose percentage of the Revolving Credit Exposure (calculated assuming settlement and repayment of all Swingline Loans by the Lenders) aggregate more than 66 2/3% of the aggregate Revolving Credit Exposure;

Swap Obligation” shall mean, with respect to any Credit Party, any obligation to pay or perform under any agreement, contract, or transaction that constitutes a “swap” within the meaning of section 1(a)(47) of the Commodity Exchange Act;

SWIFT” shall have the meaning provided in Section 3.6;

Swingline Commitment” shall mean the amount of $25,000,000. The Swingline Commitment is part of and not in addition to the Revolving Credit Commitment;

Swingline Exposure” shall mean at any time the aggregate principal amount at such time of all outstanding Swingline Loans. The Swingline Exposure of any Lender at any time shall equal its Revolving Credit Commitment Percentage of the aggregate Swingline Exposure at such time;

Swingline Lender” shall mean Canadian Imperial Bank of Commerce, in its capacity as lender of Swingline Loans hereunder or any replacement or successor thereto;

Swingline Loans” shall have the meaning provided in Section 2.1(b);

Swingline Maturity Date” shall mean, with respect to any Swingline Loan, the date that is five Business Days prior to the Revolving Credit Maturity Date;

Swiss Borrower” shall have the meaning given to such term in the opening paragraph of this Agreement;

Swiss Borrowing Base” shall mean, at any time of calculation, an amount in Dollars (or the Equivalent Amount in Dollars of any amount in a currency other than Dollars) equal to:

 

  (a) the face amount of Eligible Credit Card Receivables of the Swiss Borrowing Base Parties multiplied by the Credit Card Advance Rate;

plus

 

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  (b) the face amount of Credit Enhanced Eligible Trade Receivables of the Swiss Borrowing Base Parties multiplied by the applicable Receivables Advance Rate;

plus

 

  (c) the face amount of Eligible Trade Receivables of the Swiss Borrowing Base Parties multiplied by the applicable Receivables Advance Rate;

plus

 

  (d) the Cost of Eligible Inventory and Belgian Inventory (other than Eligible In-Transit Inventory) of the Swiss Borrowing Base Parties, net of Inventory Reserves applicable thereto, multiplied by the Appraisal Percentage of the applicable Appraised Value of Eligible Inventory of the Swiss Borrowing Base Parties;

plus

 

  (e) the Cost of Eligible In-Transit Inventory of the Swiss Borrowing Base Parties, net of Inventory Reserves applicable thereto, multiplied by the Appraisal Percentage of the applicable Appraised Value of Eligible In-Transit Inventory of the Swiss Borrowing Base Parties, up to the Maximum In-Transit Inventory Amount, less the amount of Eligible In-Transit Inventory included in the CGI Borrowing Base;

plus

 

  (f) with respect to any Eligible Letter of Credit, the Appraisal Percentage of the Appraised Value of the Inventory of the Swiss Borrowing Base Parties supported by such Eligible Letter of Credit, multiplied by the Cost of such Inventory of the Swiss Borrowing Base Parties when completed, net of Inventory Reserves applicable thereto;

minus

 

  (g) without duplication, the amount of all other Borrowing Base Reserves to the extent applicable to, or to the assets of, the Swiss Borrowing Base Parties.

The Swiss Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 10.1(i), in respect of the Swiss Borrowing Base, as adjusted to give effect to Borrowing Base Reserves to the extent applicable to, or to the assets of, the Swiss Borrowing Base Parties (in accordance with and subject to the limitations of Section 2.19) following such delivery.

Notwithstanding the foregoing, for purposes of this definition and the definition of “Pro Forma Availability Condition,” no Accounts or Inventory being acquired pursuant to a Permitted Acquisition or permitted Investment will be included in the Swiss Borrowing

 

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Base unless (i) the Administrative Agent, in its Permitted Discretion, confirms that such Accounts or Inventory conform to standards of eligibility in accordance with this Agreement, and (ii) to the extent required by the Administrative Agent, an audit of such Accounts and an appraisal of such Inventory is conducted and then only so long as such Accounts or Inventory, as the case may be, would otherwise satisfy the applicable eligibility criteria (it being understood that such audit or appraisal shall be conducted at the Swiss Borrower’s expense and shall not be counted for purposes of Section 10.2); provided, that until the earlier of (x) 45 days following the date on which a Permitted Acquisition or other permitted Investment is consummated (or such longer period as agreed to by the Administrative Agent in its Permitted Discretion) and (y) the date on which the requirements of clauses (i) and (ii) above are satisfied with respect to Accounts and Inventory being acquired in such Permitted Acquisition or other permitted Investment, an amount of such Accounts not to exceed $5,000,000 in the aggregate and such Inventory not to exceed $5,000,000 in the aggregate, that would otherwise constitute Eligible Credit Card Receivables, Eligible Trade Receivables, Eligible Inventory, Eligible In-Transit Inventory or Eligible Letters of Credit as shall be agreed upon between the Borrower Representative and the Administrative Agent in its Permitted Discretion shall be included in the Swiss Borrowing Base (including, with respect to the definition of “Pro Forma Availability Condition” for purposes of computing aggregate Excess Availability on a Pro Forma Basis as provided therein);

Swiss Borrowing Base Party” shall mean, as of the date hereof, Swiss Borrower and from time to time each Guarantor that the Borrower Representative and the Administrative Agent agree shall be a Swiss Borrowing Base Party;

Swiss Business Day” shall mean any day excluding Saturday, Sunday, and any other day on which banking institutions in Geneva, Switzerland are authorized by law or other governmental actions to close;

Swiss Credit Party” shall mean Swiss Borrower and each other Credit Party incorporated in Switzerland and/or having its registered office in Switzerland and/or qualifying as a Swiss resident pursuant to Art. 9 of the Swiss Withholding Tax Act and/or Art. 4 of the Swiss Stamp Tax Act;

Swiss Intercompany Indebtedness” shall mean all indebtedness and liabilities of Swiss Borrower owing to CGI Borrower;

Swiss Intercompany Security” shall mean the security granted by Swiss Borrower to CGI Borrower to secure the Swiss Intercompany Indebtedness;

Swiss Line Cap” shall mean, at any time of determination, the lesser of (a) the lesser of (i) fifty percent (50%) of the Total Revolving Credit Commitment and (ii) fifty percent (50%) of the Borrowing Base and (b) the Swiss Borrowing Base;

Swiss Pledge” shall have the meaning provided in Section 13.1(e);

 

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Swiss Priority Payable Reserve” shall mean, without duplication of any other Borrowing Base Reserves with respect to the Swiss Credit Parties, such reserves as the Administrative Agent from time to time determines in its Permitted Discretion (in accordance with and subject to the limitations of Section 2.19) as being appropriate to reflect any amounts secured by any Liens on Collateral of any Swiss Credit Party included in the Swiss Borrowing Base, choate or inchoate, which rank or are capable of ranking in priority to, or pari passu with, the Liens of the Administrative Agent (including, as the case may be, the Administrative Agent’s estimate of amounts owed with respect to an asset which is subject to a conditional sale or hire purchase agreement, Lien or retention of title arrangement) and/or any amounts which may represent costs relating to the enforcement of the Administrative Agent’s Liens;

Swiss Stamp Tax Act” means the Swiss Federal Act on Stamp Taxes of 27 June 1973 (Bundesgesetz über die Stempelabgaben) together with the related ordinances, regulations and guidelines, all as amended and applicable from time to time;

Swiss Withholding Tax” means the tax imposed based on the Swiss Federal Act on Withholding Tax of 13 October 1965 (Bundesgesetz über die Verrechnungssteuer);

Swiss Withholding Tax Act” means the Swiss Federal Act on the Withholding Tax of 13 October 1965 (Bundesgesetz über die Verrechnungssteuer), together with the related ordinances, regulations and guidelines, all as amended and applicable from time to time;

TARGET Day” means a day on which TARGET 2 is open for the settlement of payments in Euro;

TARGET 2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was launched on 19 November 2007;

Tax Deduction” shall have the meaning provided in Section 2.8(k)(ii);

Tax Distributions” shall mean payments made by CGI Borrower or any other Credit Party to Holdings or any direct or indirect parent of Holdings, the proceeds of which will be used to pay the amount any such Person would be required to pay in respect of Taxes attributable to the income of CGI Borrower and its Subsidiaries; provided, however, the aggregate of all such payments in respect of any tax year to Holdings and any direct or indirect Parent Entity of Holdings shall not exceed the Taxes or the income of such Person that is attributable to CGI Borrower and its Subsidiaries; provided further that any such payment in respect of the income of an Unrestricted Subsidiary shall be permitted only to the extent that cash distributions were made by such Unrestricted Subsidiary to CGI Borrower or any of its Restricted Subsidiaries for such purpose;

Taxes” shall mean any and all present or future taxes, duties, levies, imposts, assessments, deductions, withholdings (including backup withholding and Swiss Withholding Taxes), fees, or other similar charges imposed by any Governmental

 

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Authority and any interest, fines, penalties, or additions to tax with respect to the foregoing;

Term Loan Administrative Agents” shall have the meaning assigned to the terms “Administrative Agent”, “Collateral Agent”, “trustee” or any other representative of the lenders, holders or other providers of Indebtedness thereunder in the Term Loan Credit Documents;

Term Loan Credit Documents” shall mean any credit agreement, indenture or other instrument or agreement among Holdings, CGI Borrower, one or more of its Subsidiaries from time to time party thereto as borrowers or guarantors, the lenders party thereto from time to time and any the Term Loan Administrative Agent, under which Permitted Term Loans are made available to CGI Borrower and/or any of its Subsidiaries, together with each other document executed in connection therewith or pursuant thereto, as each such agreement may be amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part, whether with the original administrative agent and lenders or other agents and lenders or otherwise, and whether provided under the original Term Loan Credit Facility or one or more other credit agreements or otherwise, including any agreement extending the maturity thereof or otherwise restructuring all or any portion of the Indebtedness thereunder or increasing the amount loaned or issued thereunder or altering the maturity thereof, in each case as and to the extent permitted by this Agreement and the ABL/Term Loan Intercreditor Agreement, unless such agreement, instrument or document expressly provides that it is not intended to be and is not a Term Loan Credit Document);

Term Loan Credit Facility” shall mean the term credit facilities provided under the Term Loan Credit Documents;

Term Loan Obligations” shall have the meaning assigned to the term “Obligations” in the Term Loan Credit Documents;

Term Priority Collateral” shall mean “Term Priority Collateral” as defined in (x) the ABL/Term Loan Intercreditor Agreement attached hereto as Exhibit F until such time as an ABL/Term Loan Intercreditor Agreement is entered into and (y) thereafter, the ABL/Term Loan Intercreditor Agreement then in effect;

Test Period” shall mean, for any determination under this Agreement, the four consecutive fiscal quarters of CGI Borrower then last ended and for which Section 10.1 Financials shall have been delivered (or were required to be delivered) to the Administrative Agent (or, before the first delivery of Section 10.1 Financials, the most recent period of four consecutive fiscal quarters at the end of which financial statements are available);

Total Net Leverage Ratio” shall mean, as of any date of determination, the ratio of (i) Consolidated Total Debt as of such date of determination, minus cash and Cash

 

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Equivalents (in each case, free and clear of all Liens other than Permitted Liens) of CGI Borrower and the Restricted Subsidiaries (other than the proceeds of any Indebtedness then being incurred and giving rise to the need to calculate the Total Net Leverage Ratio) to (ii) Consolidated EBITDA of CGI Borrower for the Test Period then last ended;

Total Net Leverage Test” shall mean, as of any date of determination, with respect to the last day of the most recently ended Test Period, the Total Net Leverage Ratio shall be no greater than 6.00 to 1.00;

Total Revolving Credit Commitment” shall mean the sum of the Revolving Credit Commitments, the Incremental Revolving Credit Commitments, if applicable, and the Extended Revolving Credit Commitments, if applicable, of all the Lenders;

Transaction Expenses” shall mean any fees, costs, or expenses incurred or paid by Holdings, the Borrowers, or any of their respective Affiliates in connection with the Transactions (including expenses in connection with hedging transactions, if any), this Agreement and the other Credit Documents and the transactions contemplated hereby and thereby;

Transactions” shall mean, collectively, the transactions constituting or contemplated by this Agreement and the other Credit Documents, the Closing Refinancing and the consummation of any other transactions in connection with the foregoing and including the payment of the fees, costs and expenses incurred in connection with any of the foregoing (including the Transaction Expenses);

Transferee” shall have the meaning provided in Section 14.6(e);

Type” shall mean as to any Loan, its nature as a Prime Rate Loan, an ABR Loan, a Banker’s Acceptance, a LIBOR Loan, a EURIBOR Loan or a European Base Rate Loan;

UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that if a term is defined in Article 9 of the Uniform Commercial Code differently than in another Article thereof, the term shall have the meaning set forth in Article 9; provided, further, that, if by reason of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, of a security interest in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction from time to time for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be;

UCP” shall mean, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce (“ICC”) Publication No. 600 (or such later version thereof as may be in effect at the time of issuance);

 

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UK Credit Party” shall mean UK Holdco and UK Serviceco;

UK Holdco” shall mean Canada Goose International Holdings Limited;

UK Priority Payable Reserves” shall mean, without duplication of any other Borrowing Base Reserves with respect to the UK Credit Parties, such reserves as the Administrative Agent from time to time determines in its Permitted Discretion as being appropriate to reflect any amounts of any claims against the Collateral of any UK Credit Party included in the Borrowing Base, choate or inchoate, (whether unsecured or secured by any Liens against the Collateral and including by way of retention of title) which rank or are capable of ranking in priority to, or pari passu with, the Liens of the Administrative Agent and/or any amounts which may represent costs relating to the enforcement of the Liens of the Administrative Agent on the Collateral of any UK Credit Party included in the Borrowing Base including, without limitation, the prescribed part of each UK Credit Party’s net property that would be made available for the satisfaction of its unsecured debts pursuant to section 176A of the United Kingdom Insolvency Act 1986 together with each UK Credit Party’s liabilities which constitute preferential debts pursuant to section 386 of the United Kingdom Insolvency Act 1986 and any sums payable as administration or liquidation expenses pursuant to rules 2.67(1) and 4.218(1) of the United Kingdom Insolvency Rules 1986;

UK Serviceco” shall mean Canada Goose Services Limited;

Uncontrolled Cash” shall have the meaning provided in Section 10.9(e);

Unpaid Drawing” shall have the meaning provided in Section 3.4(a);

Unrestricted Subsidiary” shall mean (i) any Subsidiary of CGI Borrower which at the time of determination is an Unrestricted Subsidiary (as designated by CGI Borrower, as provided below) and (ii) any Subsidiary of an Unrestricted Subsidiary;

CGI Borrower may designate any Subsidiary of CGI Borrower (including any existing Subsidiary and any newly acquired or newly formed Subsidiary but excluding in all cases Swiss Borrower) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on, any property of, a Borrower or any Subsidiary of a Borrower (other than any Subsidiary of the Subsidiary to be so designated or any Unrestricted Subsidiary); provided that,

 

  (a) such designation complies with Section 11.5,

 

  (b) immediately after giving effect to such designation no Event of Default shall have occurred and be continuing or would result therefrom, and

 

  (c)

prior to making any such designation in respect of any Borrowing Base Party with Collateral included in the Borrowing Base in an amount greater than $2,000,000, the Borrower Representative has delivered to the Administrative Agent an

 

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  updated Borrowing Base Certificate giving effect to such designation on a Pro Forma Basis.

CGI Borrower may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that, immediately after giving effect to such designation no Event of Default shall have occurred and be continuing.

Any such designation by CGI Borrower shall be notified by CGI Borrower to the Administrative Agent by promptly delivering to the Administrative Agent a certificate of an Authorized Officer of CGI Borrower certifying that such designation complied with the foregoing provisions;

U.S.” and “United States” shall mean the United States of America;

U.S. Credit Party” shall mean each Credit Party organized, formed or incorporated under the laws of the United States, any state thereof or the District of Columbia;

U.S. Dollar” and “U.S.$” shall mean the lawful currency of the U.S.;

U.S. Pension Plan” shall mean any employee pension benefit plan (as defined in and subject to Section 3(2) of ERISA, but excluding any Multiemployer Plan) in respect of which any Credit Party or any Credit Party’s ERISA Affiliate is (or, if such plan were terminated, would under Section 4062 or Section 4069 of ERISA be reasonably likely to be deemed to be) an “employer” as defined in and subject to Section 3(5) of ERISA;

U.S. Subsidiary” shall mean each Subsidiary of CGI Borrower that is organized under the laws of the United States, any state thereof, or the District of Columbia;

Voting Stock” shall mean, with respect to any Person as of any date, the Capital Stock of such Person that is at the time entitled to vote in the election of the board of directors (or analogous governing body) of such Person;

Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) the amount of each then remaining scheduled installment, sinking fund, serial maturity or other required scheduled payments of principal, including payment at final scheduled maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (b) the then outstanding principal amount of such Indebtedness; provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being modified, refinanced, refunded, renewed, replaced or extended (the “Applicable Indebtedness”), the effects of any prepayments or amortization made on such Applicable Indebtedness prior to the date of the applicable modification, refinancing, refunding, renewal, replacement or extension shall be disregarded;

 

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Wholly-Owned Restricted Subsidiary” of any Person shall mean a Restricted Subsidiary of such Person, 100.0% of the outstanding Capital Stock or other ownership interests of which (other than (x) directors’ qualifying shares and (y) a nominal number of shares issued to foreign nationals to the extent required by applicable laws) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person;

Wholly-Owned Subsidiary” of any Person shall mean a Subsidiary of such Person, 100.0% of the outstanding Capital Stock or other ownership interests of which (other than (x) directors’ qualifying shares or other ownership interests and (y) a nominal number of shares or other ownership interests issued to foreign nationals to the extent required by applicable laws) shall at the time be owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person;

Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Title IV of ERISA;

Withholding Agent” shall mean any Credit Party, the Administrative Agent and, in the case of any U.S. federal withholding Tax, any other applicable withholding agent; and

Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.2    Other Interpretive Provisions

With reference to this Agreement and each other Credit Document, unless otherwise specified herein or in such other Credit Document:The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

  (b) The words “herein”, “hereto”, “hereof”, and “hereunder” and words of similar import when used in any Credit Document shall refer to such Credit Document as a whole and not to any particular provision thereof.

 

  (c) Section, Exhibit, and Schedule references are to the Credit Document in which such reference appears.

 

  (d) The term “including” is by way of example and not limitation.

 

  (e) The word “or” is not exclusive.

 

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  (f) The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

  (g) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”.

 

  (h) Section headings herein and in the other Credit Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Credit Document.

 

  (i) 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, including cash, securities, accounts and contract rights.

 

  (j) All references to “knowledge” or “awareness” of any Credit Party or any Restricted Subsidiary thereof means the actual knowledge of an Authorized Officer of such Credit Party or such Restricted Subsidiary.

1.3    Accounting Terms

(a) Except as expressly provided herein, all accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP, applied in a consistent manner.

(b) Where reference is made to “CGI Borrower and the Restricted Subsidiaries on a consolidated basis” or similar language, such consolidation shall not include any Subsidiaries of CGI Borrower other than Restricted Subsidiaries.

1.4    Rounding

Any financial ratios required to be maintained by CGI Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number.

1.5    References to Agreements Laws, Etc.

Unless otherwise expressly provided herein, (a) references to Organizational Documents, agreements (including the Credit Documents), and other Contractual Requirements shall be deemed to include all subsequent amendments, restatements, amendment and restatements, extensions, supplements, modifications, replacements, refinancings, renewals, or increases, but only to the extent that such amendments, restatements, amendment and

 

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restatements, extensions, supplements, modifications, replacements, refinancings, renewals, or increases are not prohibited by any Credit Document; and (b) references to any Requirement of Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such Requirement of Law.

1.6    Currency Equivalents Generally

(a) Any amount specified in this Agreement (other than in Article 2, Article 13 and Article 14) or any of the other Credit Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount to be determined at the spot rate of exchange quoted by the Bank of Canada for the applicable currency at 12:00 p.m. (Toronto time) on such day (or, in the event such rate is not available, by reference to such other publicly available service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower Representative, or, in the absence of such agreement, such rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 10:00 a.m. (Toronto time) on such date for the purchase of Dollars for delivery two (2) Business Days later).

(b) For purposes of determining the First Lien Net Leverage Ratio and the Total Net Leverage Ratio, the amount of Indebtedness shall reflect the currency translation effects, determined in accordance with GAAP, of Hedge Agreements permitted hereunder for currency exchange risks with respect to the applicable currency in effect on the date of determination of the Dollar equivalent of such Indebtedness.

(c) Notwithstanding the foregoing, for purposes of determining compliance with Sections 11.1, 11.2, 11.4 and 11.5 with respect to the amount of any Indebtedness, Lien, Asset Sale, Investment or Restricted Payment in a currency other than Dollars, no Default or Event of Default shall be deemed to have occurred solely as a result of changes in rates of currency exchange occurring after the time such Indebtedness or Lien is incurred or such Asset Sale, Investment or Restricted Payment is made (so long as such Indebtedness, Lien, Asset Sale, Investment or Restricted Payment at the time incurred or made was permitted hereunder).

(d) Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify with the Borrower Representative’s consent to appropriately reflect a change in currency of any country and any relevant market conventions or practices relating to such change in currency.

1.7    Rates

The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission, or any other matter related to the rates in the definition of LIBO Rate, EURIBOR or BA Rate or with respect to any comparable or successor rate thereto.

 

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1.8    Times of Day

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.9    Timing of Payment or Performance

Except as otherwise expressly provided, when the payment of any obligation or the performance of any covenant, duty, or obligation is stated to be due or performance required on (or before) a day which is not a Business Day, the date of such payment (other than as described in the definition of Interest Period) or performance shall extend to the immediately succeeding Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

1.10    Certifications

All certifications to be made hereunder by an officer or representative of a Credit Party shall be made by such a Person in his or her capacity solely as an officer or a representative of such Credit Party, on such Credit Party’s behalf and not in such Person’s individual capacity.

1.11    Compliance with Certain Sections

(a) For purposes of determining compliance with Article 11, in the event that any Lien, Investment, Indebtedness (whether at the time of incurrence or upon application of all or a portion of the proceeds thereof), disposition, Restricted Payment, Affiliate transaction, Contractual Requirement, or prepayment of Indebtedness meets the criteria of one or more than one of the “baskets” or categories of transactions then permitted pursuant to any clause or subsection of Article 11, such transaction (or portion thereof) at any time shall be permitted under one or more of such clauses as determined by the Borrower Representative in its sole discretion at such time.

(b) With respect to any amounts incurred or transactions entered into (or consummated) in reliance upon a provision of this Agreement that does not require compliance with a financial ratio or leverage test (any such amounts, the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with a financial ratio or leverage test (any such amounts, the “Incurrence-Based Amounts”), it is understood and agreed that the Fixed Amounts shall be disregarded in the calculation of the financial ratio or leverage test applicable to the Incurrence-Based Amounts. In addition, any Indebtedness (and associated Liens, subject to the applicable priorities required pursuant to the applicable Incurrence-Based Amounts), Investments, prepayments of debt and Restricted Payments incurred in reliance on Fixed Amounts may be reclassified at any time, as CGI Borrower may elect from time to time, as incurred under any applicable Incurrence-Based Amounts if CGI Borrower subsequently meets the applicable ratio or leverage test for such Incurrence-Based Amounts on a Pro Forma Basis (or would have met such ratio or leverage test, in which case, such reclassification shall be deemed to have automatically occurred if not elected by CGI Borrower).

 

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1.12    Pro Forma and Other Calculations

(a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Total Net Leverage Ratio, the Fixed Charge Coverage Ratio and the Interest Coverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section 1.12; provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.12, when calculating the Fixed Charge Coverage Ratio for purposes of Section 11.11 (other than for the purpose of determining pro forma compliance with Section 11.11), the events described in this Section 1.12 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect.

(b) For purposes of calculating any financial ratio or test or compliance with any covenant determined by reference to Consolidated EBITDA or Consolidated Total Assets, Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.12) that have been made (i) during the applicable Test Period or (ii) other than as described in the proviso to clause (a) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio or test, or any such calculation of Consolidated EBITDA or Consolidated Total Assets, is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Consolidated Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into CGI Borrower or any of the Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.12, then such financial ratio or test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.12.

(c) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Representative and may include, for the avoidance of doubt, the amount of “run- rate” cost savings, operating expense reductions and synergies resulting from or relating to such Specified Transaction projected by the Borrower Representative in good faith to be realized as a result of actions taken or with respect to which substantial steps have been taken or are expected to be taken (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and such that “run-rate” means the full recurring benefit for a period that is associated with any action taken, for which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions), and any such adjustments shall be included in the initial pro

 

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forma calculations of such financial ratios or tests relating to such Specified Transaction (and in respect of any subsequent pro forma calculations in which such Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period for any subsequent calculation of such financial ratios and tests; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower Representative, (B) such actions are taken or substantial steps with respect to such actions are or are expected to be taken no later than eighteen (18) months after the date of such Specified Transaction, and (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period.

