Exhibit 10.2.8

 

FOURTH AMENDMENT TO

FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FOURTH AMENDMENT TO FIFTH AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is made and entered into on November 19, 2019, by and among DELTA
APPAREL, INC., a Georgia corporation ("Delta"), M. J. SOFFE, LLC, a North
Carolina limited liability company ("Soffe"), CULVER CITY CLOTHING COMPANY, a
Georgia corporation ("Culver City"), SALT LIFE, LLC, a Georgia limited liability
company ("Salt Life"), DTG2GO, LLC, a Georgia limited liability company
("DTG2GO"; Delta, Soffe, Culver City, Salt Life, and DTG2GO, each individually,
a "Borrower" and, collectively, "Borrowers"); the parties to the Credit
Agreement (as defined below) from time to time as Lenders (each individually, a
"Lender" and collectively, "Lenders"); and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association ("Wells Fargo"), in its capacity as
agent for Lenders (together with its successors in such capacity, "Agent").

 

Recitals:

 

Borrowers, Agent and Lenders are parties to a certain Fifth Amended and Restated
Credit Agreement dated as of May 10, 2016 (as at any time amended, restated,
modified or supplemented, the "Credit Agreement"), pursuant to which Agent and
Lenders have made certain loans and other financial accommodations available to
Borrowers.

 

The parties desire to amend the Credit Agreement as hereinafter set forth.

 

NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:

 

1.     Definitions. All capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such terms in the
Credit Agreement.

 

2.     Amendments to Credit Agreement. The Credit Agreement is hereby amended as
follows:

 

(a)     By adding a new Section 1.7 to the Credit Agreement as follows:

 

1.7     Divisions. For all purposes under the Loan Documents, in connection with
any division or plan of division under Delaware law (or any comparable event
under a different jurisdiction's laws): (a) if any asset, right, obligation or
liability of any Person becomes the asset, right, obligation or liability of a
different Person, then it shall be deemed to have been transferred from the
original Person to the subsequent Person, and (b) if any new Person comes into
existence, such new Person shall be deemed to have been organized on the first
date of its existence by the holders of its Equity Interests at such time.

 

(b)     By deleting the last two sentences of Section 2.3(a) of the Credit
Agreement and by substituting in lieu thereof the following:

 

All Borrowing requests which are not made on-line via Agent's electronic
platform or portal shall be subject to (and unless Agent elects otherwise in the
exercise of its sole discretion, such Borrowings shall not be made until the
completion of) Agent's authentication process (with results satisfactory to
Agent) prior to the funding of any such requested Revolving Loan.

 

(c)     By deleting the references to "$14,500,000" in each of Section
2.3(b)(i), 2.3(d)(i) and 2.3(d)(ii) of the Credit Agreement and by substituting
in lieu thereof, in each instance, a reference to "$17,000,000."

 

(d)     By adding a new sentence to the end of Section 2.3(g)(ii)(G) of the
Credit Agreement as follows:

 

Subject to Section 17.14, 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.

 

(e)     By deleting the paragraph set forth at the end of Section 2.6(a) of the
Credit Agreement and by substituting the following in lieu thereof:

 

Notwithstanding anything to the contrary set forth herein, (A) to the extent
that there are any Loans outstanding on any day, an amount of such Loans equal
to the lesser of (x) the FILO Formula Amount and (y) the principal amount of the
Loans outstanding on such day shall be deemed to be made in respect of the FILO
Formula Amount, and (B) such Loans, if LIBOR Rate Loans are available hereunder,
shall be LIBOR Rate Loans and bear interest at a per annum rate equal to the
LIBOR Rate plus three and one-quarter percent (3.25%), and, otherwise, shall
bear interest at a per annum rate equal to the Base Rate plus two and
one-quarter percent (2.25%).

 

(f)     By deleting Section 2.10(c) of the Credit Agreement and by substituting
the following in lieu thereof:

 

(c)     Field Examination and Other Fees. Borrowers shall pay to Agent, field
examination, appraisal, and valuation fees and charges, as and when incurred or
chargeable, as follows (i) a fee of $1,000 per day, per examiner, plus
out-of-pocket expenses (including travel, meals, and lodging) for each field
examination of any Borrower performed by personnel employed by Agent, and (ii)
the fees or charges paid or incurred by Agent (but, in any event, no less than a
charge of $1,000 per day, per Person, plus out-of-pocket expenses (including
travel, meals, and lodging)) if it elects to employ the services of one or more
third Persons to perform field examinations of any Borrower or its Subsidiaries,
to establish electronic collateral reporting systems, to appraise the
Collateral, or any portion thereof, or to assess any Borrower's or its
Subsidiaries' business valuation; provided, that so long as no Event of Default
shall have occurred and be continuing, Borrowers shall not be obligated to
reimburse Agent for more than:

 

(i)     (1) one (1) Inventory appraisal per calendar year so long as
Availability is equal to or greater than $17,500,000 (such amount to be
increased pro rata with the amount of any increase in the Commitments pursuant
to Section 2.14), and (2) at Agent's discretion, two (2) Inventory appraisals
per calendar year so long as Availability is less than $17,500,000 (such amount
to be increased pro rata with the amount of any increase in the Commitments
pursuant to Section 2.14); provided, however, that there shall be no limit on
the number of Inventory appraisals that Agent may conduct or request or for
which Borrowers are obligated to reimburse Agent at any time Default or Event of
Default exists or has occurred and is continuing;

 

(ii)     at Agent's discretion, one (1) Real Property appraisal for each parcel
of Real Property constituting Eligible Real Property per calendar year, so long
as Availability is less than $23,500,000 (such amount to be increased pro rata
with the amount of any increase in the Commitments pursuant to Section 2.14);
provided, however, that there shall be no limit on the number of Real Property
appraisals for each parcel of Real Property constituting Eligible Real Property
that Agent may conduct or request or for which Borrowers are obligated to
reimburse Agent at any time a Default or Event of Default exists or has occurred
and is continuing;

 

(iii)     at Agent's discretion, one (1) Equipment appraisal per calendar year
so long as Availability is less than $23,500,000 (such amount to be increased
pro rata with the amount of any increase in the Commitments pursuant to Section
2.14); provided, however, that there shall be no limit on the number of
Equipment appraisals that Agent may conduct or request or for which Borrowers
are obligated to reimburse Agent at any time a Default or Event of Default
exists or has occurred and is continuing; and

 

(iv)     at Agent's discretion, one (1) Intellectual Property appraisal per
calendar year; provided, however, that there shall be no limit on the number of
Intellectual Property appraisals that Agent may conduct or request or for which
Borrowers are obligated to reimburse Agent at any time a Default or Event of
Default exists or has occurred and is continuing.

 

(g)     By deleting the reference to "$25,000,000" in Section 2.11(b)(i) of the
Credit Agreement and by substituting in lieu thereof a reference to "$10,000,000
or, if requested in writing by Borrowers at least five (5) days prior to
proposed increase date, an amount greater than $10,000,000 but less than or
equal to $25,000,000."

