UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (Date of earliest event reported):  August 27, 2013

DELTA APPAREL, INC.
(Exact name of registrant as specified in its charter)
 
Georgia
 
 
(State or Other Jurisdiction
of Incorporation)
 
 
 
 
1-15583
 
58-2508794
(Commission File Number)
 
(IRS Employer Identification No.)
322 South Main Street, Greenville,
South Carolina
 
29601
(Address of principal executive offices)
 
(Zip Code)
 
(864) 232-5200
 
(Registrant's Telephone Number
Including Area Code)
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below)
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 1.01.      Entry into a Material Definitive Agreement.

On August 27, 2013, Delta Apparel, Inc.'s (“Delta Apparel”) wholly-owned subsidiary, To The Game, LLC (“To The Game”) entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Salt Life Holdings, LLC (“Salt Life”) and Roger L. Combs, Sr., Donald R. Combs, Richard Thompson and Michael T. Hutto (collectively, the “Owners”), pursuant to which To The Game purchased substantially all of the assets and properties of Salt Life and its business of licensing its intellectual property to third parties for commercialization of products bearing such intellectual property (the “Acquisition”). The closing of the Acquisition (the “Closing”) occurred simultaneously with the execution of the Asset Purchase Agreement.

The aggregate consideration paid to Salt Life at Closing was $37,000,000, consisting of (i) a cash payment at the Closing of $12,000,000, (ii) a deposit at the Closing of $3,000,000 into an escrow account to be held to secure indemnification obligations under the Asset Purchase Agreement and to be held for a period of up to fifty-four months following the Closing, and (iii) delivery of two promissory notes in the aggregate principal amount of $22,000,000 (the “Notes"). Pursuant to the Notes: (i) a one-time installment of $9,000,000 will be due from To The Game to Salt Life on September 30, 2014; and (ii) commencing on March 31, 2015, quarterly installments will be due, with the final installment due on June 30, 2019. Delta Apparel guarantees To The Game's obligations under the Notes.

Also, an additional amount may be payable by To The Game (the payment of which is guaranteed by Delta Apparel) to Salt Life in cash after the end of calendar year 2019 if financial performance targets involving the sale of Salt Life-branded products are met during the 2019 calendar year, as more specifically described in the Asset Purchase Agreement. Salt Life and each Owner agreed to certain noncompetition and nonsolicitation restrictions, each as more specifically described in the Asset Purchase Agreement. The Asset Purchase Agreement contains representations, warranties, indemnifications and other provisions that Delta Apparel and To The Game believe are common in transactions of this type.

There were no material relationships prior to the Acquisition between Delta Apparel, To The Game or their affiliates, on the one hand, and Salt Life or the Owners, on the other hand, except that prior to the Closing Salt Life licensed intellectual property to Delta Apparel for commercialization of certain Salt Life-branded products.

The foregoing summary of the Acquisition is qualified in its entirety by reference to the text of the Asset Purchase Agreement, which is filed herewith as Exhibit 2.1 to this Current Report on Form 8-K and which is incorporated herein by reference.

Also on August 27, 2013, Delta Apparel, To The Game, Junkfood Clothing Company, M.J. Soffe, LLC and Art Gun, LLC (collectively, the “Borrowers”) entered into a Consent and First Amendment to Fourth Amended and Restated Loan and Security Agreement with Wells Fargo Bank, National Association and the other lenders set forth therein (the “Amended Loan Agreement”). The Fourth Amended and Restated Loan and Security Agreement dated as of May 27, 2011, which has been amended by the Amended Loan Agreement, was filed as Exhibit 10.1 to a Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on June 3, 2011 and is incorporated herein by reference.

Pursuant to the Amended Loan Agreement, in general and among other things, (i) the lenders and agent parties to the Amended Loan Agreement consented to the Acquisition, (ii) the maturity of the loans (other than the FILO Tranche B, as defined below) under the Amended Loan Agreement was extended one year to May 27, 2017, (iii) the lenders to the Amended Loan Agreement consented to Delta Apparel's Honduran subsidiaries borrowing up to $10,000,000 from a certain Honduran bank in connection with the purchase of certain equipment, and (iv) a first in last out Tranche B (“FILO Tranche B”) has been added to provide Delta Apparel and its affiliate parties to the Amended Loan Agreement an additional 5% (from 85% to 90%) borrowing availability with respect to eligible accounts receivable and eligible inventory, as more specifically described in the Amended Loan Agreement. Also as more specifically described in the Amended Loan Agreement, the FILO Tranche B, and only the FILO Tranche B, will terminate by August 27, 2015 (subject to earlier cancellation by Delta Apparel), has a maximum borrowing availability of $10,000,000, and includes interest rates between 150 and 200 basis points higher than the rates applicable to the other loans available under the Amended Loan Agreement.

The foregoing summary of the Amended Loan Agreement is qualified in its entirety by reference to the text of the Amended Loan Agreement, which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and which is incorporated herein by reference.

Separate from the relationship related to the Amended Loan Agreement, certain lenders under the Amended Loan Agreement have engaged in, or may in the future engage in, transactions with, and perform services for, Delta Apparel, To The Game and/or their affiliates in the ordinary course of business.
 





On August 28, 2013, Delta Apparel issued a press release announcing the Acquisition. A copy of the press release is attached as Exhibit 99.1 hereto, incorporated herein by reference and also made available through the Company's website at www.deltaapparelinc.com.

Item 2.01.      Completion of Acquisition or Disposition of Assets.

As described in Item 1.01 of this Form 8-K, on August 27, 2013, To The Game entered into the Asset Purchase Agreement with Salt Life and the Owners, pursuant to which To The Game purchased substantially all of the assets and properties of Salt Life and its business of licensing its intellectual property to third parties for commercialization of products bearing such intellectual property (the “Assets”). The description of the Acquisition and the Asset Purchase Agreement set forth in Item 1.01 is incorporated herein by reference.

The Assets acquired by To The Game include, but are not limited to, all intellectual property, substantially all contracts and all goodwill attributable to the Assets. The Assets acquired exclude, among other things, all cash and cash equivalents, the minute books and corporate records of Salt Life and all accounts receivable incurred or royalty revenue earned on or before the Closing.

The purchase price for the Assets was determined by negotiations among Delta Apparel, To The Game, Salt Life and the Owners. Other than the relationships described in Item 1.01, there are no relationships between Delta Apparel, To The Game or any of their affiliates, or any director or officer of Delta Apparel, or any associate of any such director or officer, on the one hand, and Salt Life or the Owners, on the other hand.

The $15,000,000 cash portion of the purchase price, including the $3,000,000 escrow amount, for the Assets was paid by To The Game from cash borrowed by it under the Amended Loan Agreement. $22,000,000 of the purchase price was paid by issuance of the Notes to Salt Life, as more specifically described above in Item 1.01.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The description of the Amended Loan Agreement in Item 1.01 of this Form 8-K is incorporated herein by reference.
  
To The Game borrowed $15,000,000 under the Amended Loan Agreement on August 27, 2013, to fund the payment of the cash portion of the purchase price to Salt Life in connection with the Acquisition.

Item 3.03.      Material Modification to Rights of Security Holders.

The Amended Loan Agreement contains a revision affecting the Borrowers' restrictions on paying dividends on any class of stock and repurchasing stock such that, in general, each Borrower is allowed to make cash dividends and common stock repurchases if as of the date of the dividend payment or common stock repurchase and after giving effect to the dividend payment or common stock repurchase, the Borrowers have availability on that date of not less than $18,125,000 (previously $15,000,000) and average availability for the 30-day period immediately preceding that date of not less than $18,125,000 (previously $15,000,000), as more specifically described in the Amended Loan Agreement. The information set forth above under Item 1.01 is incorporated herein by reference.

Item 9.01.      Financial Statements and Exhibits.






Exhibit Number
Description
2.1
Asset Purchase Agreement dated as of August 27, 2013, among To The Game, LLC, Salt Life Holdings, LLC, Roger L. Combs, Sr., Donald R. Combs, Richard Thompson and Michael T. Hutto.

*The exhibits and schedules to Exhibit 2.1 have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A list of schedules and exhibits is set forth in the Asset Purchase Agreement. Delta Apparel, Inc. will furnish supplementally a copy of any such omitted exhibit or schedule to the SEC upon request.
 
 
10.1
Consent and First Amendment to Fourth Amended and Restated Loan and Security Agreement dated as of August 27, 2013, among Delta Apparel, Inc., M.J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC, Art Gun, LLC, Wells Fargo Bank, National Association and the other lender parties as set forth therein.
 
 
99.1
Press Release issued by Delta Apparel, Inc. on August 28, 2013.  







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
DELTA APPAREL, INC.
 
 
 
 
 
 
Date:
August 28, 2013
/s/ Deborah H. Merrill
 
 
Deborah H. Merrill
 
 
Vice President, Chief Financial Officer & Treasurer
 
 
 




























ASSET PURCHASE AGREEMENT

among

TO THE GAME, LLC,

SALT LIFE HOLDINGS, LLC, ROGER L. COMBS, SR.,
DONALD R. COMBS, RICHARD THOMPSON & MICHAEL T. HUTTO





Dated as of August 27, 2013




                                        

1




Table of Contents
 
 
 
ARTICLE 1. SALE AND PURCHASE OF ASSETS
 
1.1
 
Sale and Purchase of Assets.
1
1.2
 
Excluded Assets.
2
1.3
 
Closing.
3
1.4
 
Purchase Price.
3
1.5
 
Escrow.
3
1.6
 
Contingent Consideration.
3
1.7
 
Assumption of Liabilities.
6
1.8
 
Closing Date Deliveries by Sellers.
8
1.9
 
Closing Date Deliveries by Purchaser.
8
1.10
 
Further Assurances.
8
1.11
 
Allocation of Purchase Price.
9
 
 
 
 
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
 
2.1
 
Representations and Warranties of Sellers.
9
2/1/2001
 
Corporate Status; Authorization.
9
2/1/2002
 
Conflicts and Consents.
10
2/1/2003
 
No Liens.
11
2/1/2004
 
Intentionally Omitted.
11
2/1/2005
 
Intellectual Property.
11
2/1/2006
 
Intentionally Omitted.
14
2/1/2007
 
Material Agreements.
14
2/1/2008
 
Litigation.
15
2/1/2009
 
No Judgments or Orders.
15
2/1/2010
 
Compliance with Laws; Permits.
15
2/1/2011
 
Tax Matters.
16
2/1/2012
 
Compliance with ERISA.
16
2/1/2013
 
Labor Matters.
16
2/1/2014
 
Environmental.
16
2/1/2015
 
Product Warranty.
16
2/1/2016
 
Product Liability.
16
2/1/2017
 
Brokers, Finders.
17
2/1/2018
 
Ïntentionally Omitted.
17
2.2
 
Representations and Warranties of Purchaser.
17
2/2/2001
 
Corporate Status; Authorization.
17
2/2/2002
 
Conflicts and Consents.
17
2/2/2003
 
Brokers, Finders.
18
 
 
 
 
ARTICLE 3. CERTAIN COVENANTS
 
3.1
 
Tax Matters.
18
3.2
 
Confidentiality.
19

2



3.3
 
Noncompetition and Nonsolicitation.
20
3.4
 
Royalty Revenue.
22
3.5
 
License Agreements With Delta Apparel, Inc.
23
3.6
 
Use of Assumed Name.
23
3.7
 
Employee Matters.
24
3.8
 
Restrictions on Company Dissolution.
24
3.9
 
Five-Year Business Plan.
24
 
 
 
 
ARTICLE 4. CONDITIONS PRECEDENT TO CLOSING OF TRANSACTION
 
ARTICLE 5. INDEMNIFICATION
24
5.1
 
Indemnification by Sellers.
26
5.2
 
Indemnification by Purchaser.
26
5.3
 
Indemnification Specific to the Company's Agent.
28
5.4
 
Survival Period.
28
5.5
 
Notice of Claims.
28
5.6
 
Third Party Claims.
29
5.7
 
Exclusive Remedies.
29
ARTICLE 6. MISCELLANEOUS
 
6.1
 
Survival.
29
6.2
 
Expenses.
29
6.3
 
Assignment; Successors; Parties in Interest.
29
6.4
 
Amendment and Modification.
30
6.5
 
Access After Closing.
30
6.6
 
Notices.
30
6.7
 
Captions.
31
6.8
 
Entire Agreement.
31
6.9
 
Counterparts.
31
6.10
 
Severability.
31
6.11
 
Intentionally Omitted.
31
6.12
 
Schedules and Exhibits.
31
6.13
 
Definitions.
31
6.14
 
Governing Law.
36



3




Schedules

Schedule 1.2(i)
Excluded Assets
Schedule 1.7(a)
Assumed Material Agreements
Schedule 1.11
Allocation of Purchase Price
Schedule 2.1.1(a)
Foreign Qualifications
Schedule 2.1.2(a)
Conflicts - Company
Schedule 2.1.2(b)
Conflicts - Owners
Schedule 2.1.2(c)
Consents
Schedule 2.1.5(a)
Intellectual Property - Registrations and Applications
Schedule 2.1.5(b)
Intellectual Property - Cease and Desist Notices
Schedule 2.1.5(c)
Intellectual Property - Office Actions
Schedule 2.1.5(e)
Intellectual Property - Foreign Notices
Schedule 2.1.5(f)
Intellectual Property - Third Party Notices Alleging Infringement
Schedule 2.1.5(g)
Intellectual Property - Exceptions to Alleged Copyright Infringement
Schedule 2.1.5(i)
Intellectual Property - Exceptions to Copyright Assignments
Schedule 2.1.5(k)
Intellectual Property - Rejected Applications
Schedule 2.1.5(m)
Intellectual Property - Exceptions to Contracts or Assignments
Schedule 2.1.6
Insurance
Schedule 2.1.7
Material Agreements
Schedule 2.1.8
Litigation
Schedule 2.1.10(b)
Permits
Schedule 2.1.12
ERISA
Schedule 2.1.14
Environmental
Schedule 2.2.2(a)
Conflicts - Purchaser
Schedule 2.2.2(b)
Consents - Purchaser

Exhibits

Exhibit A
Form of Promissory Notes
Exhibit B
Form of Escrow Agreement
Exhibit C
Form of Bill of Sale, Assignment & Assumption Agreement
Exhibit D
Form of Seller's Opinion
Exhibit E
Form of Brand Ambassador Agreement
Exhibit F
Form of License Agreement
Exhibit G

Form of Guaranty

Exhibit H
Form of Trademark Assignment Agreement
Exhibit I
Form of Copyright Assignment Agreement
Exhibit J
Form of Subordination Agreement
Exhibit K
Form of Acknowledgement of Collateral Assignment


4








ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the “ Agreement ”) is entered into as of August 27, 2013 (the "Effective Date"), by and among To The Game, LLC, a Georgia limited liability company, ( the “ Purchaser ”), Salt Life Holdings, LLC, a Florida limited liability company (the “ Company ”), Roger L. Combs, Sr., an individual resident of the state of Florida, Donald R. Combs, an individual resident of the state of Florida, Richard Thompson, an individual resident of the state of Florida, and Michael T. Hutto, an individual resident of the state of Florida. Roger L. Combs, Sr., Donald R. Combs, Richard Thompson, and Michael T. Hutto are sometimes referred to in this Agreement as the “ Owners .” The Company and the Owners are sometimes referred to in this Agreement individually as a “ Seller ” and collectively as the “ Sellers .”
W I T N E S S E T H
WHEREAS, the Company is in the business of licensing its intellectual property to third parties for commercialization of products bearing such intellectual property (the “ Business ”); and
WHEREAS, Purchaser desires to acquire, and the Company desires to sell, assign, and transfer to Purchaser, substantially all of the assets and properties of the Business, all upon the terms and subject to the conditions set forth in this Agreement (the “ Acquisition ”);
NOW, THEREFORE, in consideration of the mutual promises made in this Agreement and of the mutual benefits to be derived herefrom, the parties hereto agree as follows (certain capitalized terms used in this Agreement are defined in Section 6.13 hereof):
ARTICLE 1. SALE AND PURCHASE OF ASSETS
1.1     Sale and Purchase of Assets . Subject to all of the terms and conditions of this Agreement and in reliance upon the representations and warranties contained in this Agreement, on the Closing Date, the Sellers will sell, transfer, assign, convey, and deliver to Purchaser, and Purchaser will purchase, free and clear of all Liens (other than Permitted Liens), all right, title, and interest of the Sellers in and to all of the assets and properties of every nature, kind, and description, tangible and intangible, whether intellectual, personal, or mixed, whether contingent or otherwise, now existing and whether or not reflected on the Company's books, of or relating to the Business, excluding the Excluded Assets, as the same may exist on the Closing Date (collectively, the “ Assets ”), including, without limitation, all right, title, and interest of the Sellers in, to, and under:
(a) All personal property listed on Schedule 2.1.4 ;
(b) All Intellectual Property, including, without limitation all intellectual property or proprietary rights set forth in Schedule 2.1.5 , in addition to all rights of Company or any other Seller to sue and/or recover damages for past, present or future infringement or misappropriation of any of the foregoing, and all goodwill associated therewith;
(c) All hardware and software owned, used, or held for use in the conduct of the Business and any and all files and data contained on such software;