(d) In the event that (x) CGI Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees) or repays (including by repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (in each case, other than Indebtedness incurred or repaid under any revolving credit facility or line of credit in the ordinary course of business for working capital purposes) or (y) CGI Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except (I) in the case of calculating the “Average Revolver Debt,” any such incurrence or repayment of Revolving Loans will be given effect as if the same had occurred on the first day of the applicable Test Period and (II) in the case of the Fixed Charge Coverage Ratio and the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock will be given effect as if the same had occurred on the first day of the applicable Test Period).

(e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Fixed Charge Coverage Ratio or the Interest Coverage Ratio, as applicable, is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by an Authorized Officer of the Borrower Representative to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower Representative or any applicable Restricted Subsidiary may designate.

 

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(f) In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of:

 

  (i) determining compliance with any provision of this Agreement which requires the calculation of any financial ratio or test, including the First Lien Net Leverage Ratio, the Total Net Leverage Ratio, the Fixed Charge Coverage Ratio and the Interest Coverage Ratio; or

 

  (ii) testing availability under baskets set forth in this Agreement (including baskets measured as a percentage of Consolidated EBITDA or Consolidated Total Assets);

in each case, at the option of CGI Borrower (CGI Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted hereunder shall be either (i) on the date of execution of the definitive agreement with respect to such Limited Condition Transaction or (ii) on the date of the consummation of such Limited Condition Transaction (the date chosen pursuant to such LCT Election, the “LCT Test Date”), and if, after giving Pro Forma Effect to the Limited Condition Transaction, CGI Borrower or any of its Restricted Subsidiaries would have been permitted to take such action on the relevant LCT Test Date in compliance with such ratio, test or basket, such ratio, test or basket shall be deemed to have been complied with. For the avoidance of doubt, if CGI Borrower has made an LCT Election and any of the ratios, tests or baskets for which compliance was determined or tested as of the LCT Test Date would have failed to have been satisfied as a result of fluctuations in any such ratio, test or basket, including due to fluctuations in Consolidated EBITDA or Consolidated Total Assets of CGI Borrower or the Person subject to such Limited Condition Transaction, at any time other than the LCT Test Date at or prior (as applicable) to the consummation of the relevant transaction or action, such baskets, tests or ratios will not be deemed to have failed to have been satisfied as a result of such fluctuations. If CGI Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any event or transaction occurring after the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement or date for redemption, repurchase, defeasance, satisfaction and discharge or repayment specified in an irrevocable notice for such Limited Condition Transaction is terminated, expires or passes, as applicable, without consummation of such Limited Condition Transaction (a “Subsequent Transaction”) in connection with which a ratio, test or basket availability calculation must be made on a Pro Forma Basis or giving Pro Forma Effect to such Subsequent Transaction, for purposes of determining whether such ratio, test or basket availability has been complied with under this Agreement, any such ratio, test or basket shall be required to be satisfied on a Pro Forma Basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated until such time as the applicable Limited Condition Transaction has actually closed or the definitive agreement with respect thereto has been terminated.

 

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1.13    Quebec Matters

For purposes of any assets, liabilities or entities located in the Province of Quebec and for all other 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” or “real estate” shall include “immovable property”, (c) “tangible property” shall include “corporeal property”, (d) “intangible property” shall include “incorporeal property”, (e) “security interest”, “mortgage” and “security” shall include a “hypothec”, “right of retention”, “prior claim” and a resolutory clause, (f) all references to filing, perfection, priority, remedies, registering or recording under the Uniform Commercial Code or a PPSA shall include publication under the Civil Code of Quebec, (g) all references to “perfection” of or “perfected” security or security interest shall include a reference to an “opposable” or “set up” hypothec, security 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 security” 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”, (r) “state” shall include “province”, (s) “fee simple title” shall include “absolute ownership”, and (t) “accounts” shall include “claims”.

ARTICLE 2

AMOUNT AND TERMS OF CREDIT

2.1    Commitments

(a) Subject to and upon the terms and conditions herein set forth, each Lender severally agrees to make Revolving Credit Loans to the Borrowers (including, where applicable, loans by way of Banker’s Acceptances or BA Equivalent Notes) denominated in Dollars, U.S. Dollars, Euros or such other currency as agreed by the Borrower Representative and the Administrative Agent in accordance with Section 2.16 (each such loan (including any Protective Advances), a “Revolving Credit Loan”) in an aggregate principal amount in Dollars or the Equivalent Amount in Dollars of a Revolving Credit Loan made in any other currency not to exceed at any time outstanding the amount of such Lender’s Revolving Credit Commitment at such time; provided that any of the foregoing such Revolving Credit Loans (A) shall be made at any time and from time to time on and after the Closing Date and prior to the Revolving Credit Maturity Date, (B) may, at the option of the Borrower Representative, be incurred, maintained and/or rolled over as, and/or converted into, Prime Rate Loans, Banker’s Acceptances or BA Equivalent Notes that are Revolving Credit Loans in Dollars, or ABR Loans or LIBOR Loans that are Revolving Credit Loans in U.S. Dollars or EURIBOR Loans or European Base Rate Loans that are Revolving Credit Loans in Euros; provided that all Revolving Credit Loans made by each of the Lenders pursuant to the same Borrowing shall, unless otherwise specifically

 

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provided herein, consist entirely of Revolving Credit Loans of the same Type, (C) may be repaid (without premium or penalty) and reborrowed in accordance with the provisions hereof, (D) shall not, for any Lender (other than the Swingline Lender in its capacity as such and the Administrative Agent in respect of Protective Advances) at any time, after giving effect thereto and to the application of the proceeds thereof, result in such Lender’s Revolving Credit Exposure in respect of any Class of Revolving Loans at such time exceeding such Lender’s Commitments in respect of such Class of Revolving Loans at such time, (E) shall not result in the aggregate amount of the Lenders’ Revolving Credit Exposures of any Class of Revolving Loans at such time exceeding the aggregate Commitments with respect to such Class, (F) shall not, after giving effect thereto and to the application of the proceeds thereof, other than as described in Section 2.1(e), result at any time in the aggregate amount of the Lenders’ Revolving Credit Exposures to CGI Borrower at such time exceeding the CGI Line Cap then in effect, (G) shall not, after giving effect thereto and to the application of the proceeds thereof, other than as described in Section 2.1(e), result at any time in the aggregate amount of the Lenders’ Revolving Credit Exposures to Swiss Borrower at such time exceeding the Swiss Line Cap then in effect; and (H) shall not, after giving effect thereto and to the application of the proceeds thereof, other than as described in Section 2.1(e), result at any time in the aggregate amount of the Lenders’ Revolving Credit Exposures to CGI Borrower and the Lenders’ Revolving Credit Exposures to Swiss Borrower at such time exceeding the Line Cap then in effect.

(b) Subject to and upon the terms and conditions herein set forth, the Swingline Lender in its individual capacity agrees, at any time and from time to time on and after the Closing Date and prior to the Swingline Maturity Date, to make a loan or loans (each a “Swingline Loan” and, collectively the “Swingline Loans”) to CGI Borrower in Dollars or U.S. Dollars and to Swiss Borrower in U.S. Dollars or Euros, which Swingline Loans (i) shall be Prime Rate Loans, ABR Loans or European Base Rate Loans, (ii) shall have the benefit of the provisions of Section 2.1(c), (iii) shall, in the aggregate for CGI Borrower and Swiss Borrower, not exceed at any time outstanding the Swingline Commitment, (iv) other than as described in Section 2.1(e), shall not, after giving effect thereto and to the application of the proceeds thereof, result at any time in the aggregate amount of the Lenders’ Revolving Credit Exposures to CGI Borrower at such time exceeding the CGI Line Cap then in effect, (v) shall not, after giving effect thereto and to the application of the proceeds thereof, other than as described in Section 2.1(e), result at any time in the aggregate amount of the Lenders’ Revolving Credit Exposures to Swiss Borrower at such time exceeding the Swiss Line Cap then in effect, (vi) shall not, after giving effect thereto and to the application of the proceeds thereof, other than as described in Section 2.1(e), result at any time in the aggregate amount of the Lenders’ Revolving Credit Exposures to CGI Borrower and the Lenders’ Revolving Credit Exposures to Swiss Borrower at such time exceeding the Line Cap then in effect, and (viii) may be repaid and reborrowed in accordance with the provisions hereof. On the Swingline Maturity Date, all Swingline Loans shall be repaid in full. CGI Borrower shall be entitled to avail itself of Swingline Loans by drawing cheques on its Dollar chequing account and U.S. Dollar chequing account, as the case may be, maintained from time to time with the Swingline Lender at the Administrative Agent’s Office (or in such other accounts with the Swingline Lender at such other branch of the Swingline Lender as may be agreed upon by the Swingline Lender and the Borrower Representative from time to time). The debit balance from time to time in any such

 

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Dollar account shall be deemed to be a Prime Rate Loan outstanding to CGI Borrower from the Swingline Lender under the applicable Credit Facility. The debit balance from time to time in any such U.S. Dollar account shall be deemed to be an ABR Loan outstanding to CGI Borrower from the Swingline Lender under the applicable Credit Facility. If at any time CGI Borrower is a party to a cash concentration arrangement with the Swingline Lender, the amount of any overdraft from time to time in the Dollar or U.S. Dollar concentration account, as the case may be, of CGI Borrower established pursuant to such arrangement (which for greater certainty may include one of the Dollar or U.S. Dollar accounts identified above) shall, without duplication, be deemed to be a Prime Rate Loan or ABR Loan, as the case may be, outstanding to CGI Borrower from the Swingline Lender under the applicable Credit Facility. The Swingline Lender shall not make any Swingline Loan after receiving a written notice from the Borrower Representative, the Administrative Agent or the Required Lenders stating that a Default or Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice of (i) rescission of all such notices from the party or parties originally delivering such notice or (ii) the waiver of such Default or Event of Default in accordance with the provisions of Section 14.1.

(c) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the Administrative Agent that all then-outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans by the applicable Borrower in which case Revolving Loans constituting ABR Loans in respect of Swingline Loans in U.S. Dollars, Prime Rate Loans in respect of Swingline Loans in Dollars and European Base Rate Loans in respect of Swingline Loans in Euros shall be made on the immediately succeeding Business Day (each such Borrowing, a “Mandatory Borrowing”) by each Lender pro rata based on each Lender’s Revolving Credit Commitment Percentage, and the proceeds thereof shall be applied directly to the Swingline Lender to repay the Swingline Lender for such outstanding Swingline Loans. Each Lender hereby irrevocably agrees to make such Revolving Loans upon one Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified to it in writing by the Swingline Lender notwithstanding (i) that the amount of the Mandatory Borrowing may not comply with the minimum amount for each Borrowing specified in Section 2.2, (ii) whether any conditions specified in Article 8 are then satisfied, (iii) whether a Default or an Event of Default has occurred and is continuing, (iv) the date of such Mandatory Borrowing, or (v) any reduction in the Total Revolving Credit Commitment after any such Swingline Loans were made. In the event that, in the sole judgment of the Swingline Lender, any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including as a result of the commencement of a proceeding under any Insolvency Laws in respect of any Borrower), each Lender hereby agrees that it shall forthwith purchase from the Swingline Lender (without recourse or warranty) such participation of the outstanding Swingline Loans as shall be necessary to cause the Lenders to share in such Swingline Loans ratably based upon their respective Revolving Credit Commitment Percentages; provided that all principal and interest payable on such Swingline Loans shall be for the account of the Swingline Lender until the date the respective participation is purchased and, to the extent attributable to the purchased participation, shall be payable to such Lender purchasing same from and after such date of purchase.

 

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(d) If the maturity date shall have occurred in respect of any Class of Commitments (the “Expiring Credit Commitment”) at a time when another Class or Classes of Commitments is or are in effect with a longer maturity date (each a “Non-Expiring Credit Commitment” and collectively, the “Non-Expiring Credit Commitments”), then with respect to each outstanding Swingline Loan, if consented to by the Swingline Lender (such consent not to be unreasonably withheld, conditioned or delayed), on the earliest occurring maturity date such Swingline Loan shall be deemed reallocated to the Class or Classes of the Non-Expiring Credit Commitments on a pro rata basis; provided that (x) to the extent that the amount of such reallocation would cause the aggregate credit exposure to exceed the aggregate amount of such Non-Expiring Credit Commitments, immediately prior to such reallocation the amount of Swingline Loans to be reallocated equal to such excess shall be repaid or Cash Collateralized and (y) notwithstanding the foregoing, if a Default or Event of Default has occurred and is continuing, each Borrower shall still be obligated to pay Swingline Loans borrowed by it and allocated to the Lenders holding the Expiring Credit Commitments at the maturity date of the Expiring Credit Commitment or if the Loans have been accelerated prior to the maturity date of the Expiring Credit Commitment. Upon the maturity date of any Class of Commitments, the sublimit for Swingline Loans may be reduced as agreed between the Swingline Lender and the Borrower Representative, without the consent of any other Person.

(e) Protective Advances.

 

  (i)

The Administrative Agent shall be authorized, in its discretion, at any time that any conditions in Article 8 are not satisfied, to make Prime Rate Loans and ABR Loans that are Revolving Loans (“Protective Advances”) to CGI Borrower and to Swiss Borrower (1) up to an aggregate amount of 10% of the Total Revolving Credit Commitments outstanding at any time, if the Administrative Agent deems such Revolving Loans necessary or desirable to preserve or protect Collateral, the Secured Parties’ rights under the Credit Documents or which is otherwise for the benefit of the Secured Parties and/or to enhance the collectability or repayment of Obligations; or (2) to pay any other amounts chargeable to Credit Parties under any Credit Documents, including costs, fees and expenses. Each Protective Advance shall be subject to all the terms and conditions applicable to other Revolving Loans. Protective Advances may be made in a principal amount that would cause the aggregate of all of the Lenders’ Revolving Credit Exposure to exceed the Line Cap, that would cause the aggregate of all of the Lenders’ Revolving Credit Exposures to CGI Borrower to exceed the CGI Line Cap or that would cause the aggregate of all of the Lenders’ Revolving Credit Exposures to Swiss Borrower to exceed the Swiss Line Cap, but in no event shall Protective Advances be required that would cause the aggregate Revolving Credit Exposures of all Lenders to exceed the Total Revolving Credit Commitments. Each Lender shall participate in each Protective Advance on a pro rata basis based upon its Revolving Credit Commitment Percentage. Supermajority Lenders may at any time revoke the Administrative Agent’s authority to make further Protective

 

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  Advances by written notice to the Administrative Agent. Absent such revocation, the Administrative Agent’s determination that funding of a Protective Advance is appropriate shall be conclusive. At any time, the Administrative Agent may request the Lenders to make a Revolving Loan to repay a Protective Advance on the same terms as are applicable to Swingline Loans under Section 2.1(c). At any other time, the Administrative Agent may require the Lenders to fund their risk participations described in Section 2.1(e)(ii).

 

  (ii) Upon the making of a Protective Advance by the Administrative Agent (whether before or after the occurrence of a Default or Event of Default), each Lender shall be deemed, without further action by any party hereto, unconditionally and irrevocably to have purchased from the Administrative Agent without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Revolving Credit Commitment Percentage. From and after the date, if any, on which any Lender is required to fund its participation in any Protective Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Revolving Credit Commitment Percentage of all payments of principal and interest and all proceeds of Collateral (if any) received by the Administrative Agent in respect of such Protective Advance.

 

  (iii) The making by the Administrative Agent of a Protective Advance shall not modify or abrogate any of the provisions hereof regarding the Lenders’ obligations to purchase participations with respect to Letters of Credit Outstanding or Swingline Loans.

2.2    Minimum Amount of Each Borrowing; Maximum Number of Borrowings

The aggregate principal amount of each Borrowing of Revolving Loans shall be in a minimum amount of at least the Minimum Borrowing Amount for such Type of Loans and Swingline Loans shall be in a minimum amount of $100,000, U.S.$100,000 or €100,000, as applicable, and in a multiple of $100,000, U.S.$100,000 or €100,000, respectively, in excess thereof (except that Mandatory Borrowings shall be made in the amounts required by Section 2.1(c), Protective Advances shall be made in the amounts required by Section 2.1(e) and Revolving Loans to reimburse the Letter of Credit Issuer with respect to any Unpaid Drawing shall be made in the amounts required by Section 3.3 or Section 3.4, as applicable). More than one Borrowing may be incurred on any date; provided that at no time shall there be outstanding more than twenty-five (25) Borrowings by way of Banker’s Acceptances and BA Equivalent Notes, LIBOR Loans or EURIBOR Loans that are Revolving Loans under this Agreement.

 

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2.3    Notice of Borrowing

(a) Whenever a Borrower desires to incur Revolving Loans (other than Mandatory Borrowings, Protective Advances or borrowings to repay Unpaid Drawings), the Borrower Representative shall give the Administrative Agent at the Administrative Agent’s Office, (i) prior to 1:00 p.m. (Toronto time) at least three (3) Business Days’ prior written notice of each Borrowing of Revolving Loans that are LIBOR Loans, EURIBOR Loans or by way of Banker’s Acceptances and BA Equivalent Notes and (ii) prior to 1:00 p.m. (Toronto time) one Business Day prior to such Borrowing written notice of each Borrowing of Revolving Loans that are Prime Rate Loans, ABR Loans or European Base Rate Loans (or such shorter notice as is approved by the Administrative Agent in its reasonable discretion); provided, however, that any notice in respect of Borrowings to be made on the Closing Date, including any Borrowing of Revolving Loans that are LIBOR Loans, EURIBOR Loans or by way of Banker’s Acceptances and BA Equivalent Notes, may be provided on the Business Day prior to such advance. Each such notice (a “Notice of Borrowing”), except as otherwise expressly provided in Section 2.10, shall specify (v) the aggregate principal amount of the Revolving Loans, and the Class or Classes of Revolving Loans, to be made pursuant to such Borrowing, (w) the date of Borrowing (which shall be a Business Day), (x) whether the respective Borrowing shall be in Dollars and shall consist of Prime Rate Loans or Banker’s Acceptances and BA Equivalent Notes, shall be in U.S. Dollars and shall consist of ABR Loans or LIBOR Loans or shall be in Euros and shall consist of European Base Rate Loans or EURIBOR Loans, in each case that are Revolving Loans, (y) in respect of Borrowings by way of Banker’s Acceptances and BA Equivalent Notes, LIBOR Loans or EURIBOR Loans, the Interest Period to be initially applicable thereto and (z) the identity of the applicable Borrower. If no election of an Interest Period is specified in any such Notice of Borrowing by way of Banker’s Acceptances and BA Equivalent Notes, LIBOR Loans or EURIBOR Loans, such notice shall be deemed a request for an Interest Period of one (1) month. If no election is made as to the Type of Revolving Loan, such notice shall be deemed a request for a Borrowing of Prime Rate Loans in Dollars, ABR Loans in U.S. Dollars or European Base Rate Loans in Euros, as applicable, and, if the currency is not specified, such notice shall be deemed a request for a Borrowing in Dollars by CGI Borrower and in U.S. Dollars by Swiss Borrower. The Administrative Agent shall promptly give each applicable Lender written notice of each proposed Borrowing of Revolving Loans, of such Lender’s Revolving Credit Commitment Percentage in respect of the Class of Revolving Loans being borrowed, of the identity of the Borrower, the Type of Borrowing being requested, the Interest Period or Interest Periods applicable thereto, as appropriate, and of the other matters covered by the related Notice of Borrowing.

(b) Whenever a Borrower desires to incur Swingline Loans hereunder, the Borrower Representative shall give the Swingline Lender written notice with a copy to the Administrative Agent of each Borrowing of Swingline Loans prior to 12:00 p.m. (Toronto time) on the date of such Borrowing. Each such notice shall specify (w) whether the Borrowing will be in U.S. Dollars, Dollars or Euros, (x) the aggregate principal amount of the Swingline Loans to be made pursuant to such Borrowing, (y) the date of Borrowing (which shall be a Business Day), and (z) the identity of the applicable Borrower.

 

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(c) Mandatory Borrowings shall be made upon the notice specified in Section 2.1(c), with each Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set forth in such Section.

(d) Borrowings to reimburse Unpaid Drawings shall be made upon the notice specified in Section 3.4(a).

(e) Without in any way limiting the obligation of the Borrower Representative to confirm in writing any notice it shall give hereunder by telephone (which such obligation is absolute), the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower Representative.

2.4    Disbursement of Funds

(a) No later than 1:00 p.m. (Toronto time) on the date specified in each Notice of Borrowing (including Mandatory Borrowings), each Lender shall make available to the Administrative Agent its pro rata portion, if any, of each Borrowing requested to be made on such date in the manner provided below; provided that on the Closing Date, such funds may be made available at such time as may be agreed among the Lenders, the Borrower Representative, and the Administrative Agent for the purpose of consummating the Transactions; provided, further, that all Swingline Loans to CGI Borrower shall be made available in the full amount thereof by the Swingline Lender no later than 4:00 p.m. (Toronto time) and all Swingline Loans to the Swiss Borrower shall be sent by ACH or wire transfer by the Swingline Lender to an account of the Swiss Borrower designated by the Borrower Representative to the Swingline Lender no later than 4:00 p.m. (Toronto time).

(b) Each Lender shall make available all amounts it is to fund to the applicable Borrower under any Borrowing for its applicable Commitments, and in Same Day Funds to the Administrative Agent at the Administrative Agent’s Office (or such other place as the Administrative Agent may request) and the Administrative Agent will (except in the case of Mandatory Borrowings and Borrowings to repay Unpaid Drawings) make available to the applicable Borrower, by depositing to an account or accounts designated by the Borrower Representative to the Administrative Agent the aggregate of the amounts so made available in Dollars, U.S. Dollars, Euros or any applicable Alternative Currency, as applicable. Unless the Administrative Agent shall have been notified by any Lender prior to the date of any such Borrowing that such Lender does not intend to make available to the Administrative Agent its portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the applicable Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender and the Administrative Agent has made available such amount to the applicable Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding

 

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amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower Representative and the Borrower Representative shall immediately pay (or cause to be paid) such corresponding amount to the Administrative Agent in Dollars, U.S. Dollars or Euros, as applicable. The Administrative Agent shall also be entitled to recover from such Lender or the applicable Borrower interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the applicable Borrower to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if paid by such Lender, the Overnight Rate or (ii) if paid by a Borrower, the then-applicable rate of interest or fees, calculated in accordance with Section 2.8, for the respective Loans.

(c) Nothing in this Section 2.4 shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that the Borrowers may have against any Lender as a result of any default by such Lender hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to fulfill its commitments hereunder).

2.5    Repayment of Loans; Evidence of Debt

(a) Each Borrower shall repay to the Administrative Agent, for the benefit of the Lenders, on the Revolving Credit Maturity Date, each then outstanding Revolving Credit Loan made to such Borrower in the currency in which such Revolving Credit Loan was denominated on the date advanced. Each Borrower shall repay to the Administrative Agent for the benefit of the Lenders, on each Extended Revolving Loan Maturity Date, each then-outstanding Extended Revolving Credit Loan made to such Borrower in the currency in which such Extended Revolving Credit Loan was denominated on the date advanced. Each Borrower shall repay to the Swingline Lender, on the Swingline Maturity Date, each then-outstanding Swingline Loan made to such Borrower in the currency in which such Swingline Loan was denominated on the date advanced.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrowers to the appropriate lending office of such Lender resulting from each Loan made by such lending office of such Lender from time to time, including the amounts of principal and interest payable and paid to such lending office of such Lender from time to time under this Agreement and the currency in which such Loans are denominated.

(c) The Administrative Agent shall maintain the Register pursuant to Section 14.6(b), and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Loan made hereunder, the currency in which such Loan is denominated, whether such Loan is a Revolving Credit Loan, Incremental Revolving Credit Loan, Extended Revolving Credit Loan or Swingline Loan, as applicable, the Type of each Loan made, the name of the applicable Borrower and the Interest Period, if any, applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from

 

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the Borrowers to each Lender hereunder, and (iii) the amount of any sum received by the Administrative Agent hereunder from the Borrowers and each Lender’s share thereof.

(d) The entries made in the Register and accounts and subaccounts maintained pursuant to clauses (b) and (c) of this Section 2.5 shall, to the extent permitted by applicable law, be prima facie evidence, absent manifest error, of the existence and amounts of the obligations of the Borrowers therein recorded; provided, however, that the failure of any Lender, the Administrative Agent or the Swingline Lender to maintain such account, such Register or subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of any Borrower to repay (with applicable interest) the Loans made to such Borrower by such Lender in accordance with the terms of this Agreement.

(e) Each Borrower hereby agrees that, upon request of any Lender at any time and from time to time after a Borrower has made an initial borrowing hereunder, such Borrower shall provide to such Lender, at the Borrower’s own expense, a promissory note, substantially in the form of Exhibit G, evidencing the Revolving Loans and Swingline Loans, if any, respectively, owing by such Borrower to such Lender. Thereafter, unless otherwise agreed to by the applicable Lender, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 14.6) be represented by one or more promissory notes in such form payable to the payee named therein (or, if requested by such payee, to such payee or its registered assigns).