 

(h)     By deleting Section 2.11(f) of the Credit Agreement and by substituting
the following in lieu thereof:

 

(f)     Each Borrower agrees to indemnify, defend and hold harmless each member
of the Lender Group (including Issuing Bank and its branches, Affiliates, and
correspondents) and each such Person's respective directors, officers,
employees, attorneys and agents (each, including Issuing Bank, a "Letter of
Credit Related Person") (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, liabilities, fines, costs, penalties, and damages, and all
reasonable fees and disbursements of attorneys, experts, or consultants and all
other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), which may be incurred by
or awarded against any such Letter of Credit Related Person (other than Taxes,
which shall be governed by Section 16) (the "Letter of Credit Indemnified
Costs"), and which arise out of or in connection with, or as a result of:

 

(i)     any Letter of Credit or any pre-advice of its issuance;

 

(ii)     any transfer, sale, delivery, surrender or endorsement (or lack
thereof) of any Drawing Document at any time(s) held by any such Letter of
Credit Related Person in connection with any Letter of Credit;

 

(iii)     any action or proceeding arising out of, or in connection with, any
Letter of Credit (whether administrative, judicial or in connection with
arbitration), including any action or proceeding to compel or restrain any
presentation or payment under any Letter of Credit, or for the wrongful dishonor
of, or honoring a presentation under, any Letter of Credit;

 

(iv)     any independent undertakings issued by the beneficiary of any Letter of
Credit;

 

(v)     any unauthorized instruction or request made to Issuing Bank in
connection with any Letter of Credit or requested Letter of Credit, or any
error, omission, interruption or delay in such instruction or request, whether
transmitted by mail, courier, electronic transmission, SWIFT, or any other
telecommunication including communications through a correspondent;

 

(vi)     an adviser, confirmer or other nominated person seeking to be
reimbursed, indemnified or compensated;

 

(vii)     any third party seeking to enforce the rights of an applicant,
beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds
or holder of an instrument or document;

 

(viii)     the fraud, forgery or illegal action of parties other than the Letter
of Credit Related Person;

 

(ix)     any prohibition on payment or delay in payment of any amount payable by
Issuing Bank to a beneficiary or transferee beneficiary of a Letter of Credit
arising out of Anti-Corruption Laws, Anti-Money Laundering Laws, or Sanctions;

 

(x)     Issuing Bank's performance of the obligations of a confirming
institution or entity that wrongfully dishonors a confirmation;

 

(xi)     any foreign language translation provided to Issuing Bank in connection
with any Letter of Credit;

 

(xii)     any foreign law or usage as it relates to Issuing Bank's issuance of a
Letter of Credit in support of a foreign guaranty including the expiration of
such guaranty after the related Letter of Credit expiration date and any
resulting drawing paid by Issuing Bank in connection therewith; or

 

(xiii)     the acts or omissions, whether rightful or wrongful, of any present
or future de jure or de facto governmental or regulatory authority or cause or
event beyond the control of the Letter of Credit Related Person;

 

provided, that such indemnity shall not be available to any Letter of Credit
Related Person claiming indemnification under clauses (i) through (xiii) above
to the extent that such Letter of Credit Indemnified Costs may be finally
determined in a final, non-appealable judgment of a court of competent
jurisdiction to have resulted directly from the gross negligence or willful
misconduct of the Letter of Credit Related Person claiming indemnity. Borrowers
hereby agree to pay the Letter of Credit Related Person claiming indemnity on
demand from time to time all amounts owing under this Section 2.11(f). If and to
the extent that the obligations of Borrowers under this Section 2.11(f) are
unenforceable for any reason, Borrowers agree to make the maximum contribution
to the Letter of Credit Indemnified Costs permissible under applicable law. This
indemnification provision shall survive termination of this Agreement and all
Letters of Credit.

 

(i)     By adding new Sections 2.11(o), (p), (q) and (r) to the Credit Agreement
as follows:

 

(o)     Each standby Letter of Credit shall expire not later than the date that
is 12 months after the date of the issuance of such Letter of Credit; provided
that any standby Letter of Credit may provide for the automatic extension
thereof for any number of additional periods each of up to one year in duration;
provided further that with respect to any Letter of Credit which extends beyond
the Maturity Date, Letter of Credit Collateralization shall be provided therefor
on or before the date that is five Business Days prior to the Maturity Date.
Each commercial Letter of Credit shall expire on the earlier of (i) 120 days
after the date of the issuance of such commercial Letter of Credit and (ii) five
Business Days prior to the Maturity Date.

 

(p)     If (i) any Event of Default shall occur and be continuing, or (ii)
Availability shall at any time be less than zero, then on the Business Day
following the date when Borrowers receive notice from Agent or Required Lenders
(or, if the maturity of the Obligations has been accelerated, Revolving Lenders
with Letter of Credit Exposure representing greater than 50% of the total Letter
Credit Exposure) demanding Letter of Credit Collateralization pursuant to this
Section 2.11(p) upon such demand, Borrowers shall provide Letter of Credit
Collateralization with respect to the then existing Letter of Credit Usage. If
Borrowers fail to provide Letter of Credit Collateralization as required by this
Section 2.11(p), Revolving Lenders may (and, upon direction of Agent, shall)
advance, as Revolving Loans the amount of the cash collateral required pursuant
to the Letter of Credit Collateralization provision so that the then existing
Letter of Credit Usage is cash collateralized in accordance with the Letter of
Credit Collateralization provision (whether or not the Revolver Commitments have
terminated, an Overadvance exists or the conditions in Section 3 are satisfied).

 

(q)     The provisions of this Section 2.11 shall survive the termination of
this Agreement and the repayment in full of the Obligations with respect to any
Letters of Credit that remain outstanding.

 

(r)     At Borrowers' costs and expense, Borrowers shall execute and deliver to
Issuing Bank such additional certificates, instruments or documents and take
such additional action as may be reasonably requested by Issuing Bank to enable
Issuing Bank to issue any Letter of Credit pursuant to this Agreement and
related Issuer Document, to protect, exercise or enforce Issuing Bank's rights
and interests under this Agreement or to give effect to the terms and provisions
of this Agreement or any Issuer Document. Each Borrower irrevocably appoints
Issuing Bank as its attorney-in-fact and authorizes Issuing Bank, without notice
to Borrowers, to execute and deliver ancillary documents and letters customary
in the letter of credit business that may include but are not limited to
advisements, indemnities, checks, bills of exchange and issuance documents. The
power of attorney granted by Borrowers is limited solely to such actions related
to the issuance, confirmation or amendment of any Letter of Credit and to
ancillary documents or letters customary in the letter of credit business. This
appointment is coupled with an interest.

 

(j)     By deleting Section 2.12(d) of the Credit Agreement and by substituting
the following in lieu thereof:

 

(d)     Special Provisions Applicable to LIBOR Rate.

 

(i)     The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
prospective basis to take into account any additional or increased costs to such
Lender of maintaining or obtaining any eurodollar deposits or increased costs
(other than Taxes which shall be governed by Section 16), in each case, due to
changes in applicable law occurring subsequent to the commencement of the then
applicable Interest Period, including any Changes in Law and changes in the
reserve requirements imposed by the Board of Governors, which additional or
increased costs would increase the cost of funding or maintaining loans bearing
interest at the LIBOR Rate. In any such event, the affected Lender shall give
Borrowers and Agent notice of such a determination and adjustment and Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, Borrowers may, by notice to such affected
Lender (A) require such Lender to furnish to Borrowers a statement setting forth
in reasonable detail the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of
such Lender with respect to which such adjustment is made (together with any
amounts due under Section 2.12(b)(ii)).

 

(ii)     Subject to the provisions set forth in Section 2.12(d)(iii) below, in
the event that any change in market conditions or any Change in Law shall at any
time after the date hereof, in the reasonable opinion of any Lender, make it
unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or
to continue such funding or maintaining, or to determine or charge interest
rates at the LIBOR Rate, such Lender shall give notice of such changed
circumstances to Agent and Borrowers and Agent promptly shall transmit the
notice to each other Lender and (y) in the case of any LIBOR Rate Loans of such
Lender that are outstanding, the date specified in such Lender’s notice shall be
deemed to be the last day of the Interest Period of such LIBOR Rate Loans, and
interest upon the LIBOR Rate Loans of such Lender thereafter shall accrue
interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall
not be entitled to elect the LIBOR Option until such Lender determines that it
would no longer be unlawful or impractical to do so.

 

(iii)     Effect of Benchmark Transition Event.

 

(A)     Benchmark Replacement. Notwithstanding anything to the contrary herein
or in any other Loan Document, upon the occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, Agent and Borrowers may amend
this Agreement to replace the LIBOR Rate with a Benchmark Replacement. Any such
amendment with respect to a Benchmark Transition Event will become effective at
5:00 p.m. on the fifth (5th) Business Day after Agent has posted such proposed
amendment to all Lenders and Borrowers so long as Agent has not received, by
such time, written notice of objection to such amendment from Lenders comprising
Required Lenders. Any such amendment with respect to an Early Opt-in Election
will become effective on the date that Lenders comprising Required Lenders have
delivered to Agent written notice that such Required Lenders accept such
amendment. No replacement of the LIBOR Rate with a Benchmark Replacement
pursuant to this Section 2.12(d)(iii) will occur prior to the applicable
Benchmark Transition Start Date.

