Document:

Exhibit
10.1

September 18, 2006

Mr. William Carter

8729 Cypress Trail

Waynesville, OH 45068

Dear Bill,

I am pleased to offer you
the position of Managing Director, responsible for our electronic discovery
solutions practice, located in our New York office at 90 Park Avenue,
contingent upon successful completion of a customary background check.

Your reporting
relationship will be with the executive management committee, currently
comprised of Tom Olofson, Christopher Olofson and Elizabeth Braham. Your initial
annualized base salary will be three hundred thousand dollars ($300,000) and
will be paid pursuant to the company’s standard policies and schedule.

For the period of time
beginning on your starting date of employment and continuing through December
31, 2007, you will have a cash bonus opportunity with “base”, “target” and “stretch”
levels of $187,500, $250,000 and $375,000, respectively. The bonus for this
time frame relates to annual “base”, “target” and “stretch” bonus opportunity
levels of $150,000, $200,000 and $300,000 respectively. Relative to your bonus
opportunity through December 31, 2007, you will receive a guaranteed minimum
of  $150,000 to be paid on March 31,
2007, provided that you remain employed by EPIQ Systems on the date of
payment. The remainder of any bonus amount earned for this time period will be
paid in March 2008.

You will be eligible for
four weeks of vacation annually in addition to the company’s other benefits for
sick, personal and holiday time. Vacation time during calendar 2006 will be
prorated. You will also be eligible for those standard fringe benefit programs
that the company makes available to its associates from time to time.

You will be eligible to
receive a stock option grant for one hundred thousand (100,000) shares of
EPIQ Systems stock that will vest in equal 25% installments at the end of
each one year period of employment beginning on your second year anniversary
date. The price of the stock option grant will be assigned based on the closing
price of EPIQ Systems stock on your first date of employment. Further details,
terms and conditions 

 

regarding the stock
option benefit are documented in a stock option agreement that will be signed
by both you and the company.

You will be provided a
corporate apartment in mid-town New York and you will be eligible for
relocation benefits in the future if you relocate to the New York area at a
future date.

In the event of a change
in control of EPIQ Systems’ ownership, such as by merger or acquisition, if you
are terminated without just cause within one year of such change in control,
then you will receive a lump sum severance benefit equal to one year of your
then current base salary, subject to normal withholdings.

Your starting date of
employment will be Monday October 2, 2006 at our 90 Park Avenue location in New
York.

It is my pleasure to
welcome you to EPIQ Systems! Tom, Chris, Betsy and I are looking forward to
working with you and establishing a long-term relationship.

Sincerely,

Doreen Kennedy

Senior Vice President

Human Resources

cc: Mike Taylor, Heidrick
& StrugglesExhibit 10.1

RATIFICATION AND
AMENDMENT AGREEMENT

This RATIFICATION AND AMENDMENT AGREEMENT (the
“Ratification Agreement”) dated as of October 4, 2006, is by and among WACHOVIA
BANK, NATIONAL ASSOCIATION (successor by merger to Congress Financial Corporation
and hereinafter referred to as “Lender”), ANVIL KNITWEAR, INC., a Delaware
corporation, as Debtor and Debtor-in-Possession (“Borrower”), ANVIL HOLDINGS,
INC, a Delaware corporation, as Debtor and Debtor-in-Possession (“Holdings”)
and SPECTRATEX, Inc., formerly known as Cottontops, Inc., a Delaware
corporation, as Debtor and Debtor-in-Possession (“Spectratex” and together with
Holdings, each individually, a “Guarantor” and collectively, the “Guarantors”;
and together with Borrower, each individually, a “Debtor” and collectively, the
“Debtors”).

W I T N E S S E T H:

WHEREAS, each Debtor has commenced a case under
Chapter 11 of Title 11 of the United States Code in the United States
Bankruptcy Court for the Southern District of New York and Borrowers and Guarantors
have retained possession of their respective assets and each is authorized
under the Bankruptcy Code to continue the operation of its businesses as
debtor-in-possession;

WHEREAS, prior to the commencement of the Chapter 11
Cases (as hereinafter defined), Lender made loans and advances to Borrower
secured by substantially all assets and properties of Borrower and Guarantors
as set forth in the Existing Financing Agreements (as hereinafter defined) and
the Existing Guarantor Documents (as hereinafter defined);

WHEREAS, the Bankruptcy Court (as hereinafter defined)
has entered a Financing Order (as hereinafter defined) pursuant to which Lender
may make post-petition loans, advances and other financial accommodations to
Borrower secured by substantially all the assets and properties of Borrower and
Guarantors as set forth in the Financing Order and the Financing Agreements (as
hereinafter defined);

WHEREAS, the Financing Order provides that as a
condition to the making of such post-petition loans, advances and other
financial accommodations, Borrower and Guarantors shall execute and deliver
this Ratification Agreement;

WHEREAS, Borrowers and Guarantors desire to reaffirm
their obligations pursuant to the Existing Financing Agreements and acknowledge
their continuing liabilities to Lender thereunder in order to induce Lender to
make such post-petition loans and advances to Borrower; and

WHEREAS, Borrower and Guarantors have requested that
Lender make post-petition loans to Borrower and make certain amendments to the
Loan Agreement (as hereinafter defined) and Lender is willing to do so subject
to the terms and conditions contained herein.

 

 

NOW, THEREFORE, in consideration of the foregoing, the
mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender, Borrower and Guarantors mutually covenant, warrant and agree as
follows:

1.             DEFINITIONS.

1.1           Additional
Definitions.  As used herein, the
following terms shall have the respective meanings given to them below and the
Existing Financing Agreements shall be deemed and are hereby amended to
include, in addition and not in limitation, each of the following definitions:

(a)           “Asheville
Mortgage” shall mean the Deed of Trust and Security Agreement, dated on or
about the date hereof, by Borrower in favor of Lender with respect to the Real
Property and related assets of Borrower located in Buncombe County, North
Carolina.

(b)           “Bankruptcy
Court” shall mean the United States Bankruptcy Court or the United States
District Court for the Southern District of New York.

(c)           “Chapter
11 Cases” shall mean the Chapter 11 cases of Borrower and Guarantors which are
being jointly administered under the Bankruptcy Code and are pending in the
Bankruptcy Court.

(d)           “Bankruptcy
Code” shall mean the United States Bankruptcy Code, being Title 11 of the
United States Code as enacted in 1978, as the same has heretofore been or may
hereafter be amended, recodified, modified or supplemented, together with all
rules, regulations and interpretations thereunder or related thereto.

(e)           “Capital
Expenditures” shall mean for any Person for any period, the aggregate of
amounts that would be reflected as additions to property, plant, or equipment
on a consolidated balance sheet of such Person and its Subsidiaries, excluding
interest capitalized during construction.

(f)            “Consolidated
Net Income” shall mean, with respect to any Person, for any period, the
aggregate of the net income (loss) of such Person and its Subsidiaries, on a
consolidated basis, for such period, excluding to the extent included therein
any extraordinary, one-time or non-recurring gains, after deducting all charges
which should be deducted before arriving at the net income (loss) for such
period and after deducting the Provision for Taxes for such period, all as
determined in accordance with GAAP; provided, that, (i) the net income of any
Person that is not a majority-owned Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid or payable to such Person or a
majority-owned Subsidiary of such Person; (ii) the effect of any change in
accounting principles adopted by (or applicable to) such Person or its
Subsidiaries after the date hereof (including any cumulative effects resulting
from changes in purchase accounting principles) shall be excluded; and (iii)
the net income (if positive) of any majority-owned Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
majority-owned Subsidiary to such Person or to any other majority-owned
Subsidiary of such Person is not at the time permitted by operation of the
terms of its charter or 

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any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such majority-owned Subsidiary shall be excluded.  For the purpose of this definition, net
income excludes any gain together with any related Provision for Taxes for such
gain realized upon the sale or other disposition of any assets or of any
Capital Stock of such Person or a Subsidiary of such Person.