5



(d) All customer lists, customer data, e-mail directories, current, past or potential licensee data, and any other customer or licensee information or communications relating to or used in or by the Business;
(e) Except as provided in Section 1.2(a), all contracts, arrangements, licenses, and other agreements relating to the Business, including, without limitation, any right to receive payment pursuant to such contracts, arrangements, licenses, and other agreements which accrues after the Closing Date;
(f) All registrations, applications, licenses, permits, and orders issued by any Governmental Authority with respect to the conduct of the Business, including, without limitation, those listed on Schedule 2.1.10(b) ;
(g) All rights and interests under contracts of insurance, insurance claims, or rights to indemnity with respect to any of the Assets or any of the Assumed Liabilities;
(h) All claims and demands of any nature against third parties, whether by way of counterclaim or otherwise, with respect to the ownership, use, function, or value of any of the Assets or the Assumed Liabilities, regardless of when such claims or demands arise;
(i) All books, records, registrations, certificates, files, invoices, data bases, computer programs, manuals, and other materials (in any form or medium), including, without limitation, sales, marketing and promotional materials, agent communications and materials, any and all files and records maintained with respect to the Intellectual Propety and other Assets, accounting records, and supplier lists; and
(j) All goodwill and going concern value attributable to the Assets or operation of the Business.
1.2     Excluded Assets. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, the Company will retain and will not transfer, and Purchaser will not purchase or acquire, the following (collectively, the “ Excluded Assets ”):
(a)    Any and all Material Agreements that are not listed on Schedule 1.7(a) ;
(b)    The Plans and any other compensatory agreements, arrangements or plans with respect to any current or former service provider of the Company, the assets related thereto, and any records related thereto;
(c)    All cash and cash equivalents of the Business;
(d)    The minute books and corporate records of the Company;
(e)    Any and all real property, leases or other interests in real property;
(f)    Any inventories of raw materials, supplies, work in process, finished products, goods, spare, replacement or component parts, office supplies, packaging material and similar items;
(g)    All accounts receivable incurred by the Business on or before the Closing Date;
(h)    All rights to any action, suit, or claim of any nature available to or being pursued by Sellers that are not related, directly or indirectly, to the Assets or Assumed Liabilities, whether arising by way of counterclaim or otherwise;
(i)    All assets, properties, and rights specifically set forth on Schedule 1.2(i) ; and
(j)    The rights which accrue or will accrue to Sellers under the Agreement.
    

6



1.3     Closing . The purchase and sale of the Assets and the assumption of the Assumed Liabilities contemplated hereby (the “ Closing ”) will be consummated at the offices of Company in Jacksonville, Florida on the Effective Date or at such other place, time, or date as the parties hereto may agree in writing (the “ Closing Date ”), to be effective as of 12:01 a.m. on the Closing Date.
1.4     Purchase Price . The purchase price to be paid to the Company for the sale, transfer, and conveyance of the Assets will be Thirty-Seven Million and 00/100 Dollars ($37,000,000.00) plus the Contingent Consideration set forth in Section 1.6 below (the “ Purchase Price ”). At the Closing, Purchaser will pay to the Company Twelve Million and 00/100 Dollars ($12,000,000.00) of the Purchase Price (the “ Cash Purchase Price ”) via wire transfer of immediately available funds to an account designated by the Company in writing, and Purchaser will deposit Three Million and 00/100 Dollars ($3,000,000.00) (the “ Escrow Amount ”) by wire transfer of immediately available funds into the Escrow Account, to be held and distributed as set forth in Section 1.5 below. The remainder of the Purchase Price will be paid by Purchaser via delivery of multiple promissory notes in the form of Exhibit A attached hereto (the “ Promissory Note ”) in the aggregate principal amount of Twenty-Two Million and 00/100 Dollars ($22,000,000.00).
1.5     Escrow . The Escrow Amount plus any interest accrued thereon will be available exclusively in accordance with the terms of the Escrow Agreement among the parties, to be executed and delivered at the Closing in the form attached hereto as Exhibit B (the “ Escrow Agreement ”) to satisfy any amounts owed in connection with indemnification claims made pursuant to Sections 5.3(a) and 5.3(b) herein.
1.6     Contingent Consideration . As consideration for the transfer of goodwill and going concern value of the Business, Purchaser will pay to the Company contingent consideration (the “ Contingent Consideration ”) equal to twenty percent (20%) of the amount by which Gross Revenues for calendar year 2019 exceed Fifty Million and 00/100 Dollars ($50,000,000.00). “ Gross Revenues ” means (i) net sales revenue (gross sales less returns, allowances and discounts) generated by Purchaser or its Affiliates from the sale of Salt Life-branded products (the “ Products ”) during calendar year 2019, including both domestic and international sales of Products during calendar year 2019, determined in accordance with GAAP, plus(ii) net royalty revenues received by Purchaser or its Affiliates during calendar year 2019 pursuant to agreements with third parties licensing the sale of Products, determined in accordance with GAAP.
Within thirty (30) days following each of Purchaser's first three fiscal quarters ending during calendar year 2019, Purchaser will provide Company with an estimate of Gross Revenues for each such quarter and an estimate of Gross Revenues for calendar year 2019 to date.
(a)    No later than forty-five (45) days following December 31, 2019, Purchaser will prepare or cause to be prepared and deliver to Sellers a calculation reflecting the Contingent Consideration due to the Company, if any, determined in accordance with GAAP and consistent with Purchaser's customary accounting policies (the “ Contingent Consideration Calculation ”), along with documentation supporting the Contingent Consideration Calculation and any other documentation or data reasonably requested by the Company in connection with such calculation.
(b)    Disputes with respect to the Contingent Consideration Calculation will be resolved as follows:
(i) The Company will have ninety (90) days after receipt of the Contingent Consideration Calculation (the “ Review Period ”) to assert that the Contingent Consideration Calculation is not correct or that the Contingent Consideration Calculation was arrived at other than in accordance with the provisions of this Section 1.6(b)(i) (a “ Contingent Consideration Dispute ”). If the Company desires to assert a Contingent Consideration Dispute, then the Company must give the Purchaser written notice of such dispute (a “ Contingent Consideration Dispute Notice ”) within

7



the Review Period, setting forth in reasonable detail the items with which the Company disagrees, together with supporting calculations.
(ii) Within fifteen (15) days after delivery of the Contingent Consideration Dispute Notice (if any), if Purchaser and the Company are unable despite their reasonable efforts to resolve the dispute set forth in the Review Notice, Purchaser and the Company will jointly retain a nationally recognized firm of independent public accountants mutually acceptable to them, the cost of which will be borne equally by Purchaser and the Company. Such independent firm will review the Contingent Consideration Calculation (and, if necessary or appropriate in its judgment, any related work papers of Purchaser) and the Contingent Consideration Dispute Notice, and will, as promptly as practicable and in no event later than twenty (20) days following the date of its engagement, deliver to Purchaser and the Company a report (the “ Contingent Consideration Adjustment Report ”) setting forth, in reasonable detail, its determination with respect to all of the disputed amounts specified in the Contingent Consideration Dispute Notice, and the revisions, if any, to be made to the Contingent Consideration Calculation to reflect such determination, together with supporting calculations. The Contingent Consideration Adjustment Report will be final and binding upon Purchaser and Sellers.
(iii) If the Company does not deliver a Contingent Consideration Dispute Notice to Purchaser within the Contingent Consideration Dispute Period or the Company accepts the Contingent Consideration Calculation in writing, the Contingent Consideration Calculation delivered by Purchaser will be deemed to have been accepted by Sellers in the form in which it was delivered by Purchaser and will be final and binding upon Purchaser and Sellers.
(c)    Upon final determination of the Contingent Consideration Calculation pursuant to Sections 1.6(a) and 1.6(b), Purchaser will pay to the Company the Contingent Consideration due, if any, upon the later of the following: (i) April 15, 2020; or (ii) within five (5) days following the determination of the final and binding Contingent Consideration Calculation via wire transfer of immediately available funds to an account designated in writing by the Company.
(d)    Subject to the foregoing and to the other terms of this Agreement, Sellers acknowledge and agree that from and after the Closing, Purchaser will have the right, subject to any applicable fiduciary duties under state corporate law, to operate the Business and Purchaser's and its Affiliates' other businesses, whether now owned or hereafter acquired, in any way that it deems appropriate in its sole discretion. Sellers further acknowledge and agree that (i) the Contingent Consideration is uncertain and not guaranteed and is subject to numerous factors outside the control of Purchaser, (ii) there is no assurance that Sellers will earn any Contingent Consideration, and (iii) the parties intend that the express provisions of this Agreement will solely govern their contractual relationship.
(e)     Allocation of Contingent Consideration . Notwithstanding any other provision of this Agreement or any schedules, exhibits, or other documents relating hereto, for purposes of allocating the Purchase Price as contemplated in Section 1.11 hereof and adjustment to said allocation, the entire amount of the Contingent Consideration will be allocated to Class VII Assets on IRS Form 8594.
(f)     Payment of Contingent Consideration Upon Certain Events . If, prior to the payment of the Contingent Consideration, (i) Purchaser transfers title to a material portion of the Assets to another Person other than Delta Apparel, Inc., or ii) any Person or group of Persons shall acquire from Delta Apparel, Inc. direct or indirect beneficial ownership (whether as a result of equity ownership, revocable or irrevocable proxies or otherwise) of the securities of the Purchaser, pursuant to one or more transactions, such that after consummation and as a result of such transaction, such Person(s) possess at least 50% or more of the voting

8



power of the securities of the Purchaser (each an " Acceleration Event "), then Purchaser agrees to immediately pay to the Company, Contingent Consideration in an amount equal to (i) if the Acceleration Event occurs in calendar year 2013 or 2014, Three Million Six Hundred Thousand and 00/100 Dollars ($3,600,000.00) or (ii) if the Acceleration Event occurs in calendar year 2015 or later, an amount equal to twenty percent (20%) of the amount by which Pro Forma 2019 Gross Revenues for calendar year 2019 exceed Fifty Million and 00/100 Dollars ($50,000,000.00). 
Pro Forma 2019 Gross Revenues means the amount of Gross Revenues that would be achieved in calendar year 2019 if Gross Revenues during the Prior Calendar Year grew at the Average Annual Growth Rate.  Prior Calendar Year means the calendar year immediately preceding the calendar year in which the Acceleration Event occurs.  Average Annual Growth Rate means (i) if the Acceleration Event occurs in calendar year 2015, twenty-one percent (21%); and (ii) if the Acceleration Event occurs in calendar year 2016 or later, the average annual growth rate of Gross Revenues from 2014 to the Prior Calendar Year.
Notwithstanding the foregoing or anything to the contrary contained herein, if any Acceleration Event occurs after calendar year 2019 but before any Contingent Consideration due is paid, the amount of Contingent Consideration will be determined based on the actual Gross Revenues in calendar 2019 rather than Pro Forma 2019 Gross Revenues. If Purchaser makes a payment pursuant to this Section 1.6(f), such payment will constitute payment in full of the Contingent Consideration and no further amounts shall be due pursuant to this Section 1.6.
(g)    The Purchaser engaged an independent valuation company to conduct a valuation of the Contingent Consideration.  In the valuation, the independent valuation company determined that the value of the Contingent Consideration is highly speculative and subject to many uncertainties and assumes a dramatic increase in revenues.  The Purchaser agrees to provide a copy of the portion of the above-referenced independently commissioned valuation applicable to the Contingent Consideration within a reasonable period of time following the Closing. The parties may use or may have used estimates of value of the Contingent Consideration for financial reporting, budgeting, financing, discussion and other purposes and agree that that the estimation of value and use of any estimated value for any purpose shall not (i) be construed as a representation, warranty or covenant regarding the amount of Contingent Consideration payable under this Agreement, (ii) create any obligation to pay any minimum amount of Contingent Consideration, or (iii) operate to impose a limitation or cap on the amount of Contingent Consideration.
1.7     Assumption of Liabilities.
(a) On the Closing Date, Purchaser will assume and agree to discharge all of the following obligations with respect to the Business in accordance with their respective terms, but only to the extent that such obligations do not constitute Excluded Liabilities (the “ Assumed Liabilities ”):any and all liabilities, obligations, and commitments arising out of the Material Agreements that are listed on Schedule 1.7(a) , excluding, however, any obligation or liability arising thereunder on or prior to the Closing Date.
(b) Notwithstanding any provision of this Agreement to the contrary, Purchaser will not assume any liabilities, obligations, or commitments of the Company other than the Assumed Liabilities, and all such other liabilities, obligations, and commitments will be retained by the Company (the “ Excluded Liabilities ”). Without limiting the generality of the foregoing, none of the following will be Assumed Liabilities for purposes of this Agreement:
i. All trade accounts payable, accrued payroll, accrued employee benefits, including accrued vacation and sick leave and accrued post retirement and post employment benefits, accrued taxes, and all other accrued expenses relating to the Business;

9



ii. Any liabilities or obligations for borrowed money or evidenced by bonds, debentures, notes, drafts, or similar instruments;
iii. Any and all liabilities, obligations, or commitments arising out of any and all Material Agreements that are not listed on Schedule 1.7(a) ;
iv. Any and all Taxes (whether pursuant to existing laws and regulations or laws and regulations subsequently enacted by any Governmental Authority) that arise from (A) the operation of the Business on or prior to the Closing Date; (B) the ownership of the Assets on or prior to the Closing Date; or (C) the consummation of the transactions contemplated in this Agreement;
v. Any liabilities or obligations relating to employees of the Business arising while such employees are employed by the Company, including all liabilities or obligations relating to any claims by employees of the Business, whether pending as of the Closing Date or arising after the Closing Date, due to acts, alleged acts, or omissions of the Company under any federal labor or employment laws or state laws relating to labor relations, equal employment, fair employment practices, entitlements, prohibited discrimination, or other employment practices or otherwise relating to or arising out of the employment relationship with the Company or the termination thereof;
vi. All liabilities or obligations under any employment, severance, retention, or termination agreement between the Company and any of its employees;
vii. Any liabilities or obligations relating to any of the Plans or relating to payroll, vacation, sick leave, workers' compensation, unemployment benefits, pension benefits, or any other employee benefits of any kind for employees of the Company;
viii. Any liabilities or obligations with respect to any actions, suits, proceedings, or possible claims, whether such actions, suits, proceedings, or possible claims are currently pending, threatened, contingent, subsequently arise, or otherwise, in any way relating to the conduct of the Business prior to the Closing Date, including any such matters disclosed on Schedule 2.1.8 and without regard to whether any such actions, suits, proceedings, or possible claims are described on Schedule 2.1.8 ;
ix. Any and all liabilities or obligations arising from or in connection with warranty claims or product liability claims relating to products manufactured or sold by the Company or by a third party under license by the Company (excluding only those sold by Purchaser or its Affiliates under license by the Company) prior to the Closing Date and any liabilities relating to the return of any products sold by the Company or by a third party under license by the Company (excluding only those sold by Purchaser or its Affiliates under license by the Company) prior to the Closing Date;
x. Any liabilities for Environmental Damages relating to the Sellers, the Business or the Assets, whether or not disclosed in the Schedules to this Agreement or otherwise known to Sellers or Purchaser;
xi. All costs, expenses, liabilities, or obligations incurred by the Company incident to the negotiation and preparation of this Agreement and its performance and compliance with the agreements and conditions contained in this Agreement;
xii. Any and all liabilities, obligations, or commitments arising out of any and all ownership, lease or other interest in real property; and