 

(B)     Benchmark Replacement Conforming Changes. In connection with the
implementation of a Benchmark Replacement, Agent will have the right to make
Benchmark Replacement Conforming Changes from time to time and, notwithstanding
anything to the contrary herein or in any other Loan Document, any amendments
implementing such Benchmark Replacement Conforming Changes will become effective
without any further action or consent of any other party to this Agreement.

 

(C)     Notices; Standards for Decisions and Determinations. Agent will promptly
notify Borrowers and Lenders of (1) any occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, and its related Benchmark
Replacement Date and Benchmark Transition Start Date, (2) the implementation of
any Benchmark Replacement, (3) the effectiveness of any Benchmark Replacement
Conforming Changes and (4) the commencement or conclusion of any Benchmark
Unavailability Period. Any determination, decision or election that may be made
by Agent or Lenders pursuant to this Section 2.12(d)(iii) including any
determination with respect to a tenor, rate or adjustment or of the occurrence
or non-occurrence of an event, circumstance or date and any decision to take or
refrain from taking any action, will be conclusive and binding absent manifest
error and may be made in its or their sole discretion and without consent from
any other party hereto, except, in each case, as expressly required pursuant to
this Section 2.12(d)(iii).

 

(D)     Benchmark Unavailability Period. Upon Borrowers' receipt of notice of
the commencement of a Benchmark Unavailability Period, Borrowers may revoke any
request for a LIBOR Borrowing of, conversion to or continuation of LIBOR Rate
Loans to be made, converted or continued during any Benchmark Unavailability
Period and, failing that, Borrowers will be deemed to have converted any such
request into a request for a Borrowing of or conversion to Base Rate Loans.
During any Benchmark Unavailability Period, the component of Base Rate based
upon the LIBOR Rate will not be used in any determination of the Base Rate.

 

(k)     By deleting Section 2.12(f) of the Credit Agreement.

 

(l)     By adding a new sentence to the end of Section 4.12 of the Credit
Agreement as follows:

 

As of the Fourth Amendment Date, the information included in the Beneficial
Ownership Certification is true and correct in all respects.

 

(m)     By adding a new sentence to the end of Section 5.2 of the Credit
Agreement as follows:

 

Borrowers and Agent hereby agree that the delivery of the Borrowing Base
Certificate through Agent's electronic platform or portal, subject to Agent's
authentication process, by such other electronic method as may be approved by
Agent from time to time in its sole discretion, or by such other electronic
input of information necessary to calculate the Borrowing Base as may be
approved by Agent from time to time in its sole discretion, shall in each case
be deemed to satisfy the obligation of Borrowers to deliver such Borrowing Base
Certificate, with the same legal effect as if such Borrowing Base Certificate
had been manually executed by Borrowers and delivered to Agent.

 

(n)     By deleting the final sentence of Section 5.3 of the Credit and by
substituting the following in lieu thereof

 

Each Borrower further agrees, on behalf of itself and its Subsidiaries, that
nothing herein shall authorize any Borrower or any Subsidiary of a Borrower to
convert from a corporation to a limited liability company or from a limited
liability company to a corporation or change its classification or status for
U.S. federal income tax purposes, as the case may be, unless, in each such case,
Borrowers shall have given at least ninety (90) days prior written notice of
such conversion to Agent, Agent shall have concluded that, under Applicable Law,
such conversion shall not (x) detrimentally affect the enforceability of the
Loan Documents against the Borrower to be so converted (the "Converting
Borrower") or the Liens in favor of Agent against the Property of the Converting
Borrower, or (y) affect in any way the Converting Borrower's Obligations that
were incurred prior to giving effect to such conversion, and Borrowers shall
have taken all such actions as Agent may request in its discretion to maintain
the perfection and priority of any Liens of Agent that would otherwise be
affected thereby and to ensure the enforceability of the Obligations against
such Converting Borrower.

 

(o)     By adding a new sentence to the end of Section 5.6 to the Credit
Agreement as follows:

 

If at any time the area in which any Real Property that is subject to a Mortgage
is located is designated a "flood hazard area" in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
obtain flood insurance in such total amount and on terms that are satisfactory
to Agent and all Lenders from time to time, and otherwise comply with the Flood
Laws or as is otherwise satisfactory to Agent and all Lenders.

 

(p)     By adding a new sentence to the end of Section 5.12 of the Credit
Agreement as follows:

 

Notwithstanding anything to the contrary contained herein (including Section
5.11 and this Section 5.12) or in any other Loan Document, Agent shall not
accept delivery of any Mortgage from any Loan Party unless each Lender has
received 45 days prior written notice thereof and Agent has received
confirmation from each Lender that such Lender has completed its flood insurance
diligence, has received copies of all flood insurance documentation and has
confirmed that flood insurance compliance has been completed as required by the
Flood Laws or as otherwise satisfactory to such Lender and (y) Agent shall not
accept delivery of any joinder to any Loan Document with respect to any
Subsidiary of any Loan Party that is not a Loan Party, if such Subsidiary that
qualifies as a "legal entity customer" under the Beneficial Ownership Regulation
unless such Subsidiary has delivered a Beneficial Ownership Certification in
relation to such Subsidiary and Agent has completed its Patriot Act searches,
OFAC/PEP searches and customary individual background checks for such
Subsidiary, the results of which shall be satisfactory to Agent.

 

(q)     By inserting the following parenthetical immediately prior to the "."
set forth at the end of Section 6.4:

 

(including by an allocation of assets among newly divided limited liability
companies pursuant to a "plan of division")

 

(r)     By (i) deleting the word "or" set forth at the end of Section
14.1(a)(xi) of the Credit Agreement, (ii) deleting the ";" set forth at the end
of Section 14.1(a)(xii) of the Credit Agreement and by substituting in lieu
thereof ", or" and by adding a new Section 14.1(a)(xiii) to the Credit Agreement
as follows:

 

(xiii)     at any time that any Real Property is included in the Collateral,
add, increase, renew or extend any Loan, Letter of Credit or Commitment
hereunder until the completion of flood due diligence, documentation and
coverage as required by the Flood Laws or as otherwise satisfactory to all
Lenders

 

(s)     By deleting Section 14.1(f) of the Credit Agreement and by substituting
the following in lieu thereof:

 

(f) Anything in this Section 14.1 to the contrary notwithstanding, (i) any
amendment, modification, elimination, waiver, consent, termination, or release
of, or with respect to, any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of any Loan
Party, shall not require consent by or the agreement of any Loan Party, (ii) any
amendment, waiver, modification, elimination, or consent of or with respect to
any provision of this Agreement or any other Loan Document may be entered into
without the consent of, or over the objection of, any Defaulting Lender, and
(iii) any amendment contemplated by Section 2.12(d)(iii) of this Agreement in
connection with a Benchmark Transition Event or an Early Opt-in Election shall
be effective as contemplated by such Section 2.12(d)(iii) hereof.

 

(t)     By adding new sentences to the end of Section 15.3 of the Credit
Agreement as follows:

 

No Agent-Related Person shall have any liability to any Lender, and Loan Party
or any of their respective Affiliates if any request for a Loan, Letter of
Credit or other extension of credit was not authorized by the applicable
Borrower. Agent shall not be required to take any action that, in its opinion or
in the opinion of its counsel, may expose it to liability or that is contrary to
any Loan Document or applicable law or regulation.