(g)           “EBITDA”
shall mean, as to any Person, with respect to any period, an amount equal
to:(i) the Consolidated Net Income of such Person and its Subsidiaries for such
period, plus (ii) depreciation and amortization, imputed interest, deferred
compensation for such period (to the extent deducted in the computation of
Consolidated Net Income of such Person), all in accordance with GAAP, plus
(iii) Interest Expense for such period (to the extent deducted in the
computation of Consolidated Net Income of such Person), plus (iv) the Provision
for Taxes for such period (to the extent deducted in the computation of
Consolidated Net Income of such Person), plus (v) non-cash expenses related to
severance payments made by Borrower (to the extend deducted in the computation
of Consolidation Net Income).

(h)           “Existing
Financing Agreements” shall mean the Financing Agreements (as defined in the
Existing Loan Agreement), including, without limitation, the Existing Guarantor
Documents (as hereinafter defined), in each instance, as in effect immediately
prior to the Petition Date.

(i)            “Existing
Guarantor Documents” shall mean, collectively, (i) Guarantee, dated as of March
11, 1999, by Guarantors in favor of Lender, (ii) General Security Agreement,
dated as of March 11, 1999, by Holdings in favor of Lender, (iii) Pledge and
Security Agreement, dated as of March 11, 1999, by Holdings in favor of Lender
with respect to the outstanding capital stock of Borrower, (iv) General
Security Agreement, dated as of March 11, 1999, by Spectratex in favor of
Lender, and (v) Trademark Collateral Assignment and Security Agreement, dated
as of March 11, 1999, by Spectratex in favor of Lender, in each instance, as in
effect immediately prior to the Petition Date.

(j)            “Existing
Loan Agreement” shall mean the Loan and Security Agreement, dated as of March
11, 1999, by and among Borrower, Guarantors and Lender, as amended by Amendment
No. 1 to Loan and Security Agreement, dated as of May 28, 2002 and Amendment
No. 2 to Loan and Security Agreement, dated as of May 20, 2004, and otherwise
as in effect immediately prior to the Petition Date.

(k)           “Financing
Order” shall mean the Interim Financing Order, the Permanent Financing Order
and such other orders relating thereto or authorizing the granting of credit by
Lender to Borrowers on an emergency, interim or permanent basis pursuant to
Section 364 of the Bankruptcy Code as may be issued or entered by the
Bankruptcy Court in the Chapter 11 Cases.

(l)            “Guarantor
Documents” shall mean, collectively, the Existing Guarantor Documents, as
amended by this Ratification Agreement, in each instance, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.

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(m)          “Interest
Expense” shall mean, for any period, as to any Person, as determined in
accordance with GAAP, the total interest expense of such Person, whether paid
or accrued during such period but without duplication (including the interest
component of Capital Leases for such period), including, without limitation,
discounts in connection with the sale of any Accounts that are sold for
purposes other than collection, but excluding interest paid in property other
than cash and any other interest expense not payable in cash.

(n)           “Interim
Financing Order” shall have the meaning set forth in Section 9.8 hereof.

(o)           “Inventory
Sublimit” shall mean $20,000,000 except that commencing November 1, 2006
through and including January 31, 2007, the Inventory Sublimit shall mean
$24,000,000.”

(p)           “Permanent
Financing Order” shall have the meaning set forth in Section 9.9 hereof.

(q)           “Petition
Date” shall mean the date of the commencement of the Chapter 11 Cases.

(r)            “Post-Petition
Collateral” shall mean, collectively, all now existing and hereafter acquired
real and personal property of each Debtor’s estate, wheresoever located, of any
kind, nature or description, including any such property in which a lien is
granted to Lender pursuant to the Financing Agreements, the Financing Order or
any other order entered or issued by the Bankruptcy Court, and shall include,
without limitation:

(i)            all
of the Pre-Petition Collateral;

(ii)           all
Accounts;

(iii)          all
general intangibles, including, without limitation, all  Intellectual Property;

(iv)          all
goods, including, without limitation, all Inventory and all Equipment;

(v)           all
Real Property and fixtures;

(vi)          all
chattel paper, including, without limitation, all tangible and electronic
chattel paper;

(vii)         all
instruments, including, without limitation, all promissory notes;

(viii)        all
documents;

(ix)           all
deposit accounts;

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(x)            all
letters of credit, banker’s acceptances and similar instruments and including
all letter-of-credit rights;

(xi)           all
supporting obligations and all present and future liens, security interests,
rights, remedies, title and interest in, to and in respect of Receivables and
other Collateral, including, without limitation, (A) rights and remedies under
or relating to guaranties, contracts of suretyship, letters of credit and
credit and other insurance related to the Collateral, (B) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of
an unpaid vendor, lienor or secured party, (C) goods described in invoices,
documents, contracts or instruments with respect to, or otherwise representing
or evidencing, Receivables or other Collateral, including returned, repossessed
and reclaimed goods, and (D) deposits by and property of account debtors or
other persons securing the obligations of account debtors;

(xii)          all
(A) investment property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements, commodity contracts
or commodity accounts) and (B) monies, credit balances, deposits and other
property of Borrower and Guarantors now or hereafter held or received by or in
transit to Lender or its affiliates or at any other depository or other institution
from or for the account of Borrower or Guarantors, whether for safekeeping,
pledge, custody, transmission, collection or otherwise;

(xiii)         all
commercial tort claims;

(xiv)        to
the extent not otherwise described above, all Receivables;

(xv)         all
claims, rights, interests, assets and properties (recovered by or on behalf of
each Borrower and Guarantor or any trustee of such Borrower or Guarantor
(whether in the Chapter 11 Cases or any subsequent case to which any of the
Chapter 11 Cases is converted), including, without limitation, all property
recovered as a result of transfers or obligations avoided or actions maintained
or taken pursuant to Sections 544, 545, 547, 548, 549, 550, 551 and 553 of the
Bankruptcy Code;

(xvi)        all
Records; and

(xvii)       all
products and proceeds of the foregoing, in any form, including insurance
proceeds and all claims against third parties for loss or damage to or
destruction of or other involuntary conversion of any kind or nature of any or
all of the other Collateral.

(s)           “Post-Petition
Obligations” shall mean all Loans, Letter of Credit Accommodations and other
loans, advances, letter of credit accommodations, debts, obligations,
liabilities, covenants and duties of Borrower and Guarantors to Lender of every
kind and description, however evidenced, whether direct or indirect, absolute
or contingent, joint or several, secured or unsecured, due or not due, primary
or secondary, liquidated or unliquidated, arising on and after the Petition
Date and whether arising on or after the conversion or dismissal of the Chapter
11 Cases, or before, during and after the confirmation of any plan of
reorganization in the Chapter 11 Cases, and whether arising under or related to
this Ratification 

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Agreement, the Guarantor Documents, the other Financing Agreements, a
Financing Order, by operation of law or otherwise, and whether incurred by
Borrower or such Guarantor as principal, surety, endorser, guarantor or
otherwise and including, without limitation, all principal, interest, financing
charges, letter of credit fees, unused line fees, servicing fees, line increase
fees, DIP facility fees, early termination fees, other fees, commissions,
costs, expenses and attorneys’, accountants’ and consultants’ fees and expenses
incurred in connection with any of the foregoing.