2.6    Conversions and Continuations

(a) Subject to the penultimate sentence of this clause (a), (x) the Borrowers shall have the option on any Business Day to convert all or a portion equal to at least $100,000 of the outstanding principal amount of Revolving Loans of one Type into a Borrowing or Borrowings of another Type in the same currency and (y) the Borrowers shall have the option on any Business Day to continue the outstanding principal amount of any LIBOR Loans as LIBOR Loans or EURIBOR Loans as EURIBOR Loans for an additional Interest Period and to rollover any Banker’s Acceptances and BA Equivalent Notes for an additional Interest Period; provided that (i) no partial conversion or rollover, as the case may be, of LIBOR Loans, EURIBOR Loans or Banker’s Acceptances and BA Equivalent Notes shall reduce the outstanding principal amount of LIBOR Loans, EURIBOR Loans or Banker’s Acceptances and BA Equivalent Notes made pursuant to a single Borrowing to less than the applicable Minimum Borrowing Amount, (ii) ABR Loans may not be converted into LIBOR Loans, Prime Rate Loans may not be converted into Banker’s Acceptances and BA Equivalent Notes and European Base Rate Loans may not be converted into EURIBOR Loans if an Event of Default is in existence on the date of the conversion and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such conversion, (iii) LIBOR Loans, Banker’s Acceptances and BA Equivalent Notes and EURIBOR Loans may not be continued or rolled over, as the case may be, as LIBOR Loans, Banker’s Acceptances and BA Equivalent Notes or EURIBOR Loans, respectively, for an additional Interest Period if an Event of Default is in existence on the date of the proposed continuation or rollover and the Administrative Agent has or the Required Lenders have determined, in its or their sole discretion, not to permit such continuation or such rollover,

 

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as applicable, (iv) Borrowings resulting from conversions pursuant to this Section 2.6 shall be limited in number as provided in Section 2.2, and (v) if less than a full Borrowing of Revolving Loans is converted, such conversion shall be made pro rata among the Lenders based upon their Revolving Credit Commitment Percentage of the applicable Class or Classes in accordance with the respective principal amounts of the Revolving Loans comprising such Borrowing held by such Lenders immediately prior to such conversion. Each such conversion, continuation or rollover shall be effected by the Borrower Representative by giving the Administrative Agent at the Administrative Agent’s Office, prior to 1:00 p.m. (Toronto time), at least (i) three (3) Business Days’, in the case of a continuation or rollover of, or conversion to, LIBOR Loans, EURIBOR Loans or Banker’s Acceptances and BA Equivalent Notes (other than in the case of a notice delivered on the Closing Date, which shall be deemed to be effective on the Closing Date), or (ii) one Business Day’s, in the case of a conversion into Prime Rate Loans, ABR Loans or European Base Rate Loans, prior written notice (each, a “Notice of Conversion or Continuation” substantially in the form of Exhibit H) specifying the Loans to be so converted, continued or rolled over, as the case may be, the Type of Loans to be converted into, continued or rolled over, as the case may be, and, if such Loans are to be converted into, or continued or rolled over as LIBOR Loans, EURIBOR Loans or Banker’s Acceptances and BA Equivalent Notes, as applicable, the Interest Period to be applicable thereto. If no Interest Period is specified in any such notice with respect to any conversion to, or continuation or rollover of, a LIBOR Loan, EURIBOR Loans or Banker’s Acceptances and BA Equivalent Notes, the Borrower Representative shall be deemed to have selected an Interest Period of one-month’s duration. The Administrative Agent shall give each applicable Lender notice as promptly as practicable of any such proposed conversion, continuation or rollover affecting any of its Loans.

(b) If any Event of Default is in existence at the time of any proposed continuation or rollover of any LIBOR Loans, EURIBOR Loans or Banker’s Acceptances and BA Equivalent Notes and the Administrative Agent has or the Required Lenders have determined in its or their sole discretion not to permit such continuation or rollover, such LIBOR Loans shall be automatically converted on the last day of the current Interest Period into ABR Loans, such Banker’s Acceptances and BA Equivalent Notes shall be automatically rolled over on the last day of the current Interest Period into Prime Rate Loans and such EURIBOR Loans shall be automatically rolled over on the last day of the current Interest Period into European Base Rate Loans. If upon the expiration of any Interest Period in respect of LIBOR Loans, Banker’s Acceptances and BA Equivalent Notes or EURIBOR Loans, a Borrower has failed to elect a new Interest Period to be applicable thereto as provided in clause (a), such Borrower shall be deemed to have continued such LIBOR Loan as a LIBOR Loan with an Interest Period of one month or to have rolled over such Banker’s Acceptances and BA Equivalent Notes as Banker’s Acceptances and BA Equivalent Notes with an Interest Period of one month or to have continued such EURIBOR Loan as a EURIBOR Loan with an Interest Period of one month.

2.7    Pro Rata Borrowings

Each Borrowing of Revolving Credit Loans (other than Swingline Loans and Protective Advances) under this Agreement shall be made by the Lenders pro rata on the basis of their then-applicable Revolving Credit Commitments. Each Borrowing of Incremental

 

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Revolving Credit Loans under this Agreement shall be made by the Lenders pro rata on the basis of their then-applicable Incremental Revolving Credit Commitments. Each Borrowing of Extended Revolving Credit Loans under this Agreement shall be made by the Extending Lenders pro rata on the basis of their then-applicable Extended Revolving Credit Commitments. It is understood that (a) no Lender shall be responsible for any default by any other Lender in its obligation to make Loans hereunder and that each Lender severally but not jointly shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder and (b) other than as expressly provided herein with respect to a Defaulting Lender, failure by a Lender to perform any of its obligations under any of the Credit Documents shall not release any Person from performance of its obligation under any Credit Document.

Notwithstanding the foregoing, each of the Lenders acknowledges and agrees that the Existing Banker’s Acceptances shall be deemed to be accepted by the Lenders under this Agreement and on the Closing Date, each Lender (other than Canadian Imperial Bank of Commerce) shall pay to the Administrative Agent the amounts required by the Administrative Agent for the benefit of Canadian Imperial Bank of Commerce, and upon receipt of such payment, Canadian Imperial Bank of Commerce shall be deemed to have sold and transferred to each Lender (each such Lender, in its capacity under this Section 2.7, an “EBA Participant”), and each such EBA Participant shall be deemed irrevocably and unconditionally to have purchased and received from Canadian Imperial Bank of Commerce, without recourse or warranty, its pro rata share based on such Lender’s Revolving Credit Commitment Percentage of an undivided interest and participation in each Existing Banker’s Acceptance.

2.8    Interest

(a) The unpaid principal amount of each Prime Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum that shall at all times be the Applicable Margin for Prime Rate Loans plus the Prime Rate, in each case, in effect from time to time.

(b) The unpaid principal amount of each ABR Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum that shall at all times be the Applicable Margin for ABR Loans plus the ABR, in each case, in effect from time to time.

(c) The unpaid principal amount of each European Base Rate Loan shall bear interest from the date of the Borrowing thereof until maturity (whether by acceleration or otherwise) at a rate per annum that shall at all times be the Applicable Margin for European Base Rate Loans plus the European Base Rate, in each case, in effect from time to time

(d) The unpaid principal amount of each LIBOR Loan shall bear interest from the date of the Borrowing thereof until maturity thereof (whether by acceleration or otherwise) at a rate per annum that shall at all times be the Applicable Margin for LIBOR Loans plus the relevant LIBO Rate.

 

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(e) The unpaid principal amount of each EURIBOR Loan shall bear interest from the date of the Borrowing thereof until maturity thereof (whether by acceleration or otherwise) at a rate per annum that shall at all times be the Applicable Margin for EURIBOR Loans plus the relevant EURIBOR.

(f) If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable thereon, or (iii) any other amount payable hereunder, shall not be paid when due (whether at the stated maturity, by acceleration or otherwise but after giving effect to any grace period set forth herein), such overdue amount shall bear interest at a rate per annum that is (the “Default Rate”) (x) in the case of overdue principal or any interest thereon, the rate that would otherwise be applicable thereto plus 2.00% or (y) in the case of any other overdue amount, including overdue interest thereon, to the extent permitted by applicable law, the rate described in Section 2.8(a) plus 2.00% for amounts in Dollars, the rate described in Section 2.8(b) plus 2.00% for amounts in U.S. Dollars and the rate described in Section 2.8(c) plus 2.00 % for amounts in Euros, in each case from the date of such non-payment to the date on which such amount is paid in full (after as well as before judgment).

(g) Interest on each Loan shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof; provided that any Loan that is repaid on the same date on which it is made shall bear interest for one day. Except as provided below, interest shall be payable (i) in respect of each Prime Rate Loan, ABR Loan and European Base Rate Loan, quarterly in arrears on the first Business Day of each April, July, October and January, (ii) in respect of each LIBOR Loan and EURIBOR Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three-month intervals after the first day of such Interest Period, and (iii) in respect of each Loan, (A) on any prepayment in respect of LIBOR Loans or EURIBOR Loans, (B) at maturity (whether by acceleration or otherwise), and (C) after such maturity, on demand.

(h) All computations of interest hereunder shall be made in accordance with Section 6.5.

(i) The Administrative Agent, upon determining the interest rate for any Borrowing of LIBOR Loans or EURIBOR Loans, shall promptly notify the Borrower Representative and the relevant Lenders thereof. Each such determination shall, absent clearly demonstrable error, be final and conclusive and binding on all parties hereto.

(j) For the purposes of this Agreement, whenever interest is to be calculated on the basis of a period of time other than a calendar year, the annual rate of interest to which each rate of interest determined pursuant to such calculation is equivalent for the purposes of the Interest Act (Canada) is such rate as so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by the number of days used in the basis of such determination.

 

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(k)

 

  (i) The rates of interest provided for in this Agreement, including, without limitation under this Section 2.8 are minimum interest rates.

 

  (ii) When entering into this Agreement, each of the parties hereto have assumed that the interest payable at the rates set out in this Section 2.8 or in other provisions of this Agreement is not and will not become subject to Swiss Withholding Tax. Notwithstanding the foregoing, if any payment of interest will be subject to Swiss Withholding Tax, they agree that, if a tax deduction (the “Tax Deduction”) is required by law to be made by the Swiss Borrower in respect of any interest payable by it under this Agreement (taking into account the exceptions set out in Section 6.4(a)(ii)) and should, in respect of the Swiss Borrower, Section 6.4(a)(ii) be unenforceable for any reason, the applicable interest rate in relation to that interest payment shall be (x) the interest rate which would have applied to that interest payment as provided for in this Agreement in the absence of this Section 2.8(k) divided by (y) 1 minus the rate at which the relevant Tax Deduction is required to be made (where the rate at which the relevant deduction or withholding of tax is required to be made is for this purpose expressed as a fraction of 1 rather than as a percentage) and (a) the Swiss Borrower shall be obliged to pay the relevant interest at the adjusted rate in accordance with this Section 2.8(k), (b) the Swiss Borrower shall make the Tax Deduction on the recalculated interest, (c) all references to a rate of interest in this Agreement shall be construed accordingly, and (d) all provisions in Section 6.4 (other than Section 6.4(a)(ii)) shall apply to the Tax Deduction on the recalculated interest payment.

 

  (iii) To the extent that interest payable by the Swiss Borrower under this Agreement becomes subject to Swiss Withholding Tax, each relevant affected Secured Party and the Swiss Borrower shall promptly co-operate in completing any procedural formalities (including submitting forms and documents required by the appropriate tax authority) to the extent possible and necessary for the Swiss Borrower to obtain authorization to make interest payments without them being subject to Swiss Withholding Tax.

2.9    Interest Periods

At the time the Borrower Representative gives a Notice of Borrowing in accordance with Section 2.3(a) in respect of the making of, or Notice of Conversion or Continuation in accordance with Section 2.6(a) in respect of a rollover of, conversion into or continuation as, as the case may be, a Borrowing by way of Banker’s Acceptances and BA Equivalent Notes, LIBOR Loans or EURIBOR Loans the Borrower Representative shall give the Administrative Agent written notice of the Interest Period applicable to such Borrowing, which

 

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Interest Period shall, at the option of the Borrower Representative be a one, two, three or six month period (or if available to all the Lenders making such LIBOR Loans or EURIBOR Loans or issuing such Banker’s Acceptances and BA Equivalent Notes, as the case may be, as determined by such Lenders in good faith based on prevailing market conditions, a twelve month period or a period shorter than one month).

Notwithstanding anything to the contrary contained above:

 

  (a) the initial Interest Period for any Borrowing by way of Banker’s Acceptances and BA Equivalent Notes. LIBOR Loans or EURIBOR Loans shall commence on the date of such Borrowing (including the date of any conversion) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period expires;

 

  (b) if any Interest Period relating to a Borrowing of LIBOR Loans or EURIBOR Loans begins on the last Business Day of a calendar month or begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of the calendar month at the end of such Interest Period;

 

  (c) if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that if any Interest Period in respect of a LIBOR Loan or EURIBOR Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day; and

 

  (d) the Borrowers shall not be entitled to elect any Interest Period in respect of any LIBOR Loan or EURIBOR Loan, or Borrowing by way of Banker’s Acceptances and BA Equivalent Notes if such Interest Period would extend beyond the Maturity Date of such Loan.

2.10    Increased Costs, Illegality, Etc. of LIBOR Loans and EURIBOR Loans

(a) In the event that (x) in the case of clause (i) below, the Administrative Agent and (y) in the case of clauses (ii) and (iii) below, the Required Lenders shall have reasonably determined (which determination shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto):

 

  (i)

on any date for determining the LIBO Rate or EURIBOR or for any Interest Period that (x) deposits in the principal amounts and currencies of the Loans comprising such LIBOR or EURIBOR Borrowing are not generally available in the relevant market or (y) by reason of any changes arising on or after the Closing Date affecting the interbank LIBOR or EURIBOR market, adequate and fair means do not exist for ascertaining

 

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  the applicable interest rate on the basis provided for in the definition of LIBO Rate or EURIBOR; or

 

  (ii) at any time, that such Lenders shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any LIBOR Loans or EURIBOR Loan (including any increased costs or reductions attributable to Taxes, other than any increase or reduction attributable to (x) Taxes described in clauses (i) and (ii) of paragraph (d) of this Section 2.10 and (y) Other Taxes) because of any Change in Law; or

 

  (iii) at any time, that the making or continuance of any LIBOR Loan or EURIBOR Loan has become unlawful by compliance by such Lenders in good faith with any law, governmental rule, regulation, guideline or order (or would conflict with any such governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful), or has become impracticable as a result of a contingency occurring after the Closing Date that materially and adversely affects the interbank LIBOR market or EURIBOR market;

(such Loans, “Impacted Loans”), then, and in any such event, such Required Lenders (or the Administrative Agent, in the case of clause (i) above) shall within a reasonable time thereafter give notice (if by telephone, confirmed in writing) to the Borrower Representative, and to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in the case of clause (i) above, LIBOR Loan or EURIBOR Loan shall no longer be available until such time as the Administrative Agent notifies the Borrower Representative and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist (which notice the Administrative Agent agrees to give at such time when such circumstances no longer exist), and any Notice of Borrowing or Notice of Conversion or Continuation given by the Borrower Representative with respect to LIBOR Loan or EURIBOR Loan that have not yet been incurred shall be deemed rescinded by the Borrower Representative, (y) in the case of clause (ii) above, the applicable Borrower(s) shall pay to such Lenders, promptly after receipt of written demand therefor such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Required Lenders in their reasonable discretion shall determine) as shall be required to compensate such Lenders for such actual increased costs or reductions in amounts receivable hereunder (it being agreed that a written notice as to the additional amounts owed to such Lenders, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower Representative by such Lenders shall, absent clearly demonstrable error, be final and conclusive and binding upon all parties hereto), and (z) in the case of subclause (iii) above, the Borrower Representative shall take one of the actions specified in subclause (x) or

 

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(y), as applicable, of Section 2.10(b) promptly and, in any event, within the time period required by law.

Notwithstanding the foregoing, if the Administrative Agent has made the determination described in Section 2.10(a)(i)(x), the Administrative Agent, in consultation with the Borrower Representative and the affected Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (x) of the first sentence of the immediately preceding paragraph, (2) the Administrative Agent notifies the Borrower Representative or the Required Lenders notify the Administrative Agent and the Borrower Representative that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (3) any Lender reasonably determines that any law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable lending office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower Representative written notice thereof.

(b) At any time that any LIBOR Loan or EURIBOR Loan is affected by the circumstances described in Section 2.10(a)(i)(y) or Section 2.10(a)(ii) or (iii), the Borrower Representative may (and in the case of a LIBOR Loan or EURIBOR Loan affected pursuant to Section 2.10(a)(iii) shall) either (x) if a Notice of Borrowing or Notice of Conversion or Continuation with respect to the affected LIBOR Loan or EURIBOR Loan has been submitted pursuant to Section 2.3 or Section 2.6, as applicable, but the affected LIBOR Loan or EURIBOR Loan has not been funded or continued, cancel such requested Borrowing by giving the Administrative Agent written notice thereof on the same date that the Borrower Representative was notified by the Administrative Agent pursuant to Section 2.10(a)(i)(y) or the Lenders pursuant to Section 2.10(a)(ii) or (iii), as applicable, or (y) if the affected LIBOR Loan or EURIBOR Loan is then outstanding, (I) upon at least three (3) Business Days’ notice to the Administrative Agent, require the affected Lender to convert each such LIBOR Loan or EURIBOR Loan into an ABR Loan or European Base Rate Loan, respectively, and (II) unless the Administrative Agent and the Borrower Representative agree to a substitute rate, in which case such substitute rate shall be deemed to be the “LIBO Rate,” (1) in the case of any LIBOR Loan or EURIBOR Loan denominated in any currency other than U.S. Dollars or Euros affected by the circumstances described in Section 2.10(a)(i)(y) or (a)(ii), prepay each such LIBOR Loan or EURIBOR Loan, as applicable, at the end of the current Interest Period or (2) in the case of any LIBOR Loan or EURIBOR Loan denominated in any currency other than U.S. Dollars or Euros affected by the circumstances described in Section 2.10(a)(iii), immediately prepay each such LIBOR Loan or EURIBOR Loan, as applicable; provided that if more than one Lender is

 

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affected at any time, then all affected Lenders must be treated in the same manner pursuant to this Section 2.10(b).

(c) If, after the Closing Date, any Change in Law relating to capital adequacy or liquidity of any Lender or compliance by any Lender or its parent with any Change in Law relating to capital adequacy or liquidity occurring after the Closing Date, has or would have the effect of reducing the actual rate of return on such Lender’s or its parent’s or its Affiliate’s capital or assets as a consequence of such Lender’s commitments or obligations hereunder to a level below that which such Lender or its parent or its Affiliate could have achieved but for such Change in Law (taking into consideration such Lender’s or its parent’s policies with respect to capital adequacy or liquidity), then from time to time, promptly after demand by such Lender (with a copy to the Administrative Agent), the applicable Borrower shall pay to such Lender such actual additional amount or amounts as will compensate such Lender or its parent for such actual reduction, it being understood and agreed, however, that a Lender shall not be entitled to such compensation as a result of such Lender’s compliance with, or pursuant to any request or directive to comply with, any law, rule or regulation as in effect on the Closing Date or to the extent such Lender is not imposing such charges on, or requesting such compensation from, borrowers (similarly situated to the Borrowers hereunder) under comparable syndicated credit facilities similar to the Credit Facilities. Each Lender, upon determining in good faith that any additional amounts will be payable pursuant to this Section 2.10(c), will give prompt written notice thereof to the Borrower Representative, which notice shall set forth in reasonable detail the basis of the calculation of such additional amounts, although the failure to give any such notice shall not, subject to Section 2.13, release or diminish the applicable Borrower’s obligations to pay additional amounts pursuant to this Section 2.10(c) promptly following receipt of such notice.

(d) It is understood that this Section 2.10 shall not apply to (i) Taxes indemnifiable under Section 6.4 or (ii) Excluded Taxes.

2.11    Compensation

If (a) any payment of principal of any Banker’s Acceptance, BA Equivalent Note, LIBOR Loan or EURIBOR Loan is made by a Borrower to or for the account of a Lender prior to the last day of the Interest Period for such Banker’s Acceptance, BA Equivalent Note, LIBOR Loan or EURIBOR Loan as a result of a payment or conversion pursuant to Sections 2.5, 2.6, 2.10, 6.1, 6.2 or 14.7, as a result of acceleration of the maturity of the Loans pursuant to Article 12 or for any other reason, (b) any Borrowing by way of Banker’s Acceptance, BA Equivalent Note, LIBOR Loans or EURIBOR Loans is not made as a result of a withdrawn Notice of Borrowing or a failure to satisfy borrowing conditions, (c) any ABR Loan is not converted into a LIBOR Loan as a result of a withdrawn Notice of Conversion or Continuation, (d) any Prime Rate Loan is not converted into a Borrowing by way of Banker’s Acceptances or BA Equivalent Note as a result of a withdrawn Notice of Conversion or Continuation, (e) any European Base Rate Loan is not converted into a EURIBOR Loan as a result of a withdrawn Notice of Conversion or Continuation, (f) any Borrowing by way of Banker’s Acceptance, BA Equivalent Note, LIBOR Loan or EURIBOR Loan is not continued as a Borrowing by way of

 

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Banker’s Acceptance, BA Equivalent Note, LIBOR Loan or EURIBOR Loan, respectively, as a result of a withdrawn Notice of Conversion or Continuation or (g) any prepayment of principal of any Banker’s Acceptance, BA Equivalent Note, LIBOR Loan or EURIBOR Loan is not made as a result of a withdrawn notice of prepayment pursuant to Sections 6.1 or 6.2, the applicable Borrower shall, after receipt of a written request by such Lender (which request shall set forth in reasonable detail the basis for requesting such amount), promptly pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any losses, costs or expenses that such Lender may reasonably incur as a result of such payment, failure to convert, failure to continue or failure to prepay, including any loss, cost or expense (excluding loss of anticipated profits) actually incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Banker’s Acceptance, BA Equivalent Note, LIBOR Loan or EURIBOR Loan. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender as specified in this Section 2.11 and setting forth in reasonable detail the manner in which such amount or amounts were determined shall be delivered to the Borrower Representative and shall be conclusive, absent manifest error.

Without limitation of the foregoing, in connection with each payment of Banker’s Acceptances and BA Equivalent Notes prior to the expiry of the applicable Interest Period, the applicable Borrower shall Cash Collateralize the full face amount at maturity of each such Banker’s Acceptance and BA Equivalent Note in accordance with Section 3.7.

2.12    Change of Lending Office

Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Sections 2.10(a)(ii), 2.10(a)(iii), 2.10(b), 2.10(c), 3.5 or 6.4 with respect to such Lender, it will, if requested by the Borrower Representative use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event; provided that such designation is made on such terms that such Lender and its lending office suffer no material unreimbursed cost or other material economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section, provided, further, that each of the Borrowers and the other Credit Parties acknowledge that Canadian Imperial Bank of Commerce and certain of the other Lenders may provide Loans and other accommodations under this Agreement to Swiss Borrower from their respective lending offices in Canada or the United States and each of the Borrowers and the other Credit Parties agree that no such Lender shall be required to comply with this Section 2.12 in the event that providing Loans and other accommodations under this Agreement to Swiss Borrower from their respective lending offices in Canada or the United States gives rise to the operation of Sections 2.10(a)(ii), 2.10(a)(iii), 2.10(b), 2.10(c), 3.5 or 6.4 with respect to such Lender. Nothing in this Section 2.12 shall affect or postpone any of the obligations of the Borrowers or the right of any Lender provided in Sections 2.10, 3.5 or 6.4.

 

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2.13    Notice of Certain Costs

Notwithstanding anything in this Agreement to the contrary, to the extent any notice required by Sections 2.10, 2.11, 3.5 or 6.4 is given by any Lender more than 120 days after such Lender has knowledge (or should have had knowledge) of the occurrence of the event giving rise to the additional cost, reduction in amounts, loss, or other additional amounts described in such Sections, such Lender shall not be entitled to compensation under Sections 2.10, 2.11, 3.5 or 6.4, as the case may be, for any such amounts incurred or accruing prior to the 121st day prior to the giving of such notice to the Borrower Representative.