 

(u)     By deleting Section 16.1 of the Credit Agreement and by substituting the
following in lieu thereof:

 

16.1     Payments. All payments made by any Loan Party under any Loan Document
will be made free and clear of, and without deduction or withholding for, any
Taxes, except as otherwise required by applicable law, and in the event any
deduction or withholding of Taxes is required, the applicable Loan Party shall
make the requisite withholding, promptly pay over to the applicable Governmental
Authority the withheld tax, and furnish to Agent as promptly as possible after
the date the payment of any such Tax is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by Loan Parties.
Furthermore, if any such Tax is an Indemnified Tax or an Indemnified Tax is so
levied or imposed, Loan Parties agree to pay the full amount of such Indemnified
Taxes and such additional amounts as may be necessary so that every payment of
all amounts due under this Agreement, any note, or Loan Document, including any
amount paid pursuant to this Section 16.1 after withholding or deduction for or
on account of any Indemnified Taxes, will not be less than the amount provided
for herein. Loan Parties will promptly pay any Other Taxes or reimburse Agent
for such Other Taxes upon Agent's demand. Loan Parties shall jointly and
severally indemnify each Indemnified Person (as defined in Section 10.3)
(collectively a "Tax Indemnitee") for the full amount of Indemnified Taxes
arising in connection with this Agreement or any other Loan Document or breach
thereof by any Loan Party (including any Indemnified Taxes imposed or asserted
on, or attributable to, amounts payable under this Section 16) imposed on, or
paid by, such Tax Indemnitee and all reasonable costs and expenses related
thereto (including fees and disbursements of attorneys and other tax
professionals), as and when they are incurred and irrespective of whether suit
is brought, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority (other than
Indemnified Taxes and additional amounts that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Tax Indemnitee). The obligations of Loan Parties under this
Section 16 shall survive the termination of this Agreement, the resignation and
replacement of the Agent, and the repayment of the Obligations.

 

(v)     By adding a new Section 16.2(e) to the Credit Agreement as follows:

 

(e)     If a payment made to a Lender under any Loan Document would be subject
to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to
comply with the applicable due diligence and reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the IRC, as
applicable), such Lender shall deliver to Agent (or, in the case of a
Participant, to the Lender granting the participation only) at the time or times
prescribed by law and at such time or times reasonably requested by Agent (or,
in the case of a Participant, the Lender granting the participation) such
documentation prescribed by applicable law (including as prescribed by Section
1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably
requested by Agent (or, in the case of a Participant, the Lender granting the
participation) as may be necessary for Agent or Borrowers to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender's obligations under FATCA or to determine the amount to deduct and
withhold from such payment. Solely for purposes of this clause (e), "FATCA"
shall include any amendments made to FATCA after the date of this Agreement.

 

(w)     By deleting Section 17.9(c) of the Credit Agreement and by substituting
the following in lieu thereof:

 

(c)     Each Loan Party agrees that Agent may make materials or information
provided by or on behalf of Borrowers hereunder (collectively, "Borrower
Materials") available to Lenders by posting the Communications on IntraLinks,
SyndTrak or a substantially similar secure electronic transmission system (the
"Platform"). The Platform is provided "as is" and "as available." Agent does not
warrant the accuracy or completeness of the Borrower Materials, or the adequacy
of the Platform and expressly disclaims liability for errors or omissions in the
communications. No warranty of any kind, express, implied or statutory,
including any warranty of merchantability, fitness for a particular purpose,
non-infringement of third party rights or freedom from viruses or other code
defects, is made by Agent in connection with the Borrower Materials or the
Platform. In no event shall Agent or any Agent-Related Person have any liability
to Loan Parties, any Lender or any other person for damages of any kind,
including direct or indirect, special, incidental or consequential damages,
losses or expenses (whether in tort, contract or otherwise) arising out of any
Loan Party's or Agent's transmission of communications through the Internet,
except to the extent the liability of such person is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such person's gross negligence or willful misconduct. Each Loan Party
further agrees that certain Lenders may be "public-side" Lenders (i.e., Lenders
that do not wish to receive material non-public information with respect to Loan
Parties or their securities) (each, a "Public Lender"). Loan Parties shall be
deemed to have authorized Agent and its Affiliates and Lenders to treat Borrower
Materials marked "PUBLIC" or otherwise at any time filed with the SEC as not
containing any material non-public information with respect to Loan Parties or
their securities for purposes of United States federal and state securities
laws. All Borrower Materials marked "PUBLIC" are permitted to be made available
through a portion of the Platform designated as "Public Investor" (or another
similar term). Agent and its Affiliates and Lenders shall be entitled to treat
any Borrower Materials that are not marked "PUBLIC" or that are not at any time
filed with the SEC as being suitable only for posting on a portion of the
Platform not marked as "Public Investor" (or such other similar term).

 

(x)     By adding a new Section 17.16 to the Credit Agreement as follows:

 

Section 17.16. Acknowledgement Regarding Any Supported QFCs. To the extent that
the Loan Documents provide support, through a guarantee or otherwise, for Hedge
Agreements or any other agreement or instrument that is a QFC (such support,
"QFC Credit Support" and each such QFC a "Supported QFC"), the parties
acknowledge and agree as follows with respect to the resolution power of the
Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act
and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(together with the regulations promulgated thereunder, the "U.S. Special
Resolution Regimes") in respect of such Supported QFC and QFC Credit Support
(with the provisions below applicable notwithstanding that the Loan Documents
and any Supported QFC may in fact be stated to be governed by the laws of the
State of Georgia or of the United States or any other state of the United
States): In the event a Covered Entity that is party to a Supported QFC (each, a
"Covered Party") becomes subject to a proceeding under a U.S. Special Resolution
Regime, the transfer of such Supported QFC and the benefit of such QFC Credit
Support (and any interest and obligation in or under such Supported QFC and such
QFC Credit Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective to the same
extent as the transfer would be effective under the U.S. Special Resolution
Regime if the Supported QFC and such QFC Credit Support (and any such interest,
obligation and rights in property) were governed by the laws of the United
States or a state of the United States. In the event a Covered Party or a BHC
Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under the Loan Documents that might
otherwise apply to such Supported QFC or any QFC Credit Support that may be
exercised against such Covered Party are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special
Resolution Regime if the Supported QFC and the Loan Documents were governed by
the laws of the United States or a state of the United States. Without
limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.

 

(y)     By deleting the definitions of "Applicable Margin," "Authorized Person,"
"Borrowing Base," "Defaulting Lender," "FATCA," "FILO Maximum Amount," "Fixed
Charge Coverage Ratio," "Maturity Date" and "Maximum Revolver Amount" set forth
in Schedule 1.1 to the Credit Agreement and by substituting the following in
lieu thereof, respectively:

 

"Applicable Margin" means, as of any date of determination and with respect to
Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin set
forth in the following table that corresponds to the Alternate Average Excess
Availability of Borrowers for the most recently completed fiscal quarter;
provided, that for the period from the Closing Date through and including
December 27, 2019, the Applicable Margin shall be set at the margin in the row
styled "Level III"; provided further, that any time an Event of Default has
occurred and is continuing, the Applicable Margin shall be set at the margin in
the row styled "Level III":

 

Level

Alternate Average Excess Availability

Applicable Margin Relative to Base Rate Loans (the "Base Rate Margin")

Applicable Margin Relative to LIBOR Rate Loans (the "LIBOR Rate Margin")

I

> 50% of Revolver Commitments

0.25%

1.25%

II

< 50% of Revolver Commitments and > 20% of Revolver Commitments

0.50%

1.50%

III

< 20% of Revolver Commitments

0.75%

1.75%

 

The Applicable Margin shall be re-determined as of the first day of each fiscal
quarter of Borrowers.

 

"Authorized Person" means any one of the individuals identified as an officer of
a Borrower on Schedule A-2 to this Agreement, as such schedule is updated from
time to time by written notice from Borrowers to Agent, or any other individual
identified by Administrative Borrower as an authorized person and authenticated
through Agent's electronic platform or portal in accordance with its procedures
for such authentication.