(t)            “Pre-Petition
Collateral” shall mean, collectively, (i) all “Collateral” as such term is
defined in the Existing Loan Agreement as in effect immediately prior to the
Petition Date, (ii) all “Collateral” as such term is defined in each of the
Existing Guarantor Documents as in effect immediately prior to the Petition
Date, and (iii) all other security for the Pre-Petition Obligations as provided
in the Existing Guarantor Documents and Existing Financing Agreements
immediately prior to the Petition Date.

(u)           “Pre-Petition
Obligations” shall mean all Loans, Letter of Credit Accommodation and other
loans, advances, letter of credit accommodations, debts, obligations,
liabilities, indebtedness, covenants and duties of Borrower and Guarantors to
Lender of every kind and description, however evidenced, whether direct or
indirect, absolute or contingent, joint or several, secured or unsecured, due
or not due, primary or secondary, liquidated or unliquidated, arising before
the Petition Date under or related to the Existing Guarantor Documents, the
other Existing Financing Agreements, by operation of law or otherwise, and
whether incurred by Borrower or such Guarantor as principal, surety, endorser,
guarantor or otherwise and including, without limitation, all principal,
interest, financing charges, letter of credit fees, unused line fees, servicing
fees, line increase fees, early termination fees, other fees, commissions,
costs, expenses and attorneys’, accountants’ and consultants’ fees and expenses
incurred in connection with any of the foregoing.

(v)           “Ratification
Agreement” shall mean this Ratification Agreement by and among Borrowers,
Guarantors and Lender, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.

1.2           Amendments
to Definitions in Financing Agreements.

(a)           All
references to the term “Collateral” in any of the Existing Financing Agreements
or any other term referring to the security for the Pre-Petition Obligations shall
be deemed and each such reference is hereby amended to mean, collectively, the
Pre-Petition Collateral and the Post-Petition Collateral.

(b)           All
references to Debtors, including, without limitation, to the terms “Borrower,”
“Guarantor,” or “Guarantors” in any of the Existing Financing Agreements, shall
be deemed, and each such reference is hereby amended, to mean and include the
Debtors as defined herein, and their successors and assigns (including any
trustee or other fiduciary hereafter appointed as its legal representative or
with respect to the property of the estate of such corporation whether under
Chapter 11 of the Bankruptcy Code or any subsequent Chapter 7 case and its
successor upon conclusion of the 2006 Chapter 11 Cases of such corporation).

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(c)           All
references to the term “Financing Agreements” in any of the Existing Financing
Agreements, shall be deemed, and each such reference is hereby amended, to
include, in addition and not in limitation, this Ratification Agreement and all
of the Existing Financing Agreements, as ratified, assumed and adopted by
Borrower and each Guarantor pursuant to the terms hereof, as amended and
supplemented hereby, and the Financing Order, as each of the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

(d)           All
references to the term “Loan Agreement” in any of the Existing Financing
Agreements and the Financing Agreements, shall be deemed, and each such
reference is hereby amended, to mean the Existing Loan Agreement, as amended by
this Ratification Agreement and as ratified, assumed and adopted by Borrower
and each Guarantor pursuant to the terms hereof and the Financing Order, as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

(e)           All
references to the term “Material Adverse Effect,” “material adverse effect” and
“material adverse change” in this Ratification Agreement and in any of the
Existing Financing Agreements, shall be deemed, and each such reference in the
Existing Financing Agreements is hereby amended, to add at the end
thereof:  “provided, that, the
commencement of the Chapter 11 Cases shall not constitute a material adverse
effect”.

(f)            All
references to the term “Obligations” in this Ratification Agreement and in any
of the Financing Agreements shall be deemed, and each such reference in the
Financing Agreements is hereby amended, to mean both the Pre-Petition
Obligations and the Post-Petition Obligations.

1.3           Interpretation.

(a)           For
purposes of this Ratification Agreement, unless otherwise defined or amended
herein, including, but not limited to, those terms used and/or defined in the
recitals hereto, all terms used herein shall have the respective meanings
assigned to such terms in the Loan Agreement.

(b)           All
references to the term “Lender,” “Borrower,” “Guarantors,” “Debtors” or any
other person pursuant to the definitions in the recitals hereto or otherwise
shall include its respective successors and assigns.

(c)           All
references to any term in the singular shall include the plural and all
references to any term in the plural shall include the singular unless the
context of such usage requires otherwise.

(d)           All
terms not specifically defined herein which are defined in the Uniform
Commercial Code, as in effect in the State of New York as of the date hereof,
shall have the meaning set forth therein, except that the term “Lien” or “lien”
shall have the meaning set forth in § 101(37) of the Bankruptcy Code.

 

 

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2.             ACKNOWLEDGMENT.

2.1           Pre-Petition
Obligations.  Borrower and each
Guarantor hereby acknowledge, confirm and agree that, as of October 2, 2006,
Borrower is indebted to Lender in respect of all Pre-Petition Obligations in
the aggregate principal amount of not less than $25,818,730.34, consisting of
(a) Revolving Loans made pursuant to the Existing Financing Agreements in the
aggregate principal amount of not less than $23,404,449.01, together with
interest accrued and accruing thereon, and (b) Letter of Credit Accommodations
in the amount of not less than $2,414,281.33, together with interest accrued
and accruing thereon, and all costs, expenses, fees (including attorneys’ fees
and legal expenses) and (c) other charges now or hereafter owed by Borrower to
Lender, all of which are unconditionally owing by Borrower to Lender, without
offset, defense or counterclaim of any kind, nature and description whatsoever.

2.2           Guaranteed
Obligations.  Each Guarantor hereby
acknowledges, confirms and agrees that:

(a)           all
obligations of such Guarantor under the Guarantor Documents are unconditionally
owing by such Guarantor to Lender without offset, defense or counterclaim of
any kind, nature and description whatsoever, and

(b)           the
absolute and unconditional guarantee of the payment of the Pre-Petition
Obligations by such Guarantor pursuant to the Guarantor Documents extends to
all Post-Petition Obligations, subject only to the limitations set forth in the
Guarantor Documents.

2.3           Acknowledgment
of Security Interests.  Borrower and
each Guarantor hereby acknowledge, confirm and agree that Lender has and shall
continue to have valid, enforceable and perfected first priority and senior
security interests in and liens upon all Pre-Petition Collateral heretofore
granted to Lender pursuant to the Existing Financing Agreements as in effect
immediately prior to the Petition Date to secure all of the Obligations, as
well as valid and enforceable first priority and senior security interests in
and liens upon all Post-Petition Collateral granted to Lender under the
Financing Order or hereunder or under any of the other Financing Agreements or
otherwise granted to or held by Lender, in each case, subject only to liens or
encumbrances expressly permitted by the Loan Agreement and any other liens or
encumbrances expressly permitted by the Financing Order that may have priority
over the liens in favor of Lender.

2.4           Binding
Effect of Documents.  Borrower and
each Guarantor hereby acknowledge, confirm and agree that: (a) each of the
Existing Financing Agreements to which it is a party was duly executed and
delivered to Lender by such Borrower or Guarantor and each is in full force and
effect as of the date hereof, (b) the agreements and obligations of such
Borrower or Guarantor contained in the Existing Financing Agreements constitute
the legal, valid and binding obligations of such Borrower or Guarantor
enforceable against such Borrower or Guarantor in accordance with its
respective terms and such Borrower or Guarantor has no valid defense, offset or
counterclaim to the enforcement of such obligations, and (c) Lender is and
shall be entitled to all of the rights, remedies and benefits provided for in
the Financing Agreements and the Financing Order.