2.14    Incremental Facilities

(a) The Borrower Representative may by written notice to the Administrative Agent elect to request the establishment of one or more increases in Commitments of any Class (the “Incremental Revolving Credit Commitments”), by an aggregate amount not in excess of the Maximum Incremental Facilities Amount at the time of incurrence thereof and not less than $5,000,000 individually (or such lesser amount as (x) may be approved by the Administrative Agent or (y) shall constitute the Maximum Incremental Facilities Amount at such time) and in a multiple of $100,000 in excess thereof. Each such notice shall specify the date (each, an “Increased Amount Date”) on which the Borrower Representative proposes that the Incremental Revolving Credit Commitments shall be effective. The Borrower Representative may approach any Lender or any Person (other than a natural Person) to provide all or a portion of the Incremental Revolving Credit Commitments; provided that any Lender offered or approached to provide all or a portion of the Incremental Revolving Credit Commitments may elect or decline, in its sole discretion, to provide an Incremental Revolving Credit Commitment, and the Borrower Representative shall have no obligation to approach any existing Lender to provide any Incremental Revolving Credit Commitment. If the existing Lenders approached by the Borrower Representative (if any) are unwilling to increase their applicable commitments by an amount equal to the requested Incremental Revolving Credit Commitments, the Administrative Agent, at the request of and in consultation with Borrower Representative, will use its commercially reasonable efforts to obtain one or more Persons (other than any natural Person) which are not then Lenders (which Persons may be suggested by the Borrower Representative) to become party to the Credit Documents and to provide a commitment to the extent necessary to satisfy Borrower Representative’s request for Incremental Revolving Credit Commitments, as the case may be; provided, however, (a) compensation for any such assistance by the Administrative Agent shall be mutually agreed by the Administrative Agent and Borrower Representative, (b) such assistance shall be subject to the execution of a customary engagement letter and (c) Administrative Agent shall have no obligation to provide any such Incremental Revolving Credit Commitment. In each case, such Incremental Revolving Credit Commitments shall become effective as of the applicable Increased Amount Date; provided that (i) (x) other than as described in the immediately succeeding clause (y), no Event of Default shall exist on such Increased Amount Date immediately before or immediately after giving effect to such Incremental Revolving Credit Commitments or (y) if such Incremental Revolving Credit Commitment is being provided in connection with a Permitted Acquisition or other acquisition constituting a permitted Investment or in connection with refinancing of any Indebtedness that

 

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requires an irrevocable prepayment or redemption notice, then no Event of Default under Section 12.1 or Section 12.5 shall exist on such Increased Amount Date, (ii) the Incremental Revolving Credit Commitments shall be effected pursuant to one or more Joinder Agreements executed and delivered by the Borrower Representative and Administrative Agent, and each of which shall be recorded in the Register and shall be subject to the requirements set forth in Section 6.4(e) and (iii) the Borrowers shall make any payments required pursuant to Section 2.11 in connection with the Incremental Revolving Credit Commitments, as applicable. No Lender shall have any obligation to provide any Commitments pursuant to this Section 2.14(a). For all purposes of this Agreement, any Incremental Revolving Credit Commitments made on an Increased Amount Date shall be designated a part of the series of existing Commitments of the applicable Class subject to such increase.

(b) On any Increased Amount Date on which Incremental Revolving Credit Commitments are effected, subject to the satisfaction of the foregoing terms and conditions, (i) each loan made (including, where applicable, a loan made by way of Banker’s Acceptances or BA Equivalent Notes) under an Incremental Revolving Credit Commitment (an “Incremental Revolving Credit Loan”) shall be deemed, for all purposes, a Loan and (ii) each Lender with an Incremental Revolving Credit Commitment (each an “Incremental Revolving Loan Lender”) shall become a Lender with respect to the Incremental Revolving Credit Commitment and all matters relating thereto; provided that the Administrative Agent shall have consented (not to be unreasonably withheld or delayed) to such Incremental Revolving Loan Lender’s providing such Incremental Revolving Credit Commitment to the extent such consent, if any, would be required under Section 14.6(b) for an assignment of Incremental Revolving Credit Loans or Incremental Revolving Credit Commitments, as applicable, to such Incremental Revolving Loan Lender.

(c) On any Increased Amount Date, each Lender in respect of the applicable Class of Commitments immediately prior to such increase will automatically and without further act be deemed to have assigned to each Incremental Revolving Loan Lender in respect of such increase, and each such Incremental Revolving Loan Lender will automatically and without further act be deemed to have assumed, a portion of such Lender’s participations hereunder in outstanding Letters of Credit, so that after giving effect to each such deemed assignment and assumption of participations, the percentage of the aggregate outstanding participations hereunder in such Letters of Credit held by each Lender holding Revolving Loans (including each such Incremental Revolving Loan Lender), as applicable, will equal the percentage of the aggregate Total Revolving Credit Commitments of all Lenders under the Credit Facilities. In connection with any Incremental Revolving Credit Commitment hereunder, upon the request of the Borrower Representative, the Letter of Credit Commitment may be increased with the approval of the Letter of Credit Issuer and the Administrative Agent by an amount not to exceed the amount of such Incremental Revolving Credit Commitment, in their sole and absolute discretion. Additionally, if any Revolving Loans of the Class of Revolving Loans that are being increased are outstanding at the time any Incremental Revolving Credit Commitments are established, the applicable Lenders immediately after effectiveness of such Incremental Revolving Credit Commitments shall purchase and assign at par such amounts of the Revolving Loans of such Class outstanding at such time as the Administrative Agent may require such that all of the Lenders effectively participate in each of the outstanding Revolving Loans of such Class on a

 

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pro rata basis of their Revolving Credit Commitment Percentages in respect of such Class immediately after giving effect to all such assignments. The Administrative Agent and the Lenders hereby agree that the minimum borrowing, pro rata borrowing and pro rata payment requirements contained elsewhere in this Agreement shall not apply to the transactions effected pursuant to the immediately preceding sentence.

(d) Incremental Revolving Credit Commitments and Incremental Revolving Credit Loans shall be identical to the Class of Commitments subject to such increase and the related Revolving Loans of such Class; provided, that underwriting, arrangement, upfront or similar fees that may be agreed to among the Borrower Representative and the Lenders providing and/or arranging such Incremental Revolving Credit Commitments may be paid in connection with such Incremental Revolving Credit Commitments.

(e) Each Joinder Agreement may, without the consent of any other Lenders, effect technical and corresponding amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the opinion of the Administrative Agent and the Borrower Representative, to effect the provisions of this Section 2.14.

2.15    Extended Facilities

(a) The Borrower Representative may at any time and from time to time request that all or a portion of any Revolving Credit Commitments, any Extended Revolving Credit Commitments and/or any Incremental Revolving Credit Commitments, each existing at the time of such request (each, an “Existing Revolving Credit Commitment” and any related Revolving Loans thereunder, “Existing Revolving Credit Loans”; each Existing Revolving Credit Commitment and related Existing Revolving Credit Loans together being referred to as an “Existing Class”) be converted to extend the termination date thereof (any such Existing Revolving Credit Commitments which have been so extended, “Extended Revolving Credit Commitments” and any related Loans (including, where applicable, loans by way of Banker’s Acceptances or BA Equivalent Notes), “Extended Revolving Credit Loans”) and to provide for other terms consistent with this Section 2.15(a). In order to establish any Extended Revolving Credit Commitments, the Borrower Representative shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Class of Existing Revolving Credit Commitments which such request shall be offered equally to all such Lenders) (an “Extension Request”) setting forth the proposed terms of the Extended Revolving Credit Commitments to be established, which shall be identical to the terms of the applicable Existing Revolving Credit Commitments (the “Specified Existing Revolving Credit Commitment”) unless (x) the Lenders providing Existing Revolving Credit Commitments receive the benefit of such more favorable terms applicable before the Revolving Credit Termination Date or (y) any such provisions apply after the Revolving Credit Termination Date, in each case, to the extent provided in the applicable Extension Amendment; provided, however, that (w) all or any of the final maturity dates of such Extended Revolving Credit Commitments may be delayed to later dates than the final maturity dates of the Specified Existing Revolving Credit Commitments, (x) (A) the interest margins with respect to the Extended Revolving Credit Commitments may be higher or lower than the interest margins for the Specified Existing

 

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Revolving Credit Commitments and/or (B) additional fees and premiums may be payable to the Lenders providing such Extended Revolving Credit Commitments in addition to or in lieu of any increased margins contemplated by the preceding clause (A) and (y) the revolving credit commitment fee rate with respect to the Extended Revolving Credit Commitments may be higher or lower than the revolving credit commitment fee rate for the Specified Existing Revolving Credit Commitment; provided that, notwithstanding anything to the contrary in this Section 2.15 or otherwise, (1) the borrowing and repayment (other than (I) in connection with a permanent repayment and termination of commitments or (II) payments of interest and fees in different rates on Extended Revolving Credit Commitments) of Loans with respect to any Original Revolving Credit Commitments shall be made on a pro rata basis with all other Original Revolving Credit Commitments and (2) assignments and participations of Extended Revolving Credit Commitments and Extended Revolving Credit Loans shall be governed by the same assignment and participation provisions applicable to Revolving Credit Commitments and the Revolving Credit Loans related to such Commitments set forth in Section 14.6. No Lender shall have any obligation to agree to have any of its Revolving Loans or Commitments of any Existing Class converted into Extended Revolving Credit Loans or Extended Revolving Credit Commitments pursuant to any Extension Request. Any Extended Revolving Credit Commitments of any Extension Series shall constitute a separate Class of revolving credit commitments from the Specified Existing Revolving Credit Commitments and from any other Existing Revolving Credit Commitments; provided that any Extended Revolving Credit Commitments converted from an Existing Revolving Credit Commitment may, to the extent provided in the applicable Extension Amendment, be designated as an increase in any then outstanding Class of Commitments other than the Class of Existing Revolving Credit Commitments from which such Extended Revolving Credit Commitments were converted.

(b) Any Lender (an “Extending Lender”) wishing to have all or a portion of its Revolving Credit Commitment, Incremental Revolving Credit Commitment or Extended Revolving Credit Commitment of the Existing Class or Existing Classes subject to such Extension Request converted into Extended Revolving Credit Commitments shall notify the Administrative Agent (an “Extension Election”) on or prior to the date specified in such Extension Request of the amount of its Revolving Credit Commitments, Incremental Revolving Credit Commitments or Extended Revolving Credit Commitments of the Existing Class or Existing Classes, as applicable, subject to such Extension Request that it has elected to convert into Extended Revolving Credit Commitments. In the event that the aggregate amount of Revolving Credit Commitments, Incremental Revolving Credit Commitments or Extended Revolving Credit Commitments of the Existing Class or Existing Classes, as applicable, subject to Extension Elections exceeds the amount of Extended Revolving Credit Commitments requested pursuant to the Extension Request, Revolving Credit Commitments, Incremental Revolving Credit Commitments or Extended Revolving Credit Commitments of the Existing Class or Existing Classes, as applicable, subject to Extension Elections shall be converted to Extended Revolving Credit Commitments on a pro rata basis based on the amount of Revolving Credit Commitments, Incremental Revolving Credit Commitments or Extended Revolving Credit Commitments included in each such Extension Election. Notwithstanding the conversion of any Existing Revolving Credit Commitment into an Extended Revolving Credit Commitment, such Extended Revolving Credit Commitment shall be treated identically to all other Original

 

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Revolving Credit Commitments for purposes of the obligations of a Lender in respect of Swingline Loans under Section 2.1(b), Protective Advances pursuant to Section 2.1(e) and Letters of Credit under Article 3, except that the applicable Extension Amendment may provide that the Swingline Maturity Date and/or the L/C Facility Maturity Date may be extended and the related obligations to make Swingline Loans and issue Letters of Credit may be continued so long as the Swingline Lender and/or the Letter of Credit Issuer, as applicable, have consented to such extensions in their sole discretion (it being understood that no consent of any other Lender shall be required in connection with any such extension).

(c) Extended Revolving Credit Commitments shall be established pursuant to an amendment (an “Extension Amendment”) to this Agreement (which, except to the extent expressly contemplated by the last sentence of this Section 2.15(c) and notwithstanding anything to the contrary set forth in Section 14.1, shall not require the consent of any Lender other than the Extending Lenders with respect to the Extended Revolving Credit Commitments established thereby) executed by the Borrower Representative, the Administrative Agent and the Extending Lenders. No Extension Amendment shall provide for any Class of Extended Revolving Credit Commitments in an aggregate principal amount that is less than $5,000,000, and the Borrower Representative may condition the effectiveness of any Extension Amendment on an Extension Minimum Condition, which may be waived by the Borrower Representative in its sole discretion. In addition to any terms and changes required or permitted by Section 2.15(a), each Extension Amendment may, but shall not be required to, impose additional requirements (not inconsistent with the provisions of this Agreement in effect at such time) with respect to the final maturity of Incremental Revolving Credit Commitments incurred following the date of such Extension Amendment. Notwithstanding anything to the contrary in this Section 2.15(c) and without limiting the generality or applicability of Section 14.1 to any Section 2.15 Additional Amendments, any Extension Amendment may provide for additional terms and/or additional amendments other than those referred to or contemplated above (any such additional amendment, a “Section 2.15 Additional Amendment”) to this Agreement and the other Credit Documents; provided that such Section 2.15 Additional Amendments are within the requirements of Section 2.15 and do not become effective prior to the time that such Section 2.15 Additional Amendments have been consented to (including, without limitation, pursuant to (1) consents applicable to holders of Incremental Revolving Credit Commitments provided for in any Joinder Agreement and (2) consents applicable to holders of any Extended Revolving Credit Commitments provided for in any Extension Amendment) by such of the Lenders, Credit Parties and other parties (if any) as may be required in order for such Section 2.15 Additional Amendments to become effective in accordance with Section 14.1.

(d) Notwithstanding anything to the contrary contained in this Agreement, on any date on which any Existing Class is converted to extend the related scheduled maturity date(s) in accordance with Section 2.15(a) (an “Extension Date”), (A) in the case of the Specified Existing Revolving Credit Commitments of each Extending Lender, the aggregate principal amount of such Specified Existing Revolving Credit Commitments shall be deemed reduced by an amount equal to the aggregate principal amount of Extended Revolving Credit Commitments so converted by such Lender on such date, and such Extended Revolving Credit Commitments shall be established as a separate Class of revolving credit commitments from the Specified Existing

 

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Revolving Credit Commitments; provided that any Extended Revolving Credit Commitments converted from an Existing Revolving Credit Commitment may, to the extent provided in the applicable Extension Amendment, be designated as an increase in any then outstanding Class of Commitments other than the Class of Existing Revolving Credit Commitments from which such Extended Revolving Credit Commitments were converted and (B) if any Loans of any Extending Lender are outstanding under the applicable Specified Existing Revolving Credit Commitments, such Loans (and any related participations) shall be deemed to be allocated as Extended Revolving Credit Loans (and related participations) and Existing Revolving Credit Loans (and related participations) in the same proportion as such Extending Lender’s Specified Existing Revolving Credit Commitments to Extended Revolving Credit Commitments.

(e) The Administrative Agent and the Lenders (other than the Swingline Lender to the extent such consent is expressly required by this Section 2.15) hereby consent to the consummation of the transactions contemplated by this Section 2.15 (including, for the avoidance of doubt, payment of any interest, fees, or premium in respect of any Extended Revolving Credit Commitment on such terms as may be set forth in the relevant Extension Amendment) and hereby waive the requirements of any provision of this Agreement (including, without limitation, any pro rata payment or amendment section) or any other Credit Document that may otherwise prohibit or restrict any such extension or any other transaction contemplated by this Section 2.15.

(f) No conversion of Loans pursuant to any extension in accordance with this Section 2.15(f) shall constitute a voluntary or mandatory payment or prepayment for purposes of this Agreement.

2.16    Borrowing in Other Currencies

The Borrower Representative may from time to time request that Revolving Loans be made and/or Letters of Credit be issued on behalf of either Borrower in currencies other than Dollars, U.S. Dollars and Euros by written notice to the Administrative Agent (each such other currency approved by the Administrative Agent and, in the case of a Letter of Credit denominated in a currency other than Dollars, U.S. Dollars or Euros, the Letter of Credit Issuer, “Alternative Currency”); provided that (i) the Equivalent Amount in Dollars of all such Loans outstanding at any time shall not exceed $40,000,000, (ii) all of the terms and conditions of the Revolving Credit Loans provided in this Agreement shall apply to such Loans, unless otherwise expressly provided by the Administrative Agent or the application of such terms and conditions are not reasonably practicable, and (iii) each such Revolving Loan shall be subject to such other terms and conditions as the Administrative Agent and the Lenders require for Revolving Loans in the applicable currency, including with respect to pricing, availability, interest periods, repayment provisions and maturity.

 

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2.17    Defaulting Lenders

(a) Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

  (i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 14.1.

 

  (ii)

Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article 12 or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 14.8 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Letter of Credit Issuer, Swingline Lender or the Administrative Agent (in respect of Protective Advances) hereunder; third, to Cash Collateralize the Letter of Credit Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 3.7; fourth, as the Borrower Representative may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower Representative, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Letter of Credit Issuer’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 3.7; sixth, to the payment of any amounts owing to the Borrowers, the Lenders, the Administrative Agent, the Letter of Credit Issuer or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Borrower, any Lender, the Administrative Agent, the Letter of Credit Issuer or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and seventh, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related

 

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  Letters of Credit were issued at a time when the conditions set forth in Article 8 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.17(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.17(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

  (iii) Certain Fees.

 

  (A) No Defaulting Lender shall be entitled to receive any fee payable under Article 4 or any interest at the Default Rate payable under Section 2.8(f) for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

  (B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Credit Commitment Percentage of the Stated Amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 3.7.

 

  (C) With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrowers shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the Letter of Credit Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Letter of Credit Issuer’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

 

  (iv)

Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Credit

 

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  Commitment Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non- Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. Subject to Section 14.23, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

  (v) Cash Collateral, Repayment of Swingline Loans. If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to them hereunder or under applicable law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure and (y) second, Cash Collateralize the Letter of Credit Issuers’ Fronting Exposure in accordance with the procedures set forth in Section 3.7.

(b) Defaulting Lender Cure. If the Borrower Representative, the Administrative Agent, the Swingline Lender, and the Letter of Credit Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held on a pro rata basis by the Lenders in accordance with their respective Revolving Credit Commitment Percentages (without giving effect to Section 2.17(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

2.18    Borrower Representative

Swiss Borrower designates CGI Borrower (and any Successor Borrower thereto) as its representative and agent (in such capacity, the “Borrower Representative”) for all purposes under the Credit Documents, including requests for Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, preparation and delivery of financial reports, requests for waivers, amendments or other accommodations, actions under the Credit Documents (including in respect of compliance with covenants), and all other dealings with the applicable Agent, the Letter of Credit Issuer, the Swingline Lender or any Lender. CGI Borrower hereby accepts such appointment as Borrower Representative. The Agents, the Letter

 

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of Credit Issuer, the Swingline Lender and the Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered by the Borrower Representative on behalf of any Borrower. The Administrative Agent, the Letter of Credit Issuer, the Swingline Lender and the Lenders may give any notice to, or communication with, a Borrower hereunder to the Borrower Representative on behalf of such Borrower. Each of the Administrative Agent, Letter of Credit Issuer, the Swingline Lender and the Lenders shall have the right, in its discretion, to deal exclusively with the Borrower Representative for any or all purposes under the Credit Documents. Anything contained herein to the contrary notwithstanding, no Borrower (other than the Borrower Representative) shall be authorized to request any Borrowing or Letter of Credit hereunder without the prior written consent of CGI Borrower.

2.19    Borrowing Base Reserves; Changes to Borrowing Base Reserves

(a) The initial Borrowing Base Reserves as of the Closing Date are those set forth in the Borrowing Base Certificate delivered to the Administrative Agent on the Closing Date pursuant to Section 7.12 hereof.

(b) The Administrative Agent may hereafter establish additional Borrowing Base Reserves or change any of the Borrowing Base Reserves in effect on the Closing Date, in the exercise of its Permitted Discretion; provided that such Borrowing Base Reserves shall not be established or changed except upon not less than five (5) Business Days’ prior written notice to the Borrower Representative (during which period the Administrative Agent shall be available to discuss any such proposed Borrowing Base Reserve with the Borrower Representative); provided further that no such prior notice shall be required (1) if a Specified Default has occurred and is continuing or (2) for changes to any Borrowing Base Reserves resulting solely by virtue of mathematical calculations of the amount of the Borrowing Base Reserve in accordance with the methodology of calculation previously utilized. Upon delivery of a notice described above, the Credit Parties may take such action as may be required so that the event, condition, circumstance or new fact that is the basis for such Borrowing Base Reserve or increase no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent.

(c) The amount of any Borrowing Base Reserve established by the Administrative Agent shall have a reasonable relationship as determined by the Administrative Agent in its Permitted Discretion to the event, condition or other matter that is the basis for such Borrowing Base Reserve. Notwithstanding anything herein to the contrary, (i) a Borrowing Base Reserve shall not be established to the extent it is duplicative of any specific item excluded as ineligible in the definitions of Eligible Credit Card Receivables, Eligible In-Transit Inventory, Eligible Inventory, Eligible Letter of Credit and Eligible Trade Receivables, but the Administrative Agent shall retain the right, subject to the requirements of this clause (c), to establish a Borrowing Base Reserve with respect to prospective changes in Eligible Credit Card Receivables, Eligible In-Transit Inventory, Eligible Inventory, Eligible Letter of Credit or Eligible Trade Receivables that may reasonably be anticipated and (ii) circumstances, conditions, events or contingencies existing or arising prior to the Closing Date of which the Administrative Agent had knowledge as of the Closing Date shall not be the basis for the establishment of Borrowing Base Reserves

 

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unless the Administrative Agent establishes such Borrowing Base Reserves on or prior to the Closing Date (subject to the notice requirements of the above clause (b)) or such circumstances, conditions, events or contingencies shall have changed in a manner adverse to the Administrative Agent and the Lenders since the Closing Date; provided, for greater certainty, that this clause (ii) shall not limit or prohibit any Borrowing Base Reserve in respect of any Borrowing Base Party or the ABL Priority Collateral in respect of any Relevant Jurisdiction following the Closing Date that was not expressly included in the definition of Relevant Jurisdiction on the Closing Date.

ARTICLE 3

LETTERS OF CREDIT

3.1    Letters of Credit

(a) Subject to and upon the terms and conditions herein set forth, at any time and from time to time on and after the Closing Date and prior to the L/C Facility Maturity Date, the Letter of Credit Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Article 3, to issue from time to time from the Closing Date through the L/C Facility Maturity Date for the account of any Borrower (or, so long as a Borrower is the primary obligor, for the account of Holdings or any Restricted Subsidiary (other than a Restricted Subsidiary that is a Borrower)) letters of credit or bank guarantees in such form as may be approved by the Letter of Credit Issuer in its reasonable discretion. The Credit Parties, the Letter of Credit Issuer and the other Secured Parties agree that the Existing Letters of Credit shall be deemed Letters of Credit hereunder as if issued by the Letter of Credit Issuer, and from and after the Closing Date the Existing Letters of Credit shall be subject to and governed by the terms and conditions hereof.

(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the Stated Amount of which, when added to the Letters of Credit Outstanding at such time, would exceed the Letter of Credit Commitment then in effect; (ii) no Letter of Credit shall be issued the Stated Amount of which would cause the aggregate amount of the Lenders’ Revolving Credit Exposures at the time of the issuance thereof to exceed the Line Cap then in effect; (iii) no Letter of Credit shall be issued for the account of CGI Borrower the Stated Amount of which would cause the aggregate amount of the Lenders’ Revolving Credit Exposures to CGI Borrower at the time of the issuance thereof to exceed the CGI Borrower Line Cap then in effect; (iv) no Letter of Credit shall be issued for the account of Swiss Borrower the Stated Amount of which would cause the aggregate amount of the Lenders’ Revolving Credit Exposures to Swiss Borrower at the time of the issuance thereof to exceed the Swiss Borrower Line Cap then in effect; (v) no Letter of Credit shall be issued in an Alternative Currency, the Stated Amount of which in the Equivalent Amount in Dollars, when added to the Letters of Credit Outstanding in all such Alternative Currencies at such time would exceed the Letter of Credit Sub-Commitment then in effect; (vi) unless otherwise agreed to by the Letter of Credit Issuer and the Administrative Agent, each Letter of Credit shall have an expiration date occurring no later than one year after the date of issuance thereof (except with respect to trade or commercial Letters of Credit, which may have an expiration date occurring no later than 180 days after the date of issuance thereof, or as set forth in Section 3.2(d)), provided that in no event shall such expiration date occur later than the L/C Facility Maturity Date, in each case, unless otherwise agreed upon by the Administrative

 

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Agent, the Letter of Credit Issuer and, unless such Letter of Credit has been Cash Collateralized, the Lenders; (vii) no Letter of Credit shall be issued if it would be illegal under any applicable law for the beneficiary of the Letter of Credit to have a Letter of Credit issued in its favor; and (viii) no Letter of Credit shall be issued by the Letter of Credit Issuer after it has received a written notice from any Credit Party or the Administrative Agent or the Required Lenders stating that a Default or Event of Default has occurred and is continuing until such time as the Letter of Credit Issuer shall have received a written notice of (x) rescission of such notice from the party or parties originally delivering such notice or (y) the waiver of such Default or Event of Default in accordance with the provisions of Section 14.1.

(c) Upon at least two (2) Business Days’ prior written notice to the Administrative Agent and the Letter of Credit Issuer (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrowers shall have the right, on any day, permanently to terminate or reduce the Letter of Credit Commitment in whole or in part; provided that, after giving effect to such termination or reduction, the Letters of Credit Outstanding shall not exceed the Letter of Credit Commitment and the Letters of Credit Outstanding issued in Alternative Currencies shall not exceed the Equivalent Amount in Dollars of the Letter of Credit Sub-Commitment.