10



xiii. Any liabilities or obligations relating to the Excluded Assets.
1.8     Closing Date Deliveries by Sellers . On the Closing Date, Sellers will deliver or cause to be delivered to Purchaser: (i) a Bill of Sale, Assignment and Assumption Agreement covering all of the Assets and the Assumed Liabilities in the form attached hereto as Exhibit C (the “ Bill of Sale, Assignment and Assumption Agreement ”); (ii) the Escrow Agreement; (iii) an opinion of Akerman Senterfitt, P.A., counsel to Sellers in the form attached hereto as Exhibit D; (iv) certified copies of the resolutions adopted by the Company's members, managers, and/or board of managers (as applicable) approving the Acquisition; (v) a Brand Ambassador Agreement between Purchaser or its Affiliate and Company in the form attached hereto as Exhibit E (the “ Brand Ambassador Agreement ”); (vi) a License Agreement between Purchaser or its Affiliate and C&H Lures Ultimate Tackle, Inc. in the form attached hereto as Exhibit F (the “ License Agreement ”); (vii) a Trademark Assignment Agreement in the form attached hereto as Exhibit H (the “Trademark Assignment Agreement ”); (viii) a Copyright Assignment Agreement in the form attached hereto as Exhibit I (the “ Copyright Assignment Agreement ”); (ix) the subordination agreement requested by Purchaser's lenders in the form attached hereto as Exhibit J ("the " Subordination Agreement "); (x) the acknowledgment and consent to collateral assignment requested by Purchaser's lenders in the form attached hereto as Exhibit K ("the " Consent to Collateral Assignment "); and (xi) such other documents as may be required to give effect to this Agreement.
1.9     Closing Date Deliveries by Purchaser. On the Closing Date, Purchaser will deliver or cause to be delivered (a) to the Company the Cash Purchase Price and: (i) the Bill of Sale, Assignment and Assumption Agreement; (ii) the Promissory Notes; (iii) a Guaranty by Delta Apparel, Inc. of the Promissory Notes in the form attached hereto as Exhibit G whereby Delta Apparel, Inc., Purchaser's parent entity, will guaranty the obligations of Purchaser under the Promissory Note(s) and Purchaser's obligation to pay any Contingent Consideration pursuant to Section 1.6 (the “ Guaranty ”); (iv) the Escrow Agreement; (v) certified copies of the resolutions adopted by the Purchaser's board of managers approving the Acquisition; (vi) the Brand Ambassador Agreement; (vii) the License Agreement; and (viii) such other documents as may be required to give effect to this Agreement; and (b) to Escrow Agent, the Escrow Amount.
1.10     Further Assurances. From and after the Closing Date, subject to Section 1.1, Sellers will deliver to Purchaser such other bills of sale, deeds, endorsements, assignments, and other good and sufficient instruments of conveyance and transfer, in form reasonably satisfactory to Purchaser, as Purchaser may reasonably request or as may be otherwise reasonably necessary to vest in Purchaser all right, title, and interest of the Company in, to, or under all of the Assets If at any time following the Closing, any party receives any payment, correspondence, or other property that is intended for or belongs to another party or to which another party is legally entitled, then the party receiving such payment, correspondence, or other property will promptly pay over such payment or deliver such correspondence or other property to the other party.  From and after the Closing Date, Sellers will take all steps as may be reasonably necessary to put Purchaser in actual possession and control of all the Assets.  From time to time following the Closing, the parties will execute and deliver to each other such other instruments, documents and information as may be reasonably requested or as may be otherwise reasonably necessary to consummate or confirm the transactions contemplated hereunder, to accomplish the purpose of this Agreement, or to assure to the other party the benefits of this Agreement.  Sellers shall make available to Purchaser as of the Closing any and all files in their possession or control related to the prosecution of the Intellectual Property transferred as part of the Assets, any policing of the Intellectual Property transferred as part of the Assets, and any other certificates and other files or documents evidencing ownership of or otherwise related to the Assets. In addition, within two (2) weeks following the Closing, Sellers shall require their intellectual property counsel to send to Purchaser's General Counsel, at the Purchaser address listed in Section 6.6, any and all files related to the prosecution of the Intellectual Property transferred as part of the Assets, any policing of the

11



Intellectual Property transferred as part of the Assets, and any other certificates and other documents evidencing ownership of the Intellectual Property transferred as part of the Assets.  
Further, for any and all actions and obligations necessary to assign, obtain, perfect, preserve, protect, enforce, prosecute, and/or assure to Purchaser the ownership and benefits of the Intellectual Property conveyed herein or intellectual property assets deriving therefrom, whether in the United States of America or any other country, each Seller hereby conveys to Purchaser's General Counsel full authority and rights to act in each Seller's stead, and/or as any Seller's designated agent or proxy, with respect to the Intellectual Property, including but not limited to creation and execution of documents and any other actions necessary to assign, perfect, preserve, protect, enforce, prosecute, and/or to otherwise obtain proper intellectual property protection for the Intellectual Property conveyed herein or intellectual property assets deriving therefrom.
1.11     Allocation of Purchase Price. Subject to Section 1.6(e) hereof the Purchase Price shall be allocated among the Assets in such manner as Purchaser may reasonably determine, subject to the last sentence of this Section 1.11; provided that Purchaser shall give written notice thereof to the Company within ninety (90) days following the Closing.  The parties shall file all applicable tax returns and reports (including IRS Form 8594) in accordance with and based upon such allocation and shall not take any position in any tax return or report, or any tax proceeding or audit, that is inconsistent with such allocation unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of the Internal Revenue Code. The parties acknowledge and agree that the Purchase Price will be allocated as follows: (i) up to Nine Hundred Thousand Dollars 00/100 ($900,000.00) to the noncompetition and nonsolicitation agreements of Sellers in Section 3.3 of this Agreement and (ii) the remainder of the Purchase Price shall be allocated to other Class VI and Class VII Assets.

ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
2.1     Representations and Warranties of Sellers.
Sellers, jointly and severally, represent and warrant to Purchaser as of the date hereof:
2.1.1     Corporate Status; Authorization .
(a) Corporate Existence . The Company is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Florida and has all requisite corporate power and authority to own and operate its properties and assets and to carry on its business as presently conducted. All of the jurisdictions in which the Company is qualified as a foreign corporation to do business are listed on Schedule 2.1.1(a) . The Company does not have any subsidiaries, does not own any shares, membership interests, or other equity interests of any Person, and is not a party to any joint venture or other similar agreement or arrangement.
(b) Authorization . The Company has full corporate power and authority to execute, deliver, and perform this Agreement and the other agreements and instruments executed and delivered by it at Closing, to consummate the transactions contemplated hereby and thereby, and to perform its obligations hereunder and thereunder. Each Owner has full power and authority to execute, deliver, and perform this Agreement and the other agreements and instruments executed and delivered by him at Closing, to consummate the transactions contemplated hereby and thereby, and to perform his obligations hereunder and thereunder. The execution and delivery of this Agreement and the other agreements and instruments

12



executed and delivered by the Company at Closing and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of the Company. This Agreement and the other agreements and instruments executed and delivered by each Seller at Closing have been duly executed and delivered by each Seller that is a party thereto, and this Agreement and the other agreements and instruments executed and delivered by each Seller at Closing constitute the legal, valid, and binding obligation of each Seller that is a party thereto, enforceable against each of them in accordance with their respective terms.
2.1.2     Conflicts and Consents .
(a) Conflicts of the Company . Except as set forth on Schedule 2.1.2(a) , the execution and delivery of this Agreement and the other agreements and instruments executed and delivered by the Company at Closing and the consummation by the Company of the transactions contemplated hereby and thereby in the manner contemplated hereby and thereby will not (y) result in the creation of any Lien upon on any of the Assets, or (z) conflict with or result in any violation of or default under (or any event that, with notice or lapse of time or both, would constitute a default under), require any consent under, or result in the acceleration or required prepayment of any indebtedness pursuant to the terms of, any provision of (i) the articles of organization or operating agreement of the Company, (ii) any mortgage, indenture, loan agreement, note, bond, deed of trust, other agreement, commitment, or obligation for the borrowing of money or the obtaining of credit, lease, or other agreement, contract, license, franchise, permit, or instrument to which the Company is a party or by which the Company may be bound, or (iii) any judgment, order, decree, law, statute, rule, or regulation applicable to the Company.
(b) Conflicts of Owners . Except as set forth on Schedule 2.1.2(b) , the execution and delivery of this Agreement and the other agreements and instruments executed and delivered by each Owner at Closing and the consummation by each Owner of the transactions contemplated hereby and thereby in the manner contemplated hereby and thereby will not (y) result in the creation of any Lien upon any of the Assets, or (z) conflict with or result in any violation of or default under (or any event that, with notice or lapse of time or both, would constitute a default under) , require any consent under, or result in the acceleration or required prepayment of any indebtedness pursuant to the terms of, any provision of (i) any mortgage, indenture, loan agreement, note, bond, deed of trust, other agreement, commitment, or obligation for the borrowing of money or the obtaining of credit, lease, or other agreement, contract, license, franchise, permit, or instrument to which any Owner is a party or by which any Owner may be bound, or (ii) any judgment order, decree, law, statute, rule, or regulation applicable to any Owner.
(c) Consents . Except as set forth on Schedule 2.1.2(c) , no consent, approval, authorization, permit, order, filing, registration, or qualification of or with any Governmental Authority or third Person is required to be obtained by any Seller in connection with the execution, delivery, and performance of this Agreement or the consummation by the Sellers of the transactions contemplated hereby in the manner contemplated hereby.
2.1.3     No Liens . The Company has good, exclusive, and marketable title to the Assets, free and clear of all Liens, except for Permitted Liens.
2.1.4     Intentionally Omitted.
2.1.5     Intellectual Property .
(a) Schedule 2.1.5(a) contains a list (designated by category and including all registration, application or serial numbers) of the following: all valid trademark or service mark registrations owned by the Company (or owned by any of the Owners and ever used in or related to the Business) and that have

13



been issued by the United States Patent and Trademark Office (the “U.S. Trademark Registrations”), all pending trademark or service mark applications filed by the Company (or filed by any of the Owners and ever used in or related to the Business) with the United States Patent and Trademark Office (the “U.S. Trademark Applications”), all trademark or service mark registrations owned by Company (or owned by any of the Owners and ever used in or related to the Business) that have been issued by any foreign governmental authority (the “Foreign Trademark Registrations”), all pending trademark or service mark applications filed by the Company (or by any of the Owners and ever used in or related to the Business) with any foreign government authority (the “Foreign Trademark Applications”), all copyright registrations issued to the Company (or to any of the Owners and ever used in or related to the Business) by the U.S. Copyright Office (the “U.S. Copyright Registrations”), all patents or patent applications filed by or owned by Company (or owned by the Owners and used in or related to the Business) (the “Patents and Patent Applications”), a list of specific designs and logos that, excluding those set forth on Schedule 2.1.5(i), are owned by the Company (the “Designs/Logos”), the domain name registrations owned by the Company (or by any of the Owners and used in or related to the Business) (the “Domain Name Registrations”). Notwithstanding anything in this Agreement to the contrary, Sellers make no representations regarding any Delta Obtained IP, and such assets shall only be included in the Assets to the extent of Sellers' rights therein and to the extent assignable without consent of any third party engaged by Purchaser or Affiliates in the creation of the Delta Obtained IP.
(b) Company is the registered owner of the U.S. Trademark Registrations and, except as set forth on Schedule 2.1.5(b) , has filed all applicable post-registration filings of affidavits of continued use and incontestability and renewal applications. The U.S. Trademark Registrations are not subject to any maintenance fees or Taxes or actions due within ninety (90) days after the Closing Date. Sellers have not received any notice that any action has been taken by any third party to oppose, invalidate or cancel any U.S. Trademark Registrations and, to the Knowledge of Sellers, no such action is threatened. The U.S. Trademark Registrations are valid and enforceable. Sellers have not received notice from any third party alleging infringement of a third party's rights by the trademarks or service marks covered by the U.S. Trademark Registrations. Set forth on Schedule 2.1.5(b) is a list of third parties to whom Company has sent cease and desist or opposition or cancellation notices alleging that such third parties are infringing on Company's trademark or service mark rights, which matters are not yet resolved. Sellers have no Knowledge of any third parties that are infringing upon any of the Company's trademark or service mark rights, except as set forth on Schedule 2.1.5(b) .
(c) Set forth on Schedule 2.1.5(c) is a description of outstanding United Stated Patent and Trademark Office (“USPTO”) office actions received by Company with respect to any of the U.S. Trademark Applications. No third party has taken any action to oppose any U.S. Trademark Application, and, to the Knowledge of Sellers, no such action is threatened. Sellers have not received notice from any third party alleging infringement of a third party's rights by the trademarks or service marks covered by the U.S. Trademark Applications (other than the office actions noted above as set forth on Schedule 2.1.5(c)).
(d) No action has been taken by any third party to oppose, invalidate or cancel any Foreign Trademark Registrations and, to the Knowledge of Sellers, no such action is threatened. Sellers have not received any notice from any third party alleging trademark infringement of a third party's rights by the trademarks or service marks covered by the Foreign Trademark Registrations, except as set forth in Schedule 2.1.5(d) . The Foreign Trademark Registrations are valid and enforceable, subject to cancellation and/or rights of challenge under foreign laws that may exist due to nonuse.
(e) Set forth on Schedule 2.1.5(e) is a description of outstanding notices or objections received by Company from any foreign registration authority with respect to the Foreign Trademark Applications.

14



Sellers have not received any notice that any action has been taken by any third party to oppose any Foreign Trademark Applications, and, to the Knowledge of Sellers, no such action is threatened, except as set forth in Schedule 2.1.5(e). Sellers have not received notice from any third party alleging infringement of a third party's rights by the trademarks or service marks covered by the Foreign Trademark Applications (other than the notices or objections noted above as set forth in Schedule 2.1.5(e)).     
(f) None of the Company's Trademark or Service Mark Rights (as defined below), registered or unregistered, that are part of the Intellectual Property (other than Delta Obtained IP) infringe or otherwise violate or, to Sellers' Knowledge, are alleged (except for office actions, notices, or objections issued by a Government Authority or as set forth on Schedule 2.1.5(f) ) to infringe or otherwise violate any trademark, service mark, trade name, or other intellectual property or proprietary right of any Person in (1) the United States; or (2) any other country or jurisdiction where the trademarks or service marks (a) have been used by the Company or any licensee pursuant to a license agreement solely with respect to the licensed articles thereunder and (b) have been specifically approved for use by the Company following the execution of any such license agreement solely with respect to the licensed articles under such license agreements. For purposes of this Agreement, “Trademark or Service Mark Rights” shall mean the trademark and service mark rights of the Company with respect to the types of goods and services used by the Company or any of its licensees pursuant to license agreements within the thirty (30) months prior to the Closing.
(g) No U.S. Copyright Registration has been or is now involved in any opposition, invalidation, or cancellation, and, to the Knowledge of Sellers, no such action is threatened. The U.S. Copyright Registrations are valid and enforceable and none of the Company's copyrights, registered or unregistered, that are part of the Intellectual Property (other than Delta Obtained IP) infringe or otherwise violate or, to Seller's Knowledge, are alleged to infringe or otherwise violate any copyright of any Person, except as set forth on Schedule 2.1.5(g) . Sellers have not received any notice from any third party alleging infringement of a third party's rights by the material covered by the U.S. Copyright Registrations, except as set forth on Schedule 2.1.5(g) .
(h) Intentionally omitted.
(i) Except as set forth on Schedule 2.1.5(i) , the Company has obtained valid and enforceable assignments of the copyright to the visual art components, to the extent subject to copyright protection, of the Designs/Logos and the Design/Logos do not infringe or otherwise violate or, to Sellers' Knowledge, are alleged to infringe or otherwise violate any copyright of any Person with respect to the use of the Design/Logos without modification, within (1) the United States; or (2) any other geographical locations where goods or services bearing the Designs/Logos (a) have been sold by the Company or any licensee pursuant to a license agreement solely with respect to the licensed articles under such license agreements within the thirty (30) months prior to the Closing and (b) have been specifically approved for use by the Company following the execution of any such license agreement solely with respect to the licensed articles under such license agreements within the thirty (30) months prior to the Closing. Except as set forth on Schedule 2.1.5(i) , the Design/Logos do not infringe or otherwise violate or, to Sellers' Knowledge, are alleged to infringe or otherwise violate any trademark or other intellectual property or other proprietary right of any Person with respect to the use of the Design/Logos without modification and in the same manner as used by Company or any of its licensees pursuant to license agreements within the thirty (30) months prior to Closing, within (1) the United States; or (2) any other geographical locations where goods or services bearing the Designs/Logos (a) have been sold by the Company or any licensee pursuant to a license agreement solely with respect to the licensed articles under such license agreements within the thirty (30) months prior to the Closing, and (b) have been specifically approved for use by the Company following