 

"Borrowing Base" means, as of any date of determination, the result of:

 

(a)     85% of the amount of Eligible Accounts, less the amount, if any, of the
Dilution Reserve, plus

 

(b)     the lesser of:

 

(i)     $102,000,000, or

 

(ii)     the lesser of (A) sixty percent (60%) of the Value of Eligible Finished
Goods Inventory, Eligible Raw Material Inventory, and Eligible In-Transit
Inventory; or (B) eighty-five percent (85%) of the Net Orderly Liquidation Value
of such Eligible Inventory, plus

 

(c)     (i) at any time prior to the first day of the month immediately
following the satisfaction of the Clinton Real Property Re-Appraisal Conditions,
sixty-five percent (65%) of the appraised fair market value (based on the most
recent appraisal completed prior to the Fourth Amendment Date that is in form,
contains assumptions and utilizes methods acceptable to Agent and that is
performed by an appraiser acceptable to Agent) of the Clinton Real Property,
which amount shall be reduced on the first day of each month, commencing January
1, 2020 by an amount equal to $25,945.83, and (ii) at any time on and after the
first day of the month immediately following satisfaction of the Clinton Real
Property Re-Appraisal Conditions, an amount equal to the lesser of (i)
$10,500,000 and (ii) sixty-five percent (65%) of the appraised fair market value
of the Clinton Real Property (based on the most recent appraisal completed prior
to the satisfaction of the Clinton Real Property Re-Appraisal Conditions that is
in form, contains assumptions and utilizes methods acceptable to Agent and that
is performed by an appraiser acceptable to Agent), which amount shall be reduced
on the first day of each month, commencing on the first day of the second month
immediately following satisfaction of the Clinton Real Property Re-Appraisal
Conditions, by an amount equal to 1/120th of the lesser of (i) $10,500,000 and
(ii) sixty-five percent (65%) of the appraised fair market value of the Clinton
Real Property (based on the most recent appraisal completed prior to the
satisfaction of the Clinton Real Property Re-Appraisal Conditions that is in
form, contains assumptions and utilizes methods acceptable to Agent and that is
performed by an appraiser acceptable to Agent); plus

 

(d)     sixty-five percent (65%) of the appraised fair market value (based on
the most recent appraisal completed prior to the Fourth Amendment Date that is
in form, contains assumptions and utilizes methods acceptable to Agent and that
is performed by an appraiser acceptable to Agent) of Eligible Real Property of
Borrowers other than the Clinton Real Property, which amount shall be reduced on
the first day of each month, commencing January 1, 2020 by an amount equal to
$140,833.33; plus

 

(e)     eighty-five percent (85%) multiplied by the Net Orderly Liquidation
Value (based on the most recent appraisal completed prior to the Fourth
Amendment Date that is in form, contains assumptions and utilizes methods
acceptable to Agent and that is performed by an appraiser acceptable to Agent)
of the Eligible Equipment of Borrowers, which amount shall be reduced on the
first day of each month, commencing January 1, 2020 by an amount equal to
$37,632.74; plus

 

(f)     twenty-five percent (25%) of the appraised fair market value (based on
the most recent appraisal completed prior to the Fourth Amendment Date that is
in form, contains assumptions and utilizes methods acceptable to Agent and that
is performed by an appraiser acceptable to Agent) of the Eligible Intellectual
Property of Borrowers, which amount shall be reduced on the first day of each
month, commencing July 1, 2020 by an amount equal to $129,008.33; plus

 

(g)     the FILO Formula Amount; minus

 

(h)     the aggregate amount of Reserves, if any, established by Agent under
Section 2.1(c) of the Agreement.

 

Notwithstanding anything to the contrary contained herein, the portion of the
Borrowing Base on any date calculated with reference to Eligible Real Property,
Eligible Intellectual Property and Eligible Equipment collectively, shall not
exceed (i) at any time prior to the first day of the month immediately following
the satisfaction of the Clinton Real Property Re-Appraisal Conditions, twenty
percent (20%) of the Maximum Revolver Amount and (ii) at any time on and after
the first day of the month immediately following satisfaction of the Clinton
Real Property Re-Appraisal Conditions, twenty-five percent (25%) of the Maximum
Revolver Amount, and the aggregate amount of Adjusted Revolver Usage based on
Eligible Inventory consisting of yarn classified as work-in-process outstanding
at any time shall not exceed $2,500,000 at any time.

 

"Defaulting Lender" means any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two Business Days of the date such Loans were
required to be funded hereunder unless such Lender notifies Agent and Borrowers
in writing that such failure is the result of such Lender's determination that
one or more conditions precedent to funding (each of which conditions precedent,
together with any applicable Default or Event of Default, shall be specifically
identified in such writing) has not been satisfied, or (ii) pay to Agent,
Issuing Bank, or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit)
within two Business Days of the date when due, (b) has notified any Borrower,
Agent or Issuing Bank in writing that it does not intend to comply with its
funding obligations hereunder, or has made a public statement to that effect
(unless such writing or public statement relates to such Lender's obligation to
fund a Loan hereunder and states that such position is based on such Lender's
determination that a condition precedent to funding (which condition precedent,
together with any applicable Default or Event of Default, shall be specifically
identified in such writing or public statement) cannot be satisfied), (c) has
failed, within three Business Days after written request by Agent or
Administrative Borrower, to confirm in writing to Agent and Borrowers that it
will comply with its prospective funding obligations hereunder (provided, that
such Lender shall cease to be a Defaulting Lender pursuant to this clause (c)
upon receipt of such written confirmation by Agent and Borrowers), or (d) has,
or has a direct or indirect parent company that has, (i) become the subject of
any Insolvency Proceeding, (ii) had appointed for it a receiver, custodian,
conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such a capacity, or (iii) become the
subject of a Bail-in Action; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by Agent that a Lender is a Defaulting Lender under
any one or more of clauses (a) through (d) above shall be conclusive and binding
absent manifest error, and such Lender shall be deemed to be a Defaulting Lender
upon delivery of written notice of such determination to Borrowers, Issuing
Bank, and each Lender.

 

"FATCA" means Sections 1471 through 1474 of the IRC, 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 (a) any current or future
regulations or official interpretations thereof, (b) any agreements entered into
pursuant to Section 1471(b)(1) of the IRC, and (c) any intergovernmental
agreement entered into by the United States (or any fiscal or regulatory
legislation, rules, or practices adopted pursuant to any such intergovernmental
agreement entered into in connection therewith).

 

"FILO Maximum Amount" means (a) on and after the Third Amendment Date through
(and including) July 3, 2021, $7,000,000, (b) on and after July 4, 2021 through
(and including) August 7, 2021, $5,000,000, (c) on and after August 8, 2021
through (and including) September 4, 2021, $3,000,000, (d) on and after
September 5, 2021 through (and including) October 2, 2021, $1,000,000, and (e)
on and after October 3, 2021, $0.

 

"Fixed Charge Coverage Ratio" means, with respect to Borrowers and their
Subsidiaries, on a consolidated basis, for any period of determination, the
ratio of (a) the sum of (x) EBITDA of Borrowers during such period plus (y)
Restructuring Expenses actually recorded on Borrowers' books during such period
minus the sum of (i) the amount of any taxes paid in cash, cash dividends to the
equity holders of such Person and other distributions to equity holders of such
Person during the period in question (including all share repurchases and
redemptions with respect to the Qualified Equity Interests of such Person other
than those (A) made pursuant to Section 6.7(c) or (B) constituting Junkfood Sale
Equity Interest Repurchases) plus (ii) all Unfinanced Capital Expenditures made
during such period (other than Clinton Capital Expenditures made during such
period) plus (iii) all regularly scheduled (as determined at the beginning of
the respective period) principal payments of Indebtedness for borrowed money and
Indebtedness with respect to the Capital Leases made during such period to (b)
Fixed Charges of Borrowers and their Subsidiaries for the same period. In no
event shall the amount of (x) all Restructuring Expenses added back to EBITDA
during all periods exceed $5,000,000 in the aggregate or (y) Clinton Capital
Expenditures added back to EBITDA during all periods exceed $10,000,000 in the
aggregate.

 

"Maturity Date" means November 19, 2024.

 

"Maximum Revolver Amount" means $170,000,000, decreased by the amount of
reductions in the Revolver Commitments made in accordance with Section 2.4(c) of
the Agreement.