(d) The Letter of Credit Issuer shall not be under any obligation to issue any Letter of Credit if:

 

  (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms enjoin or restrain the Letter of Credit Issuer from issuing such Letter of Credit, or any law applicable to the Letter of Credit Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Letter of Credit Issuer shall prohibit, or request that the Letter of Credit Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Letter of Credit Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (in each case, for which the Letter of Credit Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the Letter of Credit Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the Letter of Credit Issuer in good faith deems material to it;

 

  (ii) the issuance of such Letter of Credit would violate one or more policies of the Letter of Credit Issuer applicable to letters of credit generally;

 

  (iii) except as otherwise agreed by the Administrative Agent and the Letter of Credit Issuer, such Letter of Credit is in an initial Stated Amount less than $50,000, U.S.$50,000 or €50,000, in the case of a commercial Letter of Credit, or $10,000, U.S.$10,000 or €10,000, in the case of a standby Letter of Credit;

 

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  (iv) unless otherwise agreed by the Administrative Agent and the Letter of Credit Issuer in accordance with Section 2.16, such Letter of Credit is denominated in a currency other than Dollars, U.S. Dollars or Euros;

 

  (v) such Letter of Credit contains any provisions for automatic reinstatement of the Stated Amount after any drawing thereunder; or

 

  (vi) a default of any Lender’s obligations to fund under Section 3.3 exists or any Lender is at such time a Defaulting Lender hereunder, unless, in each case, the Borrowers have entered into arrangements reasonably satisfactory to the Letter of Credit Issuer to eliminate the Letter of Credit Issuer’s risk with respect to such Lender or such risk has been reallocated in accordance with Section 2.17.

(e) The Letter of Credit Issuer shall not increase the Stated Amount of any Letter of Credit if the Letter of Credit Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

(f) The Letter of Credit Issuer shall be under no obligation to amend any Letter of Credit if (A) the Letter of Credit Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(g) The Letter of Credit Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith and the Letter of Credit Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article 14 with respect to any acts taken or omissions suffered by the Letter of Credit Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article 14 included the Letter of Credit Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the Letter of Credit Issuer.

3.2    Letter of Credit Requests

(a) Whenever a Borrower desires that a Letter of Credit be issued for its account or amended, the Borrower Representative shall give the Administrative Agent and the Letter of Credit Issuer a Letter of Credit Request by no later than 1:00 p.m. (Toronto time) at least two (2) Business Days (or such other period as may be agreed upon by the Borrower Representative, the Administrative Agent and the Letter of Credit Issuer) prior to the proposed date of issuance or amendment. Following the delivery of a Letter of Credit Request, the Borrower Representative shall promptly execute and deliver additional customary Issuer Documents to the extent reasonably required by the Letter of Credit Issuer. Each Letter of Credit Request shall be executed by the Borrower Representative. Such Letter of Credit Request may be sent by facsimile, by overnight courier, by electronic transmission using the system provided by the Letter of Credit Issuer, by personal delivery or by any other means acceptable to the Letter of Credit Issuer.

 

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(b) In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Request shall specify in form and detail reasonably satisfactory to the Letter of Credit Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the Stated Amount thereof and the currency; (C) the expiry date thereof (which shall comply with Section 3.1(b)(vi)); (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the identity of the applicant; and (H) such other matters as the Letter of Credit Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Request shall specify in form and detail reasonably satisfactory to the Letter of Credit Issuer (I) the Letter of Credit to be amended; (II) the proposed date of amendment thereof (which shall be a Business Day); (III) the nature of the proposed amendment; and (IV) such other matters as the Letter of Credit Issuer may reasonably require. Additionally, the Borrower Representative shall furnish to the Letter of Credit Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any other Issuer Documents, as the Letter of Credit Issuer or the Administrative Agent may reasonably require.

(c) Promptly after receipt of any Letter of Credit Request, the Letter of Credit Issuer (other than Canadian Imperial Bank of Commerce or any of its Affiliates) will confirm with the Administrative Agent in writing that the Administrative Agent has received a copy of such Letter of Credit Request from the Borrower Representative and, if not, the Letter of Credit Issuer will provide the Administrative Agent with a copy thereof. Unless the Letter of Credit Issuer has received written notice from any Lender, the Administrative Agent or any Credit Party, at least one (1) Business Day prior to the requested date of issuance or amendment of the Letter of Credit, that one or more applicable conditions contained in Article 7 (solely with respect to any Letter of Credit issued on the Closing Date) and Article 8 shall not then be satisfied to the extent required thereby or waived in accordance with Section 14.1, then, subject to the terms and conditions hereof, the Letter of Credit Issuer shall, on the requested date, issue a Letter of Credit for the account of such Borrower (or, so long as a Borrower is the primary obligor, for the account of Holdings or any Restricted Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the Letter of Credit Issuer’s usual and customary business practices.

(d) If the Borrower Representative so requests in any Letter of Credit Request, the Letter of Credit Issuer shall agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the Letter of Credit Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof and the Borrower Representative not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the Letter of Credit Issuer, the Borrower Representative shall not be required to make a specific request to the Letter of Credit Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the Letter of

 

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Credit Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the L/C Facility Maturity Date, unless otherwise agreed upon by the Administrative Agent and the Letter of Credit Issuer; provided, however, that the Letter of Credit Issuer shall not permit any such extension if (A) the Letter of Credit Issuer has reasonably determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (b) of Section 3.1 or otherwise), or (B) it has received written notice on or before the day that is seven (7) Business Days before the Non-Extension Notice Date from the Administrative Agent, any Lender or the Borrower Representative that one or more of the applicable conditions specified in Article 8 are not then satisfied, and in each such case directing the Letter of Credit Issuer not to permit such extension until such conditions can be satisfied or are waived in accordance with Section 14.1.

(e) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit (including any Existing Letter of Credit) to an advising bank with respect thereto or to the beneficiary thereof, the Letter of Credit Issuer will also deliver to the Borrower Representative and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. On the first Business Day of each month, the Letter of Credit Issuer (other than Canadian Imperial Bank of Commerce or any of its Affiliates) shall provide the Administrative Agent a list of all Letters of Credit (including any Existing Letter of Credit) issued by it that are outstanding at such time.

3.3    Letter of Credit Participations

(a) Immediately upon the issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of Credit Issuer shall be deemed to have sold and transferred to each Lender (each such Lender, in its capacity under this Section 3.3, an “L/C Participant”), and each such L/C Participant shall be deemed irrevocably and unconditionally to have purchased and received from the Letter of Credit Issuer, without recourse or warranty, an undivided interest and participation (each an “L/C Participation”), to the extent of such L/C Participant’s Revolving Credit Commitment Percentage in each Letter of Credit, each substitute therefor, each drawing made thereunder and the obligations of the Borrowers under this Agreement with respect thereto, and any security therefor or guaranty pertaining thereto; provided that the Letter of Credit Fees will be paid directly to the Administrative Agent for the ratable account of the L/C Participants as provided in Section 4.1(b) and the L/C Participants shall have no right to receive any portion of any Fronting Fees.

(b) In determining whether to pay under any Letter of Credit, the relevant Letter of Credit Issuer shall have no obligation relative to the L/C Participants other than to confirm that any documents required to be delivered under such Letter of Credit have been delivered and that they appear to comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by the relevant Letter of Credit Issuer under or in connection with any Letter of Credit issued by it, if taken or omitted in the absence of gross negligence or willful misconduct as determined in the final non-appealable judgment of a court of competent jurisdiction, shall not create for the Letter of Credit Issuer any resulting liability.

 

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(c) In the event that the Letter of Credit Issuer makes any payment under any Letter of Credit issued by it and the applicable Borrower shall not have repaid such amount in full to the respective Letter of Credit Issuer through the Administrative Agent pursuant to Section 3.4(a), the Administrative Agent shall promptly notify each L/C Participant of such failure, and each L/C Participant shall promptly and unconditionally pay to the Administrative Agent for the account of the Letter of Credit Issuer, the amount of such L/C Participant’s Revolving Credit Commitment Percentage of such unreimbursed payment in Same Day Funds. If and to the extent such L/C Participant shall not have so made its Revolving Credit Commitment Percentage of such amount available to the Administrative Agent for the account of the Letter of Credit Issuer, such L/C Participant agrees to pay to the Administrative Agent for the account of the Letter of Credit Issuer, forthwith on demand, such amount, together with interest thereon for each day from such date until the date such amount is paid to the Administrative Agent for the account of the Letter of Credit Issuer at a rate per annum equal to the Overnight Rate from time to time then in effect, plus any administrative, processing or similar fees that are reasonably and customarily charged by the Letter of Credit Issuer in connection with the foregoing. The failure of any L/C Participant to make available to the Administrative Agent for the account of the Letter of Credit Issuer its Revolving Credit Commitment Percentage of any payment under any Letter of Credit shall not relieve any other L/C Participant of its obligation hereunder to make available to the Administrative Agent for the account of the Letter of Credit Issuer its Revolving Credit Commitment Percentage of any payment under such Letter of Credit on the date required, as specified above, but no L/C Participant shall be responsible for the failure of any other L/C Participant to make available to the Administrative Agent such other L/C Participant’s Revolving Credit Commitment Percentage of any such payment.

(d) Whenever the Administrative Agent receives a payment in respect of an unpaid reimbursement obligation as to which the Administrative Agent has received for the account of the Letter of Credit Issuer any payments from the L/C Participants pursuant to clause (c) above, the Administrative Agent shall promptly pay to each L/C Participant that has paid its Revolving Credit Commitment Percentage of such reimbursement obligation, in Same Day Funds, an amount equal to such L/C Participant’s share (based upon the proportionate aggregate amount originally funded by such L/C Participant to the aggregate amount funded by all L/C Participants) of the amount so paid in respect of such reimbursement obligation and interest thereon accruing after the purchase of the respective L/C Participations at the Overnight Rate.

(e) The obligations of the L/C Participants to make payments to the Administrative Agent for the account of the Letter of Credit Issuer with respect to Letters of Credit shall be irrevocable and not subject to counterclaim, set-off or other defense or any other qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances.

(f) If any payment received by the Administrative Agent for the account of the Letter of Credit Issuer pursuant to Section 3.3(c) is required to be returned under any of the circumstances described in Section 14.19 (including pursuant to any settlement entered into by the Letter of Credit Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the Letter of Credit Issuer its Revolving Credit Commitment Percentage

 

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thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

3.4    Agreement to Repay Letter of Credit Drawings

(a) Each Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making payment with respect to any drawing under any Letter of Credit issued for the account of such Borrower (or under which such Borrower is the primary obligor) in the currency of such Letter of Credit. Any such reimbursement shall be made by the applicable Borrower to the Administrative Agent in Same Day Funds (whether with its own funds or with the proceeds of any Borrowings under this Agreement) for any payment or disbursement made by the Letter of Credit Issuer under any Letter of Credit (each such amount so paid until reimbursed, an “Unpaid Drawing”) no later than the date that is one (1) Business Day after the date on which the Borrower Representative receives written notice of such payment or disbursement (the “Reimbursement Date”), with interest on the amount so paid or disbursed by the Letter of Credit Issuer, to the extent not reimbursed prior to 5:00 p.m. (Toronto time) on the Reimbursement Date, from the Reimbursement Date to the date the Letter of Credit Issuer is reimbursed therefor at a rate per annum that shall at all times be (v) the Applicable Margin for Prime Rate Loans that are Revolving Credit Loans, plus the Prime Rate as in effect from time to time if the payment or reimbursement obligation is in Dollars, (w) the Applicable Margin for ABR Loans that are Revolving Credit Loans, plus the ABR as in effect from time to time if the payment or reimbursement obligation is in U.S. Dollars, (x) the Applicable Margin for European Base Rate Loans that are Revolving Credit Loans, plus the European Base Rate as in effect from time to time if the payment or reimbursement obligation is in Euros, (y) the rate referred to in clause (v) above in respect of Letters of Credit issued to CGI Borrower in any currency other than Dollars or U.S. Dollars on the Equivalent Amount in Dollars of the reimbursement obligation, and (z) the rate referred to in clause (w) above in respect of Letters of Credit issued to Swiss Borrower in any currency other than U.S. Dollars or Euros on the Equivalent Amount in U.S. Dollars of the reimbursement obligation; provided that, notwithstanding anything contained in this Agreement to the contrary, (i) unless the Borrower Representative shall have notified the Administrative Agent and the relevant Letter of Credit Issuer prior to 1:00 p.m. (Toronto time) on the Reimbursement Date that the Borrower intends to reimburse the relevant Letter of Credit Issuer for the amount of such drawing with funds other than the proceeds of Loans, the Borrower Representative shall be deemed to have given a Notice of Borrowing requesting that, with respect to Letters of Credit, the Lenders make Prime Rate Loans for Letters of Credit in Dollars (which shall be Prime Rate Loans), ABR Loans for Letters of Credit in U.S. Dollars (which shall be ABR Loans) or European Base Rate Loans for Letters of Credit in Euros (which shall be European Base Rate Loans) on the Reimbursement Date in the amount of such drawing and (ii) the Administrative Agent shall promptly notify each L/C Participant of such drawing and the amount of its Revolving Loan to be made in respect thereof, and each L/C Participant shall be irrevocably obligated to make a Revolving Loan to the Borrowers in such currency in the manner deemed to have been requested in the amount of its Revolving Credit Commitment Percentage of the applicable Unpaid Drawing by 2:00 p.m. (Toronto time) on such Reimbursement Date by

 

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making the amount of such Revolving Loan available to the Administrative Agent. Such Revolving Loans shall be made without regard to the Minimum Borrowing Amount. The Administrative Agent shall use the proceeds of such Revolving Loans solely for purpose of reimbursing the Letter of Credit Issuer for the related Unpaid Drawing. In the event that the Borrowers fail to Cash Collateralize any Letter of Credit that is outstanding on the L/C Facility Maturity Date, the full amount of the Letters of Credit Outstanding in respect of such Letter of Credit shall be deemed to be an Unpaid Drawing subject to the provisions of this Section 3.4, except that the Letter of Credit Issuer shall hold the proceeds received from the L/C Participants as contemplated above as Cash Collateral for such Letter of Credit to reimburse any drawing under such Letter of Credit and shall use such proceeds first, to reimburse itself for any drawings made in respect of such Letter of Credit following the L/C Facility Maturity Date, second, to the extent such Letter of Credit expires or is returned undrawn while any such Cash Collateral remains, to the repayment of obligations in respect of any Revolving Loans that have not been paid at such time and third, to the Borrowers or as otherwise directed by a court of competent jurisdiction. Nothing in this Section 3.4(a) shall affect each Borrower’s obligation to repay all outstanding Revolving Loans made to such Borrower when due in accordance with the terms of this Agreement.

(b) The obligation of each Borrower to reimburse the Letter of Credit Issuer for each drawing under each Letter of Credit issued for its account or under which it is the primary obligor and to repay each L/C Borrowing in its favor shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

  (i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents;

 

  (ii) the existence of any claim, set-off, defense or other right that any Borrower may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, the Letter of Credit Issuer, any Lender or other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between a Borrower and the beneficiary named in any such Letter of Credit);

 

  (iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

  (iv)

waiver by the Letter of Credit Issuer of any requirement that exists for the Letter of Credit Issuer’s protection and not the protection of a Borrower (or Holdings or any Restricted Subsidiary) or any waiver by the Letter of

 

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  Credit Issuer which does not in fact materially prejudice such Borrower (or Holdings or any Restricted Subsidiary);

 

  (v) any payment made by the Letter of Credit Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under, such Letter of Credit if presentation after such date is authorized by the UCC, the PPSA, the ISP or the UCP, as applicable;

 

  (vi) any payment by the Letter of Credit Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Letter of Credit Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Insolvency Law;

 

  (vii) honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft; or

 

  (viii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, a Borrower (or any Restricted Subsidiary) (other than the defense of payment or performance).

(c) The Borrowers shall not be obligated to reimburse the Letter of Credit Issuer for any wrongful payment made by the Letter of Credit Issuer under the Letter of Credit issued by it as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Letter of Credit Issuer as determined in the final non-appealable judgment of a court of competent jurisdiction.

3.5    Increased Costs

If after the Closing Date, the adoption of any applicable law, treaty, rule, or regulation, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or actual compliance by the Letter of Credit Issuer or any L/C Participant with any request or directive made or adopted after the Closing Date (whether or not having the force of law), by any such authority, central bank or comparable agency shall either (x) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against letters of credit issued by the Letter of Credit Issuer, or any L/C Participant’s L/C Participation therein, or (y) impose on the Letter of Credit Issuer or any L/C Participant any other conditions or costs affecting its obligations under this Agreement in respect of Letters of Credit or L/C Participations therein or any Letter of Credit or such L/C Participant’s L/C

 

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Participation therein, and the result of any of the foregoing is to increase the actual cost to the Letter of Credit Issuer or such L/C Participant of issuing, maintaining or participating in any Letter of Credit, or to reduce the actual amount of any sum received or receivable by the Letter of Credit Issuer or such L/C Participant hereunder (including any increased costs or reductions attributable to Taxes, other than any such increase or reduction attributable to (i) Taxes indemnifiable under Section 6.4, (ii) Excluded Taxes or (iii) Other Taxes) in respect of Letters of Credit or L/C Participations therein, then, promptly after receipt of written demand to the Borrower Representative by the Letter of Credit Issuer or such L/C Participant, as the case may be (a copy of which notice shall be sent by the Letter of Credit Issuer or such L/C Participant to the Administrative Agent), the applicable Borrower shall pay to the Letter of Credit Issuer or such L/C Participant such actual additional amount or amounts as will compensate the Letter of Credit Issuer or such L/C Participant for such increased cost or reduction relating to Letters of Credit issued for the account of such Borrower (or under which such Borrower is the primary obligor), it being understood and agreed, however, that the Letter of Credit Issuer or an L/C Participant shall not be entitled to such compensation as a result of such Person’s compliance with, or pursuant to any request or directive to comply with, any such law, rule or regulation as in effect on the Closing Date or to the extent such Letter of Credit Issuer or L/C Participant is not imposing such charges on, or requesting such compensation from, borrowers (similarly situated to the Borrowers hereunder) under comparable letter of credit facilities similar to the Letter of Credit Commitment. A certificate submitted to the Borrower Representative by the relevant Letter of Credit Issuer or an L/C Participant, as the case may be (a copy of which certificate shall be sent by the Letter of Credit Issuer or such L/C Participant to the Administrative Agent), setting forth in reasonable detail the basis for the determination of such actual additional amount or amounts necessary to compensate the Letter of Credit Issuer or such L/C Participant as aforesaid shall be conclusive and binding on the Borrowers absent clearly demonstrable error.

3.6    Role of Letter of Credit Issuer

Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, the Letter of Credit Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the Letter of Credit Issuer, the Administrative Agent, any of their respective Affiliates nor any correspondent, participant or assignee of the Letter of Credit Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Required Lenders; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct as determined in the final non-appealable judgment of a court of competent jurisdiction; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrowers hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided that this assumption is not intended to, and shall not, preclude the Borrowers’ pursuit of such rights and remedies as they may have against the beneficiary or transferee at law or under any other agreement. None of the Letter of Credit Issuer, the Administrative Agent, any of their respective Affiliates nor any correspondent, participant or assignee of the Letter of Credit Issuer

 

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shall be liable or responsible for any of the matters described in Section 3.3(b); provided that anything in such Section to the contrary notwithstanding, the Borrowers may have a claim against the Letter of Credit Issuer, and the Letter of Credit Issuer may be liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrowers which the Borrowers prove were caused by the Letter of Credit Issuer’s willful misconduct or gross negligence or the Letter of Credit Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit in each case as determined in the final non-appealable judgment of a court of competent jurisdiction. In furtherance and not in limitation of the foregoing, the Letter of Credit Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the Letter of Credit Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

The Letter of Credit Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

3.7    Cash Collateral

(a) Certain Credit Support Events. Upon the written request of the Administrative Agent or the Letter of Credit Issuer, if (i) as of the L/C Facility Maturity Date, any L/C Obligation for any reason remains outstanding, (ii) the Borrowers shall be required to provide Cash Collateral pursuant to Section 2.1(d), 2.11, 3.1(b), 3.4(a), 3.11, 6.2, 12.13 or 12.14, or (iii) the provisions of Section 2.17(a)(v) are in effect, the Borrowers shall immediately (in the case of clause (ii) above) or within one (1) Business Day (in all other cases) following any written request by the Administrative Agent or the Letter of Credit Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iii) above, after giving effect to Section 2.17(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

(b) Grant of Security Interest. Each Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subject to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the Letter of Credit Issuer and the Lenders, and agrees to maintain, a first priority security interest, with respect to such Borrower, in all such cash, deposit accounts and all balances therein as described in Section 3.7(a), and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 3.7(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or the Letter of Credit Issuer as herein provided, other than Permitted Liens, or that the

 

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total amount of such Cash Collateral is less than the Minimum Collateral Amount, the applicable Borrower will, promptly upon written demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. Cash Collateral shall be maintained in blocked, interest bearing deposit accounts with the Administrative Agent. Each Borrower shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral deposited by such Borrower.

(c) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 3.7 or Section 2.17, 6.2 or 12.13 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(d) Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 14.6(b)(ii)) or there is no longer existing an Event of Default) or (ii) the determination by the Administrative Agent and the Letter of Credit Issuer that there exists excess Cash Collateral.

3.8    Applicability of ISP and UCP

Unless otherwise expressly agreed by the Letter of Credit Issuer and the applicable 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 the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance, shall apply to each trade or commercial Letter of Credit. Notwithstanding the foregoing, the Letter of Credit Issuer shall not be responsible to such Borrower for, and the Letter of Credit Issuer’s rights and remedies against such Borrower shall not be impaired by, any action or inaction of the Letter of Credit Issuer required or permitted under any law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the applicable law or any order of a jurisdiction where the Letter of Credit Issuer or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Banker’s Association for Finance and Trade—International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.

 

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3.9    Conflict with Issuer Documents

In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control and any grant of security interest in any Issuer Documents shall be void.

3.10    Letters of Credit Issued for Holdings and Restricted Subsidiaries

Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, Holdings or a Restricted Subsidiary, the applicable Borrower shall be obligated to reimburse the Letter of Credit Issuer hereunder for any and all drawings under such Letter of Credit under which it is the primary obligor. The Borrowers hereby acknowledge that the issuance of Letters of Credit for the account of Holdings or any Restricted Subsidiaries inures to the benefit of each Borrower and that each Borrower’s business derives substantial benefits from the businesses of Holdings and the Restricted Subsidiaries.

3.11    Provisions Related to Extended Revolving Credit Commitments

If the L/C Facility Maturity Date in respect of any Class of Commitments occurs prior to the expiry date of any Letter of Credit, then (i) if consented to by the Letter of Credit Issuer which issued such Letter of Credit, if one or more other Classes of Commitments in respect of which the L/C Facility Maturity Date shall not have so occurred are then in effect, such Letters of Credit for which consent has been obtained shall automatically be deemed to have been issued (including for purposes of the obligations of the Lenders to purchase participations therein and to make Revolving Loans and payments in respect thereof pursuant to Sections 3.3 and 3.4) under (and ratably participated in by Lenders pursuant to) the Commitments in respect of such non-terminating Classes up to an aggregate amount not to exceed the aggregate amount of the unutilized Commitments thereunder at such time (it being understood that no partial face amount of any Letter of Credit may be so reallocated) and (ii) to the extent not reallocated pursuant to immediately preceding clause (i), the Borrowers shall Cash Collateralize any such Letter of Credit in accordance with Section 3.7. Upon the maturity date of any Class of Commitments, the sublimit for Letters of Credit may be reduced as agreed between the Letter of Credit Issuer and the Borrower Representative, without the consent of any other Person.

ARTICLE 4

FEES

4.1    Fees

(a) CGI Borrower agrees to pay to the Administrative Agent in Dollars, for the account of each Lender (in each case pro rata according to the respective Revolving Credit Commitments of all such Lenders), a commitment fee (the “Commitment Fee”) for each day from the Closing Date to the Revolving Credit Termination Date. Each Commitment Fee shall be payable (x) quarterly in arrears on the first Business Day of each April, July, October and

 

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January (for the three-month period (or portion thereof) ended prior to such day for which no payment has been received) and (y) on the Revolving Credit Termination Date (for the period ended on such date for which no payment has been received pursuant to clause (x) above), and shall be computed for each day during such period at a rate per annum equal to the Commitment Fee Rate in effect on such day on the Available Commitment in effect on such day.

(b) CGI Borrower agrees to pay to the Administrative Agent in Dollars for the account of the Lenders pro rata on the basis of their respective Letter of Credit Exposure, a fee on the Stated Amount in respect of each Letter of Credit issued on any Borrower’s, Holdings or any Restricted Subsidiaries’ behalf (the “Letter of Credit Fee”), for the period from the date of issuance of such Letter of Credit to the termination date of such Letter of Credit computed at the per annum rate for each day equal to (i) in the case of any standby Letter of Credit, the then applicable Letter of Credit Fee Rate, and (ii) in the case of any trade or commercial Letter of Credit, fifty percent (50%) of the then applicable Letter of Credit Fee Rate. Except as provided below, such Letter of Credit Fees shall be due and payable (x) quarterly in arrears on the first Business Day of each April, July, October and January and (y) on the date upon which the Total Revolving Credit Commitment terminates and the Letters of Credit Outstanding shall have been reduced to zero.

(c) CGI Borrower agrees to pay to the Administrative Agent in Dollars, for its own account, administrative agent fees as have been previously agreed in writing, or as may be agreed in writing, by the Borrower Representative from time to time and on the Closing Date for the account of each Lender in accordance with its Revolving Credit Commitment Percentage, the facility fee in an amount equal to 15 basis points multiplied by the aggregate Revolving Credit Commitments (Peak Season).