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3.             ADOPTION AND RATIFICATION

Borrower and each Guarantor hereby (a) ratifies,
assumes, adopts and agrees to be bound by the Existing Financing Agreements
applicable to it and (b) agrees to pay all of the Pre-Petition Obligations in
accordance with the terms of such Existing Financing Agreements, as amended by
this Ratification Agreement, and in accordance with the Financing Order.  All of the Existing Financing Agreements are
hereby incorporated herein by reference and hereby are and shall be deemed
adopted and assumed in full by Borrower and Guarantors, each as Debtor and
Debtor-in-Possession, and considered as agreements between such Borrower or
Guarantor and Lender, as applicable. 
Borrower and each Guarantor hereby ratifies, restates, affirms and
confirms all of the terms and conditions of the Existing Financing Agreements,
as amended and supplemented pursuant hereto and the Financing Order, and
Borrower and each Guarantor agrees to be fully bound, as Debtor and
Debtor-in-Possession, by the terms of the Financing Agreements to which such
Borrower or Guarantor is a party.

4.             GRANT OF SECURITY INTEREST.

Upon the entry of the Financing Order, as collateral
security for the prompt performance, observance and payment in full of all of
the Obligations (including the Pre-Petition Obligations and the Post-Petition
Obligations), Borrower and each Guarantor, each as Debtor and
Debtor-in-Possession, hereby grants, pledges and assigns to Lender, and also
confirms, reaffirms and restates the prior grant to Lender of, continuing
security interests in and liens upon, and rights of setoff against, all of the
Collateral.

5.             ADDITIONAL REPRESENTATIONS,
WARRANTIES AND COVENANTS.

In addition to the continuing representations,
warranties and covenants heretofore and hereafter made by Borrower and each
Guarantor to Lender, whether pursuant to the Financing Agreements or otherwise,
and not in limitation thereof, Borrower and each Guarantor hereby represents,
warrants and covenants to Lender the following (which shall survive the
execution and delivery of this Ratification Agreement), the truth and accuracy
of which, or compliance with, to the extent such compliance does not violate
the terms and provisions of the Bankruptcy Code, shall be a continuing
condition of the making of Loans by Lender:

5.1           Financing
Order.  The Interim Financing Order
(and, following the expiration of the Interim Financing Period (as defined in
the Interim Financing Order), the Permanent Financing Order) has been duly
entered, is valid, subsisting and continuing and has not been vacated,
modified, reversed on appeal, or vacated or modified by any order of the
Bankruptcy Court (other than as consented to by Lender) and is not subject to
any pending appeal or stay.

5.2           Use
of Proceeds.  All Loans and Letter of
Credit Accommodations provided by Lender to Borrower pursuant to the Financing
Orders, the Loan Agreement or otherwise, shall be used by Borrower for general
operating and working capital purposes in the ordinary course of business of
Borrower.  Unless authorized by the
Bankruptcy Court and approved by Lender in writing, no portion of any
administrative expense claim or other claim relating to the Chapter 11 Cases
shall be paid with the proceeds of such Loans and Letter of 

 

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Credit Accommodations provided by Lender to Borrower, other than those
administrative expense claims and other claims relating to the Chapter 11 Cases
directly attributable to the operation of the business of Borrower or any
Guarantor in the ordinary course of such business in accordance with the
Financing Agreements.

5.3           Ratification
of Blocked Account Agreement.   To
the extent Lender deems it necessary in its discretion and upon Lender’s
request, Borrower and Guarantors shall promptly provide Lender with evidence,
in form and substance satisfactory to Lender, that the Blocked Account
Agreement (as defined in the Financing Order) and other deposit account
arrangements provided for under Section 6.3 of the Loan Agreement have been
ratified and amended by the parties thereto, or their respective successors in
interest, in form and substance satisfactory to Lender, to reflect the
commencement of the Chapter 11 Cases, that Borrower and each Guarantor, each as
Debtor and Debtor-in-Possession, is the successor in interest to such Borrower
or Guarantor, that the Obligations include both the Pre-Petition Obligations
and the Post-Petition Obligations, that the Collateral includes both the
Pre-Petition Collateral and the Post-Petition Collateral as provided for herein
and the other terms and conditions of this Ratification Agreement.

5.4           ERISA.   Borrower and Guarantors hereby represent and
warrant with, to and in favor of Lender that (a) there are no liens, security
interests or encumbrances upon, in or against any assets or properties of
Borrower or any Guarantor arising under ERISA, whether held by the Pension
Benefit Guaranty Corporation (the “PBGC”) or the contributing sponsor of, or a
member of the controlled group thereof, any pension benefit plan of Borrower or
any Guarantor and (b) no notice of lien has been filed by the PBGC (or any other
Person) pursuant to ERISA against any assets or properties of Borrower or any
Guarantor.

5.5           Real
Property.  Borrower and Guarantors
hereby represent and warrant with, to and in favor of Lender that except with
respect to the Real Property of Borrower located at P.O. Box 367, 850 Warren
Wilson College Road, Swannanoa, North Carolina, 28778, all of the Real Property
of Borrower identified on Schedule 1.40 and Schedule 9.70 of the Loan Agreement
(as in effect immediately prior to the date hereof) has been sold prior to the
date hereof and is no longer owned by Borrower.

6.             DIP FACILITY FEE.

Borrower shall pay Lender a closing fee in respect of
the financing provided by Lender to Borrower in the Chapter 11 Cases in the
amount of $200,000, which shall be fully earned and payable on the date hereof.

7.             AMENDMENTS.

7.1           Availability
Reserves.  Section 1.4 of the Loan
Agreement is hereby amended to add the following clause (g) at the end of the
first sentence thereof:

“ or (g) to establish the reserve provided for in
Section 2.4 of the Financing Order.”

 10
 

 

 

7.2           Eligible
Accounts.  Section 1.22(m) of the
Loan Agreement is hereby deleted in its entirety and the following substituted
therefor:

“(m)        the
aggregate amount of (i) such Accounts owing by a single account debtor (other
than New Buffalo, Fortune Fashion, Imprints Wholesale and Broder Bros. Co., its
divisions, Affiliates and Subsidiaries) do not constitute more than fifteen
(15%) percent of the aggregate amount of all otherwise Eligible Accounts, (ii)
such Accounts owing by each of New Buffalo, Fortune Fashion, and Imprints
Wholesale do not, in each case, constitute more than twenty (20%) percent of
the aggregate amount of all otherwise Eligible Accounts, and (iii) such
Accounts owing by Broder Bros. Co., its divisions, Affiliates and Subsidiaries,
collectively, do not constitute more than thirty-five (35%) percent of the
aggregate amount of all otherwise Eligible Accounts; provided  however,
that, in each of the foregoing clauses (i), (ii) and (iii), the portion of the
Accounts not in excess of the applicable percentages may be deemed Eligible
Accounts.”

7.3           Eligible
Inventory.  Section 1.25 of the Loan
Agreement is hereby amended by deleting the word “and” from before clause (l)
and adding the following clause (m) to the second sentence thereof:

“and (m) Inventory located outside the United States
of America.”

7.4           Existing
Real Property.  Schedule 1.40 of the
Loan Agreement is hereby amended by deleting the text of such schedule in its
entirety and substituting the following therefor:

“None.”

