4
Amount, (B) the portion of the Borrowing Base on any date calculated with reference to Eligible In-Transit Inventory,
shall not exceed $6,000,000 at any
time, and (C) 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.”
(g)
Cash Dominion Trigger
Event. The definition
of Cash
Dominion Trigger Event
set forth in
Schedule 1.1 of
the Credit Agreement
is
hereby amended and restated in its entirety to read as follows:
“ “Cash Dominion Trigger Event”
means (a) during the Accommodation Period,
(i) upon notice thereof from Agent to Borrower at the
Agent’s sole discretion if Availability (calculated for this purpose, after giving effect to the Availability
Block) of Borrowers is, at any
time, less
than $2,000,000
or (ii)
the occurrence
of an
Event of
Default and
(b) at
all other
times, (i)
the occurrence
of an
Event of
Default, or (ii) Agent's reasonable determination that Availability
(without giving effect to the FILO Formula
Amount) is less than an
amount equal to twelve and one-half percent (12.5%) of the
lesser of (1) the Borrowing Base and (2) the Revolving
Commitments.”
(h)
FILO.
The definition of FILO Maximum Amount set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
“ “FILO Maximum Amount”
means (a) on and after
the Ninth Amendment Date through
(and including) July 31,
2023, $3,000,000, (b)
on and after August 1, 2023,
through (and including) October 31, 2023, $2,750,000, (c)
on and after November 1, 2023, through
(and
including) January 31, 2024, $2,500,000, (d) on and after February 1, 2024 through (and including) April 30, 2024, $2,250,000,
(e) on
and after
May 1,
2024, through
(and including) July
31, 2024,
$2,000,000, (f) on
and after
August 1,
2024 through
(and including)
October 31, 2024, $1,750,000, (g)
on and after November 1, 2024, through (and including) January
31, 2025, $1,500,000, (h) on and
after February 1, 2025, through (and including) April 30, 2025, $1,250,000, (i) on and after May 1, 2025, through (and including) July
31, 2025, $1,000,000,
(j) on and after
August 1, 2025, through
(and including) October 31,
2025, $750,000, (k) on
and after November
1, 2025, through (and including) January
31, 2026, $500,000, (l) on and
after February 1, 2026, through
(and including) April 30,
2026,
$250,000, and (m) at all times on and after May 1, 2026,
$0.”
(i)
Financial Covenant Period.
The definition of Financial Covenant Period set forth in Schedule 1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
“ “Financial Covenant
Period”
means a period
which shall commence on
any date on
which a Financial Covenant
Trigger Event has
occurred and shall continue
until the date on
which Agent has
determined that no Financial
Covenant Trigger Event exists
or has existed
for a period
of sixty (60)
consecutive days; provided,
that, if a
Financial Covenant Trigger
Event occurs under
clause (c) of
the definition
thereof, the Financial
Covenant Period shall
continue until the
date thereafter on which
Agent receives
from Borrowers
a written request
to terminate the Financial Covenant Period together with evidence that, as of the date of such written request,
the Average Availability
of Borrowers for the consecutive thirty (30) day period ending on such date of determination is more than the greater the greater of (a)
seventeen
and
one-half percent
(17.50%) of
the
lesser
of
(i)
the
Borrowing Base
or
(ii)
the
Maximum
Revolver
Amount
and
(b)
$25,000,000.
For purposes of this definition, Average Availability will be calculated without giving effect to the Availability Block.”
(j)
Financial Covenant Trigger
Event.
The definition of
Financial Covenant
Trigger Event set
forth in Schedule
1.1 of the
Credit
Agreement is hereby amended and restated in tis entirety
to read as follows:
“ “Financial Covenant Trigger Event” means (a) any
date on which Alternate Excess Availability (without giving
effect, at any time, to
the FILO Formula Amount) is less than 12.5% of the lesser
of the Borrowing Base or the Maximum Revolver Amount, (b)
any date on
which an Event
of Default has occurred
or (c) September 30,
2023 but only if
the Availability
of Borrowers, as of
the date on
which
Agent receives (and based on) the Borrowing Base
Certificate for September 30, 2023, does not
exceed the greater of (i) seventeen and
one-half percent (17.50%) of the
lesser of (A) the
Borrowing Base or (B) the
Maximum Revolver Amount and (ii) $25,000,000.
For
purposes of this definition Availability will be calculated without giving effect to the Availability Block.”
(k)
Collateral Reporting (Monthly).
Clause (a) of the first
row of Schedule 5.2
to the Credit Agreement
is hereby amended and
restated in its entirety to read as follows:
(l)
Collateral Reporting (Weekly).
The third row of
Schedule 5.2 to the
Credit Agreement is hereby
deleted in its entirety
and
replaced with the third row as set forth on Exhibit A 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 opening of business
on February 3, 2023,
the unpaid principal amount of
the Revolver Loans totaled $149,693,285.22,
and the undrawn
face
amount of all Letters of Credit totaled $425,000
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