15



the execution of any such license agreement solely with respect to the licensed articles under such license agreements within the thirty (30) months prior to the Closing
(j) All Domain Name Registrations have been registered in the name of Company. No Domain Name Registrations are now involved in any dispute, oppositon, invalidation or cancellation proceedings and, to Sellers' Knowledge, no such action is threatened. No Domain Name Registration, as currently used in the Business, infringes, interferes with or, to Sellers' Knowledge, is alleged to interfere with or infringe the trademark or other intellectual property or proprietary right of any other Person within the United States or any other geographical locations where goods or services bearing the Design/Logos have been sold and licensed for use to date.
(k) Set forth on Schedule 2.1.5(k) is a list of any copyright applications or trademark or service mark applications that have been refused registration by any Governmental Authority.
(l) Subject to the limitation noted in this Section 2.1.5(l), the Company is the owner of all right, title and interest in and to the Intellectual Property, holds all Intellectual Property free and clear of all Liens, and has the right to use without payment to a third party (other than prosecution, registration, renewal, maintenance and similar fees due a Governmental Authority), all of the Intellectual Property as set forth on Schedule 2.1.5(a) , other than as restricted by the licenses listed in Schedule 2.1.7 . No intellectual property other than the Intellectual Property and the Delta Obtained IP is necessary for the conduct of the Business as currently conducted.  Owners have validly assigned to the Company all right, title and interest they have in and to any intellectual property or proprietary rights that relate to or have been used in the Business. Notwithstanding anything herein to the contrary, Sellers make no representations regarding Liens or payment obligations to third parties related to the Delta Obtained IP that attached because of the act or omission of Delta prior to the assignment or transfer of the Delta Obtained IP to the Company. Company's assignment of the Delta Obtained IP and the inclusion thereof as part of the Assets is limited to the rights obtained by Company from Delta in and to the Delta Obtained IP and is subject to any requirements for obtaining the consent of any third party that may have arisen prior to the assignment or transfer of the Delta Obtained IP to the Company. Notwithstanding anything herein to the contrary, Sellers make no representations regarding Liens or payment obligations to third parties related to the IMG Obtained IP. Company's assignment of the IMG Obtained IP and the inclusion thereof as part of the Assets is limited to the rights obtained by the Company from IMG in and to the IMG Obtained IP and is subject to any requirements for obtaining the consent of any third party and any payments to third parties related thereto.
(m) All contractors, consultants or other third parties that have created or provided to the Company any Intellectual Property, other than Delta Obtained IP and IMG Obtained IP, have assigned to the Company all of their right, title and interest in and to such Intellectual Property and to the extent the assignment of such rights required a written agreement such Persons have executed such an agreement, except as set forth on Schedule 2.1.5(m) . All employees of Sellers that have created or provided to the Company any Intellectual Property, other than Delta Obtained IP and IMG Obtained IP, have assigned to Sellers all right, title and interest in and to such Intellectual Property.
2.1.6     Intentionally Omitted .
2.1.7     Material Agreements . Except for the contracts, franchises, agreements, plans, leases, and licenses described on Schedule 2.1.7 , the Company is not a party to or subject to:
(a) any contract or agreement with a licensee, agent, sales representative, dealer, distributor, or with respect to Intellectual Property , any designer, artist or other independent contractor;

16



(b) any contract or agreement pursuant to which the Company has any obligation to indemnify any Person;
(c) any instrument evidencing or related to indebtedness for money loaned or borrowed by the Company or indebtedness guaranteed by the Company;
(d) any contract or agreement containing covenants limiting the freedom of the Company to compete in any line of business or with any Person;
(e) any license or franchise agreement in which the Company is the licensor or franchisor or in which the Company is the licensee or franchisee; or
(f) any contract or agreement, not covered by any of the other items of this Section 2.1.7, which (i) involves the payment or receipt by the Company of $5,000 or more; or (ii) does not terminate, or is not terminable, by and without penalty to the Company prior to one year from the date hereof.
All contracts, agreements, and licenses described on Schedule 2.1.7 (the “ Material Agreements ”) are valid and in full force and effect, and no Seller has received any notice of termination with respect to any Material Agreement.  Neither the Company nor, to the Knowledge of Sellers, any other party to any such Material Agreement has breached any material provision of any such Material Agreement or is in default in any material respect under the terms of any such Material Agreement.  Schedule 2.1.7 identifies each Material Agreement that is or might be breached by, or terminable by any other party upon, the sale of substantially all of the Assets or occurrence of any of the other transactions contemplated by this Agreement. 
    2.1.8     Litigation . Except as set forth on Schedule 2.1.8 , there are no actions, suits, or proceedings pending or, to the Knowledge of Sellers, threatened or any basis for any such actions, suits, or proceedings against or affecting the Company or its properties, assets, or business or which would prevent the consummation of the transactions contemplated hereby.  None of the actions, suits, or proceedings set forth on Schedule 2.1.8 will, individually or in the aggregate, if adversely decided against the Company, have a material adverse effect or will prevent or hinder the consummation of the transactions contemplated hereby.  There is no investigation pending or threatened by any Governmental Authority with respect to the Business.
2.1.9     No Judgments or Orders . The Company is not a party to or subject to any judgment, order, or decree entered in any action or proceeding brought by any Governmental Authority or any other Person enjoining it in respect of any business practice, the conduct of business in any area, the acquisition of any property, or in any other respect.
2.1.10     Compliance with Laws; Permits .
(a) Compliance with Laws . The Company is not in violation of any Applicable Law. No Seller has received any notice to the effect that, or otherwise been advised that, the Company is not in compliance with any Applicable Law, and no Seller has any reason to anticipate that any presently existing circumstance of which it or he has Knowledge is likely to result in a violation of any Applicable Law.
(b) Permits . All licenses, permits, registrations, orders, and other approvals of all Governmental Authorities and third Persons with respect to the conduct of the Business have been obtained by the Company, are set forth on Schedule 2.1.10(b) , and are in full force and effect, and there has been neither any violation, suspension, or cancellation thereof, nor any basis for any suspension or cancellation therof.
2.1.11     Tax Matters . Sellers have correctly prepared and timely filed all material tax returns and other tax reports required to be filed, and have paid all taxes shown thereon as owing. Sellers are not currently the beneficiary of any extension of time within which to file any material tax return other than

17



extensions of time to file tax returns obtained in the ordinary course of business. No Liens exist, or will exist immediately following Closing, on the Assets that relate to or are attributable to any Taxes. The representations and warranties in this section are the Seller's sole and exclusive representations and warranties regarding taxes.
2.1.12     Compliance with ERISA . Schedule 2.1.12 sets forth a complete list of each “employee benefit plan,” as that term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (the “Plans”). Each Plan has been administered and operated in material compliance with its terms and the applicable requirements of ERISA and the Code and there are no pending or, to the knowledge of Sellers, threatened, claims of any Company Personnel against or otherwise involving any of the Plans (other than routine claims for benefits or routine appeals thereof).
2.1.13     Labor Matters . Sellers have complied in all respects with all Applicable Laws relating to employment practices, terms and conditions of employment, equal employment opportunity, nondiscrimination, nonretaliation, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar Taxes and occupational safety and health. No Seller is liable for the payment of any Taxes, fines, penalties, or other amounts, however designated, for failure to comply with any such Applicable Law. The Company has not been, and is not now, a party to any collective bargaining agreement or other labor contract, and there is no representation petition pending or threatened with respect to any employee of the Company.
2.1.14     Environmental. As of the Effective Date, the Company is not in violation of or liable under, any Environmental Law.
2.1.15     Product Warranty .
To the Knowledge of Sellers, each Product manufactured, sold, or delivered by the Company or by a third party under license from the Company (excluding only Purchaser or its Affiliates) has been in conformity with all material contractual commitments and all express and implied warranties.    
2.1.16     Product Liability . The Company has no liability (and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against the Company giving rise to any liability) arising out of any injury to any individual or property as a result of the ownership, possession, or use of any Product manufactured, sold, or delivered by the Company or by a third party under license from the Company (excluding only Purchaser or its Affiliates).  Each Product manufactured, sold, or delivered by a third party under license from the Company (excluding only Purchaser or its Affiliates) has been in conformity with all applicable intellectual property laws and regulations and does not infringe or otherwise violate the trademark, service mark, copyright, patent, or other intellectual property or proprietary right of any third party, and the Company has no liability (and there is no basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against it giving rise to any liability) for such infringement or other violation.
2.1.17     Brokers, Finders . Sellers have not retained any broker or finder in connection with the transactions contemplated hereby so as to give rise to any claim against Purchaser for any brokerage or finder's commission, fee, or similar compensation.
2.1.18 Ïntentionally Omitted.
2.2 Representations and Warranties of Purchaser. Purchaser represents and warrants to Sellers as of the date hereof as follows:
2.2.1 Corporate Status; Authorization .

18



(a) Corporate Existence . Purchaser is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Georgia and has all requisite company power and authority to own, lease, and operate its properties and to carry on its business as presently conducted.
(b) Authorization . Purchaser has full company power and authority to execute, deliver, and perform this Agreement and the other agreements and instruments executed and delivered by it at Closing, to consummate the transactions contemplated hereby and thereby, and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other agreements and instruments executed and delivered by Purchaser at Closing and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of Purchaser. This Agreement and the other agreements and instruments executed and delivered by Purchaser at Closing have been duly executed and delivered by Purchaser, and this Agreement and the other agreements and instruments executed and delivered by Purchaser at Closing constitute the legal, valid, and binding obligation of Purchaser, enforceable against Purchaser in accordance with their respective terms.
2.2.2 Conflicts and Consents .
(a) Conflicts . Except as set forth on Schedule 2.2.2(a) , the execution and delivery of this Agreement and the other agreements and instruments executed and delivered by Purchaser at Closing and the consummation by Purchaser of the transactions contemplated hereby and thereby in the manner contemplated hereby and thereby will not conflict with or result in any violation of or default under (or any event that, with notice or lapse of time or both, would constitute a default under), require any consent under, or result in the acceleration or required prepayment of any indebtedness pursuant to the terms of, any provision of (i) the articles of organization or operating agreement of Purchaser, (ii) any mortgage, indenture, loan agreement, note, bond, deed of trust, other agreement, commitment, or obligation for the borrowing of money or the obtaining of credit, lease, or other agreement, contract, license, franchise, permit, or instrument to which Purchaser is a party or by which Purchaser may be bound, or (iii) any judgment, order, decree, law, statute, rule, or regulation applicable to Purchaser.
(b) Consents . Except as set forth on Schedule 2.2.2(b) , no consent, approval, authorization, permit, order, filing, registration, or qualification of or with any Governmental Authority or third Person is required to be obtained by Purchaser in connection with the execution, delivery, and performance of this Agreement or the consummation by Purchaser of the transactions contemplated hereby in the manner contemplated hereby.
2.2.3 Brokers, Finders . Purchaser has not retained any broker or finder in connection with the transactions contemplated hereby so as to give rise to any claim against any Seller for any brokerage or finder's commission, fee, or similar compensation.
2.2.4     Sufficiency of Funds . Purchaser has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Cash Purchase Price and consummate the transactions contemplated by the Agreement.
2.2.5     Solvency . Immediately after giving effect to the transactions contemplated hereby, Purchaser shall be solvent and shall: (a) be able to pay its debts as they become due; (b) have adequate capital to carry on its business; and (c) not be in default under any mortgage, indenture, loan agreement, note, bond, deed of trust or other agreement or obligation for the borrowing of money. No transfer of property is being made and no obligation is being incurred in connection with the transactions contemplated hereby with the intent to hinder, delay, or defraud either present or future creditors of Purchaser or Sellers. In connection with the transactions contemplated hereby, Purchaser has not incurred, nor plans to incur, debts beyond its ability to pay as they become absolute and matured.

19



2.2.6     Intentionally omitted .
2.2.7     Independent Investigation . Purchaser has conducted its own independent investigation, review and analysis of the Business and the Assets and acknowledges that it has been provided adequate access to the personnel, properties, assets, premises, books and records, and other documents and data of Sellers for such purpose. Purchaser acknowledges and agrees that (a) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Purchaser has relied solely upon its own investigation and the express representations and warranties of Sellers set forth in Article II of this Agreement (including related portions of the Schedules); and (b) Sellers have not made any representation or warranty as to Seller, the Business, the Assets or this Agreement, except as expressly set forth in Article II of this Agreement (including the related portions of the Schedules).
ARTICLE 3.
CERTAIN COVENANTS
3.1 Tax Matters.
(a) Sellers and Purchaser will (i) provide each other with such assistance as may be reasonably requested in connection with the preparation of any tax return, audit, or other examination by any taxing Governmental Authority or judicial or administrative proceedings relating to liability for Taxes relating to the Business, (ii) retain and provide each other with any records or other information that may be relevant to such tax return, audit, examination, or proceeding, and (iii) provide Purchaser with any final determination of any such audit, examination, or proceeding that affects any amount required to be shown on any tax return of the Business for any period. Without limiting the generality of the foregoing, Sellers will retain, until the applicable statutes of limitations (including any extensions) have expired, copies of all tax returns, supporting work schedules, and other records and information that are relevant to such returns for all tax periods or portions thereof ending on or before the Closing Date.
(b) Notwithstanding any provision of Applicable Law or this Agreement to the contrary, the Company will pay any sales, use, transfer, stamp, documentary, and similar Taxes and recording and filing fees (and file any tax returns relating to such Taxes) applicable to the transactions contemplated by this Agreement, it being agreed that none of such payments will be borne directly or indirectly by Purchaser.
(c) Personal property taxes and assessments with respect to the Assets will be prorated as of the Closing Date on the basis of the calendar year in which the Closing occurs, regardless of when such taxes become a lien or are payable. If the rate of any such taxes is not fixed prior to the Closing Date, the proration thereof at the Closing will be upon the basis of the rate for the preceding calendar year applied to the latest assessed valuation.
(d) The parties will cooperate to make any necessary filings and to furnish any required supplemental information to any taxing Governmental Authority resulting from the consummation of the transactions contemplated by this Agreement.
3.2 Confidentiality.
(a) Each of the parties agrees to treat in confidence all documents, materials, and other information obtained from any other party in connection with the Acquisition or in connection with any investigation or examination relating thereto, regardless of whether such materials and information were obtained before the signing of this Agreement (collectively, “ Acquisition Information ”). All Acquisition Information will be kept confidential by the receiving party and its respective officers, directors, employees, representatives, agents, and advisors; provided, that (i) Purchaser will have no obligation to keep Acquisition

20



Information received by it from Sellers confidential so long as its disclosure of such Acquisition Information is related to the operation of the Business or is for a legitimate purpose; and (ii) Acquisition Information may be disclosed if so required by law (including securities laws).
(b) Any public announcement relating to the execution of this Agreement must be reasonably acceptable to Purchaser and Sellers and may be made only if agreed to by Purchaser and Sellers, except that any party may make a public announcement to the extent required by law (including securities laws).
(c) Notwithstanding anything in this Agreement to the contrary, none of the parties will have any obligation to preserve the confidentiality of any Acquisition Information that (a) prior to disclosure to the receiving party was already rightfully in such receiving party's possession, (b) is or becomes publicly available, other than by unauthorized disclosure, or (c) is received from a third party who is rightfully in possession of such information and has the authority to disclose it and who does not require the receiving party, in connection with disclosing such Acquisition Information to the receiving party, to refrain from disclosing such Acquisition Information to others.
(d) Each Seller hereby agrees that it or he will keep confidential and will not disclose to any Person, appropriate, or make use of for itself or himself or any other Person any Business Information. For purposes of this Agreement, “ Business Information ” means all information regarding the Business and its licensees, agents, customers or suppliers (i) that is not generally known to persons not employed by the Business, (ii) that is not generally disclosed by the Business to persons not employed by it, and (iii) as to which, prior to Closing, the Company made reasonable efforts to keep confidential, or after Closing, Purchaser makes reasonable efforts to keep confidential. Business Information includes, but is not limited to, information regarding the intellectual property, products and/or services of the Business, licensees, license agreements and any royalty rates, guarantees, or amounts paid or payable thereunder, sales information, research and development, inventions, discoveries, improvements, marketing, business, licensing, brand and product development strategies and plans, and non-public information concerning the legal or financial affairs of the Business.
3.3 Noncompetition and Nonsolicitation.
(a) Each Seller agrees that during the period beginning on the Closing Date and ending upon payment in full of the Contingent Consideration or upon final determination that no Contingent Consideration is due (the “ Restricted Period ”), it or he will not, directly or indirectly (on behalf of itself or himself or as principal, agent, joint venture partner, contractor, employee, consultant, director, or officer of any Person), engage in a Competitive Business in the Territory or own any stock or equity or other securities of any Person that engages in a Competitive Business in the Territory. Notwithstanding the foregoing or anything to the contrary contained in this Section 3.3, (i) any Seller may own stock or other securities of any publicly-traded entity if such ownership interest is not greater than five percent (5%) of the outstanding stock or securities of such entity; (ii) Donald R. Combs and Roger L. Combs may continue to own C&H Lures Ultimate Tackle, Inc. and operate such business as currently operated as of the Effective Date; (iii) Michael T. Hutto may continue to own and operate a business for surfboard wax; and (iv) Richard Thompson may engage in a business related to paddleboard accessories or surfboard luggage.
Competitive Business ” means engaging in any activities or providing any products or services that are of the type conducted, authorized, licensed, offered or provided by the Company or any Seller within one (1) year prior to the Closing Date and includes, without limitation:
(i)     licensing or otherwise permitting intellectual property to be used commercially in connection with any: (i) ocean, beach, coastal, surfing, fishing, diving, tropical or aquatic-themed (collectively "Beach-Themed") casual and/or performance apparel, footwear, accessory, eyewear,

