1
EXECUTION VERSION
NINTH AMENDMENT
 
TO
 
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS NINTH
 
AMENDMENT TO FIFTH
 
AMENDED AND
 
RESTATED CREDIT AGREEMENT (this “Amendment”)
 
is made and
 
entered into
 
on February
3, 2023, 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.
 
(a)
Certain Definitions.
 
Schedule 1.1 of the
 
Credit Agreement is hereby
 
amended to add,
 
in addition to
 
and not in
 
limitation thereof, the
following new definitions in the appropriate alphabetical order:
“ “Accommodation Period”
 
means the period
 
commencing upon the
 
Ninth Amendment Date
 
through and including
 
the date upon which
Agent has received from Borrowers, (a) a Borrowing Base Certificate as of the month ending September 30, 2023, evidencing that the
Availability
 
of Borrowers,
 
as of
 
the date
 
of receipt
 
of
 
such Borrowing
 
Base Certificate,
 
is equal
 
to or
 
more than
 
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 or (b) a written request by Borrowers to Agent, at any time after
 
receipt of such Borrowing Base Certificate, to terminate
the Accommodation 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 of such
 
amounts specified in the
foregoing clause (a).
 
For purposes of this definition, Availability
 
and Average Availability
 
will be calculated without giving effect to
the Availability Block.
“Availability Block” means, (a) on and after the Ninth Amendment Date through
 
(and including) April 1, 2023, $7,500,000, (b)
 
on and
after April 2,
 
2023 through (and including)
 
June 4, 2023, $9,000,000,
 
(c) on and
 
after June 5, 2023
 
through the date
 
of (i) receipt
 
by
Agent of a Borrowing Base Certificate as of the month
 
ending September 30, 2023, evidencing that the Availability (calculated for this
purpose, without giving effect to the Availability
 
Block) of Borrowers, as of the date of receipt of
 
such Borrowing Base Certificate, is
equal to
 
or more
 
than the greater
 
of (A)
 
seventeen and
 
one-half percent (17.50%)
 
of the
 
lesser of
 
(1) the
 
Borrowing Base or
 
(2) the
Maximum Revolver Amount
 
and (B) $25,000,000,
 
$10,000,000 or (ii) a
 
written request by
 
Borrowers to Agent, at
 
any time after receipt
of such Borrowing Base Certificate, to
 
reduce the Availability Block, 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 of such amounts specified in the foregoing clause (c) and
 
(d) at all times thereafter, $0.
“Increased Interest Period” means on the first day of the Accommodation Period through and including the date after expiration of the
Accommodation Period and upon which Borrowers have provided evidence, in form
 
and substance acceptable to Agent, that as of the
last day of any
 
two (2) consecutive quarters, Borrowers have
 
maintained a Fixed Charge Coverage Ratio
 
greater than 1.00 to
 
1.00, in
each case, for the trailing three (3) month period then ended.
“Ninth Amendment Date” means February 3, 2023.
“Ninth Amendment Fee Letter” means that certain fee letter,
 
dated as of the Ninth Amendment Date, among Borrowers and Agent,
 
in
form and substance reasonably satisfactory to Agent.
“Non-Amortizing
 
Period”
 
means,
 
with
 
respect
 
to
 
the
 
Borrowing
 
Base,
 
the
 
period
 
commencing
 
on
 
February
 
1,
 
2023
 
through
 
and
including July 31, 2023.
“Restricted Payment Accommodation Period”
 
means the period commencing upon the Ninth Amendment Date through and including
the date upon which Agent has received from Borrowers (a) a Borrowing Base Certificate
 
as of the month ending September 30, 2023,
evidencing that the Availability of Borrowers, as of the date of receipt of such Borrowing Base Certificate, is equal to or more than the
greater of (i)
 
twenty
 
percent
 
(20%) of the
 
lesser of (A)
 
the Borrowing Base
 
or (B) the
 
Maximum Revolver Amount
 
and (ii) $30,000,000
or (b) a written request by Borrowers to
 
Agent, at any time after receipt of such
 
Borrowing Base Certificate, to terminate the Restricted
Payment
 
Accommodation
 
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 of
 
such amounts
specified in the foregoing clause (a).
 
For purposes of this definition, Availability
 
and Average Availability
 
will be calculated without
giving effect to the Availability Block
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2
(b)
Restricted Payments.
 
