Contract
1
EXECUTION VERSION
NINTH AMENDMENT
TO
THIS NINTH AMENDMENT TO FIFTH AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is made and entered into on February
3, 2023, by and among
, a Georgia corporation (“Delta”),
X. X. XXXXX, LLC
, a North Carolina limited liability company (“Soffe”),
XXXXXX
CITY CLOTHING COMPANY
, a Georgia corporation (“Xxxxxx City”),
SALT LIFE, LLC
, a Georgia limited liability company (“Salt Life”),
DTG2GO, LLC
, a
Georgia limited liability company (“DTG2GO”; Delta, Soffe, Xxxxxx 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
XXXXX FARGO
BANK, NATIONAL ASSOCIATION
, a national banking association (“Xxxxx Fargo”), in its capacity as agent for Xxxxxxx (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.
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 Xxxxx) of Xxxxxxxxx, 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 Xxxxxxxxx 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
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(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”:
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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:
(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
(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)
minus
(g)
Agent under Section 2.1(c) of the Agreement,
minus
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 Xxxxxxxx
0
Xxxxxx, (X) 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). Xxxxxx (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
Xxxxxxxx's covenants, duties, indebtedness and liabilities under the Loan Documents.
4. Acknowledgments and Stipulations.
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.
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 Xxxxxxxx; 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
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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.
“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.
shall constitute an Event of Default.
8. Conditions Precedent.
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.
assigns.
12. No Novation, etc.
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.
to evidence or give effect to the amendments set forth herein or any of the transactions contemplated hereby.
15. Section Titles.
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 Xxxxxxx, 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.]
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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/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title: Chief Accounting Officer
X.X. XXXXX, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title: Chief Accounting Officer
XXXXXX CITY CLOTHING COMPANY
By: /s/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title: Chief Accounting Officer
SALT LIFE, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title: Chief Accounting Officer
DTG2GO, LLC
By: /s/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title: Chief Accounting Officer
[Signatures continue on the following page.]
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AGENT:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxxxx Xxxxxxxxxxx
Name:
Xxxxxxxxxxx Xxxxxxxxxxx
Title: Vice President
LENDERS:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxxxx Xxxxxxxxxxx
Name:
Title: Vice President
[Signatures continue on the following page.]
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REGIONS BANK
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Managing Director
[Signatures continue on the following page.]
2
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxxxxxxx
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
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Exhibit A
To
Ninth Amendment
To
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 xxxxxx, and
(d)
a detailed calculation of those Accounts that are not eligible for the Borrowing
Base, if Borrowers have not implemented electronic reporting.