21



decal, skincare or luggage products; (ii) any other Beach-Themed products, items or services that are the same or similar to those offered for sale by the Company, any third party under license from the Company, or any Seller as of the Closing Date; or (iii) any other Beach-Themed products or services which, as of the Closing Date, are otherwise licensed for use by the Company, or for which the Company has definite plans to license for use as of the Closing Date as described in the Purchaser's business plan and provided in Section 3.9; and
(ii)     manufacturing, marketing, promoting, representing, distributing, selling or otherwise using for commercial purposes any: (i) Beach-Themed casual and/or performance apparel, footwear, accessory, eyewear, decal, skincare or luggage products; (ii) any other Beach-themed products, items or services that are the same or similar to those offered for sale by the Company, any third party under license from the Company, or any Seller as of the Closing Date; or (iii) any other Beach-Themed products or services which, as of the Closing Date, are otherwise licensed for use by the Company or for which the Company has definite plans to license for use as described in the Purchaser's business plan and provided in Section 3.9.
Territory ” means:
(i) The United States of America and its territories, possessions and military bases and installations;
(ii) Any country or other jurisdiction throughout the world where Products are sold or offered for sale as of the Closing Date or where the Company licenses or otherwise permits the sale of Products as of the Closing Date; and
(iii) Any country or other jurisdiction throughout the world where the Company applied for trademark registration or similar intellectual property rights with respect to any of the intellectual property assets contained in Schedule 2.1.5 as of the Closing Date.
(b)    Each Seller agrees that during the Restricted Period, it or he will not, directly or indirectly (on behalf of itself or himself or as principal, agent, joint venture partner, employee, consultant, director, or officer of any Person), solicit or sell to any licensee or customer of Company as of the Closing Date (or any actively sought or licensee or customer of Company as of the Closing Date) for or on behalf of any Competing Business in the Restricted Territory.
(c)    Each Seller further agrees that during the Restricted Period, it or he will not, directly or indirectly (on behalf of itself or himself or as principal, agent, joint venture partner, employee, consultant, director, or officer of any Person), entice, induce or attempt to induce any of Company's customers as of the Closing Date to limit, reduce, or discontinue purchasing Products or Salt Life-branded services from Purchaser or Purchaser's Affiliates or entice, induce or attempt to induce any of Company's licensees as of the Closing Date to limit, reduce, or discontinue its efforts to manufacture, market, promote, distribute and/or sell Products or Salt Life-branded services under its license agreement with Purchaser or Purchaser's Affiliates or terminate any such agreement.
(d)    Each Seller agrees that during the Restricted Period, it or he will not, directly or indirectly (on behalf of itself or himself or as principal, agent, joint venture partner, employee, consultant, director, or officer of any Person), hire, contract with, induce, or attempt to induce any Person who is an employee, agent, representative or licensee of Purchaser or any Purchaser Affiliate to terminate his, her, or its employment or relationship with Purchaser or any Purchaser Affiliate.

22



The parties hereto recognize that irreparable damage will result to the Purchaser in the event of the breach of any of the covenants and assurances made by Sellers in the provisions contained in this Section 3.3. The parties therefore agree that the Purchaser shall be entitled, in addition to any other remedies or damages available to it under applicable statutory or common law, to obtain injunctive relief without bond in order to restrain the violation of such covenants by any Seller. In the event that the Purchaser prevails, in whole or in part, in any such action, such Seller shall be liable to the Purchaser for all of its costs and expenses, including, without limitation, reasonable attorney fees and expert witness fees. Sellers agree that the geographical, time, and subject matter limitations of the covenants contained in this Section 3.3 are required for the adequate protection of Purchaser and are reasonable in light of Purchaser's acquisition of the Assets or Business and Purchaser's legitimate interest in its relationship with licensees, customers, suppliers and agents of the Business. If any Court should construe any provision, or any clause or portion of this Section 3.3 to be too broad to prevent enforcement to its fullest extent, then such restrictions shall be enforced to the maximum extent that the Court finds reasonable and enforceable. In the event that any of such geographical, time, scope, or subject matter limitations is deemed to be unreasonable by a court of competent jurisdiction, the covenants contained in this Section 3.3 will be deemed to extend over the maximum geographical area for which they may be enforceable and over the maximum time period for which they may be enforceable, and the maximum extent in any and all other respects as to which they may be enforceable, all as will be determined by such court, which can modify the restrictions contained in Section 3.3 to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. The parties in no way intend to include a provision, or any clause or portion of these provisions, that contravenes public policy. Therefore, if any provision, or any clause or portion of these provisions, of this Section 3.3 is unlawful, against public policy, or otherwise declared void or unenforceable, such provision, or clause or portion of these provisions, shall be deemed excluded from this Section 3.3, which shall in all other respects remain in effect.
3.4 Royalty Revenue.
(a) After Closing Date . In the event that any Seller receives after the Closing Date any royalty, minimum royalty guarantee, advance, marketing, or other payments or fees due in connection with a Licensee's sale of licensed Products after the Closing Date or any such payment or fee due pursuant to an agreement with a Licensee for any period (or portion thereof) subsequent to the Closing Date, such payment or fee will be the property of, and will be immediately forwarded to, Purchaser. Each Seller will promptly endorse and deliver to Purchaser any cash, checks, or other documents received by such Seller after the Closing Date relating to any such payments or fees.
(b) On Or Before Closing Date . In the event that Purchaser receives after the Closing Date any royalty, minimum royalty guarantee, advance, marketing, or other payments or fees due in connection with a Licensee's sale of licensed Products on or before the Closing Date or any such payment or fee due pursuant to an agreement with a Licensee for any period (or portion thereof) on or before the Closing Date, such payment or fee will be the property of, and will be immediately forwarded to, the Company. Purchaser will promptly endorse and deliver to Company any cash, checks, or other documents received by Purchaser after the Closing Date relating to any such payments or fees.
3.5 License Agreements With Delta Apparel, Inc Any royalty, minimum royalty guarantee, advance, marketing, or other payments or fees due pursuant to the terms and conditions of the license agreements between Delta Apparel, Inc., the Company, and IMG Worldwide, Inc., as agent on behalf of the Company, in effect as of the date of this Agreement (the “ Delta Apparel License Agreements ”) for the sale of licensed products under such agreements on or before the Closing Date or any payment or fee due

23



pursuant to such agreements for any period (or portion thereof) on or before the Closing Date (collectively, the " Pre-Closing Amounts "), will be paid by Delta Apparel, Inc. in accordance with the terms of such agreements. After the Closing, Sellers hereby acknowledge and agree that neither Delta Apparel, Inc., Purchaser, nor its Affiliates will owe any royalty, minimum royalty guarantee, advance, marketing, or other payments, fees or amounts to Sellers under the Delta Apparel License Agreements except for the Pre-Closing Amounts and, subject to Purchaser's indemnity obligations hereunder, each Seller hereby fully releases and discharges Delta Apparel, Inc., Purchaser and its Affiliates, as of the Closing Date, from any and all liability and payment or performance obligations under the Delta Apparel License Agreements other than the obligation to make payment of the Pre-Closing Amounts. Each Seller agrees not to bring any claim against Delta Apparel, Inc., Purchaser or its Affiliates after the Closing relating to or arising under any Delta Apparel License Agreement other than claims regarding payment of the Pre-Closing Amounts. Further, Sellers agree that Delta Apparel, Inc. may terminate any or all of the Delta Apparel License Agreements any time after the Closing without reason, penalty or damages, contingent on its payment of the Pre-Closing Amounts. Sellers agree to execute any and all documents requested by Purchaser or Delta Apparel, Inc. to carry out the purpose and intent of this Section 3.5. Subject to Seller's indemnity obligations hereunder, Purchaser hereby fully releases and discharges the Sellers and their respective officers, managers, members, employees, Affiliates, and their successors and assigns from and against any and all liability and payment or performance obligations under the Delta Apparel License Agreements. No third party (other than Sellers and their respective officers, managers, members, employees, Affiliates, and their successors and assigns) will be entitled to rely on the foregoing release for any purpose whatsoever.  The foregoing release will not be deemed to confer any rights or benefits on any Person other than Sellers and their respective officers, managers, members, employees, Affiliates, and their successors and assigns.
3.6 Use of Assumed Name. From and after the Closing Date, the Company will cease to do business as “Salt Life Holdings, LLC” or any derivative thereof, and Sellers will refrain from using the name “Salt Life Holdings”, “Salt Life” or any derivative thereof (including, without limitation, using any letterhead, business cards, stationary, or other items that contain the name “Salt Life Holdings”, “Salt Life” or any derivative thereof) without the express permission of Purchaser, and will, upon Purchaser's request, terminate or amend any filings made with Governmental Authorities with respect to the use of the name “Salt Life Holdings”, “Salt Life” or any derivative thereof. Upon the request of Purchaser after the Closing, the Company will change its limited liability company name to a name that does not contain and is not otherwise similar to “Salt Life” and Sellers will change the name of the company Salt Life, Inc. to a name that does not contain and is not otherwise similar to “Salt Life.”
3.7 Employee Matters.
(a) On or prior to the Closing Date, Purchaser will make an offer of employment to Company employee Keith Combs on terms comparable in the aggregate to the compensation provided to such employee by the Company immediately prior to the Closing. Effective as of the Closing Date, Company employee Keith Combs (the “ Hired Employee ”) will cease to be an active participant in the Plans, in accordance with the terms of the Plans and Applicable Law, including ERISA and the Code. The Company will retain liability for all claims incurred by Hired Employee or its other employees (and their enrolled dependents) under the Plans on or prior to the Closing Date. Purchaser will be liable for all claims incurred by Hired Employee (and any enrolled dependents) under the employee welfare benefit plans of Purchaser or its Affiliates after the Closing Date.
(b) The Company agrees to cause the release of Hired Employee from any contrac-tual provision with the Company that would impair the utility of such Hired Employee's services to Purchaser or that would impose upon such Hired Employee any monetary or other obligation to the Company that otherwise

24



would be occasioned by the transfer of such Hired Employee's employment to Purchaser including, without limitation, any agreements of noncompetition or confiden-tiality owed to the Company.
3.8 Restrictions on Company Dissolution.
The Company shall not dissolve until Purchaser has paid in full the Contingent Consideration or until a final determination by the parties that no Contingent Consideration is due, as the case may be.
3.9 Five-Year Business Plan.
Purchaser shall have provided a five-year business plan acceptable to Company with respect to the Salt Life brand; provided, however, such business plan shall be non-binding and shall not impair Purchaser's right, subject to any applicable fiduciary duties under state corporate law, to operate the Business and Purchaser's and its Affiliates' other businesses, whether now owned or hereafter acquired, in Purchaser's best commercial judgment.

ARTICLE 4
CONDITIONS PRECEDENT TO CLOSING OF TRANSACTION
Intentionally Omitted.

ARTICLE 5
INDEMNIFICATON

5.1 Indemnification by Sellers. Subject to the other terms and conditions of this Agreement, Sellers agree to jointly and severally, indemnify and hold harmless Purchaser and its officers, directors, shareholders, managers, members, agents, employees, Affiliates, and their representatives, successors, and assigns from and against any and all Loss and Expense suffered or incurred by any of them in connection with or arising from:
(i) any breach by any Seller of any warranty or the inaccuracy of any representation of any Seller contained in this Agreement or in any agreement or instrument contemplated by this Agreement (including any Schedule or Exhibit hereto);
(ii) any breach by any Seller of any of its or his obligations or covenants contained in this Agreement or in any agreement or instrument contemplated by this Agreement (including any Schedule or Exhibit hereto);
(iii) the Excluded Liabilities; or
(iv)    the special indemnities provided in Schedule 5.1(iv);
provided, however, that (1) Sellers will have no liability with respect to the indemnification described in Section 5.1(i) until the total of all Loss and Expense with respect to such indemnification exceeds One Hundred Thousand and 00/100 Dollars ($100,000.00) (the “ Threshold Limitation ”), at which time Sellers will be liable for all Loss and Expense that comprises the Threshold Limitation in addition to Loss and Expense in excess of the Threshold Limitation; (2) the aggregate liability of Sellers for Loss and Expense

25



with respect to the indemnification described in Section 5.1(i) will not exceed, on an aggregate basis, an amount equal to the sum of Seventeen Million and Five Hundred Thousand 00/100 Dollars ($17,500,000.00) (the “ Amount Limitation ”); (3) the aggregate liability of Roger L. Combs, Sr. for Loss and Expense with respect to the indemnification described in Sections 5.1(i) will not exceed an amount equal to the sum of Four Million Three Hundred Fifty-Seven Thousand Five Hundred and 00/100 Dollars ($4,357,500.00) (the “ Owner Amount Limitation ”); (4) the aggregate liability of Donald R. Combs for Loss and Expense with respect to the indemnification described in Sections 5.1(i) will not exceed an amount equal to the Owner Amount Limitation; (5) the aggregate liability of Richard Thompson for Loss and Expense with respect to the indemnification described in Sections 5.1(i) will not exceed an amount equal to the Owner Amount Limitation; and (6) the aggregate liability of Michael T. Hutto for Loss and Expense with respect to the indemnification described in Sections 5.1(i) will not exceed an amount equal to the sum of Four Million Four Hundred Twenty-Seven Thousand Five Hundred and 00/100 Dollars ($4,427,500.00). Notwithstanding the foregoing, neither the Threshold Limitation nor the Amount Limitation will apply to the indemnification described in Section 5.1(i) with respect to the representations and warranties of Sellers under Section 2.1.1(b) (Authorization), 2.1.11 (Tax Matters), 2.1.12 (Compliance with ERISA), and 2.1.14 (Environmental) or to those representations and warranties of Sellers in Section 2.1.3 regarding title to and encumbrances against the Assets.
Purchaser is entitled to withhold payments due under the Promissory Notes and/or payments due as Contingent Consideration pursuant to Section 1.6 herein to satisfy any indemnification obligation of any Seller under this Section 5.1. Payments due under this Section 5.1 shall be limited to the amount of any liability or damage that remains after deducting therefrom any insurance proceeds and any indemnity, contribution or other similar payment received by the Purchaser in respect of any such claim. The Sellers shall not be liable under this Section 5.1 for any Losses or Expenses based upon or arising out of any breach of any of the representations or warranties of the Company or Owners contained in this Agreement if (a) Purchaser or its Affiliates had actual knowledge of such specifically identified breach prior to the Closing Date, and (b) Sellers had no Knowledge of such breach prior to the Closing Date, except for any breach by Sellers of any warranty or representation contained in Section 2.1.5. For purposes of this Agreement, Purchaser and its Affiliates will be deemed to have had actual knowledge of a matter only if (i) the Chief Executive Officer of Delta Apparel, Inc. had actual knowledge of such matter; or (ii) the President of Purchaser had actual knowledge of such matter.
5.2 Indemnification by Purchaser. Purchaser agrees to indemnify and hold harmless Sellers and their respective members, managers, officers, directors, shareholders, employees, Affiliates, and their successors and assigns from and against any and all Loss and Expense suffered or incurred by any of them in connection with or arising from:
(i) any breach by Purchaser of any warranty or the inaccuracy of any representation of Purchaser contained in this Agreement or in any agreement or instrument contemplated by this Agreement (including any Schedule or Exhibit hereto);
(ii) any breach by Purchaser of any of its obligations or covenants contained in this Agreement or in any agreement or instrument contemplated by this Agreement (including any Schedule or Exhibit hereto); or
(iii) the Assumed Liabilities;
provided, however, that (1) Purchaser will not have any liability with respect to the indemnification described in Section 5.2(i) until the total of all Loss and Expense with respect to such indemnification exceeds the Threshold Limitation, at which time Purchaser will be liable for all Loss and Expense that comprises the