(d) Without duplication, each Borrower agrees to pay to the Letter of Credit Issuer a fee in the currency thereof in respect of each Letter of Credit issued by it for the account of such Borrower or under which such Borrower is the primary obligor (the “Fronting Fee”), for the period from the date of issuance of such Letter of Credit to the termination date of such Letter of Credit computed at the rate for each day equal to 0.125% per annum on the Stated Amount of such Letter of Credit (or at such other rate per annum as agreed in writing between the Borrower Representative and the Letter of Credit Issuer). Such Fronting Fees shall be due and payable (x) quarterly in arrears on the first Business Day of each April, July, October and January and (y) on the date upon which the Total Revolving Credit Commitment terminates and the Letters of Credit Outstanding shall have been reduced to zero.

(e) Without duplication, each of Swiss Borrower and CGI Borrower, as applicable, agrees to pay directly to the Letter of Credit Issuer in Dollars upon each issuance or renewal of, drawing under, and/or amendment of, or other administration of, a Letter of Credit issued by it for the account of such Borrower or under which such Borrower is the primary obligor such amount as shall at the time of such issuance or renewal of, drawing under, and/or amendment or other administration be the processing charge that the Letter of Credit Issuer is customarily charging for issuances or renewals of, drawings under or amendments of, or other administration of, letters of credit issued by it.

 

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(f) CGI Borrower agrees to pay to the Administrative Agent in Dollars a monitoring fee in the amount of $1,000 per month payable quarterly in advance on the Closing Date and thereafter on the first Business Day of each April, July, October and January (for the three-month period (or portion thereof) beginning on such date).

(g) Notwithstanding the foregoing, no Borrower shall be obligated to pay any amounts to any Defaulting Lender pursuant to this Section 4.1.

4.2    Voluntary Reduction or Termination of Commitments

(a) Upon at least three (3) Business Days’ prior written notice to the Administrative Agent at the Administrative Agent’s Office (or such shorter period of time as agreed to by the Administrative Agent in its reasonable discretion) (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrowers shall have the right, without premium or penalty, on any day, to terminate or permanently reduce any Commitments of any Class in whole or in part; provided that (a) any such reduction shall apply proportionately and permanently to reduce the Commitment of each of the Lenders of any applicable Class and any such reduction or termination shall be accompanied by any repayment of Revolving Loans of such Class required under Section 6.2(a), except that (i) notwithstanding the foregoing, in connection with the establishment on any date of any Extended Revolving Credit Commitments pursuant to Section 2.15 the Commitments of any one or more Lenders providing any such Extended Revolving Credit Commitments on such date shall be reduced in an amount equal to the amount of Commitments so extended on such date (provided that after giving effect to any such reduction and to the repayment of any Revolving Loans made on such date, the Revolving Credit Exposure of any such Lender does not exceed the Commitment thereof) and (ii) the Borrowers may at their election permanently reduce any Commitment of a Defaulting Lender to $0 without affecting the Commitments of any other Lender, and

(b) After giving effect to such termination or reduction and to any prepayments of the Loans made on the date thereof in accordance with this Agreement, the aggregate amount of the Lenders’ Revolving Credit Exposures shall not exceed the Line Cap and the aggregate amount of the Lenders’ Revolving Credit Exposures in respect of any Class of Revolving Loans shall not exceed the aggregate Commitment of such Class. Each such reduction shall be in the principal amount of $1,000,000 and any whole multiple of $1,000,000 in excess thereof (or if less, the remaining applicable amount at the time of such termination or reduction). Each such reduction or termination shall (i) be applied ratably to each Lender holding the Commitments of the applicable Class and (ii) be irrevocable at the effective time of any such termination or reduction. The Borrowers shall pay to the Administrative Agent for application as provided herein at the effective time of any such termination (but not any partial reduction), all earned and unpaid fees and the Commitment Fee accrued on the Revolving Credit Commitments so terminated. Notwithstanding anything to the contrary contained in this Agreement, the Borrower Representative may rescind, or extend the date for termination or reduction specified in, any notice delivered under this Section 4.2 if such termination or reduction would have occurred in connection with a refinancing of all or any portion of any Credit Facility or Credit Facilities or

 

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other conditional event, which refinancing or other conditional event shall not be consummated or shall otherwise be delayed.

4.3    Mandatory Termination of Commitments

(a) The Revolving Credit Commitments shall terminate at 5:00 p.m. (Toronto time) on the Revolving Credit Maturity Date.

(b) The Swingline Commitment shall terminate at 5:00 p.m. (Toronto time) on the Swingline Maturity Date.

ARTICLE 5

BANKER’S ACCEPTANCES

5.1    Drafts and BA Equivalent Notes

(a) To facilitate the procedures contemplated in this Agreement, each Borrower irrevocably appoints each Lender from time to time as the attorney-in-fact of it to execute, endorse and deliver on behalf of it drafts (including book based forms and electronic paper) in the forms prescribed by such Lender (if such Lender is a BA Lender) for banker’s acceptances denominated in Dollars (each such executed draft which has not yet been accepted by a Lender being referred to as a “Draft”) or non-interest-bearing promissory notes of such Borrower in favour of such Lender (if such Lender is a Non BA Lender) (each such promissory note being referred to as a “BA Equivalent Note”). Each Banker’s Acceptance and BA Equivalent Note executed and delivered by a Lender on behalf of a Borrower as provided for in this Section 5.1 shall be as binding upon such Borrower as if it had been executed and delivered by a duly authorized officer of such Borrower.

(b) Notwithstanding Section 5.1(a), each Borrower will from time to time as required by the applicable Lender provide to the Lenders an appropriate number of Drafts drawn by such Borrower upon each BA Lender and either payable to a clearing service (if such BA Lender is a member thereof) or payable to such Borrower and endorsed in blank by such Borrower (if such BA Lender is not a member of such clearing service) and an appropriate number of BA Equivalent Notes in favour of each Non BA Lender. The dates, the maturity dates and the principal amounts of all Drafts and BA Equivalent Notes delivered by a Borrower shall be left blank, to be completed by the Lenders as required by this Agreement. All such Drafts or BA Equivalent Notes shall be held by each Lender subject to the same degree of care as if they were such Lender’s own property kept at the place at which the Drafts or BA Equivalent Notes are ordinarily kept by such Lender. Each Lender, upon written request of a Borrower, will promptly advise such Borrower of the number and designation, if any, of the Drafts and BA Equivalent Notes then held by it. No Lender shall be liable for its failure to accept a Draft or purchase a BA Equivalent Note as required by this Agreement if the cause of such failure is, in whole or in part, due to the failure of a Borrower to provide on a timely basis appropriate Drafts or BA Equivalent Notes to the applicable Lender as may be requested by such Lender on a timely basis from time to time.

 

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5.2    Borrowings of Banker’s Acceptances and BA Equivalent Notes

(a) The Administrative Agent, promptly following receipt of a Notice of Borrowing requesting Banker’s Acceptances, shall (i) advise each BA Lender of the face amount and the term of the Draft to be accepted by it and (ii) advise each applicable Non BA Lender of the face amount and term of the BA Equivalent Note to be purchased by it. All Drafts to be accepted from time to time by each BA Lender that is a member of a clearing service shall be payable to such clearing service. The term of all Banker’s Acceptances and BA Equivalent Notes issued pursuant to any Notice of Borrowing shall be identical. Each Banker’s Acceptance and BA Equivalent Note shall be dated the date on which it is issued and shall be for a term of 1, 2, 3 or 6 months, subject to availability (or if available to all the BA Lenders accepting Banker’s Acceptances as determined by such BA Lenders in good faith based on prevailing market conditions, a twelve month period or a period shorter than one month), provided that in no event shall the term of a Banker’s Acceptance or a BA Equivalent Note extend beyond the Maturity Date applicable to such Borrowing. The face amount of the Draft (or the aggregate face amount of the Drafts) to be accepted at any time by each Lender which is a BA Lender, and the face amount of the BA Equivalent Notes to be purchased at any time by each Lender which is a Non BA Lender, shall be determined by the Administrative Agent based upon the amounts of their respective Commitments of the applicable Class. In determining a Lender’s Revolving Credit Commitment Percentage of the applicable Class in respect of a request for Banker’s Acceptances, the Administrative Agent, in its sole discretion, shall be entitled to increase or decrease the face amount of any Draft, or BA Equivalent Note to the nearest $1,000.

(b) Each BA Lender shall complete and accept on the applicable drawdown date a Draft having a face amount (or Drafts having the face amounts) and term advised by the Administrative Agent pursuant to subsection 5.2(a). Each applicable BA Lender shall purchase on the date specified in the applicable Notice of Borrowing the Banker’s Acceptance accepted by it, for an aggregate price equal to the BA Discount Proceeds of such Banker’s Acceptance. Each Borrower shall ensure that there is delivered to each applicable BA Lender that is a member of a clearing service the completed Banker’s Acceptances, and such BA Lender is hereby authorized to release the Banker’s Acceptance accepted by it to such clearing house upon receipt of confirmation that such clearing house holds such Banker’s Acceptance for the account of such BA Lender.

(c) Each Non BA Lender, in lieu of accepting Drafts or purchasing Banker’s Acceptances on any date of Borrowing, will complete and purchase from the applicable Borrower on such date a BA Equivalent Note in a face amount and for a term identical to the face amount and term of the Draft which such Non BA Lender would have been required to accept on such date if it were a BA Lender, for a price equal to the BA Discount Proceeds of such BA Equivalent Note. Each Non BA Lender shall be entitled without charge to exchange any BA Equivalent Note held by it for two or more BA Equivalent Notes of identical date and aggregate face amount, and, upon request of such Non BA Lender, the applicable Borrower will execute and deliver to such Non BA Lender such replacement BA Equivalent Notes and such Non BA Lender shall return the original BA Equivalent Note to such Borrower for cancellation.

 

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(d) The signature of any duly authorized officer of a Borrower (or the Borrower Representative on behalf of any Borrower) on a Draft or a BA Equivalent Note may be mechanically reproduced in facsimile, and all Drafts and BA Equivalent Notes bearing such facsimile signature shall be as binding upon such Borrower as if it had been manually signed by such officer, notwithstanding that such Person whose manual or facsimile signature appears on such Draft or BA Equivalent Note may no longer hold office at the date of such Draft or BA Equivalent Note or at the date of acceptance of such Draft by a BA Lender or at any time thereafter.

(e) Subject to the second paragraph of Section 2.7, the Credit Parties and the Secured Parties agree that the Existing Banker’s Acceptances shall be deemed Banker’s Acceptances hereunder as if accepted by the Lenders hereunder, and from and after the Closing Date the Existing Banker’s Acceptances shall be subject to and governed by the terms and conditions hereof.

5.3    Fees

(a) The applicable Borrower shall pay to each BA Lender in respect of each Draft tendered by such Borrower to and accepted by such BA Lender, and to each Non BA Lender in respect of each BA Equivalent Note tendered to and purchased by such Non BA Lender, as a condition of such acceptance or purchase, the BA Stamping Fee.

(b) Upon acceptance of each Draft or purchase of each BA Equivalent Note, the applicable Borrower shall pay to the applicable Lender the related fee specified in Section 5.3(a), and to facilitate payment such Lender shall be entitled to deduct and retain for its own account the amount of such fee from the amount to be transferred by such Lender to the Administrative Agent for the account of such Borrower pursuant to this Agreement in respect of the sale of the related Banker’s Acceptance or of such BA Equivalent Note.

5.4    Repayment

(a) On the date of maturity of each Banker’s Acceptance or BA Equivalent Note, the applicable Borrower shall pay to the Administrative Agent, for the account of the holder of such Banker’s Acceptance or BA Equivalent Note, in Dollars an amount equal to the face amount of such Banker’s Acceptance or BA Equivalent Note, as the case may be (subject to standard and customary mechanics in connection with rollovers or conversions pursuant to Section 2.6). The obligation of a Borrower to make such payment shall not be prejudiced by the fact that the holder of such Banker’s Acceptance is the Lender that accepted such Banker’s Acceptances. No days of grace shall be claimed by a Borrower for the payment at maturity of any Banker’s Acceptance or BA Equivalent Note. If a Borrower does not make such payment, from the proceeds of a Borrowing obtained under this Agreement or otherwise, the amount of such required payment shall be deemed to be a Prime Rate Loan to such Borrower from the Lender that accepted such Banker’s Acceptance or purchased such BA Equivalent Note.

 

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5.5    Major Disruption

(a) If

 

  (i) the Administrative Agent makes a determination (acting reasonably and in good faith), which determination shall, absent clearly demonstrable error, be conclusive and binding upon the Borrowers, and notifies the Borrower Representative, that there no longer exists an active market for Banker’s Acceptances accepted by the Lenders;

 

  (ii) the Required Lenders advise the Administrative Agent who in turn advises the Borrower Representative that for any reason after the Closing Date affecting the market for Banker’s Acceptances, adequate and fair means do not exist for the Lenders to readily sell Banker’s Acceptances or perform their obligations under this Agreement with respect to Banker’s Acceptances; or

 

  (iii) the Administrative Agent is advised by the Required Lenders by written notice (each, a “Lender BA Suspension Notice”) that such Lenders have determined (acting reasonably and in good faith) that the BA Rate will not or does not accurately reflect the cost of funds of such Lenders or the discount rate which would be applicable to a sale of Banker’s Acceptances accepted by such Lenders in the market;

then:

 

  (iv) the right of the Borrowers to request Banker’s Acceptances or BA Equivalent Notes from any Lender shall be suspended until the Administrative Agent determines that the circumstances causing such suspension no longer exist, and so notifies the Borrower Representative and the Lenders;

 

  (v) any outstanding Notice of Borrowing requesting a Borrowing by way of Banker’s Acceptances or BA Equivalent Notes shall be deemed to be a Notice of Borrowing requesting a Borrowing by way of Prime Rate Loans in the amount specified in the original Notice of Borrowing;

 

  (vi) any outstanding Notice of Conversion or Continuation requesting a conversion of a Borrowing by way of Banker’s Acceptances or BA Equivalent Notes shall be deemed to be a Notice of Conversion or Continuation requesting a conversion of such Borrowings into a Borrowing by way of Prime Rate Loans; and

 

  (vii)

any outstanding Notice of Conversion or Continuation requesting a rollover of a Borrowing by way of Banker’s Acceptances or BA Equivalent Notes, shall be deemed to be a Notice of Conversion or

 

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  Continuation requesting a conversion of such Borrowings into a Borrowing by way of Prime Rate Loans.

(b) The Administrative Agent shall promptly notify the Borrower Representative and the Lenders of any suspension of the Borrowers’ right to request Borrowings by way of Banker’s Acceptances or BA Equivalent Notes and of any termination of any such suspension. A Lender BA Suspension Notice shall be effective upon receipt of the same by the Administrative Agent if received prior to 2:00 p.m. (Toronto time) on a Business Day and if not, then on the next following Business Day, except in connection with an outstanding Notice of Borrowing, Notice of Conversion or Continuation, in which case the applicable Lender BA Suspension Notice shall only be effective with respect to such outstanding Notice of Borrowing or Notice of Conversion or Continuation if received by the Administrative Agent prior to 2:00 p.m. (Toronto time) two (2) Business Days prior to the proposed date of Borrowing, date of conversion or date of rollover (as applicable) applicable to such outstanding Notice of Borrowing or Notice of Conversion or Continuation, as applicable.

ARTICLE 6

PAYMENTS

6.1    Voluntary Prepayments

(a) The Borrowers shall have the right to prepay Loans, including Revolving Loans and Swingline Loans, as applicable, without premium or penalty, in whole or in part from time to time on the following terms and conditions: (a) the Borrower Representative shall give the Administrative Agent at the Administrative Agent’s Office written notice of a Borrower’s intent to make such prepayment, the amount of such prepayment and, in the case of LIBOR Loans, EURIBOR Loans, Banker’s Acceptances and BA Equivalent Notes, the specific Borrowing(s) pursuant to which made, which notice shall be given by the Borrower Representative no later than (i) 1:00 p.m. (Toronto time) (A) in the case of LIBOR Loans, EURIBOR Loans, Banker’s Acceptances and BA Equivalent Notes three (3) Business Days prior to, or (B) in the case of Prime Rate Loans, ABR Loans and European Base Rate Loans, one (1) Business Day prior to, or (ii) 2:00 p.m. (Toronto time) in the case of Swingline Loans, on, the date of such prepayment (or, in any case under the foregoing clause (a)(i) or clause (a)(ii), such shorter period of time as agreed to by the Administrative Agent in its reasonable discretion) and shall promptly be transmitted by the Administrative Agent to each of the Lenders or the Swingline Lender, as the case may be; (b) each partial prepayment of (i) any Borrowing by way of Banker’s Acceptances and BA Equivalent Notes shall be in a minimum amount of $100,000 and in multiples of $100,000 in excess thereof, (ii) any Prime Rate Loans (including Swingline Loans) shall be in a minimum amount of $100,000 and in multiples of $100,000 in excess thereof, (iii) any Borrowing of LIBOR Loans shall be in a minimum amount of U.S.$100,000 and in multiples of U.S.$100,000 in excess thereof and (iv) any ABR Loans (including Swingline Loans) shall be in a minimum amount of U.S.$100,000 and in multiples of U.S.$100,000 in excess thereof, (v) any Borrowing of EURIBOR Loans shall be in a minimum amount of €100,000 and in multiples of €100,000 in excess thereof and (vi) any Borrowing of European Base Rate Loans shall be in a minimum amount of €100,000 and in multiples of €100,000 in excess thereof; provided that no

 

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partial prepayment of LIBOR Loans or EURIBOR Loans made pursuant to a single Borrowing shall reduce the outstanding LIBOR Loans or EURIBOR Loans made pursuant to such Borrowing to an amount less than the applicable Minimum Borrowing Amount for such LIBOR Loans or EURIBOR Loans; (c) notwithstanding the foregoing, Banker’s Acceptances and BA Equivalent Notes may not be repaid prior to their respective maturity or expiry dates but may be Cash Collateralized together with delivery of such documentation as may be required by the Administrative Agent as specified in Section 3.7; and (d) in the case of any prepayment of LIBOR Loans or EURIBOR Loans pursuant to this Section 6.1 on any day prior to the last day of an Interest Period applicable thereto, the applicable Borrower shall, promptly after receipt of a written request by any applicable Lender (which request shall set forth in reasonable detail the basis for requesting such amount), pay to the Administrative Agent for the account of such Lender any amounts required pursuant to Section 2.11.

(b) Application to Revolving Loans. Each prepayment in respect of any Loans pursuant to Section 6.1(a), other than Banker’s Acceptances and BA Equivalent Notes specifically identified for prepayment in the applicable prepayment notice, shall be applied pro rata to the Class or Classes of Loans as are outstanding at the time of such prepayment except where such prepayment is in connection with the termination of any Class of Commitments pursuant to Section 4.2, in which case such prepayment may be directed to the Class of Commitments being terminated at such time. At the Borrower Representative’s election in connection with any prepayment pursuant to this Section 6.1, subject to compliance with Section 2.17(a)(ii), such prepayment shall not be applied to any Revolving Loan of a Defaulting Lender. Each prepayment under Section 6.1(a) of Revolving Loans of any particular Class (x) made pursuant to a Borrowing shall be applied pro rata among such Revolving Loans; and (y) notwithstanding the provisions of the preceding clause (x), subject to compliance with Section 2.17(a)(ii), no prepayment of Revolving Loans shall be applied to the Revolving Loans of any Defaulting Lender unless otherwise agreed in writing by the Borrower Representative. Notwithstanding the foregoing, with respect to each prepayment of Revolving Loans, the Borrower Representative may designate the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant to which made. In the absence of a designation by the Borrower Representative as described in the preceding sentence with respect to the Type of Loans that are to be prepaid, the Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.11. The voluntary prepayments set forth in this Section 6.1 shall not reduce the aggregate amount of Commitments and amounts prepaid may be reborrowed.

(c) Notwithstanding anything to the contrary contained in this Agreement, the Borrower Representative may rescind, or extend the date for prepayment specified in, any notice of prepayment under Section 6.1(a) if such prepayment would have resulted from a refinancing of all or any portion of any Credit Facility or Credit Facilities or other conditional event, which refinancing or other conditional event shall not be consummated or shall otherwise be delayed; provided that the applicable Borrower shall pay to the Administrative Agent for the account of such Lender any amounts required pursuant to Section 2.11.

 

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6.2    Mandatory Prepayments

(a) Repayment of Revolving Loans.

 

  (i) Except with respect to Protective Advances permitted under Section 2.1(e), if on any date the aggregate amount of the Lenders’ Revolving Credit Exposures for any reason exceeds the Line Cap then in effect, the aggregate amount of the Lenders’ Revolving Credit Exposures to Swiss Borrower for any reason exceeds the Swiss Line Cap then in effect or the aggregate amount of the Lenders’ Revolving Credit Exposures to CGI Borrower for any reason exceeds the CGI Line Cap then in effect, the applicable Borrower(s) shall forthwith repay within one (1) Business Day after the date on which the Borrower Representative receives notice of such excess, Revolving Loans of such Borrower in an aggregate amount equal to such excess; provided that Banker’s Acceptances and BA Equivalent Notes may not be repaid prior to their respective maturity or expiry dates but shall be Cash Collateralized in accordance with Section 3.7. If after giving effect to the prepayment (or Cash Collateralization) of all outstanding Revolving Loans in accordance with the foregoing, the Lenders’ Revolving Credit Exposures for any reason exceed the Line Cap then in effect, the aggregate amount of the Lenders’ Revolving Credit Exposures to Swiss Borrower for any reason exceed the Swiss Line Cap then in effect or the aggregate amount of the Lenders’ Revolving Credit Exposures to CGI Borrower for any reason exceed the CGI Line Cap then in effect, the applicable Borrower(s) shall Cash Collateralize, in accordance with Section 3.7, the Letters of Credit Outstanding (and any Banker’s Acceptances and BA Equivalent Notes outstanding) of such Borrower in relation to such Class to the extent of such excess within one (1) Business Day after the date on which the Borrower Representative receives notice of such excess.

 

  (ii) The Revolving Loans shall be repaid daily in accordance with (and to the extent required under) the provisions of Section 10.9, to the extent then applicable.

(b) Application to Revolving Loans. With respect to each prepayment of Revolving Loans required by Section 6.2(a), the Borrower Representative may designate (i) the Types of Loans that are to be prepaid and the specific Borrowing(s) pursuant to which made and (ii) the Revolving Loans to be prepaid, provided that (x) each prepayment shall be applied first, ratably to outstanding Swingline Loans and Unpaid Drawings and second, to the prepayment of outstanding Revolving Loans, (y) after giving effect to clause (x), each prepayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans; and (z) notwithstanding the provisions of the preceding clauses (x) or (y), subject to compliance with Section 2.17(a)(ii), no prepayment of Revolving Loans shall be applied to the Revolving Loans of any Defaulting Lender unless otherwise agreed in writing by the Borrower Representative. In

 

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the absence of a designation by the Borrower Representative as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its reasonable discretion with a view, but no obligation, to minimize breakage costs owing under Section 2.11. The mandatory prepayments set forth in this Section 6.2 shall not reduce the aggregate amount of Commitments and amounts prepaid may be reborrowed in accordance with the terms hereof.

6.3    Method and Place of Payment

(a) Except as otherwise specifically provided herein, all payments under this Agreement shall be made by the Borrowers, without set-off, counterclaim or deduction of any kind, to the Administrative Agent for the ratable account of the Lenders entitled thereto (or, in the case of the Swingline Loans to the Swingline Lender) or the Letter of Credit Issuer entitled thereto, as the case may, be not later than 2:00 p.m. (Toronto time), in each case, on the date when due and shall be made in Same Day Funds at the Administrative Agent’s Office or at such other office as the Administrative Agent shall specify for such purpose by notice to the Borrower Representative (or, in the case of the Swingline Loans, at such office as the Swingline Lender shall specify for such purpose by notice to the Borrower Representative), it being understood that written or facsimile notice by the Borrower Representative to the Administrative Agent to make a payment from the funds in the Borrowers’ account at the Administrative Agent’s Office shall constitute the making of such payment to the extent of such funds held in such account. All repayments or prepayments of any Loans (whether of principal, interest or otherwise) hereunder shall be made in Dollars. The Administrative Agent will thereafter cause to be distributed on the same day (if payment was actually received by the Administrative Agent prior to 2:00 p.m. (Toronto time) or, otherwise, on the next Business Day) like funds relating to the payment of principal or interest or Fees ratably to the Lenders entitled thereto.

(b) Any payments under this Agreement that are made later than 2:00 p.m. (Toronto time) may, solely for purposes of calculating interest and fees, be deemed to have been made on the next succeeding Business Day in the Administrative Agent’s reasonable discretion (or, in the case of the Swingline Loans, at the Swingline Lender’s reasonable discretion). Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension.

6.4    Net Payments

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

 

  (i) Any and all payments by or on account of any obligation of any Credit Party hereunder or under any other Credit Document shall to the extent permitted by applicable laws be made free and clear of and without reduction or withholding for any Taxes.

 

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  (ii) A payment shall not be increased under paragraph (i) above by reason of Swiss Withholding Tax if (A) the Non-Bank Rules would not have been violated if the assigning Lender would have complied with its obligation to obtain the consent of the Borrower Representative to the assignment of all or a portion of its Loans and Commitment under Section 14.6 (Successors and Assigns) or if (B) the Lender in relation to which the Swiss Borrower makes the payment was a Qualifying Bank when it became a Lender under this Agreement but on that date such Lender is not or has ceased to be a Qualifying Bank, other than as a result of any Change in Law after the date it became a Lender under this Agreement.