7.5           Definition
of GAAP.  The definition of GAAP set
forth at Section 1.42 of the Loan Agreement is hereby amended by adding the
following language to the end of such definition:

“except that, for purposes of Sections 9.20 and 9.21
hereof, GAAP shall be determined on the basis of such principles in effect on
the date of the Ratification Agreement and consistent with those used in the
preparation of the most recent audited financial statements delivered to Agent
prior to the date hereof.”

7.6           Mortgages.  The definition of Mortgages set forth at
Section 1.58 of the Loan Agreement is hereby amended by deleting the “.” at the
end thereof and substituting the following therefor:

“, and (c) the Asheville Mortgage.”

 11
 

 

 

7.7           Borrowing
Base.  Section 2.1(a)(ii)of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefor:

“(ii) the lesser of:

(A) Inventory Sublimit or

(B) the sum of :

(1) the lesser of (aa)
sixty (60%) percent multiplied by the Value of the Eligible Inventory of
Borrower consisting of finished goods or (bb) eighty-five (85%) percent of the
Net Recovery Percentage multiplied by the Value of such Eligible Inventory,
plus

(2) the lesser of (aa)
$2,000,000 or (bb) the lesser of (i) fifty (50%) percent multiplied by the
Value of the Eligible Inventory of Borrower consisting of raw materials or (ii)
eighty-five (85%) percent of the Net Recovery Percentage multiplied by the
Value of such Inventory.”

7.8           Limits
and Sublimits.  Section 3 of the Loan
Agreement is hereby amended by adding the following new Section 3.6 at the end
thereof:

“3.6         All limits and sublimits set forth in
the Loan Agreement, and any formula or other provision to which a limit or
sublimit may apply, shall be determined on an aggregate basis considering
together both the Pre-Petition Obligations and the Post-Petition Obligations.”

7.9           Foreign
Subsidiaries.  Section 5 of the Loan
Agreement is hereby amended to add the following subsection 5.10 thereto:

“5.10  No later
than sixty (60) days after the entry date of the Interim Financing Order (or
such later date as the Lender, in its discretion, shall agree), (i) Borrower
and Guarantors shall execute and deliver to Lender in form and substance
satisfactory to Lender, a pledge and security agreement (and/or other
appropriate documentation, in accordance with the jurisdiction of incorporation
of such Foreign Subsidiary) granting to Lender a first pledge of and lien on
sixty-five percent (65%) of the issued and outstanding shares of Capital Stock
of each Foreign Subsidiary (including, without limitation, A.K.H. S.A., LIVNA,
Limitada, Estrella Mfg. Ltda. S.A., Star, S.A., Annic LLC, S.A., and Anvil
GmbH), and (ii) to the extent the capital stock of such foreign subsidiaries
are certificated, Borrower and such Guarantor shall deliver the original stock
certificates evidencing such shares of Capital Stock together with stock powers
(or other appropriate instrument) with respect thereto duly executed in blank,
and (iii) Lender shall have received 

 12
 

 

all other documents, instruments and opinions, Lender
deems desirable in order to obtain a perfected first priority security interest
in such Capital Stock.”

7.10         Payments.  Section 6.4 of the Loan Agreement is hereby
amended by adding the following at the end thereof:

“Without limiting the
generality of the foregoing, Lender may, in its discretion, apply any such
payments or proceeds first to the Pre-Petition Obligations (as such term is
defined in this Agreement) until such Pre-Petition Obligations are paid and
satisfied in full.”

7.11         Inventory
Appraisals.  Section 7.3(d) of the
Loan Agreement is hereby deleted in its entirety and the following substituted
therefor:

“(d) upon Lender’s request, Borrower shall, at its
expense, no more than once in any consecutive six (6) month period but at any
time or times as Lender may request on or after and during the continuance of
an Event of Default, deliver or cause to be delivered to Lender written reports
or appraisals as to the Inventory in form, scope and methodology reasonably
acceptable to Lender and by an appraiser reasonably acceptable to Lender,
addressed to Lender and upon which Lender is expressly permitted to rely;”

7.12         Equipment
Covenants.  Notwithstanding Section
7.4 of the Loan Agreement to the contrary, Borrower shall be permitted to
transfer Equipment from the “Asheville” facility located at 850 Warren Wilson
College Road, Swannanoa, North Carolina, 28778 to the “Honduras” facility
located at 800 Mts. Carreters A La Jutosa, Zone Libre Inhdelva, Choloma Cortes,
Honduras, C.A; provided, however, that not less than thirty (30)
days prior to transferring any such Equipment from the Asheville facility to
the Honduras facility, Borrower shall provide Lender with a schedule of the
Equipment to be moved and the month(s) in which such Equipment will be moved.

7.13         Additional
Financial Reporting Requirements.

(a)           Section
9.6(a)(i) of the Loan Agreement is hereby amended by adding the following
language to the end of such section:

“along with a schedule in form reasonably satisfactory
to Lender of the calculations used in determining, as of the end of such month,
whether Borrower and Guarantors were in compliance with the covenants set forth
in Sections 9.20 and 9.21 of this Agreement for such month,”

(b)           Section
9.6 of the Loan Agreement is hereby amended by adding the following new Section
9.6(f):

 

 13

 

 

“(f)  Borrower and each Guarantor shall also
provide Lender with copies of all financial reports, schedules and other
materials and information at any time furnished by or on behalf of Borrower or
any Guarantor to the Bankruptcy Court, or the U.S. Trustee or to any creditors’
committee or such Borrower’s or Guarantor’s shareholders, concurrently with the
delivery thereof to the Bankruptcy Court, creditors’ committee, U.S. Trustee or
shareholders, as the case may be.”

7.14         Real Property. 
Schedule 9.7 of the Loan Agreement is hereby amended by deleting the
text of such schedule in its entirety and substituting the following therefor:

“None.”

7.15         Costs and Expenses. 
Section 9.16(f) of the Loan Agreement is hereby amended by adding the
following new language at the end thereof:

“provided,
however, that Lender shall conduct, at Borrower’s sole cost and expense,
not more than three (3) field examinations during any consecutive twelve (12)
month period, but as many field examinations as Lender may deem necessary (each
at Borrower’s sole cost and expense) on or after an Event of Default;”

7.16         Sale of Assets, Consolidation, Merger, Disabilities, Etc.  Notwithstanding anything to the contrary
contained in Section 9.7(b) of the Loan Agreement or any other provision of the
Loan Agreement or the other Financing Agreements, Borrower and Guarantors shall
not directly or indirectly sell, transfer, lease, encumber, return or otherwise
dispose of any portion of the Collateral or any other assets of Borrower and
Guarantors, including, without limitation, assume, reject or assign any
leasehold interest or enter into any agreement to return Inventory to vendor,
whether pursuant to section 546 of the Bankruptcy Code or otherwise, without
the prior written consent of Lender (and no such consent shall be implied, from
any other action, inaction or acquiescence by Lender) except for sales of
Borrower’s and Guarantors’ Inventory in the ordinary course of their business.

7.17         Capital Expenditures. 
Section 9 of the Loan Agreement is hereby amended by adding the
following new Section 9.20 at the end thereof:

“9.20  Maximum Capital Expenditures.  Borrower shall not during any period set
forth in Schedule 9.20 hereto, directly or indirectly, make or commit to make,
whether through purchases, capital leases or otherwise, Capital Expenditures in
an aggregate amount in excess of the amount for such period set forth on
Schedule 9.20, excluding Capital Expenditures financed with the proceeds of
Indebtedness or equity from third parties permitted under the terms of this
Agreement.