Section 6.7(c)
 
of the
 
Credit Agreement
 
is amended
 
to add
 
the following
 
new sentence
 
at the
 
end
thereof:
“Notwithstanding the foregoing or anything
 
to the contrary contained herein, in
 
no event shall any Restricted Payments
 
be made during
the Restricted Payment Accommodation Period.”
 
(c)
Fixed Charge Coverage Ratio. Section 7(a) of the
 
Credit Agreement is hereby amended and restated
 
in its entirety to read as
follows:
“(a)
 
Fixed Charge Coverage Ratio.
 
Commencing on the date on
 
which a Financial Covenant Period begins
 
and measured as of
the
 
end of
 
the
 
fiscal month
 
immediately preceding
 
the date
 
on which
 
a Financial
 
Covenant Period
 
first begins
 
for which
 
financial
statements have been received by Agent in
 
accordance with this Agreement (or, in the event
 
such Financial Covenant Period is due to
 
a
Financial Covenant
 
Trigger
 
under clause
 
(c) of
 
the definition
 
thereof, as
 
of
 
September 30,
 
2023) and
 
as of
 
each
 
fiscal month
 
end
thereafter during such Financial Covenant
 
Period,
 
have a Fixed Charge
 
Coverage Ratio, measured on a
 
fiscal month-end basis, tested
for the twelve
 
fiscal (12) month period
 
ending on such date,
 
of not less
 
than 1.00 to 1.00;
 
provided, that,
 
the Fixed Charge
 
Coverage
Ratio hereunder
 
shall not
 
be tested
 
prior to
 
the month
 
ending September
 
30, 2023;
 
provided, further,
 
that,
 
regardless of
 
whether a
Financial Covenant
 
Period is
 
in effect, Borrowers
 
shall continue
 
to submit,
 
concurrently with
 
the delivery
 
of each Compliance
 
Certificate
required to be delivered hereunder, calculations with respect to such Fixed
 
Charge Coverage Ratio.”
(d)
EBITDA Performance to Plan. Section 7(b)
 
of the Credit Agreement is hereby
 
amended and restated in its entirety
 
to read
as follows:
“(b)
 
EBITDA Performance
 
to Plan.
 
Commencing with
 
the fiscal
 
month ending
 
March 4,
 
2023, and
 
as of
 
the last
 
day of
 
each
month during
 
the
 
Accommodation Period,
 
maintain EBITDA
 
initially
 
tested for
 
the
 
trailing one
 
(1) month
 
period then
 
ended and
thereafter building, by month, to a trailing three (3) month
 
period of not
less than the amount set forth below adjacent to such fiscal
 
month end for such corresponding period then ended.
Fiscal Month Ending
EBITDA
March 4, 2023
$1,326,000
April 1, 2023
$3,757,000
May 6, 2023
$5,250,000
June 3, 2023
$4,449,000
July 1, 2023
$3,128,000
August 5, 2023
$3,049,000
September 2, 2023
$4,907,000
September 30, 2023
$7,521,000”
 
(e)
Applicable Margin.
 
The definition
 
of Applicable
 
Margin set
 
forth in
 
Schedule 1.1 of
 
the Credit
 
Agreement is hereby
 
amended and
restated in its entirety to read as follows:
“ “Applicable Margin” means, as of any date of determination and with respect to Base Rate Loans or SOFR 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 Seventh
 
Amendment Date through and including
 
June 30,
2022, the Applicable Margin shall be set at the margin in the row styled “Level II”; 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”:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
Level
Alternate Average Excess Availability
Applicable
 
Margin
 
Relative
 
to
 
Base
Rate Loans (the “Base Rate Margin”)
Applicable
 
Margin
Relative
 
to
 
SOFR
Loans
 
(the
 
“SOFR
Margin”)
I
>
 
66.67%
 
of
 
the
 
Revolver
Commitments
0.50%
 
(or,
 
during
 
the
 
Increased
Interest Period,
 
1.00%)
1.50%
 
(or,
 
during
 
the
Increased
 
Interest
Period, 2.00%)
II
<
 
66.67%
 
of
 
the
 
Revolver
Commitments
 
and
 
>
 
33%
 
of
 
the
Revolver Commitments
0.75%
 
(or,
 
during
 
the
 
Increased
Interest Period,
 
1.25%)
1.75%
 
(or,
 
during
 
the
Increased
 
Interest
Period, 2.25%)
III
< 33.33% of Revolver Commitments
1.00%
 
(or,
 
during
 
the
 
Increased
Interest Period,
 
1.50%)
2.00%
 
(or,
 
during
 
the
Increased
 
Interest
Period, 2.50%)
The Applicable Margin shall be re-determined as of the first
 
day of each fiscal quarter of Borrowers.”
(f)
Borrowing Base.
 