 

  (iii) If any Credit Party, the Administrative Agent or any other applicable Withholding Agent shall be required by applicable law to withhold or deduct any Taxes from any payment, then (A) such Withholding Agent shall withhold or make such deductions as are reasonably determined by such Withholding Agent to be required by applicable law, (B) such Withholding Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes or Other Taxes, the sum payable by the applicable Credit Party shall be increased as necessary so that after any required withholding or deductions have been made (including withholding or deductions applicable to additional sums payable under this Section 6.4) each Lender (or, in the case of a payment to the Administrative Agent for its own account, the Administrative Agent) receives an amount equal to the sum it would have received had no such withholding or deductions been made.

(b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of subsection (a) above, the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law or timely reimburse the Administrative Agent or any Lender for the payment of any Other Taxes.

(c) Tax Indemnifications. Without limiting the provisions of subsection (a) or (b) above (but subject to the exclusion set out in paragraph (ii) of subsection (a) above), each Borrower shall, severally and not jointly, indemnify the Administrative Agent and each Lender, and shall make payment in respect thereof within 15 days after demand therefor, for the full amount of Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 6.4) payable by the Administrative Agent or such Lender, as the case may be, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of any such payment or liability (along with a written statement setting forth in reasonable detail the basis and calculation of such amounts) delivered to the Borrower Representative by a Lender, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. If the Borrower Representative reasonably

 

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believes that any such Indemnified Taxes or Other Taxes were not correctly or legally asserted, the Administrative Agent and/or each affected Lender will use reasonable efforts to cooperate with the Borrower Representative in pursuing a refund of such Indemnified Taxes or Other Taxes so long as such efforts would not, in the sole determination of the Administrative Agent or affected Lender, result in any additional costs, expenses or risks or be otherwise disadvantageous to it.

(d) Evidence of Payments. After any payment of Taxes by any Credit Party or the Administrative Agent to a Governmental Authority as provided in this Section 6.4, the Borrower Representative shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower Representative, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower Representative or the Administrative Agent, as the case may be.

(e) Status of Lenders and Tax Documentation.

 

  (i) Each Lender shall deliver to the Borrower Representative and to the Administrative Agent, at such time or times reasonably requested by the Borrower Representative or the Administrative Agent, such properly completed and executed documentation prescribed by applicable laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Borrower Representative or the Administrative Agent, as the case may be, to determine (A) whether or not any payments made hereunder or under any other Credit Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of any payments to be made to such Lender by any Credit Party pursuant to any Credit Document or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction and (D) information satisfactory for the Borrower Representative to determine if such Lender is or is not a Qualifying Bank. Any documentation and information required to be delivered by a Lender pursuant to this Section 6.4(e) shall be delivered by such Lender (i) on or prior to the Closing Date (or on or prior to the date it becomes a party to this Agreement), (ii) on or before any date on which such documentation expires or becomes obsolete or invalid, (iii) after the occurrence of any change in the Lender’s circumstances requiring a change in the most recent documentation previously delivered by it to the Borrower Representative and the Administrative Agent, and (iv) from time to time thereafter if reasonably requested by the Borrower Representative or the Administrative Agent, and each such Lender shall promptly notify in writing the Borrower Representative and the Administrative Agent if such Lender is no longer legally eligible to provide any documentation previously provided.

 

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  (ii) Notwithstanding anything to the contrary in this Section 6.4, no Lender or the Administrative Agent shall be required to deliver any documentation that it is not legally eligible to deliver.

(f) Treatment of Certain Refunds. If the Administrative Agent or any Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by any Credit Party or with respect to which any Credit Party has paid additional amounts pursuant to this Section 6.4, the Administrative Agent or such Lender (as applicable) shall promptly pay to the Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Credit Parties under this Section 6.4 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) incurred by the Administrative Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrowers, upon the request of the Administrative Agent or such Lender, agree to repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. In such event, the Administrative Agent or such Lender, as the case may be, shall, at the Borrower Representative’s request, provide the Borrower Representative with a copy of any notice of assessment or other evidence of the requirement to repay such refund received from the relevant taxing authority (provided that the Administrative Agent or such Lender may delete any information therein that it deems confidential). Notwithstanding anything to the contrary in this paragraph, in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph the payment of which would place the indemnified party in a less favourable net after-Tax position than the indemnified party 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. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to any Credit Party or any other Person.

(g) For the avoidance of doubt, for purposes of this Section 6.4, the term Lender includes the Letter of Credit Issuer and the Swingline Lender and the term “applicable law” includes FATCA.

(h) Each party’s obligations under this Section 6.4 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under the Credit Documents.

 

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6.5    Computations of Interest and Fees

(a) All interest on Loans shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed, except interest on LIBOR Loans and EURIBOR Loans shall be calculated on the basis of a 360-day year for the actual days elapsed.

(b) Fees and the average daily Stated Amount of Letters of Credit shall be calculated on the basis of a 360-day year for the actual days elapsed.

6.6    Limit on Rate of Interest

(a) No Payment Shall Exceed Lawful Rate. Notwithstanding any other term of this Agreement, the Borrowers shall not be obliged to pay any interest or other amounts under or in connection with this Agreement or otherwise in respect of the Obligations in excess of the amount or rate permitted under or consistent with any applicable law, rule or regulation.

(b) Payment at Highest Lawful Rate. If the Borrowers are not obliged to make a payment that they would otherwise be required to make, as a result of Section 6.6(a), the Borrowers shall make such payment to the maximum extent permitted by or consistent with applicable laws, rules, and regulations.

(c) Adjustment if Any Payment Exceeds Lawful Rate. If any provision of this Agreement or any of the other Credit Documents would obligate the Borrowers to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate that would be prohibited by any applicable law, rule or regulation, then notwithstanding such provision, such amount or rate shall be 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 law (the “Maximum Rate”), such adjustment to be effected, to the extent necessary, by reducing the amount or rate of interest required to be paid by the Borrowers to the affected Lender under Section 2.8; provided that to the extent lawful, the interest or other amounts that would have been payable but were not payable as a result of the operation of this Section shall be cumulated and the interest payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

Notwithstanding the foregoing, and after giving effect to all adjustments contemplated thereby, if any Lender shall have received from the Borrowers an amount in excess of the maximum permitted by any applicable law, rule or regulation, then the Borrowers shall be entitled, by notice in writing to the Administrative Agent to obtain reimbursement from that Lender in an amount equal to such excess, and pending such reimbursement, such amount shall be deemed to be an amount payable by that Lender to the Borrowers.

 

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ARTICLE 7

CONDITIONS PRECEDENT TO INITIAL BORROWING

The initial Borrowing under this Agreement is subject to the satisfaction of the following conditions precedent, except as otherwise agreed between the Borrowers and the Administrative Agent.

7.1    Credit Documents

The Administrative Agent (or its counsel) shall have received:

 

  (a) this Agreement, executed and delivered by a duly Authorized Officer of Holdings, CGI Borrower and Swiss Borrower;

 

  (b) a guarantee from each of Holdings, CGI Borrower, each other Canadian Credit Party and each U.S. Credit Party guaranteeing the due payment and performance to the Administrative Agent and the Lenders of all present and future Obligations of each of the other Credit Parties to the Administrative Agent, the Lenders and the other Secured Parties or any one or more of them under the Credit Documents, executed and delivered by a duly Authorized Officer of each Credit Party;

 

  (c) a general security agreement from each Credit Party (other than Swiss Borrower and the UK Credit Parties) in favor of the Administrative Agent constituting a first-priority Lien (subject only to Permitted Liens) on substantially all of its present and future property (other than Excluded Property), executed and delivered by a duly Authorized Officer of each such Credit Party;

 

  (d) a securities pledge agreement from Holdings, in favor of the Administrative Agent constituting a first-priority Lien (subject to Permitted Liens) on all Equity Interests (other than Excluded Stock and Stock Equivalents) that it owns, executed and delivered by a duly Authorized Officer of Holdings;

 

  (e) a securities pledge agreement from CGI Borrower, in favor of the Administrative Agent constituting a first-priority Lien (subject to Permitted Liens) on all Equity Interests that it owns (other than Excluded Stock and Stock Equivalents), executed and delivered by a duly Authorized Officer of CGI Borrower;

 

  (f) the Holdings Subordination Agreement, executed and delivered by a duly Authorized Officer of Holdings and CGI Borrower; and

 

  (g) the Shareholder Subordination Agreement, executed and delivered by a duly Authorized Officer of the Shareholder and Holdings.

 

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7.2    Collateral

(a) All outstanding Equity Interests in whatever form of CGI Borrower and each Restricted Subsidiary that are directly owned by any Credit Party and required to be pledged pursuant to the Security Documents shall have been pledged pursuant thereto;

(b) The Administrative Agent shall have received the certificates representing securities of the Borrowers and of each Credit Party’s Wholly-Owned Restricted Subsidiaries to the extent required to be delivered and pledged under the Security Documents (to the extent certificated, accompanied by undated stock (or equivalent) powers endorsed in blank); and

(c) All Uniform Commercial Code, PPSA financing statements and the equivalent filings and registrations in each of the Relevant Jurisdictions of each Credit Party reasonably requested by the Administrative Agent to be filed, registered or recorded to create the Liens intended to be created by any Security Document and perfect such Liens to the extent required by, and with the priority required by, such Security Document shall have been delivered to the Administrative Agent for filing, registration or recording and in the case of any Collateral located in Canada, and such other Relevant Jurisdiction where pre-filing or registration are permitted, shall have been filed, registered or recorded;

provided that each of the requirements set forth in this Section 7.2 shall be subject to Section 10.14(d) and Schedule 10.14(d) and shall not constitute conditions precedent to the initial Borrowing on the Closing Date, and CGI Borrower agrees to deliver, or cause to be delivered, such documents and instruments, or take or cause to be taken such other actions, as may be required to perfect such security interests in accordance with Section 10.14(d) and Schedule 10.14(d).

7.3    Legal Opinions

The Administrative Agent (or its counsel) shall have received the executed legal opinions, in customary form, of each of:

 

  (a) Stikeman Elliott LLP, Ontario and British Columbia counsel to the Credit Parties;

 

  (b) Aikins MacAulay & Thorvaldson LLP, Manitoba counsel to the Credit Parties;

 

  (c) Ropes & Gray LLP, U.S. counsel to the Credit Parties;

 

  (d) Homburger AG, Swiss counsel to the Credit Parties;

 

  (e) Stewart McKelvey, Nova Scotia counsel; and

 

  (f) Borel & Barbey, Swiss counsel to the Administrative Agent.

 

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7.4    Closing Certificates

(a) The Administrative Agent (or its counsel) shall have received a certificate of the Borrowers and each other Credit Party, dated the Closing Date, substantially in the form of Exhibit I, with appropriate insertions, and attaching the documents referred to in Section 7.5.

(b) The Administrative Agent (or its counsel) shall have received a certificate of status or good standing (or an equivalent), as applicable, from each Credit Party’s jurisdiction of incorporation or organization.

(c) The Administrative Agent shall have received certificates of insurance acceptable to the Administrative Agent, acting reasonably, showing, inter alia, the Administrative Agent as a loss payee as its interest may appear on all property insurance policies.

7.5    Authorization of Proceedings of Guarantors and the Borrowers; Corporate Documents

The Administrative Agent shall have received (i) a copy of the resolutions of the board of directors or other governing body of the Borrowers and each other Credit Party (or a duly authorized committee thereof) authorizing (a) the execution, delivery, and performance of the Credit Documents (and any agreements relating thereto) to which it is a party, and (b) in the case of the Borrowers, the extensions of credit contemplated hereunder, (ii) the certificate of incorporation and by-laws, certificate of formation and operating agreement, up-to-date trade register excerpts or other comparable Organizational Documents, as applicable, of each Borrower and each other Credit Party, (iii) signature and incumbency certificates (or other comparable documents evidencing the same) of the authorized officers of the Borrowers and each other Credit Party executing the Credit Documents to which it is a party, and (iv) in the case of CGI Borrower, copies of the Holdings Loan Agreement and Shareholder Loan Agreement.

7.6    Fees

The Agents and Lenders shall have received, substantially simultaneously with the funding of the initial Borrowing, fees required to be paid on the Closing Date pursuant to this Agreement and, to the extent invoiced at least three (3) Business Days prior to the Closing Date (except as otherwise reasonably agreed by the Borrower Representative), reasonable out-of-pocket expenses previously agreed in writing to be paid on the Closing Date.

7.7    Representations and Warranties

The representations and warranties set forth in Article 9 and in the other Credit Documents are true and correct in all material respects (except for representations and warranties that are already qualified by materiality, which representations and warranties shall be true and correct in all respects after giving effect to such materiality qualifier) on and as of the Closing Date and an Authorized Officer of CGI Borrower shall have certified the same to the Lenders.

 

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7.8    Anti-terrorism; Patriot Act; etc.

The Administrative Agent shall have received (at least two Business Days prior to the Closing Date to the extent requested with reasonable advance notice) all documentation and information about the Borrowers and each other Credit Party that is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).

7.9    Financial Statements

The Administrative Agent shall have received the Historical Financial Statements.

7.10    No Material Adverse Effect; No Default or Event of Default

(a) Since December 31, 2015, a Material Adverse Effect will not have occurred or arisen and an Authorized Officer of CGI Borrower shall have certified the same to the Lenders.

(b) No Default or Event of Default has occurred and is continuing on the Closing Date or would result from making the initial Borrowing and an Authorized Officer of CGI Borrower shall have certified the same to the Lenders.

7.11    Refinancing

Prior to, or substantially concurrently with, the execution and delivery of this Agreement and, if applicable, the funding of the initial Borrowing hereunder, the Closing Refinancing shall be consummated.

7.12    Initial Borrowing Base Certificate

The Administrative Agent shall have received an initial Borrowing Base Certificate.

7.13    Notice of Borrowing; Letter of Credit Request

(a) Prior to the making of any Revolving Credit Loan and any Swingline Loan on the Closing Date, the Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 2.3.

(b) Prior to the issuance of any Letter of Credit (other than any Existing Letter of Credit) on the Closing Date, the Administrative Agent and the Letter of Credit Issuer shall have received a Letter of Credit Request meeting the requirements of Section 3.2(a).

7.14    Collateral, Closing Date Excess Availability

The Borrowing Base on the Closing Date shall be sufficient in value, as reasonably determined by the Administrative Agent, to provide CGI Borrower with Excess

 

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Availability, after giving effect to the extensions of credit to be made hereunder on the Closing Date (on a pro forma basis, with trade payables being paid currently, and expenses and liabilities being paid in the ordinary course of business and without acceleration of sales or deterioration of working capital) of at least $10,000,000. For purposes of determining compliance with the conditions specified in Article 7 on the Closing Date, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

ARTICLE 8

CONDITIONS PRECEDENT TO ALL CREDIT EVENTS AFTER THE CLOSING DATE

The agreement of each Lender to make any Loan requested to be made by it on any date after the Closing Date (excluding Mandatory Borrowings, Revolving Loans required to be made by the Lenders in respect of Unpaid Drawings pursuant to Sections 3.3 and 3.4 and any Protective Advance, any Incremental Revolving Credit Loan made to finance a Permitted Acquisition or Permitted Investment, or in connection with refinancing of any Indebtedness that requires an irrevocable prepayment or redemption notice, in accordance with Section 2.14 and, for the avoidance of doubt, any conversion or continuation of any Loan pursuant to Section 2.6) and the obligation of the Letter of Credit Issuer to issue Letters of Credit on any date after the Closing Date is subject to the satisfaction (or waiver) of the following conditions precedent:

8.1    No Default; Representations and Warranties

At the time of each Credit Event and also after giving effect thereto (a) no Default or Event of Default shall have occurred and be continuing and (b) all representations and warranties made by any Credit Party contained herein or in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Credit Event (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date).

8.2    Notice of Borrowing; Letter of Credit Request

(a) Prior to the making of each Revolving Loan (other than any Revolving Loan made pursuant to Section 3.4(a)) and each Swingline Loan, the Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 2.3.

(b) Prior to the issuance of each Letter of Credit, the Administrative Agent and the Letter of Credit Issuer shall have received a Letter of Credit Request meeting the requirements of Section 3.2(a).

 

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(c) After giving effect to any requested Credit Event, the aggregate of all Lenders’ Revolving Credit Exposures does not exceed the Line Cap then in effect, the aggregate of all Lenders’ Revolving Credit Exposures to CGI Borrower does not exceed the CGI Line Cap then in effect and the aggregate of all Lenders’ Revolving Credit Exposures to Swiss Borrower does not exceed the Swiss Line Cap then in effect.

The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by each Credit Party to each of the Lenders that all the applicable conditions specified in Article 8 above have been satisfied as of that time.

ARTICLE 9

REPRESENTATIONS AND WARRANTIES

In order to induce the Agents and the Lenders to enter into this Agreement, to make the Loans and issue or participate in Letters of Credit as provided for herein, each of the Borrowers and, in respect of Sections 9.1, 9.2, 9.3 and 9.18 only, Holdings make the following representations and warranties to the Agents and the Lenders, all of which shall survive the execution and delivery of this Agreement and the making of the Loans and the issuance of the Letters of Credit (it being understood that the following representations and warranties shall be deemed made with respect to any Foreign Subsidiary only to the extent relevant under applicable law):

9.1    Corporate Status and Structure

Each Credit Party (a) is a duly organized and validly existing corporation, limited liability company, unlimited liability company or other entity in good standing (if applicable) under the laws of the jurisdiction of its organization and has the corporate, limited liability company, unlimited liability company or other organizational power and authority to own its property and assets and to transact the business in which it is engaged and (b) has duly qualified and is authorized to do business and is in good standing (if applicable) in all jurisdictions where it is required, to be so qualified, except where the failure to be so qualified, authorized and in good standing would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. The corporate structure of Holdings and its Subsidiaries, as at the Closing Date, together with details of the authorized and issued share capital, partnership interests, membership interest or other similar interest of each of CGI Borrower and its Subsidiaries, the name of the registered and beneficial owner of all of the issued and outstanding securities of each of CGI Borrower and its Subsidiaries and the full and correct name of Holdings and each of its Subsidiaries (including any French and English forms of name) are as set out in Schedule 9.1.

9.2    Corporate Power and Authority

Each Credit Party has the corporate or other organizational power and authority to execute, deliver and carry out the terms and provisions of the Credit Documents to which it is a party and has taken all necessary corporate or other organizational action to authorize the execution, delivery and performance of the Credit Documents to which it is a party. Each Credit

 

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Party has duly executed and delivered each Credit Document to which it is a party and each such Credit Document constitutes the legal, valid, and binding obligation of such Credit Party enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and subject to general principles of equity.

9.3    No Violation

Neither the execution, delivery or performance by any Credit Party of the Credit Documents to which it is a party nor compliance with the terms and provisions thereof nor the consummation of the Transactions contemplated hereby (a) contravene any applicable provision of any law, statute, rule, regulation, order, writ, injunction or decree of any court or governmental instrumentality that would be, individually or in the aggregate, reasonably expected to result in a Material Adverse Effect, (b) violate any provision of the certificate of incorporation, by-laws, articles or other Organizational Documents of such Credit Party or any of the Restricted Subsidiaries or (c) result in a breach or material contravention of the documentation governing any material Indebtedness of a Credit Party, in each case under this Section 9.3, in a manner that would be, individually or in the aggregate, reasonably expected to result in a Material Adverse Effect.

9.4    Litigation

There are no actions, suits or proceedings pending or, to the knowledge of CGI Borrower, threatened in writing against any of CGI Borrower or any of the Restricted Subsidiaries that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

9.5    Margin Regulations

Neither the making of any Loan hereunder nor the use of the proceeds thereof will violate the provisions of Regulation T, U or X of the Board.

9.6    Governmental Approvals

The execution, delivery and performance of each Credit Document by any Credit Party does not require any consent or approval of, registration or filing with, or other action by, any Governmental Authority, except for (i) such as have been obtained or made and are in full force and effect, (ii) filings, consents, approvals, registrations and recordings in respect of the Liens created pursuant to the Security Documents (and to release existing Liens), and (iii) such licenses, approvals, authorizations, registrations, filings, consents or other actions the failure of which to obtain or make would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

 

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9.7    Investment Company Act

None of Holdings, CGI Borrower, or any Restricted Subsidiary is required to be registered as an “investment company” under the Investment Company Act of 1940.

9.8    True and Complete Disclosure

(a) None of the written factual information and written data (taken as a whole) heretofore or contemporaneously furnished by or on behalf of CGI Borrower or any of its Restricted Subsidiaries or any of their respective authorized representatives to the Administrative Agent, any Joint Lead Arranger and Bookrunner, and/or any Lender on or before the Closing Date (as updated prior to the Closing Date) concerning Holdings, the Borrowers and their respective Subsidiaries for purposes of or in connection with this Agreement or any transaction contemplated herein contained any untrue statement of any material fact or omitted to state any material fact necessary to make such information and data (taken as a whole) not materially misleading at such time in light of the circumstances under which such information or data was furnished (after giving effect to all supplements and updates), it being understood and agreed that for purposes of this Section 9.8(a), such factual information and data shall not include pro forma financial information, projections, estimates (including financial estimates, forecasts, and other forward-looking information) or other forward looking information or information of a general economic or general industry nature.

(b) The projections (including financial estimates and forecasts) contained in the information and data referred to in paragraph (a) above were based on good faith estimates and assumptions believed by the Borrowers to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts or a guarantee of performance, are subject to significant uncertainties and contingencies, many of which are beyond the control of the CGI Borrower and its Subsidiaries and that actual results during the period or periods covered by any such projections may differ from the projected results and such differences may be material.

9.9    Financial Condition; Financial Statements

(a) The Historical Financial Statements present fairly, in all material respects, the combined financial position of CGI Borrower and its Subsidiaries at the respective dates thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein (subject, in the case of the any unaudited quarterly Historical Financial Statements to changes resulting from normal year-end adjustments and the absence of footnotes).

(b) There has been no Material Adverse Effect since the Closing Date.

Each Lender and the Administrative Agent hereby acknowledges and agrees that CGI Borrower and its Subsidiaries may be required to restate historical financial statements as the result of the implementation of changes in GAAP or IFRS, or the respective interpretation

 

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thereof, and that such restatements will not result in a Default or an Event of Default under the Credit Documents.

9.10    Compliance with Laws

Each Credit Party is in compliance with all Requirements of Law applicable to it or its property, except where the failure to be so in compliance would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

9.11    Tax Matters

Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (a) CGI Borrower and each of the Restricted Subsidiaries has filed all Tax returns required to be filed by it and has timely paid all Taxes payable by it (whether or not shown on a Tax return and including in its capacity as withholding agent) that have become due, other than those being contested in good faith and by proper actions if it has maintained adequate reserves (in the good faith judgment of management of CGI Borrower or such Restricted Subsidiary, as applicable) with respect thereto to the extent required by GAAP and (b) each of CGI Borrower and each of its Restricted Subsidiaries has paid, or has provided adequate reserves (in the good faith judgment of management of CGI Borrower or such Restricted Subsidiary, as applicable) in accordance with GAAP for the payment of all Taxes not yet due and payable. There is no current or proposed Tax assessment, deficiency or other claim against CGI Borrower or any Restricted Subsidiary that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

9.12    Pension Plans; Compliance with ERISA

(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (i) no steps have been taken to terminate any Canadian Pension Plan (wholly or in part) which could result in any Credit Party being required to make a material additional contribution to any Canadian Pension Plan; (ii) no contribution failure has occurred with respect to any Canadian Pension Plan sufficient to give rise to a Lien under any applicable pension benefits laws of any other jurisdiction (for certainty, not including payments in respect of contributions payable but not yet due); and (iii) no condition exists and no event or transaction has occurred with respect to any Canadian Pension Plan which is reasonably likely to result in any Credit Party incurring any liability, fine or penalty. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each Canadian Pension Plan is in compliance with all applicable pension benefits and tax laws; (ii) all contributions (including employee contributions made by authorized payroll deductions or other withholdings) required to be made to the appropriate funding agency have been made in accordance with all Requirements of Law and the terms of each Canadian Pension Plan; (iii) all liabilities under each Canadian Pension Plan are funded in accordance with the terms of the respective Canadian Pension Plans, the requirements of applicable pension benefits laws and of applicable Governmental Authorities and (v) no event has occurred and no conditions exist with respect to any Canadian Pension Plan that has resulted or could reasonably be expected to result

 

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in any Canadian Pension Plan having its registration revoked or refused by any administration of any relevant pension benefits regulatory authority or being required to pay any taxes (other than taxes the amounts of which are immaterial) or penalties under any applicable pension benefits or tax laws. None of the Credit Parties contributes to a Canadian DB Plan.

(b) Except as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no ERISA Event or Foreign Plan Event has occurred or is reasonably expected to occur.

(c) Except as set forth on Schedule 9.12, as of the Closing Date no Foreign Plan of any Credit Party or any of their respective Related Parties is a pension plan or subject to any pension benefits legislation. Except as set forth on Schedule 9.12, as of the Closing Date no Canadian Credit Party has any Canadian Pension Plan.