7.18         EBITDA. 
Section 9 of the Loan Agreement is hereby amended by adding the
following new Section 9.21 at the end thereof:

 

 14
 

 

 

“9.21  Minimum EBITDA.  At any time, the EBITDA of Holdings and its
Subsidiaries (on a consolidated basis) for each period set forth on Schedule
9.21 hereto shall be not less than amounts set forth on Schedule 9.21 hereto
with respect to such period.”

7.19         Events of Default. 
Section 10.1 of the Loan Agreement is hereby amended as follows:

(a)           Sections 10.1(g) and (h) are hereby amended to delete all
references to “any Borrower or any Obligor” and substitute “any Obligor (other
than Debtors)” therefor.

(b)           Section 10.1 is hereby amended by deleting the reference
to the word “or” at the end of Section 10.1(m), replacing the period appearing
at the end of Section 10.1(n) with a semicolon, and adding the following:

“10.1(o)  the occurrence of any condition or event
which permits Lender to exercise any of the remedies set forth in the Financing
Order, including, without limitation, any “Event of Default” (as defined in the
Financing Order);

10.1(p)  the termination or non-renewal of the
Financing Agreements as provided for in the Financing Order;

10.1(q) Borrower or any
Guarantor suspends or discontinues or is enjoined by any court or governmental
agency from continuing to conduct all or any material part of its business, or
a trustee, receiver or custodian is appointed for Borrower or any Guarantor, or
any of their respective properties;

10.1(r)  any act, condition or event occurring after
the date of the commencement of the Chapter 11 Cases that has or would
reasonably expect to have a Material Adverse Effect upon the assets of Borrower
or any Guarantor, or the Collateral or the rights and remedies of Lender under
the Loan Agreement or any other Financing Agreements or the Financing Order;

10.1(s)  conversion of any Chapter 11 Case to a
Chapter 7 case under the Bankruptcy Code;

10.1(t)  dismissal of any Chapter 11 Case or any
subsequent Chapter 7 case either voluntarily or involuntarily;

10.1(u)  the grant of a lien on or other interest in
any property of Borrower or any Guarantor other than a lien or encumbrance
permitted by Section 9.8 hereof or by the Financing Order or an administrative
expense claim other than such

 

 15
 

 

 

administrative expense claim permitted by the
Financing Order or this Ratification Agreement by the grant of or allowance by
the Bankruptcy Court which is superior to or ranks in parity with Lender’s
security interest in or lien upon the Collateral or Lender’s Superpriority
Claim (as defined in the Financing Order);

10.1(v)  the Financing Order shall be modified,
reversed, revoked, remanded, stayed, rescinded, vacated or amended on appeal or
by the Bankruptcy Court without the prior written consent of Lender (and no
such consent shall be implied from any other authorization or acquiescence by
Lender);

10.1(w)  the appointment of a trustee pursuant to
Sections 1104(a)(1) or 1104(a)(2) of the Bankruptcy Code;

10.1(x)  the appointment of an examiner with special
powers pursuant to Section 1104(a) of the Bankruptcy Code;

10.1(y)  the filing of a plan of reorganization by or
on behalf of Borrower or any Guarantor, to which Lender has not consented in
writing, which does not provide for payment in full of all Obligations on the
effective date thereof in accordance with the terms and conditions contained
herein; or

10.1(z) the confirmation
of any plan of reorganization in the Chapter 11 Case of Borrower or any
Guarantor, to which Lender has not consented to in writing, which does not
provide for payment in full of all Obligations on the effective date thereof in
accordance with the terms and conditions contained herein.”

7.20         Governing Law; Choice of Forum; Service of Process; Jury
Trial Waiver.

(a)           Section 11.1(a) of the Loan Agreement is hereby amended by
adding the following at the end thereof: 
“except to the extent that the provisions of the Bankruptcy Code are
applicable and specifically conflict with the foregoing.”

(b)           Section 11.1(b) of the Loan Agreement is hereby amended by
deleting the phrase “United States District Court for the Southern District of
New York” and replacing it with the phrase “United States District Court for
the Southern District of New York and United States Bankruptcy Court for the
Southern District of New York” therefor.

7.21         Term of Loan Agreement.  The first two sentences of Section 12.1(a) of
the Loan Agreement are hereby deleted in their entirety and the following
substituted therefor:

“This Agreement and the other Financing Agreements
shall become effective as of the date set forth on the first page hereof and
shall continue in full force and effect for a term ending on the earlier to
occur of (i) September 28, 2007, or (ii) the last

 

 16
 

 

 

termination date set forth in the Interim Financing
Order, unless the Permanent Financing Order has been entered prior to such
date, and in such event, then the last termination date set forth in the
Permanent Financing Order; provided, however that this Agreement and all other
Financing Agreements must be terminated simultaneously.”

7.22         Notices. 
Section 12.2 of the Loan Agreement is hereby amended by adding that any
notices, requests and demands also be sent to the following parties:

	
  If to Borrowers or Guarantors:

  	
  Anvil Knitwear, Inc.

  228 East 45th Street

  New York, New York 10017

  Facsimile No.:212.885.9411

  Attn: President

  Attn: General Counsel

  
	
   

  	
   

  
	
  with a copy to:

  	
  Dechert LLP

  30 Rockefeller Plaza

  New York, NY 10112

  Facsimile No.:212.698.3599

  Attn: Joel H. Levitin, Esq.

  
	
   

  	
   

  
	
  If to Lender:

  	
  Wachovia Bank, National Association

  1133 Avenue of the Americas

  New York, New York 10036

  Attention: Portfolio Manager -ANVIL

  Facsimile No.: (212) 545-4283

  
	
   

  	
   

  
	
  with a copy to:

  	
  Otterbourg, Steindler, Houston & Rosen, P.C.

  230 Park Avenue

  New York, New York 10169

  Facsimile No.: (212) 682-6104

  Attn: Jonathan N. Helfat, Esq.

  

8.             RELEASE.

8.1           Release of Pre-Petition Claims.

(a)           Upon the earlier of (i) the entry of the Permanent
Financing Order or (ii) upon entry of an Order extending the term of the
Interim Financing Order beyond thirty (30) calendar days after the date of the
Interim Financing Order, in consideration of the agreements of Lender contained
herein and the making of any Loans by Lender, each of Borrower and each
Guarantor, pursuant to the Loan Agreement, and for other good and valuable

 

 17
 

 

 

consideration, the receipt and sufficiency of
which is hereby acknowledged, on behalf of itself and its respective
successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably releases, remises and forever discharges the
Lender, its successors and assigns, and their respective present and former
shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers,
attorneys, employees and other representatives (Lender and all such other
parties being hereinafter referred to collectively as the “Releasees” and
individually as a “Releasee”), of and from all demands, actions, causes of
action, suits, covenants, contracts, controversies, agreements, promises, sums
of money, accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set-off, demands and liabilities whatsoever
(individually, a “Pre-Petition Released Claim” and collectively, “Pre-Petition
Released Claims”) of every name and nature, known or unknown, suspected or
unsuspected, both at law and in equity, which Borrower and each Guarantor, or
any of its respective successors, assigns, or other legal representatives may
now or hereafter own, hold, have or claim to have against the Releasees or any
of them for, upon, or by reason of any nature, cause or thing whatsoever which
arises at any time on or prior to the day and date of this Agreement,
including, without limitation, for or on account of, or in relation to, or in
any way in connection with the Loan Agreement, as amended and supplemented
through the date hereof, and the other Financing Agreements.