26



Threshold Limitation in addition to Loss and Expense in excess of the Threshold Limitation; and (2) the aggregate liability of Purchaser for Loss and Expense with respect to the indemnification described in Section 5.2(i) will not exceed, on an aggregate basis, the Amount Limitation.
5.3 Indemnification Specific to the Company's Agent.
(a)    Sellers agree to jointly and severally indemnify and hold harmless Purchaser and its officers, directors, shareholders, managers, members employees, Affiliates, and their successors and assigns from and against any and all Loss and Expense, up to an amount not to exceed the Escrow Amount less any portion used by the Purchaser pursuant to Section 5.3(b) below, suffered or incurred by any of them (i) in connection with or arising from any claims, lawsuits or other disputes brought or initiated by the Company's agent, IMG Worldwide, Inc. (“ IMG ”); or any party to an agreement with IMG described on Schedule 1.7(a) (each an "IMG Third Party") which relate to the transactions described in this Agreement or the assignment and the assumption of the agreements with such IMG Third Parties, including, without limitation, any claims relating to the assignment by the Company to Purchaser of agreements between the Company and its licensees that are listed on Schedule 1.7(a) , or (ii) arising from or under any agreements the Company, Purchaser or Purchaser's Affiliates has with IMG as of the date hereof or the termination of agreements with IMG, including, without limitation, any agency, royalty, minimum royalty guarantee, advance, marketing, or other fees, expenses, or amounts paid in settlement of such claims, lawsuits, or other disputes, or any payments made pursuant to existing, new or amended agreements Purchaser or Purchaser's Affiliates may enter with respect to the settlement of such claims, lawsuits, or other disputes with IMG or any IMG Third Parties. Purchaser acknowledges and agrees that the aggregate liability and indemnification of Sellers under this Section 5.3(a) is limited to the actual amount of funds then-held in escrow under the Escrow Agreement. Sellers acknowledge and agree that Purchaser has the sole right to conduct and control the defense of any claim, lawsuit, or other dispute relating to agreements between the Company and IMG or any IMG Third Party or Purchaser or Purchaser's Affiliates and IMG or any IMG Third Party and that Purchaser may resolve and settle any such claim, lawsuit, or other dispute with IMG or any IMG Third Party in its sole discretion. Sellers further acknowledge and agree that Purchaser has the sole right, in its sole discretion, to (i) amend and/or terminate any agreements between the Company and IMG or any IMG Third Party that are assumed by Purchaser pursuant to this Agreement and to take any other actions under those agreements or with respect to those agreements and (ii) amend and/or terminate any agreements between Purchaser or Purchaser's Affiliates and IMG or any IMG Third Party and to take any other actions under those agreements or with respect to those agreements. Sellers acknowledge and agree that Purchaser may access the full amount of the Escrow Amount in accordance with the terms and conditions of the Escrow Agreement to satisfy any indemnification claims under this Section 5.3(a). Sellers will not take any position adverse to that which Purchaser, Delta Apparel, Inc., or any other Purchaser Affiliate takes with respect to any litigation, claims, disputes or other proceedings or actions involving IMG and related to the Acquisition or any agreements the Company, Purchaser or Purchaser's Affiliates has with IMG or any IMG Third Party as of the date hereof or the termination of such agreements. Upon Purchaser's request at any time after the Closing, Company will immediately assign to Purchaser all of Company's rights, interests and obligations under its November 22, 2010, Amended and Restated Agency Agreement with IMG and Company will execute all documentation and take all action reasonably requested by Purchaser to effectuate such assignment.
(b)    Subject to the terms of Section 5.3(a) above, Purchaser agrees to indemnify and hold harmless Sellers and their respective officers, managers, members, employees, Affiliates, and their successors and assigns from and against any and all Loss and Expense that is suffered or incurred by any of them (i) in connection with or arising from any claims, lawsuits or other disputes brought or initiated by IMG or any IMG Third Party which relate to the transactions described in this Agreement, the assignment and the

27



assumption of the agreements with such IMG Third Parties or Purchaser's actions or omissions after the Closing Date under such agreements with IMG Third Parties, including, without limitation, any claims relating to the assignment by the Company to Purchaser of agreements between the Company and its licensees that are listed on Schedule 1.7(a) , or (ii) arising from or under any agreements the Company, Purchaser or Purchaser's Affiliates has with IMG, as of the date hereof or the termination of agreements with IMG, including, without limitation, any agency, royalty, minimum royalty guarantee, advance, marketing, license or other fees, expenses or amounts paid in settlement of such claims, lawsuits, or other disputes or any payments made pursuant to existing, new or amended agreements Purchaser or Purchaser's Affiliates may enter with respect to the settlement of such claims, lawsuits, or other disputes with IMG or any IMG Third Party, excluding, however, any Loss or Expenses arising from any breach by Sellers of any of those agreements prior to the Closing Date. Sellers acknowledge and agree that Purchaser may access the full amount of the Escrow Amount in accordance with the terms and conditions of the Escrow Agreement to satisfy any indemnification claims under this Section 5.3(b). The terms of this Section 5.3(b) are not subject to the right of set off against any amount due under Section 5.1.
5.4 Survival Period. The indemnification provided for in Sections 5.1(i) and 5.2(i), will terminate twenty-four (24) months after the Closing Date and the indemnification provided for in Section 5.3 will terminate fifty-four (54) months after the Closing Date, provided that (i) the representations and warranties of Sellers under Sections 2.1.11 (Tax Matters), 2.1.12 (Compliance with ERISA), and 2.1.14 (Environmental) and those representation and warranties of Sellers under Section 2.1.1(b) (Authorization) and those representation and warranties of Sellers in Section 2.1.3 regarding title to and encumbrances against the Assets and the indemnification contained in Section 5.1(i) with respect thereto will survive the for the applicable statute of limitations and (ii) the representations and warranties of Sellers under Section 2.1.5 (Intellectual Property) will survive for the later of the applicable statute of limitations or a period of four (4) years, (as the case may be, the “Survival Period”). Such indemnification obligation will continue after the Closing Date, without regard to any investigation made at any time by the indemnified persons, as to any Loss or Expense of which the indemnified persons has notified the indemnifying party in accordance with the requirements of Section 5.5 on or prior to the expiration of the applicable Survival Period, as to which the obligation of the indem nifying party will then continue until the liability of the indemnifying party will have been determined pursuant to this Article 5, and the indemnifying party will have reimbursed the indemnified persons for the full amount of such Loss and Expense in accordance with this Article 5.
5.5 Notice of Claims. If Purchaser or any Seller believes that any of the Persons indemnified under this Article 5 has suffered or incurred any Loss or Expense, Purchaser or such Seller will so notify the other parties promptly in writing describing such Loss or Expense, the amount thereof, if known, and the method of computation of such Loss or Expense, all with reasonable particularity and containing a reference to the provisions of this Agreement or other agreement, instrument, or certificate delivered pursuant hereto in respect of which such Loss or Expense will have occurred, except that the failure to so notify will not relieve a party of its obligations to indemnify except to the extent that its, his, or her rights hereunder are materially prejudiced as a result of such failure. If any action at law or suit in equity is instituted by a third party with respect to which any of the indemnified persons intends to claim any liability or expense as Loss or Expense under this Article 5, such indemnified person will promptly notify the indemnifying party of such action or suit. This Section 5.5 will not apply to any matters described in Section 5.3.
5.6 Third Party Claims. In the event of a third party claim giving rise to indemnification under Sections 5.1, 5.2 or 5.3(b), the indemnifying party will have 30 days after receipt of the notice referred to

28



in Section 5.5 to notif y the indemnified persons that it elects to conduct and control such action or suit with counsel satisfactory to the indemnified persons. If the indemnifying party does not give the foregoing notice, the indemnified persons will have the right to defend and contest such action or suit in any manner the indemnified persons reasonably deem appropriate; provided, however, that the indemnified persons will not consent to the entry of any judgment or to any settlement of such claim without the prior written consent of the indemnifying party, not to be unreasonably withheld or delayed. If the indemnifying party gives the foregoing notice, the indemnifying party will have the right to undertake, conduct, and control, through counsel of its own choosing and at the sole expense of the indemnifying party, the conduct and settlement of such action or suit, and the indemnified persons will cooperate with the indemnifying party in connection therewith; provided that (w) the indemnifying party will not settle or compromise any such action or suit without the indemnified persons' prior written consent (not to be unreasonably withheld or delayed), unless the terms of such settlement or compromise release the indemnified persons from any and all liability with respect to such action or suit at no cost to the indemnified persons, (x) the indemnifying party will not thereby permit to exist any Lien upon any asset of any indemnified person or permit the issuance of an injunction or other equitable relief against the indemnified persons, (y) the indemnifying party will permit the indemnified persons to participate in such conduct or settlement through one counsel chosen by the indemnified persons, and the fees and expenses of such counsel will be borne by the indemnified persons, and (z) the indemnifying party will agree promptly to reimburse to the extent required under this Article 5 the indemnified persons for the full amount of any Loss resulting from such action or suit and all related Expense incurred by the indemnified persons, except fees and expenses of counsel for the indemnified persons incurred after the assumption of the conduct and control of such action or suit by the indemnifying party. So long as the indemnifying party is contesting any such action or suit in good faith, the indemnified persons will not pay or settle any such action or suit. Notwithstanding the foregoing, the indemnified persons will have the right to pay or settle any such action or suit; provided that in such event the indemnified persons will waive the right to indemnity therefore by the indemnifying party, and no amount in respect thereof will be claimed as Loss or Expense under this Article 5. This Section 5.6 will not apply to any matters described in Section 5.3(a).
5.7 Exclusive Remedies. The parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud on the part of a party hereto in connection with the transactions contemplated by this Agreement) for any breach of any representation, warranty, covenant, agree ment or obligation set forth herein or otherwise relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article V.
ARTICLE 6.
MISCELLANEOUS
6.1 Survival. Notwithstanding any otherwise applicable statute of limitations or presumption, all agreements, covenants, representations, and warranties of Purchaser and Sellers in this Agreement and in any other agreement, instrument, or document delivered in connection herewith will survive Closing in accordance with their terms.
6.2 Expenses. Except as otherwise provided herein, each party will be solely responsible for and bear all of its or his own expenses incurred at any time in connection with pursuing or consummating this Agreement and the transactions contemplated in this Agreement.
6.3 Assignment; Successors; Parties in Interest. This Agreement will not be assignable by any party hereto without the prior written consent of the other parties (which consent will not be unreasonably withheld), and any attempt to assign this Agreement without such consent will be void and of no effect,

29



except that Purchaser may, without the prior written consent of any Seller (i) assign this Agreement to any lender of Purchaser; (ii) assign this Agreement in connection with the sale of all or substantially all of the assets of Purchaser; or (iii) assign this Agreement to Delta Apparel, Inc. or any wholly-owned subsidiary of Delta Apparel, Inc. provided however that nothing herein shall release Purchaser from its obligations under the Promissory Notes (referenced in Section 1.4) and Contingent Consideration (referenced in Section 1.6). This Agreement will inure to the benefit of, and be binding on and enforceable against, each party hereto and the successors and permitted assigns of the respective parties hereto, and nothing in this Agreement, express or implied, is intended to confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever under this Agreement. This Agreement is for the sole benefit of the parties hereto and their successors and permitted assigns, and no other Person shall be entitled to rely on this Agreement for any purposes whatsoever.
6.4 Amendment and Modification. Neither this Agreement nor any term hereof may be changed, waived, discharged, or terminated orally, but only with the written consent signed by the party against which such change, waiver, discharge, or termination is sought to be enforced. The waiver by any party hereto of a breach of any provision of this Agreement will not operate or be construed as a waiver of any subsequent or other breach, whether similar or not.
6.5 Access After Closing. The parties will retain for a period of six (6) years following Closing all books and records within their possession or control that they are permitted hereby to retain and that relate to the operation and conduct of the Business prior to Closing. The parties will provide to the other parties and their representatives reasonable access during normal business hours to copies of all such books and records upon request.
6.6 Notices. All notices, consents, requests, instructions, approvals, and other communications provided for in this Agreement and all legal processes in regard hereto will be validly given, made, or served, if in writing and delivered personally or sent by registered or certified mail, postage prepaid, or by commercial courier or by telecopy (promptly confirmed in writing) to the following addresses (or at such other addresses for such parties as will be specified by like notice):

To Purchaser:
To The Game, LLC
322 South Main Street
Greenville, SC 29601
Attn: General Counsel
Telecopy: (864) 232-5199
Telephone: (864) 232-5200

To the Sellers:
OG4, LLC
13051 Beach Blvd, Suite 300
Jacksonville, FL 32224
Attention: Roger Combs
Telecopy: (904)
Telephone: (904) 241-7258

30




With a copy to:
(which copy will not constitute notice)
AkermanSenterfitt
50 North Laura Street
Suite 3100
Jacksonville, FL 32202
Attention: Peter O. Larsen, Esq.
Telecopy: (904) 798-3730
Telephone: (904) 598-8662

6.7 Captions. The headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.
6.8 Entire Agreement. This Agreement (including the Schedules and Exhibits) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral (including, without limitation, that certain Letter of Intent dated as of March 29, 2013, as amended, and that certain Amended and Restated Letter of Intent dated as of August 1, 2013,), among the parties with respect to the subject matter hereof.
6.9 Counterparts. This Agreement may be executed in several counterparts, each of which will constitute one and the same instrument.
6.10 Severability.
If any term or provision of this Agreement is held by a court or other authority of competent jurisdiction to be invalid, void, or unenforceable, the remaining terms and provisions of this Agreement will remain in full force and effect and will in no way be affected, impaired, or invalidated.
6.11 Intentionally Omitted.
6.12 Schedules and Exhibits.
The Schedules and Exhibits are a part of this Agreement as if fully set forth in this Agreement. All references to Sections, subsections, Schedules and Exhibits will be deemed references to such parts of this Agreement, unless the context will otherwise require.
6.13 Definitions. Used in this Agreement, the following terms have the meanings specified or referred to in this Section 6.13 :
(a) Acquisition ” will have the meaning set forth in the recitals to this Agreement.
(b) Acquisition Information ” will have the meaning set forth in Section 3.2(a).
(c) Affiliate ” means, with respect to any Person, (i) any Person directly or indirectly controlling, controlled by, or under common control with such Person, (ii) any Person owning or controlling ten percent (10%) or more of the outstanding voting interests of such Person, (iii) any officer, director, manager, member or general partner of such Person, or (iv) any Person who is an officer, director, manager, member, general partner, trustee, or holder of ten percent (10%) or more of the voting interests of any Person described in

31



clauses (i) through (iii) of this sentence. For purposes of this definition, the term "controls," "is controlled by," or "is under common control with" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
(d) Agreement ” has the meaning set forth in the first paragraph of this Agreement.
(e) Amount Limitation ” has the meaning set forth in Section 5.1.
(f) Applicable Law ” means all applicable provisions of (i) constitutions, treaties, statutes, laws (including common law), rules, regulations, ordinances, codes, and orders of any Governmental Authority, (ii) consents of, with, or to any Governmental Authority, and (iii) orders, decisions, injunctions, writs, judgments, awards, decrees of, and agreements with any Governmental Authority.
(g) Assets ” has the meaning set forth in Section 1.1.
(h) Assumed Liabilities ” has the meaning set forth in Section 1.7(a).
(i) Bill of Sale, Assignment and Assumption Agreement ” has the meaning set forth in Section 1.8.
(j) Brand Ambassador Agreement ” has the meaning set forth in Section 1.8
(k) Business ” has the meaning set forth in the recitals to this Agreement.
(l) Business Information ” has the meaning set forth in Section 3.2(d).
(m) Cash Purchase Price ” has the meaning set forth in Section 1.4.
(n) Closing ” has the meaning set forth in Section 1.3.
(o) Closing Date ” has the meaning set forth in Section 1.3.
(p) Code ” means the Internal Revenue Code of 1986, as amended.
(q) Company ” has the meaning set forth in the first paragraph of this Agreement.
(r) Company Personnel ” means the current and former officers, directors, employees, and agents of the Company (excluding only IMG).
(s) Competitive Business ” has the meaning set forth in Section 3.3(a).
(t) Contingent Consideration ” has the meaning set forth in Section 1.6.
(u) Contingent Consideration Adjustment Report ” has the meaning set forth in Section 1.6(b)(ii).
(v) Contingent Consideration Calculation” has the meaning set forth in Section 1.6(a).
(w) Contingent Consideration Dispute ” has the meaning set forth in Section 1.6(b)(i).
(x) Contingent Consideration Dispute Notice ” has the meaning set forth in Section 1.6(b)(i).
(y) Delta Apparel License Agreement ” has the meaning set forth in Section 3.5.
(z) " Delta Obtained IP " means all intellectual property or proprietary rights used in the Business that were assigned or otherwise transferred by or on behalf of Delta Apparel, Inc. ("Delta"), Purchaser or

32



otheir respective Affiliates to Company pursuant to the terms of one or more of those certain Salt Life Holdings, LLC Standard Retail Product License Agreements between Delta Apparel, Inc., Company and IMG, as Company's agent, dated on or about December 22, 2010, January 10, 2012 and January 1, 2011, respectively, or pursuant to the terms of that certain Salt Life Holdings, LLC E-Commerce Agreement between Delta Apparel, Inc., Company and IMG, as Company's agent, dated December 30, 2010, for use by Company or any of its Licensees, including without limitation, Delta, but excluding any component parts thereof that are listed on Schedule 2.1.5(i) as part of the Intellectual Property. For the avoidance of doubt, the parties acknowledge and agree that none of the Intellectual Property listed in Schedule 2.1.5(a) is part of the Delta Obtained IP even if it has been incorporated with the Delta Obtained IP.
(aa) " Effective Date " has the meaning set forth in the first paragraph.
(bb)    “ Environmental Damages ” means any cost, damages, expense, liability, obligation, or other responsibility arising from or under any Environmental Law.
(cc)    “ Environmental Law ” means any Applicable Law that requires or relates to: (i) the protection of human health or the environment, including all legal requirements pertaining to reporting, licensing, permitting, controlling, investigating or remediating emissions, discharges, releases or threatened releases of hazardous substances, whether solid, liquid or gaseous in nature, into the air, surface water, groundwater or land, (ii) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous substances, whether solid, liquid or gaseous in nature; or (iii) workplace or worker safety and health.
    (dd)    “ ERISA ” has the meaning set forth in Section 2.1.12.
(ee)    “ Escrow Account ” has the meaning set forth in the Escrow Agreement.
(ff)    “ Escrow Agent ” means Wells Fargo Bank, N.A.
(gg)    “ Escrow Agreement ” has the meaning set forth in Section 1.5.
(hh)    “ Escrow Amount ” has the meaning set forth in Section 1.4.
(ii)    “ Excluded Assets ” has the meaning set forth in Section 1.2.
(jj)    “ Excluded Liabilities ” has the meaning set forth in Section 1.7(b).
(kk)     “ Expense ” means any and all attorneys' and accountants' fees and expenses, court costs, and all other reasonable expenses ( including expenses of investigation), including, without limitation, and any and all such fees, expenses and costs arising from actual or alleged intellectual property infringement claims based on Product sales on, before or subsequent to the Closing.
(ll)    “ GAAP ” means generally accepted accounting principles.
(mm)    “ Governmental Authority ” means any agency, department, court, or other administrative, legislative, or regulatory authority of any foreign, federal, state, or local governmental body.
(nn)    “ Gross Revenues ” has the meaning set forth in Section 1.6.
(oo)    “ Guaranty ” has the meaning set forth in Section 1.9.
(pp)    “ Hired Employee ” has the meaning set forth in Section 3.7(a).
(qq)     “ IMG ” has the meaning set forth in Section 5.3(a).