 

(z)     By adding the following new definitions of "Benchmark Replacement,"
"Benchmark Replacement Adjustment," "Benchmark Replacement Conforming Changes,"
"Benchmark Replacement Date," "Benchmark Transition Event," "Benchmark
Transition Start Date," "Benchmark Unavailability Period," "Beneficial Ownership
Certification," "BHC Act Affiliate," "Clinton Capital Expenditures," "Clinton
Expansion Project" "Clinton Real Property," "Clinton Real Property Re-Appraisal
Conditions," "Covered Entity," "Covered Party," "Default Right," "Early Opt-in
Election," "Eligible Intellectual Property," "Federal Reserve Bank of New York’s
Website," "Flood Laws," "Fourth Amendment Date," "Fourth Amendment Fee Letter,"
"Other Taxes," "QFC," "QFC Credit Support," "Relevant Governmental Body,"
"SOFR," "Supported QFC," "Tax Indemnitee," "Term SOFR," "Unadjusted Benchmark
Replacement" and "U.S. Special Resolution Regimes" to Schedule 1.1 to the Credit
Agreement in proper alphabetical order as follows, respectively:

 

"Benchmark Replacement" means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by Agent and Borrowers
giving due consideration to (i) any selection or recommendation of a replacement
rate or the mechanism for determining such a rate by the Relevant Governmental
Body or (ii) any evolving or then-prevailing market convention for determining a
rate of interest as a replacement to the LIBOR Rate for United States
dollar-denominated syndicated credit facilities, and (b) the Benchmark
Replacement Adjustment; provided that, if the Benchmark Replacement as so
determined would be less than zero, the Benchmark Replacement shall be deemed to
be zero for the purposes of this Agreement.

 

"Benchmark Replacement Adjustment" means, with respect to any replacement of the
LIBOR Rate with an Unadjusted Benchmark Replacement for each applicable Interest
Period, the spread adjustment, or method for calculating or determining such
spread adjustment, (which may be a positive or negative value or zero) that has
been selected by Agent and Borrowers giving due consideration to (i) any
selection or recommendation of a spread adjustment, or method for calculating or
determining such spread adjustment, for the replacement of the LIBOR Rate with
the applicable Unadjusted Benchmark Replacement by the Relevant Governmental
Body or (ii) any evolving or then-prevailing market convention for determining a
spread adjustment, or method for calculating or determining such spread
adjustment, for the replacement of the LIBOR Rate with the applicable Unadjusted
Benchmark Replacement for United States dollar-denominated syndicated credit
facilities at such time.

 

"Benchmark Replacement Conforming Changes" means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of "Base Rate", the definition of "Interest Period",
timing and frequency of determining rates and making payments of interest and
other administrative matters) that Agent decides may be appropriate to reflect
the adoption and implementation of such Benchmark Replacement and to permit the
administration thereof by Agent in a manner substantially consistent with market
practice (or, if Agent decides that adoption of any portion of such market
practice is not administratively feasible or if Agent determines that no market
practice for the administration of the Benchmark Replacement exists, in such
other manner of administration as Agent decides is reasonably necessary in
connection with the administration of this Agreement).

 

"Benchmark Replacement Date" means the earlier to occur of the following events
with respect to the LIBOR Rate:

 

(a) in the case of clause (a) or (b) of the definition of "Benchmark Transition
Event," the later of (i) the date of the public statement or publication of
information referenced therein and (ii) the date on which the administrator of
the LIBOR Rate permanently or indefinitely ceases to provide the LIBOR Rate; or

 

(b) in the case of clause (c) of the definition of "Benchmark Transition Event,"
the date of the public statement or publication of information referenced
therein.

 

"Benchmark Transition Event" means the occurrence of one or more of the
following events with respect to the LIBOR Rate:

 

(a)     a public statement or publication of information by or on behalf of the
administrator of the LIBOR Rate announcing that such administrator has ceased or
will cease to provide the LIBOR Rate, permanently or indefinitely, provided
that, at the time of such statement or publication, there is no successor
administrator that will continue to provide the LIBOR Rate;

 

(b)     a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBOR Rate, the Federal Reserve System
of the United States (or any successor), an insolvency official with
jurisdiction over the administrator for the LIBOR Rate, a resolution authority
with jurisdiction over the administrator for the LIBOR Rate or a court or an
entity with similar insolvency or resolution authority over the administrator
for the LIBOR Rate, which states that the administrator of the LIBOR Rate has
ceased or will cease to provide the LIBOR Rate permanently or indefinitely,
provided that, at the time of such statement or publication, there is no
successor administrator that will continue to provide the LIBOR Rate; or

 

(c)     a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBOR Rate announcing that the LIBOR
Rate is no longer representative.

 

"Benchmark Transition Start Date" means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by Agent or Required
Lenders, as applicable, by notice to Borrowers, Agent (in the case of such
notice by Required Lenders) and Lenders.

 

"Benchmark Unavailability Period" means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the LIBOR Rate
and solely to the extent that the LIBOR Rate has not been replaced with a
Benchmark Replacement, the period (x) beginning at the time that such Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has
replaced the LIBOR Rate for all purposes hereunder in accordance with Section
2.12(d)(iii) and (y) ending at the time that a Benchmark Replacement has
replaced the LIBOR Rate for all purposes hereunder pursuant to Section
2.12(d)(iii).

 

"Beneficial Ownership Certification" means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

 

"BHC Act Affiliate" of a Person means an "affiliate" (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such Person.

 

"Clinton Capital Expenditures" means Capital Expenditures incurred by Borrowers
in connection with the Clinton Expansion Project.

 

"Clinton Expansion Project" means the expansion of Borrowers' distribution
facility located on the Clinton Real Property.

 

"Clinton Real Property" means Borrowers' real property located within the Town
of Clinton, Anderson County, Tennessee, as more fully described on Schedule R-1.

 

"Clinton Real Property Re-Appraisal Conditions" means the first date on which:

 

(a)     no Default or Event of Default is in existence;

 

(b)     Agent shall have received an appraisal of the Clinton Real Property that
is (i) in form, contains assumptions and utilizes methods acceptable to Agent,
(ii) performed by an appraiser acceptable to Agent, and (iii) conducted after
the completion of the Clinton Expansion Project (to the reasonable satisfaction
of Agent);

 

(c)     Agent shall have received an ALTA as-built survey of the Clinton Real
Property that is (i) in form and substance acceptable to Agent, including a
metes-and-bounds property description of the Clinton Real Property, (ii)
performed by a licensed surveyor acceptable to Agent, and (iii) performed after
the completion of the Clinton Expansion Project (to the reasonable satisfaction
of Agent);

 

(d)     Agent shall have received a mortgagee title insurance policy with such
endorsements and affirmative coverages as may be required by Agent (or a marked
commitment to issue the same) for the Clinton Real Property issued by a title
insurance company satisfactory to Agent in amounts satisfactory to Agent
assuring Agent that the Mortgage on the Clinton Real Property is a valid and
enforceable first priority mortgage Lien on the Clinton Real Property free and
clear of all defects and encumbrances except Permitted Liens (and insuring over
all mechanics' and material suppliers' Liens arising (or which may arise) from
work performed with respect to the Clinton Expansion Project), and otherwise in
form and substance satisfactory to Agent;

 

(e)     Agent shall have received confirmation from each Lender that such Lender
has (i) completed its flood insurance diligence, (ii) has received copies of all
flood insurance documentation, and (iii) has confirmed that flood insurance
compliance has been completed as required by the Flood Laws or as otherwise
satisfactory to such Lender, in each case with respect to the Clinton Real
Property;

 

(f)      Agent shall have received a duly executed counterpart of an amendment
to the Mortgage for the Clinton Real Property from the applicable Borrower,
which shall be in form and substance satisfactory to Agent;

 

(g)     Agent shall have received an opinion of Loan Parties' Tennessee counsel
in form and substance satisfactory to Agent with respect to the Mortgage on the
Clinton Real Property;

 

(h)     Agent shall have received a certificate of insurance, together with the
endorsements thereto, as are required by Section 5.6 of this Agreement, in form
and substance satisfactory to Agent;

 

(i)     Agent shall have received a copy of the certificate of occupancy (or
similar document) issued by the applicable Governmental Authority with respect
to the Clinton Real Property and such other evidence that Agent may reasonably
require to demonstrate the completion of the Clinton Expansion Project; and

 

(j)     Agent shall have received a certificate signed by Borrowers' chief
financial officer on such date certifying that, without giving effect to the
transactions contemplated by this definition and in the definition of "Borrowing
Base," Borrowers have (i) pro forma Alternate Excess Availability of not less
than twelve and one-half percent (12.5%) of the lesser of (x) the Borrowing Base
(based on the most recently delivered Borrowing Base Certificate prior to such
date pursuant to Section 5.2) and (y) the Maximum Revolver Amount on such date,
and (ii) a pro forma Fixed Charge Coverage Ratio of not less than 1.10 to 1.00
for the twelve fiscal (12) month period ending on the last day of the most
recently ended fiscal month for which Borrowers have delivered the financial
statements required by Section 5.1, in each case as demonstrated by the
calculations attached thereto.