The definition of Borrowing Base set forth in Schedule 1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
“ “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)
seventy percent (70%)
 
of the appraised
 
fair market
 
value (based
 
on the
 
most recent
 
appraisal completed
 
prior to
 
the Seventh
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, which amount
 
shall be reduced on the first day of each
 
fiscal month, by an amount equal to $118,416.67;
 
provided,
that, no such reduction shall occur during the Non-Amortizing
 
Period;
 
plus
(d)
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 fiscal
 
month (excluding Borrowers'
fiscal months ending each of May 2,
 
2020, May 30, 2020, June 27, 2020,
 
August 1, 2020, August 29, 2020, October
 
3, 2020, November 7, 2020, January 2,
2021, February 6, 2021, March 6,
 
2021 and April 3, 2021), by
 
an amount equal to $37,632.74;
 
provided, that, no such reduction
 
shall occur during the Non-
Amortizing Period;
plus
 
(e)
 
the lesser of:
(i)
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 fiscal
month, by an amount equal to $129,008.33; provided,
 
that, no reduction shall occur during the Non-Amortizing
 
Period; or
(ii)
twenty-five percent (25%) of the appraised
 
fair market value (based on the
 
first appraisal completed after the
Seventh 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 fiscal
 
month,
commencing on the first
 
day of the first fiscal
 
month beginning after Agent
 
receives such appraisal by an
 
amount equal to one-sixtieth
 
of twenty-
five percent (25%) of the appraised
 
fair market value (based on
 
such appraisal) of the Eligible
 
Intellectual Property of Borrowers;
 
provided, that,
no reduction shall occur during the Non-Amortizing Period;
plus
(f)
 
the FILO Formula Amount;
minus
(g)
 
the aggregate amount of Receivable Reserves,
 
Inventory Reserves, Bank Product Reserves,
 
and other Reserves, if any, established by
Agent under Section 2.1(c) of the Agreement,
minus
 
(h)
 
the Availability Block.
Notwithstanding
 
anything to
 
the
 
contrary contained
 
herein,
 
(A) 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 fiscal month immediately following the Seventh Amendment Date, twenty percent (20%) of the Maximum Revolver Amount
 
and (ii) at any time on
and after
 
the first
 
day of
 
the fiscal
 
month immediately
 
following the
 
Seventh Amendment
 
Date,
 
twenty-five percent
 
(25%) of
 
the Maximum
 
Revolver
 
 
 
 
 
 
 
 
 
 
 
 
 
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:
“(a)
 
[reserved],”
(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
 
 
 
 
 
 
 
 
 
 
 
 
 
5
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
 
Ninth Amendment
 
Fee Letter,
 
and all
 
instruments and
 
documents to
 
be
entered into in connection herewith from the applicable Borrowers
 
and Lenders;
(b)
 
Agent’s receipt of all fees and expenses due and owing under the Ninth Amendment
 
Fee Letter;
 
(c)
 
no Default or Event of Default shall exist both before and
 
after giving pro forma effect to this Amendment;
 
(d)
 
the representations and warranties of each Borrower
 
or its Subsidiaries contained in the
 
Credit Agreement or in the other Loan Documents
 
shall be
true and correct in
 
all material respects (except that
 
such materiality qualifier shall not
 
be applicable to any
 
representations and warranties that already
 
are qualified or
modified by
 
materiality in
 
the text
 
thereof) on
 
and as
 
of the
 
date of
 
such extension
 
of credit,
 
as though
 
made on
 
and as
 
of such
 
date (except
 
to the
 
extent that
 
such
representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be
 
true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by
 
materiality in the text thereof) as of
such earlier date); and
9.
Post-Closing Covenant
.
 
Borrowers agree that they shall permit
 
(or, cause to be
 
permitted), within ninety (90) days from the
 
Ninth Amendment
Date, the engagement and the scheduling of an appraisal
 
of the Collateral in accordance with the terms and conditions
 
of the Credit Agreement.
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.
 