33



(rr)    " IMG Obtained IP " means all intellectual property or proprietary rights used in the Business that were purportedly obtained by IMG or any of is Affiliates, whether in their own name or on behalf of the Company, for use by Company or any of its Licensees, including without limitation, IMG or Delta, in the Business , but excluding any component parts thereof that are listed on Schedule 2.1.5 as part of the Intellectual Property. For the avoidance of doubt, the parties acknowledge and agree that none of the Intellectual Property listed in Schedule 2.1.5(a) is part of the IMG Obtained IP even if it has been incorporated with the IMG Obtained IP.
(ss)    “ Intellectual Property ” means other than Excluded Assets (i) all logos, designs, drawings, artwork, graphics, trade styles, trade names, trademarks, service marks all applications for registration of any of the foregoing, and all goodwill associated therewith, whether registered or not, owned by or assigned to the Company or in which the Company has an interest by license, agreement, shop right, work made for hire, or common law, or, to the extent used in or related to the Business, owned by or assigned to any Owner or in which any Owner has an interest by license, agreement, shop right, work made for hire, or common law, (ii) all patents, patent applications, and inventions and discoveries that may be patentable owned by or assigned to the Company or in which the Company has an interest by license, agreement, shop right, work made for hire, or common law, or, to the extent used in or related to the Business, owned by or assigned to any Owner or in which any Owner has an interest by license, agreement, shop right, work made for hire, or common law, (iii) all copyrights (and applications therefore), whether registered or not, owned by or assigned to the Company or in which the Company has an interest by license, agreement, shop right, work made for hire, or common law, or, to the extent used in or related to the Business, owned by or assigned to any Owner or in which any Owner has an interest by license, agreement, shop right, work made for hire, or common law, (iv) all email addresses, toll-free telephone numbers, websites, web pages and applications, and domain names owned by or assigned to the Company or in which the Company has an interest by license, agreement, shop right, work made for hire, or common law, or, to the extent used in or related to the Business, owned by or assigned to any Owner or in which any Owner has an interest by license, agreement, shop right, work made for hire, or common law, and (v) all processes, inventions, trade secrets, know-how, ideas, concepts and other intellectual or proprietary rights owned by or assigned to the Company or in which the Company has an interest by license, agreement, shop right, work made for hire, or common law, or, to the extent used in or related to the Business, owned by or assigned to any Owner or in which any Owner has an interest by license, agreement, shop right, work made for hire, or common law.
(tt)    “ Knowledge ” means, with respect to an individual, both (i) the actual knowledge of such individual and (ii) the knowledge a prudent person should reasonably be expected to have in the operation of the Business of the Company. A Person (other than an individual) will be deemed to “Know” or have “Knowledge” of a particular fact or matter if any individual who is serving, or who has at any relevant time served, as a director, officer, or shareholder of such Person (or in any similar capacity) has, or at any time had, Knowledge of a fact or other matter. Without limiting the foregoing, the Knowledge of Sellers will include the Knowledge of Company employee Keith Combs.
(uu)    “ License Agreement ” has the meaning set forth in Section 1.8.
(vv)    “ Licensee ” means Salt Life Restaurant Group, LLC, Board The Earth, LLC, Absolutely Natural, Inc., Bimini Bay Outfitters, Ltd., and any other Person with whom the Company has entered into a license agreement as of the date of this Agreement or with whom Company has permitted any of the foregoing entities to enter into a license or sublicense agreement with respect to Products or Salt-Life branded services as of the date of this Agreement, including, without limitation, Tervis Tumbler Company.
(ww)    “ Liens ” means, with respect to any assets or properties (whether real, personal or intellectual, or mixed, or tangible or intangible), any mortgage, pledge, option, escrow, hypothecation, lien, security

34



interest, financing statement, lease, charge, preemptive subscription, encumbrance, easement, option, conditional sale, or other title retention or security agreement or any other similar restriction, claim, or right of others, on, in, or with respect to such assets or properties, whether arising by contract, operation of law, or otherwise.
(xx)    “ Loss ” means any and all liabilities, losses, claims, costs, and damages, including, without limitation, any and all liabilities, losses, claims, costs, and damages arising from actual or alleged intellectual property infringement based on Product sales on, before or subsequent to the Closing.
(yy)     “ Material Agreements ” has the meaning set forth in Section 2.1.7.
(zz)    “ Owner Amount Limitation ” has the meaning set forth in Section 5.1.
(aaa)    “ Owners ” has the meaning set forth in the first paragraph of this Agreement.
(bbb)    “ Permitted Liens ” means Liens for taxes not yet due and any restrictions or options contained in any License Agreement.
(ccc)    “ Person ” means any individual, partnership, limited liability company, corporation, trust, unincorporated organization, or any other form of legal entity.
(ddd)    “ Plans ” has the meaning set forth in Section 2.1.12.
(eee)    " Pre-Closing Amounts " has the meaning set forth in Section 3.5.
(fff)    “ Products ” has the meaning set forth in Section 1.6.
(ggg)    “ Promissory Notes ” has the meaning set forth in Section 1.4.
(hhh)    “ Purchase Price ” has the meaning set forth in Section 1.4.
(iii)    “ Purchaser ” has the meaning set forth in the first paragraph of this Agreement.
(jjj)    “ Restricted Period ” has the meaning set forth in Section 3.3(a).
(kkk)    “ Review Period ” has the meaning set forth in Section 1.6(b)(i).
(lll)    “ Sellers ” has the meaning set forth in the first paragraph of this Agreement.
(mmm)    “ Survival Period ” has the meaning set forth in Section 0.
(nnn)    “ Taxes ” means all foreign, federal, state, and local income taxes and other taxes, including, without limitation, all franchise, property, sales, use, excise, intangible, and employment taxes.
(ooo)    “ Territory ” has the meaning set forth in Section 3.3(a).
(ppp)     “ Threshold Limitation ” has the meaning set forth in Section 5.1.
(qqq)    “ Trademark Applications ” has the meaning set forth in Section 2.1.5(b).
6.14 Governing Law.
This Agreement will be governed in all respects, including validity, interpretation, and effect, by the laws of the State of Georgia, without giving effect to the conflict of laws rules thereof.
(a) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS OR THE

35



TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA OR THE COURTS OF THE STATE OF GEORGIA LOCATED IN THE COUNTY OF GWINNETT, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY'S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

6.15    PURSUANT TO THAT CERTAIN DEBT SUBORDINATION AGREEMENT DATED THE DATE HEREOF (AS AT ANY TIME AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED, THE " SUBORDINATION AGREEMENT "), AMONG SALT LIFE HOLDINGS, LLC, A FLORIDA LIMITED LIABILITY COMPANY, DELTA APPAREL, INC., A GEORGIA CORPORATION, TO THE GAME, LLC, A GEORGIA LIMITED LIABILITY COMPANY, AND WELLS FARGO BANK, NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION, IN ITS CAPACITY AS AGENT FOR CERTAIN FINANCIAL INSTITUTIONS, THIS AGREEMENT AND THE PAYMENT OF ALL AMOUNTS HEREUNDER ARE SUBORDINATED TO THE PAYMENT IN FULL (AS DEFINED IN THE SUBORDINATION AGREEMENT) OF THE SENIOR DEBT (AS DEFINED IN THE SUBORDINATION AGREEMENT) ON THE TERMS AND CONDITIONS SET FORTH IN THE SUBORDINATION AGREEMENT.  IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE SUBORDINATION AGREEMENT AND THE TERMS OF THIS AGREEMENT, THE TERMS OF THE SUBORDINATION AGREEMENT SHALL GOVERN.


[Signature page to follow]


36





IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.
                    

TO THE GAME, LLC


By:    /s/Jeff Stillwell            
Name: Jeff Stillwell
Title: President
                    

                    
                    



SALT LIFE HOLDINGS, LLC    


By:    /s/Roger L. Combs, Sr.                
Name: Roger L. Combs, Sr.
Title: Treasurer

                    
                                    
                    
/s/Roger L. Combs, Sr.
--------------------------------------------------

                                    
/s/Donald R. Combs
--------------------------------------------------


                                        
/s/Richard Thompson
--------------------------------------------------


                                        
/s/Michael T. Hutto
--------------------------------------------------


37


EXECUTION VERSION

CONSENT AND FIRST AMENDMENT TO
FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS CONSENT AND FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this " Amendment ") is made and entered into this 27th day of August, 2013, by and among DELTA APPAREL, INC. , a Georgia corporation (" Delta "), M. J. SOFFE, LLC , a North Carolina limited liability company and successor-by-merger to TCX, LLC , a North Carolina limited liability company (" Soffe "), JUNKFOOD CLOTHING COMPANY , a Georgia corporation (" Junkfood "), TO THE GAME, LLC , a Georgia limited liability company (" TTG "), ART GUN, LLC , a Georgia limited liability company (" Art Gun "; Delta, Soffe, Junkfood, TTG and Art Gun being hereinafter collectively called " Borrowers " and individually a " Borrower "); the parties to the Loan 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 Fourth Amended and Restated Loan and Security Agreement dated May 27, 2011 (as at any time amended, restated, modified or supplemented, the " Loan Agreement "), pursuant to which Agent and Lenders have made certain loans and other financial accommodations available to Borrowers.
Prior to the date hereof, TCX, LLC, a North Carolina limited liability company, merged into Soffe, with Soffe being the surviving entity.
Borrowers have informed Agent and Lenders that TTG intends to purchase certain trademarks from Salt Life Holdings, LLC, a Florida limited liability company (the " Salt Life Acquisition "). In addition, Borrowers have informed Agent and Lenders that Borrowers' Central American Affiliates intend to purchase additional Equipment using the proceeds of loans from financial institutions other than Agent and Lenders (the " Central American Equipment Purchase ").To facilitate the Salt Life Acquisition and the Central American Equipment Purchase, Borrowers have requested that Agent and Lenders make available certain additional loans and other financial accommodations to Borrowers and consent to the Salt Life Acquisition and the Central American Equipment Purchase. Agent and Lenders are willing to consent to the Salt Life Acquisition and the Central American Equipment Purchase and extend such additional loans and other financial accommodations on the terms and subject to the conditions set forth herein.
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 Loan Agreement.
2.      Amendments to Loan Agreement . The Loan Agreement is hereby amended as follows:
(a)    By deleting the definitions of "Alternate Excess Availability," "Application Event," "Cash Dominion Period," "Cash Dominion Trigger Event," "Commitment," "Excess Availability," "Financial Covenant Testing Period," "Financial Covenant Trigger Event," "Financing Agreements,"

1



"Fixed Charge Coverage Ratio," "Fixed Charges," "Interest Period,""Loans," "Permitted Foreign Debt," "Permitted Trademark Financing Debt," "Pro Rata Share," "Reserves" and "Value" set forth in Section 1 of the Loan Agreement and by substituting the following in lieu thereof, respectively:
"Alternate Excess Availability" shall mean the amount, as determined by Agent, calculated at any time, equal to: (a) the Tranche A Borrowing Base minus (b) the amount of all then outstanding and unpaid Obligations.
"Application Event" shall mean the occurrence of (a) a failure by Borrowers to repay (i) all of the Obligations with respect to the Tranche B Loans in full on the Tranche B Maturity Date, (ii) all of the Obligations in full on the Tranche A Maturity Date, or (iii) any earlier date upon which the Obligations become due and payable in full, or (b) an Event of Default and the election by Agent or the Required Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 6.4(b) hereof.
"Cash Dominion Period" shall mean the period beginning on the date of a Cash Dominion Trigger Event and ending on the day on which Agent has reasonably determined that (a) no Event of Default exists, and (b) Borrowers have maintained Excess Availability in an amount equal to or greater than twelve and one-half percent (12.5%) of the lesser of (i) the Tranche A Borrowing Base and (ii) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, for a period of sixty (60) consecutive days.
"Cash Dominion Trigger Event" shall mean (a) the occurrence of an Event of Default, or (b) Agent's reasonable determination that Excess Availability is less than an amount equal to twelve and one-half percent (12.5%) of the lesser of (i) the Tranche A Borrowing Base and (ii) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit.
"Commitment" shall mean each of the Tranche A Commitment and the Tranche B Commitments, sometimes being collectively referred to herein as the "Commitments."
"Excess Availability" shall mean the amount, as determined by Agent, calculated at any time, equal to: (a) the lesser of (i) the Tranche A Borrowing Base and (ii) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, minus (b) the amount of all then outstanding and unpaid Obligations.
"Financial Covenant Testing Period" shall mean the period beginning on the date of a Financial Covenant Trigger Event, and ending on the day on which Agent has determined that (a) no Event of Default exists or has existed for sixty (60) consecutive days, and (b) Borrowers have maintained Alternate Excess Availability in an amount equal to or greater than twelve and one-half percent (12.5%) of the lesser of (i) the Tranche A Borrowing Base and (ii) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, for a period of sixty (60) consecutive days.
"Financial Covenant Trigger Event" shall mean (a) the occurrence of an Event of Default or (b) Agent's reasonable determination in its discretion that Alternate Excess Availability is less than an amount equal to twelve and one-half percent (12.5%) of the lesser of (i) the Tranche A Borrowing Base and (ii) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit.