 

"Covered Entity" means any of the following:

 

(a)     a "covered entity" as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 252.82(b);

 

(b)     a "covered bank" as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 47.3(b); or

 

(c)     a "covered FSI" as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 382.2(b).

 

"Covered Party" has the meaning specified therefor in Section 17.16 of this
Agreement.

 

"Default Right" has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

 

"Early Opt-in Election" means the occurrence of:

 

(a)     (i) a determination by Agent or (ii) a notification by Required Lenders
to Agent (with a copy to Borrowers) that Required Lenders have determined that
United States dollar-denominated syndicated credit facilities being executed at
such time, or that include language similar to that contained in Section
2.12(d)(iii) are being executed or amended, as applicable, to incorporate or
adopt a new benchmark interest rate to replace the LIBOR Rate, and

 

(b)     (i) the election by Agent or (ii) the election by Required Lenders to
declare that an Early Opt-in Election has occurred and the provision, as
applicable, by Agent of written notice of such election to Borrowers and
Required Lenders or by Required Lenders of written notice of such election to
Agent.

 

"Eligible Intellectual Property" means any federally registered trademark of
Borrowers used in the ordinary course of Borrowers' business which is acceptable
to Agent based on the criteria set forth below. In general, Eligible Trademarks
shall not include (a) any trademark subject to an Intellectual Property Claim,
any trademark securing Permitted Trademark Financing Debt, or any trademark
otherwise subject to a security interest or other Lien in favor of any Person
other than Agent except those permitted in this Agreement (but without limiting
the right of Agent to establish any Reserves with respect to amounts secured by
such security interest or other Lien in favor of any Person even if permitted
herein); (b) any trademark which is not subject to the first priority, valid and
perfected security interest or Lien of Agent; (c) any trademark registered
exclusively outside the United States of America; or (d) any trademark with
respect to which Agent has not received an appraisal in form, scope and
methodology acceptable to Agent and by an appraiser acceptable to Agent,
addressed to Agent and Lenders and upon which Agent and Lenders are expressly
permitted to rely. General criteria for Eligible Trademarks may be established
and revised from time to time by Agent in good faith based on an event,
condition or other circumstance arising after the date hereof, or existing on
the date hereof to the extent Agent has no written notice thereof from a
Borrower, which adversely affects or could reasonably be expected to adversely
affect the trademark in the good faith determination of Agent. Any trademark
which is not an Eligible Trademark shall nevertheless be part of the Collateral.

 

"Federal Reserve Bank of New York’s Website" means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

 

"Flood Laws" means the National Flood Insurance Act of 1968, Flood Disaster
Protection Act of 1973, and related laws, rules and regulations, including any
amendments or successor provisions.

 

"Fourth Amendment Date" means November 19, 2019.

 

"Fourth Amendment Fee Letter" means that certain fee letter, dated as of the
Fourth Amendment Date, among Borrowers and Agent, in form and substance
reasonably satisfactory to Agent.

 

"Other Taxes" means all present or future stamp, court, excise, value added, or
documentary, intangible, recording, filing or similar Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, from the receipt or perfection of a security interest under, or
otherwise with respect to, any Loan Document.

 

"QFC" has the meaning assigned to the term "qualified financial contract" in,
and shall be interpreted in accordance with, 12 U.S.C. § 5390(c)(8)(D).

 

"QFC Credit Support" has the meaning specified therefor in Section 17.16 of this
Agreement.

 

"Relevant Governmental Body" means the Federal Reserve Board or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board or the Federal Reserve Bank of New York or any successor
thereto.

 

"SOFR" with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark, (or a successor administrator) on the Federal
Reserve Bank of New York’s Website.

 

"Supported QFC" has the meaning specified therefor in Section 17.16 of this
Agreement.

 

"Tax Indemnitee" has the meaning specified therefor in Section 16.1 of the
Agreement.

 

"Term SOFR" means the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.

 

"Unadjusted Benchmark Replacement" means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.

 

"U.S. Special Resolution Regimes" has the meaning specified therefor in Section
17.16 of this Agreement.

 

(aa)     By deleting clause (o)(ii) of the definition of "Permitted
Indebtedness" set forth in Schedule 1.1 of the Credit Agreement and by
substituting the following in lieu thereof:

 

(ii) the Permitted Foreign Debt in an aggregate outstanding principal amount not
to exceed $25,000,000 at any time outstanding for all Subsidiaries of each
Borrower that are CFCs,

 

(bb)     To correct a scrivener's error, by changing the definition of "Change
in Control" set forth in Schedule 1.1 of the Credit Agreement to read "Change of
Control."

 

(cc)     By deleting Schedule C-1 to the Credit Agreement and by substituting in
lieu thereof Schedule C-1 attached hereto.

 

3.     Ratification and Reaffirmation. Each Borrower hereby ratifies and
reaffirms the Obligations, each of the Loan Documents and all of such Borrower's
covenants, duties, indebtedness and liabilities under the Loan Documents.

 

4.     Acknowledgments and Stipulations. Each Borrower acknowledges and
stipulates that the Credit Agreement and the other Loan Documents executed by
such Borrower are legal, valid and binding obligations of such Borrower that are
enforceable against such Borrower in accordance with the terms thereof; all of
the Obligations are owing and payable without defense, offset or counterclaim
(and to the extent there exists any such defense, offset or counterclaim on the
date hereof, the same is hereby waived by such Borrower); the security interests
and Liens granted by such Borrower in favor of Agent are duly perfected, first
priority security interests and Liens; and, as of the close of business on
November 18, 2019, the unpaid principal amount of the Revolver Loans totaled
$106,872,594.13, and the undrawn face amount of all Letters of Credit totaled
$425,000.00.

 

5.     Representations and Warranties. Each Borrower represents and warrants to
Agent and Lenders, to induce Agent and Lenders to enter into this Amendment,
that no Default or Event of Default exists on the date hereof; the execution,
delivery and performance of this Amendment have been duly authorized by all
requisite corporate action on the part of such Borrower and this Amendment has
been duly executed and delivered by such Borrower; and all of the
representations and warranties made by such Borrower in the Credit Agreement are
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as
of the date hereof, as though made on and as of the date hereof (except to the
extent that such representations and warranties relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) as of such earlier
date).

 

6.     Reference to Credit Agreement. Upon the effectiveness of this Amendment,
each reference in the Credit Agreement to "this Agreement," "hereunder," or
words of like import shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.

 

7.     Breach of Amendment. This Amendment shall be part of the Credit Agreement
and a breach of any representation, warranty or covenant herein shall constitute
an Event of Default.