9.13    Intellectual Property

As of the Closing Date, all Intellectual Property owned or licensed by any of CGI Borrower and its Subsidiaries that will be subject to a Lien under any of the Security Documents and which is registered, or in respect of which an application for registration has been made, with the United States Patent and Trademark Office, the United States Copyright Office, the Canadian Intellectual Property Office or with any equivalent Governmental Authority in the United Kingdom and Switzerland are described in Schedule 9.13. Each of CGI Borrower and the Restricted Subsidiaries owns or has the right to use all Intellectual Property that is used in or otherwise necessary for the operation of their respective businesses as currently conducted, except where the failure of the foregoing would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Except as set forth on Schedule 9.13, or as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, the operation of their respective businesses by CGI Borrower and the Restricted Subsidiaries does not infringe upon, misappropriate, violate or otherwise conflict with the Intellectual Property of any third party.

9.14    Environmental Laws

(a) Except as set forth on Schedule 9.14, or as would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) each of CGI Borrower and the Restricted Subsidiaries and their respective operations and properties are in compliance with all applicable Environmental Laws; (ii) none of CGI Borrower or any Restricted Subsidiary has received written notice of any Environmental Claim; (iii) none of CGI Borrower or any Restricted Subsidiary is conducting any investigation, removal, remedial or other corrective action pursuant to any Environmental Law at any location; and (iv) to the knowledge of CGI Borrower, no underground or above ground storage tank or related piping, or any impoundment or other disposal area containing Hazardous Materials is located at, on or under any Real Estate currently owned or leased by CGI Borrower or any of the Restricted Subsidiaries.

(b) Except as set forth on Schedule 9.14, none of CGI Borrower or any Restricted Subsidiary has treated, stored, transported, Released or arranged for disposal or transport for

 

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disposal or treatment of Hazardous Materials at, on, under or from any currently or, formerly owned or operated property nor, to the knowledge of CGI Borrower, has there been any other Release of Hazardous Materials at, on, under or from any such properties, in each case, in a manner that would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

9.15    Properties

(a) Each of CGI Borrower and the Restricted Subsidiaries has good and valid record title to, valid leasehold interests in, or rights to use, all properties that are necessary for the ordinary operation of their respective businesses as currently conducted, free and clear of all Liens (other than any Liens permitted by this Agreement) and except where the failure to have such good title or interest or right to use would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

(b) Schedule 9.15 contains a description as of the Closing Date of (i) the full address (including postal code or zip code) of each such Credit Party’s chief executive office, (ii) all real property owned by each Credit Party including municipal addresses, legal description (to the extent available), the name of the Credit Party that owns such property and a brief description of such property’s use), (iii) all real property leased by each Credit Party (including municipal addresses, the name of the Credit Party that leases such property and the name of the landlord), and (iv) all real property not owned or leased by a Credit Party at which any of its Inventory may from time to time be stored or located (including municipal addresses, the name of the Credit Party which keeps Inventory at such property and the name of the bailee or third party holding such Inventory at such property) and (v) if different than above, the address at which the books and records of each Credit Party are located.

9.16    Solvency

On the Closing Date, after giving effect to the Transactions, immediately following the making of any Loans and after giving effect to the application of the proceeds of such Loans, CGI Borrower on a consolidated basis with its Restricted Subsidiaries will be Solvent.

9.17    Patriot Act; Anti-Terrorism Laws

No proceeds of the Loans (if any) will be used by Holdings, CGI Borrower and its Subsidiaries (i) in violation of United States Foreign Corrupt Practices Act of 1977, (ii) in violation of the Patriot Act, (iii) in violation of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), Criminal Code (Canada), Freezing Assets of Corrupt Foreign Officials Act (Canada), Special Economic Measures Act (Canada), United Nations Act (Canada) or any other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” laws of Canada or any province or territory thereof, and (iv) for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC, in each case, in any material respect.

 

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9.18    Security Interest in Collateral

Subject to the terms of the proviso in Section 7.2, the provisions of this Agreement and the other Credit Documents create legal, valid, and enforceable Liens on all of the Collateral in favor of the Administrative Agent, for the benefit of itself and the other Secured Parties, subject, as to enforceability, to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally and to general principles of equity and principles of good faith and dealing, and, subject to the proper recordation of Mortgages and fixture filings with respect to any Mortgaged Property and to the filing of UCC financing statements (and similar public filings and registration in other applicable jurisdictions, where such filings cannot be completed prior to the Closing Date) in each case in favor of the Administrative Agent for the benefit of the Secured Parties, such Liens constitute perfected Liens on the Collateral of the type required by the Security Documents securing the Obligations to the extent such Liens may be perfected by such filings and the taking of such other actions required to be taken hereunder or under the applicable Credit Documents, including by (i) with respect to Intellectual Property included in the Collateral that is registered or in respect of which an application for registration has been made with a Governmental Authority, the filing of appropriate notices with the Canadian Intellectual Property Office, the U.S. Patent and Trademark Office and the U.S. Copyright Office and the filings, registrations or other actions required under the laws of Switzerland and the United Kingdom; and (ii) the delivery to the Administrative Agent of any stock or equivalent certificates or promissory notes required to be delivered pursuant to the applicable Credit Documents.

Notwithstanding anything to the contrary, the Borrowers and the other Credit Parties shall not be required, nor shall the Administrative Agent be authorized, (i) to perfect any pledges, security interests and mortgages by any means other than by (A) (I) filings pursuant to the UCC in the office of the secretary of state (or similar central filing office) of the relevant state(s), (II) PPSA filings or the registration of one or more hypothecs in Canada or the relevant province or territory thereof, and (III) customary filings and registrations and other necessary perfection steps pursuant to the laws of the United Kingdom, Switzerland and, to the extent permitted by applicable law, solely with respect to Collateral included in the Borrowing Base located in another Relevant Jurisdiction, other Relevant Jurisdictions outside of Canada, the United States, the United Kingdom and Switzerland; (B) filings in the United States, Canadian, United Kingdom and Swiss government offices with respect to Intellectual Property as expressly required in the Security Documents; (C) delivery to the Administrative Agent for its possession of all Collateral consisting of material intercompany notes, stock certificates of CGI Borrower and its Material Subsidiaries (other than Excluded Stock and Stock Equivalents) and material instruments issued to a Borrower or other Credit Party, (D) Mortgages, solely to the extent required pursuant to Section 10.14, or (E) control agreements solely to the extent required by Section 10.9 or (ii) to take any action other than the actions listed in clause (i)(A), (B), (D) and (E) above with respect to any Collateral titled or located outside of the United States, Canada, the United Kingdom, Switzerland or, solely with respect to Collateral included in the Borrowing Base, any other Relevant Jurisdiction, including The Netherlands.

 

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9.19    Anti-Terrorism Laws

(a) To the extent applicable, each of Holdings, the Borrowers and the Restricted Subsidiaries is in compliance, in all material respects, with the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto.

(b) No part of the proceeds of the Loans will be used by Holdings, the Borrowers or any of the Restricted Subsidiaries, directly or, to the knowledge of CGI Borrower, 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 obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977 or under similar Requirements of Law in Canada.

(c) None of Holdings, the Borrowers or any of the Restricted Subsidiaries nor, to the knowledge of CGI Borrower, any director, officer or employee of Holdings, any Borrower or any of the Restricted Subsidiaries, (i) is a person on the list of “Specially Designated Nationals and Blocked Persons” or (ii) is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

9.20    Borrowing Base Certificates

The information set forth in each Borrowing Base Certificate is true and correct in all material respects and has been prepared in accordance with the requirements of this Agreement.

9.21    Non-Bank Rules

Swiss Borrower is in compliance with the Non-Bank Rules, it being understood, however, that the Swiss Borrower shall not be in breach of this representation if the relevant number of creditors is exceeded solely (i) by reason of a failure by one or more Lenders to comply with their obligations under Section 14.6, (ii) by a Lender having made a misrepresentation in respect of the information provided under Section 6.4(e)(i)(D), or (iii) by a Lender having lost its status as Qualifying Bank.

ARTICLE 10

AFFIRMATIVE COVENANTS

Each Borrower hereby covenants and agrees that on the Closing Date and thereafter, until the Commitments, the Swingline Commitment and each Letter of Credit, Banker’s Acceptance and BA Equivalent Note have terminated or been Cash Collateralized in accordance with the terms of this Agreement, the obligations under the CIBC Designated Secured Bank Product/Hedge Agreements have been paid in full or other arrangements reasonably satisfactory to Canadian Imperial Bank of Commerce (or its applicable Affiliate) have been made in respect thereof and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations incurred hereunder (other than contingent obligations, Secured

 

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Cash Management Obligations, Secured Bank Product Obligations and Secured Hedge Obligations), are paid in full:

10.1    Information Covenants

The Borrower Representative will furnish to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

 

  (a) Annual Financial Statements. On or before the date that is 120 days after the end of each fiscal year commencing with the fiscal year ending March 31, 2016, the consolidated balance sheets of Holdings, CGI Borrower and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations and cash flows for such fiscal year, and setting forth comparative consolidated figures for the prior fiscal year, all in reasonable detail and prepared in accordance with GAAP, and, in each case, certified by Deloitte, LLP or independent certified public accountants of recognized national standing whose opinion shall not be qualified as to the scope of audit or as to the status of CGI Borrower or any Restricted Subsidiaries as a going concern (other than any exception, explanatory paragraph or qualification, that is expressly solely with respect to, or expressly resulting solely from, (i) an upcoming maturity date under any Indebtedness of CGI Borrower and its Restricted Subsidiaries occurring within one year from the time such opinion is delivered or (ii) any prospective or actual default of a financial maintenance covenant), together with a narrative providing a summary description of the highlights of results of operations of CGI Borrower and its Restricted Subsidiaries for such fiscal year commencing with the quarter ending March 31, 2017; provided, that if at the end of any applicable fiscal year there are any Unrestricted Subsidiaries, Borrower Representative shall also furnish the related consolidating balance sheets of CGI Borrower and its Restricted Subsidiaries as at the end of such fiscal year, and the related consolidating statements of income or operations and cash flows for such fiscal year, in each case, reflecting the adjustments necessary to eliminate such Unrestricted Subsidiaries from the consolidated balance sheets of CGI Borrower and its Restricted Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations and cash flows for such fiscal year; provided, further, that no consolidating financial statements provided pursuant to the immediately preceding proviso shall be required to be audited.

 

  (b)

Quarterly Financial Statements. On or before the date that is 45 days after the end of each of the first three fiscal quarters of each fiscal year, commencing with the fiscal quarter ending June 30, 2016, the consolidated balance sheets of Holdings, CGI Borrower and its Subsidiaries as at the end of such fiscal quarter and the related consolidated statements of income or operations for such fiscal quarter and for the elapsed portion of the fiscal year ended with the last day of such fiscal quarter, and the related consolidated statement of cash flows for the elapsed

 

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  portion of the fiscal year ended with the last day of such fiscal quarter, and a narrative providing a summary description of the highlights of results of operations of CGI Borrower and its Restricted Subsidiaries for such fiscal quarter and for the elapsed portion of the fiscal year ended with the last day of such fiscal quarter and commencing with the quarter ending June 30, 2016 setting forth comparative consolidated figures for the related periods in the prior fiscal year or, in the case of such consolidated balance sheet, for the last day of the related period in the prior fiscal year, all of which shall be certified by an Authorized Officer of CGI Borrower as fairly presenting in all material respects the financial position, results of operations and cash flows of CGI Borrower and its Subsidiaries in accordance with GAAP (except as noted therein), subject to changes resulting from normal year-end adjustments and the absence of footnotes; provided, that if at the end of any applicable fiscal quarter there are any Unrestricted Subsidiaries, Borrower Representative shall also furnish the related consolidating balance sheets of CGI Borrower and its Restricted Subsidiaries as at the end of such fiscal quarter, and the related consolidating statements of income or operations and cash flows for such fiscal quarter, in each case, reflecting the adjustments necessary to eliminate such Unrestricted Subsidiaries from the consolidated balance sheets of CGI Borrower and its Restricted Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations and cash flows for such fiscal quarter.

 

  (c) [Reserved].

 

  (d) Budgets. Within 90 days after the commencement of each fiscal year of CGI Borrower beginning with the fiscal year ending March 31, 2017, a budget of CGI Borrower and its Restricted Subsidiaries in reasonable detail on a quarterly basis for such fiscal year, setting forth the principal assumptions upon which such budget is based and containing a “Monthly Availability Model” (collectively, the “Projections”), which Projections shall in each case be accompanied by a certificate of an Authorized Officer of CGI Borrower stating that such Projections have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were based on good faith estimates and assumptions believed by such Persons to be reasonable at the time of preparation of such Projections, it being recognized by the Lenders that such Projections and assumptions as to future events are not to be viewed as facts or a guarantee of performance, are subject to significant uncertainties and contingencies, many of which are beyond the control of CGI Borrower and its Subsidiaries and that actual results during the period or periods covered by any such Projections may differ from the projected results and such differences may be material.

 

  (e)

Officer’s Certificates. Not later than five days after the delivery of the financial statements provided for in Sections 10.1(a) and (b), a certificate of an Authorized Officer of CGI Borrower to the effect that no Event of Default exists or, if any Event of Default does exist, specifying the nature and extent thereof, as the case

 

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  may be, which certificate shall set forth (i) a specification of any change in the identity of the Restricted Subsidiaries and Unrestricted Subsidiaries as at the end of such fiscal year or period, as the case may be, from the Restricted Subsidiaries and Unrestricted Subsidiaries, respectively, provided to the Administrative Agent on the Closing Date or the most recent fiscal year or period, as the case may be and (ii) a reasonably detailed calculation of the Fixed Charge Coverage Ratio and, to the extent then applicable, compliance with the provisions of Section 11.11. At the time of the delivery of the financial statements provided for in Section 10.1(a), a certificate of an Authorized Officer of CGI Borrower setting forth changes to the legal name, jurisdiction of formation, type of entity and organizational number (or equivalent) (to the extent such Person is organized in a jurisdiction where an organizational identification number is required to be included in a Uniform Commercial Code financing statement or any other similar requirement in any Relevant Jurisdiction), in each case for each Credit Party or confirming that there has been no change in such information since the Closing Date, the date of the most recent certificate delivered pursuant to this clause (e) or the most recent disclosure of any such information to the Administrative Agent, as the case may be.

 

  (f) Notice of Events of Default, Litigation; etc. Promptly after an Authorized Officer of CGI Borrower or any of the Restricted Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any event that constitutes a Default or an Event of Default, which notice shall specify the nature thereof, the period of existence thereof and what action the Borrowers and the other Credit Parties propose to take with respect thereto, (ii) any litigation or governmental proceeding pending against Holdings, any Borrower or any of their Subsidiaries that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (iii) any casualty or other insured damage to any portion of the Collateral included in the Borrowing Base in excess of $2,000,000, or the commencement of any action or proceeding for the taking of any interest in a portion of the Collateral included in the Borrowing Base in excess of $2,000,000 under power of eminent domain or by condemnation, expropriation or similar proceeding, and (iv) the occurrence of any event or circumstance that would reasonably be expected to have a Material Adverse Effect.

 

  (g) Environmental Matters. Promptly after an Authorized Officer of a Borrower or any of the Restricted Subsidiaries obtains knowledge of any one or more of the following environmental matters, unless such environmental matters would not reasonably be expected to result in a Material Adverse Effect, notice of:

 

  (i) any pending or threatened Environmental Claim against any Credit Party or any Real Estate; and

 

  (ii)

the conduct of any investigation, or any removal, remedial or other corrective action in response to the actual or alleged presence, Release or

 

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  threatened Release of any Hazardous Material on, at, under or from any Real Estate.

All such notices shall describe in reasonable detail the nature of the claim, investigation or removal, remedial or other corrective action in response thereto. The term “Real Estate” shall mean land, buildings, facilities and improvements owned or leased by any Credit Party.

 

  (h) Other Information. Promptly upon filing thereof, copies of any filings (including on the Annual Information Form, Form 10-K, 10-Q or 8-K) or prospectus or registration statements with, and reports to, any Canadian provincial or territorial securities regulator, the SEC or any analogous Governmental Authority in any relevant jurisdiction by CGI Borrower or any of the Restricted Subsidiaries (other than amendments to any prospectus or registration statement (to the extent such prospectus or registration statement, in the form it becomes effective, is delivered to the Administrative Agent), exhibits to any of the foregoing and, if applicable, any registration statements on Form S-8) and copies of all financial statements, notices of default and reports that CGI Borrower or any of the Restricted Subsidiaries shall send to the holders of any publicly issued debt of CGI Borrower and/or any of the Restricted Subsidiaries, in their capacity as such holders (in each case to the extent not theretofore delivered to the Administrative Agent pursuant to this Agreement) and, with reasonable promptness, such other information (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of any Lender (acting through the Administrative Agent) may reasonably request in writing from time to time; provided, that none of CGI Borrower or any Restricted Subsidiary will be required to disclose or permit the inspection or discussion of, any document, information or other matter (i) that constitutes non-registered Intellectual Property, non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective contractors) is prohibited by law or any binding agreement or (iii) that is subject to attorney-client or similar privilege or constitutes attorney work product.

 

  (i) Borrowing Base Certificates. The Borrower Representative will furnish to the Administrative Agent a certificate for each Borrower in substantially the form of Exhibit I (each a “Borrowing Base Certificate”), each certified as true and correct in all material respects on behalf of the Borrower Representative by a Financial Officer of the Borrower Representative and containing necessary supporting calculations, as follows:

 

  (A)

no later than (x) with respect to the Borrowing Base Certificate for CGI Borrower, the fifteenth (15th) Business Day following the end of each calendar month (or on the third (3rd) Business Day of each week if the Borrower Representative shall so elect in its sole discretion, subject to the proviso at the end of this clause (i)(A)) or

 

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  (y) with respect to the Borrowing Base Certificate for Swiss Borrower, the fifteenth (15th) Swiss Business Day following the end of each calendar month (or on the third (3rd) Swiss Business Day of each week if the Borrower Representative shall so elect in its sole discretion, subject to the proviso at the end of this clause (i)(A)), in each case, showing each Borrowing Base as of the close of business on the last day of the immediately preceding calendar month (or in the case of a voluntary weekly delivery of Borrowing Base Certificates at the election of the Borrower Representative, showing each Borrowing Base as of the close of business on the immediately preceding Friday); provided, that if the Borrower Representative elects to furnish the Administrative Agent with Borrowing Base Certificates on a weekly basis, then the Borrower Representative shall continue to furnish Borrowing Base Certificates on such weekly basis until at least the date that is 60 days from the date of such election;

 

  (B) solely during an Accelerated Borrowing Base Delivery Period, more frequently (but not more frequently than weekly) as shall be determined by the Administrative Agent in its Permitted Discretion (if such Borrowing Base Certificates are required to be delivered on a weekly basis pursuant to this clause (i)(B), such Borrowing Base Certificates (which shall include information relating to the Inventory only to the extent then available) shall be delivered (x) with respect to the Borrowing Base Certificate for CGI Borrower, on the third (3rd) Business Day of each week or (y) with respect to the Borrowing Base Certificate for Swiss Borrower, on the third (3rd) Swiss Business Day of each week, in each case showing each Borrowing Base as of the close of business on the immediately preceding Friday); and

 

  (C) upon any Asset Sale of ABL Priority Collateral included in the Borrowing Base, if the Net Cash Proceeds thereof are in excess of $2,000,000, the Borrower Representative shall also furnish an updated Borrowing Base Certificate to the Administrative Agent giving Pro Forma Effect to such Asset Sale promptly upon the receipt of such Net Cash Proceeds.

All calculations of Excess Availability in any Borrowing Base Certificate shall originally be made by the Borrowers and certified by a Financial Officer of the Borrower Representative in accordance with this Section 10.1(i); provided that the Administrative Agent may from time to time review and, in all respects in accordance with Section 2.19 (including with notice to the Borrower Representative as required thereunder), adjust any such calculation to the extent the calculation is not made in accordance with this Agreement or does not

 

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accurately reflect the Borrowing Base Reserves, in each case, as determined by the Administrative Agent in its Permitted Discretion.

The Borrower Representative will furnish to the Administrative Agent at the time of delivery of each Borrowing Base Certificate such additional information as the Administrative Agent may reasonably request in advance of such delivery, including, with respect to customer deposits, agings, freight/duty payables, gift card balances, a schedule of rent expenses organized by location, the amount of any unpaid Taxes, the amount of any overdue rent, overdue amounts owed to any warehousemen or bailee, any overdue amount owed to any third party manufacturer, a schedule of inventory organized by location and with respect to any disputes regarding Intellectual Property that would reasonably be expected to have a material impact on the realizable value of any Eligible Inventory.

Notwithstanding the foregoing, the obligations in clauses (a) and (b) of this Section 10.1 may be satisfied with respect to financial information of CGI Borrower and its Subsidiaries by furnishing (A) the applicable financial statements of any direct or indirect parent company of CGI Borrower or (B) the Form 10-K or 10-Q (or any equivalent form under applicable Canadian Securities Laws), as applicable, of CGI Borrower or any direct or indirect parent of CGI Borrower, as applicable, filed with the SEC or Canadian Securities Administrator (or the Ontario Securities Commission, British Columbia Securities Commission or other securities commission in Canada or any province or territory thereof); provided that, with respect to each of subclauses (A) and (B) of this paragraph, to the extent such information relates to a parent of CGI Borrower, such information is accompanied by unaudited consolidating or other information that explains in reasonable detail the differences between the information relating to such parent, on the one hand, and the information relating to CGI Borrower and the Restricted Subsidiaries on a standalone basis, on the other hand.

10.2    Books, Records, Inspections, Audit Rights and Appraisals

(a) CGI Borrower will, and will cause each Restricted Subsidiary to, permit officers and designated representatives of the Administrative Agent to visit and inspect any of the properties or assets of CGI Borrower and any such Restricted Subsidiary in whomsoever’s possession to the extent that it is within such party’s control to permit such inspection (and shall use commercially reasonable efforts to cause such inspection to be permitted to the extent that it is not within such party’s control to permit such inspection), and to examine the books and records of CGI Borrower and any such Restricted Subsidiary and discuss the affairs, finances and accounts of CGI Borrower and of any such Restricted Subsidiary with, and be advised as to the same by, its and their officers and independent accountants, all at such reasonable times and intervals, and reasonable advance notice, and to such reasonable extent as the Administrative Agent may request (and subject, in the case of any such meetings or advice from such independent accountants, to such accountants’ customary policies and procedures); provided that, subject to clause (b) below and excluding any such visits and inspections during the continuation of an Event of Default, (1) only the Administrative Agent on behalf of the Required Lenders may exercise rights of the Administrative Agent and the Lenders under this Section 10.2, (2) the

 

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Administrative Agent shall not exercise such rights more than one time in any calendar year, which such visit will be at CGI Borrower’s expense and (3) notwithstanding anything to the contrary in this Section 10.2, none of CGI Borrower nor any of the Restricted Subsidiaries will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (x) constitutes non-registered Intellectual Property, non-financial trade secrets or non-financial proprietary information, (y) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives or contractors) is prohibited by law or any binding agreement or (z) is subject to attorney-client or similar privilege or constitutes attorney work product; provided, further, that when an Event of Default exists, the Administrative Agent (or any of its respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrowers at any time during normal business hours and upon reasonable advance notice. The Administrative Agent shall give the Borrower Representative the opportunity to participate in any discussions with CGI Borrower’s independent public accountants.

(b) Subject to the limitations in this Section 10.2(b), the Borrower Representative will from time to time upon the request of the Administrative Agent, permit the Administrative Agent or professionals (including consultants, accountants, lawyers and appraisers) retained by the Administrative Agent, on reasonable prior notice and during normal business hours, to conduct appraisals and commercial finance examinations, including, without limitation, of (i) the Borrowers’ practices in the computation of their respective Borrowing Base, and (ii) the assets included in the Borrowing Base and related financial information such as, but not limited to, gross margins, payables, accruals and reserves. Subject to the limitations in the following clauses (b)(i) and (b)(ii), the Borrowers shall pay the reasonable out-of-pocket fees and expenses of the Administrative Agent and such professionals with respect to such evaluations, examinations and appraisals.

 

  (i)

The Administrative Agent may conduct (A) one (1) commercial finance examination in each calendar year of the Credit Parties, at the Credit Parties’ expense, and (B) one (1) additional commercial finance examination in any calendar year of the Credit Parties, at the Credit Parties’ expense, solely during any period in such calendar year commencing on the date that Excess Availability shall have been less than the greater of (x) $15,000,000 and (y) 20% of the Line Cap for five (5) consecutive Business Days and ending on the date thereafter that Excess Availability shall have been at least the greater of (i) $15,000,000 and (ii) 20% of the Line Cap for thirty (30) consecutive calendar days, provided, however, that during the period from the Closing Date until November 30, 2016, the applicable Excess Availability threshold, for all purposes under this clause (i)(B) shall be 5% of the Line Cap, with no fixed dollar amount. Notwithstanding anything to the contrary contained herein, (A) the Administrative Agent may undertake one (1) additional commercial finance examination in each calendar year at the sole expense of the Administrative Agent, and (B) after the occurrence and during the continuance of any Specified Default, the Administrative Agent may cause

 

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  such additional commercial finance examinations to be taken for each of the Credit Parties (each, at the expense of the Credit Parties) as the Administrative Agent, in its Permitted Discretion, determines are necessary or appropriate.