Successors and Assigns.
 
This Amendment shall be binding upon and inure to
 
the benefit of the parties hereto and their respective successors
 
and
assigns.
12.
 
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.
13.
 
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.
14.
 
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.
15.
 
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.
16.
 
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.
17.
 
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.]
- 1 -
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/ Nancy P. Bubanich
Name:
Nancy P. Bubanich
Title: Chief Accounting Officer
M.J. SOFFE, LLC
By: /s/ Nancy P. Bubanich
Name:
Nancy P. Bubanich
Title: Chief Accounting Officer
CULVER CITY CLOTHING COMPANY
By: /s/ Nancy P. Bubanich
Name:
Nancy P. Bubanich
Title: Chief Accounting Officer
SALT LIFE, LLC
By: /s/ Nancy P. Bubanich
Name:
Nancy P. Bubanich
Title: Chief Accounting Officer
DTG2GO, LLC
By: /s/ Nancy P. Bubanich
Name:
Nancy P. Bubanich
Title: Chief Accounting Officer
[Signatures continue on the following page.]
- 1 -
AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Christopher Waterstreet
Name:
 
Christopher Waterstreet
Title:
 
Vice President
LENDERS:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Christopher Waterstreet
Name:
 
 
Christopher Waterstreet
Title:
 
Vice President
[Signatures continue on the following page.]
- 1 -
REGIONS BANK
By: /s/ Scott Martin
Name: Scott Martin
Title: Managing Director
[Signatures continue on the following page.]
2
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Doug Meckelnburg
Name: Doug Meckelnburg
 
Title: Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3
Exhibit A
To
Ninth Amendment
To
Fifth Amended and Restated Credit Agreement
Weekly
 
(no
 
later
 
than
Wednesday of each week)
(a)
an executed Borrowing
 
Base Certificate, provided,
 
that, upon the
 
date which Agent
receives a Borrowing
 
Base Certificate as
 
of the month ending
 
September 30, 2023,
 
evidencing
that
 
the
 
Availability
 
(calculated
 
for
 
this
 
purpose
 
without
 
giving
 
effect
 
to
 
the
 
Availability
Block) of Borrowers, as of the date of receipt of such Borrowing Base Certificate, is equal to
or more than the greater of (i) an amount equal to seventeen and one-half percent
 
(17.5%) of
the lesser of (A) the
 
Borrowing Base or (B)
 
Maximum Revolver Amount and
 
(ii) $25,000,000
or upon the date
 
which Agent receives a written
 
request by Borrowers to Agent,
 
at any time
after receipt of
 
such Borrowing
 
Base Certificate, to
 
provide collateral reports
 
on monthly basis
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 of such amounts specified in the foregoing clause (a),
 
Borrowers shall
deliver to Agent such calculations of
 
the Borrowing Base and certification
 
on a monthly basis
(no
 
later
 
than
 
the
 
20th
 
day
 
of
 
each
 
month)
 
(the
 
“Decreased Reporting
 
Event”);
 
provided,
further, that,
 
if Availability
 
at any
 
time after
 
the Decreased Reporting
 
Event is
 
less than
 
an
amount equal to the greater of (y) seventeen and one-half percent (17.5%) of the lesser of (1)
the
 
Borrowing
 
Base
 
or
 
(2)
 
Maximum
 
Revolver
 
Amount
 
and
 
(z)
 
$25,000,000,
 
in
 
Agent’s
discretion and at
 
Agent’s request,
 
Borrowers shall deliver
 
to Agent
 
such calculations of
 
the
Borrowing Base and certification on
 
a weekly basis until such
 
time that Availability is greater
than such amount, at which time the delivery requirements
 
shall revert to a monthly basis,
(b)
a detailed aging,
 
by total, of
 
Borrowers' Accounts, together
 
with a reconciliation
and supporting documentation for any reconciling items noted (delivered electronically in an
acceptable format, if Borrowers have implemented electronic reporting),
(c)
a weekly Account
 
roll-forward, in a
 
format acceptable to
 
Agent in its
 
discretion,
tied to the
 
beginning and ending
 
account receivable
 
balances of Borrowers'
 
general ledger, and
(d)
a detailed
 
calculation of
 
those Accounts
 
that are
 
not eligible
 
for the
 
Borrowing
Base, if Borrowers have not implemented electronic reporting.