(b)           Upon the earlier of (i) the entry of the Permanent Financing
Order or (ii) upon entry of an Order extending the term of the Interim
Financing Order beyond thirty (30) calendar days after the date of the Interim
Financing Order, Borrower and each Guarantor, on behalf of itself and its
successors, assigns, and other legal representatives, hereby absolutely,
unconditionally and irrevocably, covenants and agrees with each Releasee that
it will not sue (at law, in equity, in any regulatory proceeding or otherwise)
any Releasee on the basis of any Pre-Petition Released Claim released, remised
and discharged by Borrower and each Guarantor pursuant to this Section
8.1.  If Borrower or any Guarantor
violates the foregoing covenant, Borrower and Guarantors agree to pay, in
addition to such other damages as any Releasee may sustain as a result of such
violation, all attorneys’ fees and costs incurred by any Releasee as a result
of such violation.

8.2           Release of Post-Petition Claims. Upon (a) the
receipt by Lender of payment in full of all Obligations in cash or other
immediately available funds, plus cash collateral or other collateral security
acceptable to Lender to secure any Obligations that survive or continue beyond
the termination of the Financing Agreements, and (b) the termination of the
Financing Agreements (the “Payment Date”), in consideration of the agreements
of Lender contained herein and the making of any Loans by Lender, Borrower and
each Guarantor hereby covenants and agrees to execute and deliver in favor of
Lender a valid and binding termination and release agreement, in form and
substance satisfactory to Lender.  If
Borrower or any Guarantor violates such covenant, Borrower and Guarantors agree
to pay, in addition to such other damages as any Releasee may sustain as a
result of such violation, all attorneys’ fees and costs incurred by any
Releasee as a result of such violation.

8.3           Releases Generally.

(a)           Borrower and each Guarantor understands, acknowledges and
agrees that the releases set forth above in Sections 8.1 and 8.2 hereof  may be pleaded as a full

 

 18
 

 

 

and complete defense and may be used as a
basis for an injunction against any action, suit or other proceeding which may
be instituted, prosecuted or attempted in breach of the provisions of such
releases.

(b)           Borrower and each Guarantor agrees that no fact, event,
circumstance, evidence or transaction which could now be asserted or which may
hereafter be discovered shall affect in any manner the final and unconditional
nature of the releases set forth in Section 8.1 hereof and, when made, Section
8.2 hereof.

9.             CONDITIONS
PRECEDENT.

In addition to any other conditions contained herein
or the Loan Agreement, as in effect immediately prior to the Petition Date,
with respect to the Loans and other financial accommodations available to
Borrower (all of which conditions, except as modified or made pursuant to this
Ratification Agreement shall remain applicable to the Loans and be applicable
to other financial accommodations available to Borrower), the following are
conditions to Lender’s obligation to extend further loans, advances or other
financial accommodations to Borrower pursuant to the Loan Agreement:

9.1           Borrower and Guarantors shall furnish to Lender all
financial information, projections, budgets, business plans, cash flows and
such other information as Lender shall reasonably request from time to time;

9.2           as of the Petition Date, the Existing Financing Agreements
shall not have been terminated;

9.3           no trustee, examiner or receiver or the like shall have
been appointed or designated with respect to Borrower or any Guarantor, as
Debtor and Debtor-in-Possession, or its respective business, properties and
assets and no motion or proceeding shall be pending seeking such relief;

9.4           the execution and delivery of this Ratification Agreement
and all other Financing Agreements to be delivered in connection herewith by
Borrower and Guarantors in form and substance satisfactory to Lender;

9.5           the Interim Financing Order or other Order(s) of the
Bankruptcy Court shall ratify and amend the Blocked Account Agreement and
deposit account arrangements of Borrower and Guarantors to reflect the
commencement of the Chapter 11 Cases, that each Debtor, as Debtor and
Debtor-in-Possession, is the successor in interest to such Borrower or
Guarantor, as the case may be, that the Obligations include both the
Pre-Petition Obligations and the Post-Petition Obligations, that the Collateral
includes both the Pre-Petition Collateral and the Post-Petition Collateral as
provided for herein and the other terms and conditions of this Ratification
Agreement;

9.6           the execution or delivery to Lender of all other Financing
Agreements, and other agreements, documents and instruments which, in the good
faith judgment, of Lender are necessary or appropriate.  The implementation of the terms of this
Ratification Agreement and the other Financing Agreements, as modified pursuant
to this Ratification Agreement, all of

 

 19
 

 

 

which contains provisions, representations,
warranties, covenants and Events of Default, as are satisfactory to Lender and
its counsel;

9.7           satisfactory review by counsel for Lender of legal issues
attendant to the post-petition financing transactions contemplated hereunder;

9.8           Borrower and each Guarantor shall comply in full with the
notice and other requirements of the Bankruptcy Code and the applicable
Bankruptcy Rules with respect to any relevant 
Financing Order in a manner acceptable to Lender and its counsel, and an
Interim Financing Order shall have been entered by the Bankruptcy Court (the “Interim
Financing Order”) authorizing the secured financing under the Financing
Agreements as ratified and amended hereunder on the terms and conditions set
forth in this Ratification Agreement and, among other things, modifying the
automatic stay, authorizing and granting the senior security interest in liens
in favor of Lender described in this Ratification Agreement and in the
Financing Order, and granting super-priority expense claims to Lender with
respect to all obligations due Lender. 
The Interim Financing Order shall authorize post-petition financing
under the terms set forth in this Ratification Agreement in an amount
acceptable to Lender, in its sole discretion, and it shall contain such other
terms or provisions as Lender and its counsel shall require;

9.9           with respect to further credit after expiration of the
Interim Financing Order, on or before the expiration of the Interim Financing
Order, the Bankruptcy Court shall have entered a Permanent Financing Order
authorizing the secured financing on the terms and conditions set forth in this
Ratification Agreement, granting to Lender the senior security interest and
liens described above and super-priority administrative expense claims
described above (except as otherwise specifically provided in the Interim
Financing Order), and modifying the automatic stay and other provisions
required by Lender and its counsel (“Permanent Financing Order”).  Lender shall not provide any Loans (or other
financial accommodations) other than those authorized under the Interim
Financing Order unless, on or before the expiration of the Interim Financing
Order, the Permanent Financing Order shall have been entered, and there shall
be no appeal or other contest with respect to either the Interim Financing
Order or the Permanent Financing Order and the time to appeal to contest such
order shall have expired;

9.10         other than the voluntary commencement of the Chapter 11
Cases, no material impairment of the priority of Lender’s security interests in
the Collateral shall have occurred from the date of the latest field
examinations of Lender to the Petition Date;

9.11         no Event of Default shall have occurred or be existing under
any of the Existing Financing Agreements, as modified pursuant hereto, and
assumed by Borrowers and Guarantors; and

9.12         the execution and/or delivery in favor of Lender of the
Asheville Mortgage, in form and substance satisfactory to Lender and in form
appropriate for recording in the real estate records of the jurisdiction in
which such Real Property is located; provided, however, that,
until such time as Lender shall provide Borrower with written notice to the
contrary, Sections 4.1(i) and 4.1(j) of the Loan Agreement shall not be
applicable to the Asheville Mortgage.

 

 20
 

 

 

10.           MISCELLANEOUS.

10.1         Amendments and Waivers.  Neither this Ratification Agreement nor any
other instrument or document referred to herein or therein may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought.