 

8.     Conditions Precedent. The effectiveness of the amendments contained in
Section 2 hereof are subject to the satisfaction of each of the following
conditions precedent, in form and substance satisfactory to Agent, unless
satisfaction thereof is specifically waived in writing by Agent:

 

(a)     Agent's receipt of duly executed counterparts of this Amendment, the
Fourth Amendment Fee Letter, amendments to the Mortgages and the other Loan
Documents and all instruments and documents to be entered into in connection
herewith from the applicable Borrowers and Lenders;

 

(b)     Agent's receipt of (i) evidence that appropriate financing statements
have been duly filed in such office or offices as may be necessary or, in the
opinion of Agent, desirable to perfect the Agent's Liens in and to the
Collateral, and (ii) searches reflecting the filing of all such financing
statements;

 

(c)     Agent's receipt of a certificate from the Secretary of each Loan Party
(i) attesting to the resolutions of such Loan Party's board of directors
authorizing its execution, delivery, and performance of the Loan Documents to
which it is a party, (ii) authorizing specific officers of such Loan Party to
execute the same, and (iii) attesting to the incumbency and signatures of such
specific officers of such Loan Party;

 

(d)     Agent's receipt of copies of each Loan Party's Governing Documents, as
amended, modified, or supplemented to the Closing Date, which Governing
Documents shall be (i) certified by the Secretary of such Loan Party, and (ii)
with respect to Governing Documents that are charter documents, certified as of
a recent date (not more than 30 days prior to the Closing Date) by the
appropriate governmental official;

 

(e)     Agent's receipt of a certificate of status with respect to each Loan
Party, dated within 10 days of the Closing Date, such certificate to be issued
by the appropriate officer of the jurisdiction of organization of such Loan
Party, which certificate shall indicate that such Loan Party is in good standing
in such jurisdiction;

 

(f)     Subject to Section 9 hereof, Agent's receipt of certificates of status
with respect to each Loan Party, each dated within 30 days of the Closing Date,
such certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Loan Party) in which its
failure to be duly qualified or licensed would constitute a Material Adverse
Effect, which certificates shall indicate that such Loan Party is in good
standing in such jurisdictions;

 

(g)     Agent's receipt of a completed Borrowing Base Certificate as of
September 28, 2019 giving pro forma effect to the transactions contemplated by
this Amendment showing that Borrowers shall have not less than $25,000,000 of
Availability;

 

(h)     Agent's receipt of flood certifications (and, if applicable, acceptable
flood insurance and FEMA form acknowledgements of insurance) for the Real
Property Collateral, satisfactory in form and substance to Agent;

 

(i)     Agent's receipt of appraisals of the Real Property Collateral, Eligible
Equipment and Eligible Intellectual Property satisfactory to Agent;

 

(j)     Agent's completion, with results satisfactory to Agent, of (i) Patriot
Act searches, OFAC/PEP searches and customary individual background checks for
each Loan Party, and (ii) OFAC/PEP searches and customary individual background
searches for each Loan Party's senior management and key principals;

 

(k)     Agent's receipt of an opinion of Loan Parties' counsel in form and
substance satisfactory to Agent;

 

(l)     Agent's receipt of a certificate of insurance, together with the
endorsements thereto, as are required by Section 5.6 of the Credit Agreement, in
form and substance satisfactory to Agent; and

 

(m)     Agent and each Lender's receipt, at least ten Business Days prior to the
date hereof, of a Beneficial Ownership Certification that is complete and
accurate in all respects in relation to any Loan Party that qualifies as a
"legal entity customer" under the Beneficial Ownership Regulation.

 

9.     Post-Closing Covenants. Borrowers covenant and agree to deliver to Agent:

 

(a)     On or before November 27, 2019, mortgagee title insurance policies with
such endorsements and affirmative coverages as may be required by Agent (or
marked commitments to issue the same) for the Real Property Collateral issued by
a title insurance company satisfactory to Agent (each a "Mortgage Policy" and,
collectively, the "Mortgage Policies") in amounts satisfactory to Agent assuring
Agent that the Mortgages on such Real Property Collateral are valid and
enforceable first priority mortgage Liens on such Real Property Collateral free
and clear of all defects and encumbrances except Permitted Liens, which Mortgage
Policies otherwise shall be in form and substance satisfactory to Agent; and

 

(b)     On or before December 20, 2019, a certificate of status with respect to
Delta issued by the appropriate officer of the State of Texas, which certificate
shall indicate that Delta is in good standing in such jurisdiction.

 

10.     Expenses of Agent. Borrowers agree to pay, on demand, all costs and
expenses incurred by Agent in connection with the preparation, negotiation and
execution of this Amendment and any other Loan Documents executed pursuant
hereto and any and all amendments, modifications, and supplements thereto,
including, without limitation, the costs and fees of Agent's legal counsel and
any taxes or expenses associated with or incurred in connection with any
instrument or agreement referred to herein or contemplated hereby.

 

11.     Effectiveness; Governing Law. This Amendment shall be effective upon
acceptance by Agent and Lenders (notice of which acceptance is hereby waived),
whereupon the same shall be governed by and construed in accordance with the
internal laws of the State of Georgia.

 

12.     Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

 

13.     No Novation, etc. Except as otherwise expressly provided in this
Amendment, nothing herein shall be deemed to amend or modify any provision of
the Credit Agreement or any of the other Loan Documents, each of which shall
remain in full force and effect. This Amendment is not intended to be, nor shall
it be construed to create, a novation or accord and satisfaction, and the Credit
Agreement as herein modified shall continue in full force and effect.

 

14.     Counterparts; Telecopied Signatures. This Amendment may be executed in
any number of counterparts and by different parties to this Amendment on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same agreement.
Any signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto.

 

15.     Further Assurances. Each Borrower agrees to take such further actions as
Agent shall reasonably request from time to time in connection herewith to
evidence or give effect to the amendments set forth herein or any of the
transactions contemplated hereby.

 

16.     Section Titles. Section titles and references used in this Amendment
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreements among the parties hereto.

 

17.     Release of Claims. To induce Agent and Lenders to enter into this
Amendment, each Borrower hereby releases, acquits and forever discharges Agent
and Lenders, and all officers, directors, agents, employees, successors and
assigns of Agent and Lenders, from any and all liabilities, claims, demands,
actions or causes of action of any kind or nature (if there be any), whether
absolute or contingent, disputed or undisputed, at law or in equity, or known or
unknown, that such Borrower now has or ever had against Agent or any Lender
arising under or in connection with any of the Loan Documents or otherwise. Each
Borrower represents and warrants to Agent and Lenders that such Borrower has not
transferred or assigned to any Person any claim that such Borrower ever had or
claimed to have against Agent or any Lender.

 

18.     Waiver of Jury Trial. To the fullest extent permitted by applicable law,
the parties hereto each hereby waives the right to trial by jury in any action,
suit, counterclaim or proceeding arising out of or related to this Amendment.

 

[Remainder of page intentionally left blank; signatures appear on following
pages.]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed under seal and delivered by their respective duly authorized officers
on the date first written above.

 

BORROWERS:

 

DELTA APPAREL, INC.

 

By: /s/ Deborah H. Merrill

Name: Deborah H. Merrill

Title:    Vice President, Chief Financial Officer,

             and Treasurer

 

M.J. SOFFE, LLC

 

By: /s/ Deborah H. Merrill

Name: Deborah H. Merrill

Title:    Vice President, Chief Financial Officer,

             and Treasurer

 

CULVER CITY CLOTHING COMPANY

 

By: /s/ Deborah H. Merrill

Name: Deborah H. Merrill

Title:    Chief Financial Officer

 

SALT LIFE, LLC

 

By: /s/ Deborah H. Merrill

Name: Deborah H. Merrill

Title:    Vice President, Chief Financial Officer,

             and Treasurer

 

DTG2GO, LLC

 

By: /s/ Deborah H. Merrill

Name: Deborah H. Merrill

Title:    Vice President, Chief Financial Officer,

             and Treasurer

 

 

[Signatures continue on the following page.]

 

AGENT:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

By: /s/ Ryan C. Tozier

Name: Ryan C. Tozier

Title:    Vice President

 

LENDERS:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

By: /s/ Ryan C. Tozier

Name: Ryan C. Tozier

Title:    Vice President

 

 

[Signatures continue on the following page.]

 

REGIONS BANK

 

By: /s/ Elizabeth L. Schoer

Name: Elizabeth L. Schoer

Title: Sr. Vice President

 

 

[Signatures continue on the following page.]

 

PNC BANK, NATIONAL ASSOCIATION

 

By: /s/ Doug Meckelnburg

Name: Doug Meckelnburg

Title: Vice President

 

 

 

Schedule C-1

 

Commitments

 

Lender

Revolver Commitment

Wells Fargo Bank, National Association

$88,000,000.00

PNC Bank, National Association

$41,000,000.00

Regions Bank

$41,000,000.00

All Lenders

$170,000,000.00