10.2         Further Assurances. 
Borrower and each Guarantor shall, at its expense, at any time or times
duly execute and deliver, or shall use its best efforts to cause to be duly
executed and delivered, such further agreements, instruments and documents,
including, without limitation, additional security agreements, collateral
assignments, UCC financing statements or amendments or continuations thereof,
landlord’s or mortgagee’s waivers of liens and consents to the exercise by
Lender of all the rights and remedies hereunder, under any of the other
Financing Agreements, any Financing Order or applicable law with respect to the
Collateral, and do or use its best efforts to cause to be done such further
acts as may be reasonably necessary or proper in Lender’s opinion to evidence,
perfect, maintain and enforce the security interests of Lender, and the
priority thereof, in the Collateral and to otherwise effectuate the provisions
or purposes of this Ratification Agreement, any of the other  Financing Agreements or the Financing
Order.  Upon the request of Lender, at
any time and from time to time, Borrower and each Guarantor shall, at its cost
and expense, do, make, execute, deliver and record, register or file, updates
to the filings of Lender with respect to the Intellectual Property with the
United States Patent and Trademark Office, the financing statements, mortgages,
deeds of trust, deeds to secure debt, and other instruments, acts, pledges,
assignments and transfers (or use its best efforts to cause the same to be
done) and will deliver to Lender such instruments evidencing items of
Collateral as may be requested by Lender.

10.3         Headings.  The
headings used herein are for convenience only and do not constitute matters to
be considered in interpreting this Ratification Agreement.

10.4         Counterparts. 
This Ratification Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall together constitute one and the same agreement.  In making proof of this Ratification
Agreement, it shall not be necessary to produce or account for more than one
counterpart thereof signed by each of the parties hereto.  Delivery of an executed counterpart of this Ratification
Agreement by telefacsimile shall have the same force and effect as delivery of
an original executed counterpart of this Ratification Agreement.  Any party delivering an executed counterpart
of this Ratification Agreement by telefacsimile also shall deliver an original
executed counterpart of this Ratification Agreement, but the failure to deliver
an original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Ratification Agreement as to such party or any other
party.

10.5         Additional Events of Default.  The parties hereto acknowledge, confirm and
agree that the failure of Borrower or any Guarantor to comply with any of the
covenants, conditions and agreements contained herein or in any other
agreement, document or instrument at any time executed by such Borrower or
Guarantor in connection herewith shall constitute an Event of Default under the
Financing Agreements.

 

 21
 

 

 

10.6         Costs and Expenses. 
Borrower shall pay to Lender on demand all costs and expenses that
Lender pays or incurs in connection with the negotiation, preparation,
consummation, administration, enforcement, and termination of this Ratification
Agreement and the other Financing Agreements and the Financing Order,
including, without limitation: (a) reasonable attorneys’ and paralegals’ fees
and disbursements of counsel to, and reasonable fees and expenses of
consultants, accountants and other professionals retained by, Lender; (b) costs
and expenses (including reasonable attorneys’ and paralegals’ fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with this Ratification Agreement, the other Financing
Agreements, the Financing Order and the transactions contemplated thereby; (c)
taxes, fees and other charges for recording any agreements or documents with
any governmental authority, and the filing of UCC financing statements and
continuations, and other actions to perfect, protect, and continue the security
interests and liens of Lender in the Collateral; (d) sums paid or incurred to
pay any amount or take any action required of Borrower and Guarantors under the
Financing Agreements or the Financing Order that Borrower and Guarantors fail
to pay or take; (e) costs of appraisals, inspections and verifications of the
Collateral and including travel, lodging, and meals for inspections of the
Collateral and the Debtors’ operations by Lender or its agent and to attend
court hearings or otherwise in connection with the Chapter 11 Cases; (f) costs
and expenses of preserving and protecting the Collateral; (g) all out-of-pocket
expenses and costs heretofore and from time to time hereafter incurred by the
Lender during the course of periodic field examinations of the Collateral and
Debtors’ operations, plus a per diem charge at the rate of $750 per person per
day for Lender’s examiners in the field and office; and (h) costs and expenses
(including attorneys’ and paralegals’ fees and disbursements) paid or incurred
to obtain payment of the Obligations, enforce the security interests and liens
of Lender, sell or otherwise realize upon the Collateral, and otherwise enforce
the provisions of this Ratification Agreement, the other Financing Agreements
and the Financing Order, or to defend any claims made or threatened against
Lender arising out of the transactions contemplated hereby (including, without
limitation, preparations for and consultations concerning any such
matters).  The foregoing shall not be
construed to limit any other provisions of the Financing Agreements regarding
costs and expenses to be paid by Borrowers. 
All sums provided for in this Section 10.6 shall be part of the
Obligations, shall be payable on demand, and shall accrue interest after demand
for payment thereof at the highest rate of interest then payable under the
Financing Agreements.  Lender is hereby
irrevocably authorized to charge any amounts payable hereunder directly to any
of the account(s) maintained by Lender with respect to Borrower or any
Guarantor.

10.7         Effectiveness. 
This Ratification Agreement shall become effective upon the execution
hereof by Lender and the entry of the Interim Financing Order.

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INTENTIONALLY LEFT BLANK]

 

 22

 

IN WITNESS WHEREOF, the parties hereto have caused
this Ratification Agreement to be duly executed as of the day and year first
above written.

	
   

  	
  BORROWER

  
	
   

  	
   

  
	
   

  	
  ANVIL KNITWEAR, INC.

  
	
   

  	
  as Debtor and Debtor-in-Possession

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY
  CORSANO

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
  ANVIL HOLDINGS, INC. 

  
	
   

  	
  as Debtor and Debtor-in-Possession

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY
  CORSANO

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECTRATEX, INC.

  
	
   

  	
  as Debtor and Debtor-in-Possession

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ANTHONY
  CORSANO

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL 

  
	
   

  	
  ASSOCIATION, successor by merger to Congress 

  
	
   

  	
  Financial Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS
  GRABOSKY

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  

 

 

SCHEDULE 9.20

	
  Period

  	
   

  	
  Maximum CapEx

  
	
  One month ended October 2006

  	
   

  	
  $1,000,000

  
	
  One month ended November 2006

  	
   

  	
  $1,000,000

  
	
  One month ended December 2006

  	
   

  	
  $1,000,000

  
	
  One month ended January 2007

  	
   

  	
  $1,000,000

  
	
  One month ended February 2007

  	
   

  	
  $700,000

  
	
  One month ended March 2007

  	
   

  	
  $700,000

  
	
  One month ended April 2007

  	
   

  	
  $500,000

  
	
  One month ended May 2007

  	
   

  	
  $500,000

  
	
  One month ended June 2007

  	
   

  	
  $300,000

  
	
  One month ended July 2007

  	
   

  	
  $300,000

  
	
  One month ended August 2007

  	
   

  	
  $300,000

  
	
  One month ended September 2007

  	
   

  	
  $300,000

  

 

 

 

SCHEDULE 9.21

	
  Period

  	
   

  	
  Cumulative Minimum EBITDA

  
	
  One month ended October 2006

  	
   

  	
  ($500,000)

  
	
  Two months ended November 2006

  	
   

  	
  ($1,250,000)

  
	
  Three months ended December 2006

  	
   

  	
  ($1,000,000)

  
	
  Four months ended January 2007

  	
   

  	
  ($250,000)

  
	
  One month ended February 2007

  	
   

  	
  $250,000

  
	
  Two months ended March 2007

  	
   

  	
  $500,000

  
	
  Three months ended April 2007

  	
   

  	
  $1,000,000

  
	
  Four months ended May 2007

  	
   

  	
  $1,500,000

  
	
  Five Months ended June 2007

  	
   

  	
  $2,000,000

  
	
  Six Months ended July 2007

  	
   

  	
  $2,500,000

  
	
  Seven Months ended August 2007

  	
   

  	
  $3,000,000

  
	
  Eight Months ended September 2007

  	
   

  	
  $3,500,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00111-of-00352.parquet"}]]