2



"Financing Agreements" shall mean, collectively, this Agreement, the Art Gun Subordination Agreement, the Salt Life Subordination Agreement, the Pledge Agreement, the Guarantees, the Mortgages and all notes, guarantees, security agreements and other agreements, documents and instruments now or at any time hereafter executed and/or delivered by any Borrower or Obligor in connection with this Agreement.
"Fixed Charge Coverage Ratio" shall mean, with respect to Borrowers and their Subsidiaries, on a consolidated basis, for any period of determination, the ratio of (a) EBITDA of Borrowers during such period minus the sum of (i) the amount of any taxes paid in cash, cash dividends to the equity holders of such Person and other distributions to equity holders of such Person during the period in question (for avoidance of doubt, excluding redemptions with respect to the Capital Stock of such Person (including, but not limited to stock repurchases)) plus (ii) all Unfinanced Capital Expenditures made during such period plus (iii) all regularly scheduled (as determined at the beginning of the respective period) principal payments of Indebtedness for borrowed money and Indebtedness with respect to the Capital Leases made during such period to (b) Fixed Charges of Borrowers and their Subsidiaries for the same period.
"Fixed Charges" for any Person during any period shall mean the sum of, without duplication:
(a) Interest Expense (including the interest component with respect to Indebtedness under Capital Leases) paid in cash during such period, plus
(b) an amount equal to the sum of:
(i) the product of (A)$227,575.30 (which represents the aggregate monthly reduction of the Eligible Real Property and Eligible Equipment components of the Tranche A Borrowing Base in effect under this Agreement) multiplied by (B) the cumulative number of months during such period for which the amount set forth in subclause (i)(A) of this definition was deducted from the Tranche A Borrowing Base plus
(ii) the product of (A) $213,056.45 (which represents the aggregate monthly reduction of the Eligible Real Property and Eligible Equipment components of the "Borrowing Base" in effect under and as defined in this Agreement prior to the First Amendment Date) multiplied by (B) the cumulative number of months during such period for which the amount set forth in subclause (ii)(A) of this definition was deducted from the "Borrowing Base" in effect under and as defined in this Agreement prior to the First Amendment Date.
"Interest Period" shall mean, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending one (1)or three (3) months thereafter; provided , however , that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (b) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next

3



preceding Business Day, (c) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is one (1) or three (3) months after the date on which the Interest Period began, as applicable, and (d) Borrowers may not elect an Interest Period (i) with respect to Tranche A Loans, which will end after the Tranche A Maturity Date, and (ii) with respect to Tranche B Loans, which will end after the Tranche B Maturity Date.
"Loans" shall mean the Tranche A Loans and the Tranche B Loans.
"Obligations" shall mean (a) any and all Loans, Letter of Credit Obligations and all other obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of the Borrowers to Agent or any Lender or any of their Affiliates or Issuing Bank, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether arising under this Agreement or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after the commencement of any case with respect to any or all of the Borrowers under the Bankruptcy Code or any similar statute (including the payment of interest and other amounts which would accrue and become due but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired by Agent or Lenders and (b) for purposes only of Sections 5 and 6.4 hereof, any and all Banking Relationship Debt; provided that, anything to the contrary contained in the foregoing notwithstanding, the Obligations of any Obligor shall exclude any Excluded Swap Obligation of such Obligor. From and after the Closing Date, all Existing Obligations outstanding on the Closing Date shall be deemed to be outstanding, and to constitute Obligations, under this Agreement, and shall be subject to all of the terms and conditions hereof.
"Permitted Foreign Debt" shall mean Indebtedness incurred by a Foreign Subsidiary, which is formed by Borrowers or their Subsidiaries in compliance with this Agreement, with respect to one or more working capital credit facilities for use in the operations of such Foreign Subsidiary at any time after the Closing Date with respect to a credit facility in an aggregate principal amount acceptable to Agent; provided that (a) such Indebtedness is not secured by any stock or assets of any Borrower or Obligor, and any Lien upon the assets of such Foreign Subsidiary to secure such Indebtedness (including Inventory of such Foreign Subsidiary) shall not extend or continue following the sale of any such assets to a Borrower, and the secured party holding any such Lien (and its successors and assigns), if required by Agent, is a party with Agent to an intercreditor agreement that is in all respects acceptable to Agent, (b) such Indebtedness (except in the case of the Permitted Central American Debt and Permitted First Amendment Honduran Debt) matures on a date not earlier than six (6) months after the last day of the Credit Facility and includes amortization payments (if any) in any calendar year in an amount not greater than fifteen percent (15%) of the principal amount of such Indebtedness, (c) such Indebtedness accrues interest at a rate determined in good faith by the Board of Directors (or applicable governing authority) of such Foreign Subsidiary

4



to be a market rate of interest for such Indebtedness at the time of issuance thereof, (d) at the time of the incurrence of such Indebtedness, such Indebtedness is permitted under the Material Contracts as in effect on the date hereof without the need to obtain any waivers thereunder, and (e) such Indebtedness is otherwise on terms and conditions satisfactory to Agent, acting reasonably. For the avoidance of doubt, the Permitted Central American Debt constitutes Permitted Foreign Debt hereunder but the Permitted First Amendment Honduran Debt does not constitute Permitted Foreign Debt hereunder.
"Permitted Trademark Financing Debt" shall mean Indebtedness incurred by one or more Borrowers at any time after the Closing Date with respect to a credit facility in an aggregate principal amount acceptable to Agent; provided that (a) such Indebtedness is unsecured by any stock or assets of any Borrower or Obligor other than certain or all of the trademarks of Borrowers, (b) the secured party holding any Lien securing such Indebtedness (and its successors and assigns), if required by Agent, is a party with Agent to an intercreditor agreement that is in all respects acceptable to Agent, and specifically in which Agent is given the unqualified right, vis-à-vis such secured party (and its successors and assigns), to enforce Agent's security interests and Liens with respect to and to dispose of a Borrower's Inventory with the benefit of any trademarks applicable thereto, irrespective of such Borrower's default under any financing agreements or other documents with such secured party, (c) any subsequent purchaser or licensor of the trademarks (from either a Borrower or any other Person), if required by Agent, is a party to an intercreditor agreement or other agreement that is in all respects acceptable to Agent, and specifically in which Agent is given the unqualified right, vis-à-vis such purchaser or licensor (and its successors and assigns), to enforce Agent's security interests and Liens with respect to and to dispose of a Borrower's Inventory with the benefit of any trademarks applicable thereto, irrespective of such Borrower's default under any agreements or other documents with such purchaser or licensor, (d) such Indebtedness matures on a date not earlier than six (6) months after the last day of the Credit Facility and does not include any amortization payments, (e) such Indebtedness accrues interest at a rate determined in good faith by the Board of Directors (or applicable governing authority) of the applicable Borrower to be a market rate of interest for such Indebtedness at the time of issuance thereof, (f) at the time of the incurrence of such Indebtedness, such Indebtedness is permitted under the Material Contracts as in effect on the date hereof without the need to obtain any waivers thereunder, (g) if such Indebtedness is to be secured by a trademark of any Borrower that was included as an Eligible Trademark on the most recent report detailing the calculation of the Tranche A Borrowing Base delivered prior to the incurrence of such Indebtedness, Agent shall have received an updated report that excludes such trademark from Eligible Trademarks, (h) at the time of and after giving pro forma effect to the incurrence of such Indebtedness, no Event of Default exists, and (i) such Indebtedness is otherwise on terms and conditions satisfactory to Agent, acting reasonably. For the avoidance of doubt, any Indebtedness owing to Salt Life in respect of trademarks purchased by TTG from Salt Life shall not constitute Permitted Trademark Financing Debt.
"Pro Rata Share" shall mean as to any Lender, the fraction (expressed as a percentage) the numerator of which is such Lender's Tranche A Commitment, Tranche B Commitment or Commitment, as applicable, and the denominator of which is the aggregate amount of all of the Tranche A Commitments, Tranche B Commitments or

5



Commitments, as applicable, of Lenders, as adjusted from time to time in accordance with the provisions of Section 13.7 hereof; provided, that, if the Commitments have been terminated, the numerator shall be the unpaid amount of such Lender's Loans and its interest in the Letters of Credit and the denominator shall be the aggregate amount of all unpaid Loans and Letters of Credit.
"Reserves" shall mean as of any date of determination, such amounts as Agent may from time to time establish and revise in good faith reducing the amount of Tranche A Loans and Letters of Credit which would otherwise be available to Borrowers under the lending formula(s) provided for herein: (a) to reflect events, conditions, contingencies or risks arising after the date of this Agreement or of which Agent had no actual knowledge as of such date, which, as determined by Agent in good faith, adversely affect, or would have a reasonable likelihood of adversely affecting, either (i) the Collateral or any other property which is security for the Obligations or its value, including any Dilution Reserve, (ii) the assets, business or financial condition of any Borrower or Obligor or (iii) the security interests and other rights of Agent or any Lender in the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect Agent's good faith belief that any collateral report or financial information furnished by or on behalf of any Borrower or Obligor to Agent is or may have been incomplete, inaccurate or misleading in any material respect; or (c) to reflect outstanding Letters of Credit as provided in Section 2.2 hereof; or (d) in the amount of any Bank Product Reserve Amount; or (e) in respect of any state of facts which Agent determines in good faith constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default. To the extent Agent may revise the lending formulas used to determine either the Tranche A Borrowing Base or the Tranche B Borrowing Base or establish new criteria or revise existing criteria for Eligible Accounts or Eligible Inventory so as to address any circumstances, condition, event or contingency in an manner satisfactory to Agent, Agent shall not establish a Reserve for the same purpose. The amount of any Reserve established by Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such reserve as determined by Agent in good faith.
"Value" shall mean, as determined by Agent in good faith, with respect to Inventory, the lower of (a) cost computed on a first-in, first-out basis in accordance with GAAP or (b) market value; provided , that, for purposes of the calculation of either the Tranche A Borrowing Base or the Tranche B Borrowing Base, (i) the Value of the Inventory shall not include: (A) the portion of the value of Inventory equal to the profit earned by any Affiliate on the sale thereof to any Borrower or (B) write-ups or write-downs in value with respect to currency exchange rates and (ii) notwithstanding anything to the contrary contained herein, the cost of the Inventory shall be computed in the same manner and consistent with the most recent appraisal of the Inventory received and accepted by Agent prior to the date hereof, if any.
(b)    By adding the following new definitions of "Commodity Exchange Act," "Excluded Swap Obligation," "First Amendment Date," "Permitted First Amendment Honduran Debt," "Qualified ECP Obligor," "Salt Life," "Salt Life Purchase Agreement," "Salt Life Subordination Agreement," "Swap Obligation," "Tranche A Borrowing Base," "Tranche A Commitment," "Tranche A Loans," "Tranche A Maturity Date," "Tranche A Maximum Credit," "Tranche B Borrowing Base," "Tranche B

6



Commitment," "Tranche B Loans," "Tranche B Maturity Date" and "Tranche B Maximum Credit" to Section 1 of the Loan Agreement in proper alphabetical order:
"Commodity Exchange Act" shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
"Excluded Swap Obligation" shall mean, with respect to any Obligor, any Swap Obligation if, and to the extent that, all or a portion of the joint and several liabilities with respect to, guarantee of such Obligor of, or the grant by such Obligor of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Obligor's failure for any reason to constitute an "eligible contract participant" as defined in the Commodity Exchange Act and the regulations thereunder at the time the joint and several liabilities or guarantee of such Obligor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such joint and several liabilities, guarantee or security interest is or becomes illegal.
"First Amendment Date" shall mean August ___, 2013.
"Permitted First Amendment Honduran Debt" shall mean Indebtedness incurred by the Honduras Subsidiaries and owing to Banco Ficohsa, a Honduran bank,and incurred for the purpose of purchasing certain Equipment by the Honduras Subsidiaries, and any refinancing of such Indebtedness on terms and conditions materially not less favorable to the Honduran Subsidiaries.
"Qualified ECP Obligor" shall mean, in respect of any Swap Obligation, each Obligor that has total assets exceeding $10,000,000 at the time the relevant guaranty, keepwell, or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an "eligible contract participant" under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an"eligible contract participant" at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
"Salt Life" shall mean Salt Life Holdings, LLC, a Florida limited liability company.
"Salt Life Purchase Agreement" shall mean that certain Asset Purchase Agreement among TTG, Salt Life,Roger C. Combs, Sr., an individual resident of the state of Florida, Donald R. Combs, an individual resident of the state of Florida, Richard Thompson, an individual resident of the state of Florida, and Michael T. Hutto, an individual resident of the state of Florida, dated the First Amendment Date.
"Salt Life Subordination Agreement" shall mean that certain Debt Subordination Agreement dated the First Amendment Date, among Salt Life, TTG, Delta and Agent.

7



"Swap Obligation" shall mean, with respect to any Obligor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act.
"Tranche A Borrowing Base" shall mean, at any time, an amount equal:
(a)    the sum of:
(i)
eighty-five percent (85%) of the Net Amount of the Eligible Accounts, plus
(ii)    the lesser of:
(1)    the Inventory Loan Limit, or
(2)    the lesser of (A) sixty percent (60%) of the Value of Eligible Inventory consisting of finished goods (including finished garments and headwear regardless of whether Borrowers classify such goods as raw materials or finished goods), Borrowers' raw materials consisting of raw cotton and yarn for such finished goods, and finished yarn categorized as work-in-process; or (B) eighty-five percent (85%) of the Net Orderly Liquidation Value of such Eligible Inventory, plus
(iii) sixty-five percent (65%) of the appraised fair market value (based on the most recent appraisal completed prior to the First 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, which amount shall be reduced on the first day of each month, commencing October 1, 2013 by an amount equal to $150,447.92; plus
(iv)    eighty-five percent (85%) multiplied by the Net Orderly Liquidation Value of the Eligible Equipment of Borrowers (based on the most recent appraisal completed prior to the First Amendment Date that is in form, contains assumptions and utilizes methods acceptable to Agent and that is performed by an appraiser acceptable to Agent), which amount shall be reduced on the first day of each month, commencing October 1, 2013, by an amount equal to $77,127.38; plus
(v)    the lesser of: (A) $7,500,000; or (B) forty-five percent (45%) of the Net Orderly Liquidation Value of Eligible Trademarks (inclusive of any potential value after tax benefit, at the Agent's discretion); minus
(b)    the Reserves.
"Tranche A Commitment" shall mean, at any time, as to each Lender, the principal amount set forth beside such Lender's name on Schedule 1.21 hereto with respect to Tranche A Loans or in the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Section 13.7 hereof,

8



as the same may be adjusted from time to time in accordance with the terms hereof; sometimes being collectively referred to herein as "Tranche A Commitments."
"Tranche A Loans" shall mean the loans now or hereafter made by or on behalf of any Lender or by Agent for the benefit of any Borrower on a revolving basis (involving advances, repayments and readvances) as set forth in Section 2.1(a)(i) hereof.
"Tranche A Maturity Date" shall have the meaning set forth in Section 13.1 hereof.
"Tranche A Maximum Credit" shall mean the amount of (a) at any time prior to the Tranche B Maturity Date, the difference between $145,000,000 minus the Tranche B Maximum Credit, or (b) at any time on or after the Tranche B Maturity Date, $145,000,000, subject to increase from time to time pursuant to Section 2.5 .
"Tranche B Borrowing Base" shall mean, at any time, an amount equal to the sum of:
(a)    five percent (5%) of the Net Amount of the Eligible Accounts, plus
(b)    five percent (5%) of the Net Orderly Liquidation Value of Eligible Inventory consisting of finished goods (including finished garments and headwear regardless of whether Borrowers classify such goods as raw materials or finished goods), Borrowers' raw materials consisting of raw cotton and yarn for such finished goods, and finished yarn categorized as work-in-process.
"Tranche B Commitment" shall mean, at any time, as to each Lender, the principal amount set forth beside such Lender's name on Schedule 1.21 hereto with respect to Tranche B Loans or in the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder in accordance with the provisions of Section 13.7 hereof, as the same may be adjusted from time to time in accordance with the terms hereof; sometimes being collectively referred to herein as "Tranche B Commitments."
"Tranche B Loans" shall mean the loans now or hereafter made by or on behalf of any Lender or by Agent for the benefit of any Borrower on a revolving basis (involving advances, repayments and readvances) as set forth in Section 2.1(a)(ii) hereof.
"Tranche B Maturity Date" shall have the meaning set forth in Section 13.1 hereof.
"Tranche B Maximum Credit" shall mean the lesser of (i) $10,000,000 and (ii) the Tranche B Borrowing Base as set forth in the most recent monthly reporting delivered to Agent in compliance with Section 7.1(a)(ii) hereof.
(c)    By deleting clause (a) of the definition of "Interest Rate" set forth in Section 1 of the Loan Agreement and by substituting the following in lieu thereof:
(a)     Subject to clauses (b) and (c) of this definition below: (i) as to Base Rate Tranche A Loans, the Base Rate plus three-quarters of one percent (0.75%), (ii) as to LIBOR Rate Tranche A Loans, a rate of one and three-quarters of one percent (1.75%) per annum in excess of the LIBOR Rate (based on the LIBOR Rate applicable for the Interest Period selected by Borrowers (or Administrative Borrower on behalf of

9



Borrowers)as in effect two (2) Business Days after the date of receipt by Agent of the request of Borrowers (or Administrative Borrower on behalf of Borrowers) for such LIBOR Rate Tranche A Loans in accordance with the terms hereof, whether such rate is higher or lower than any rate previously quoted to any Borrower), (iii)as to Base Rate Tranche B Loans, the Base Rate plus two and three-quarters of one percent (2.75%), and (iv) as to LIBOR Rate Tranche B Loans, a rate of three and three-quarters of one percent(3.75%) per annum in excess of the LIBOR Rate (based on the LIBOR Rate applicable for the Interest Period selected by Borrowers (or Administrative Borrower on behalf of Borrowers)as in effect two (2) Business Days after the date of receipt by Agent of the request of Borrowers (or Administrative Borrower on behalf of Borrowers) for such LIBOR Rate Tranche B Loans in accordance with the terms hereof, whether such rate is higher or lower than any rate previously quoted to any Borrower);
(d)    By deleting clauses (c) and (f) of the definition of "Permitted Acquisition" set forth in Section 1 of the Loan Agreement and by substituting the following in lieu thereof, respectively:
(c)    if the acquired assets are to be included in either the Tranche A Borrowing Base or the Tranche B Borrowing Base simultaneously with the consummation of the Permitted Acquisition, Agent's examiners shall have completed a field exam and audit of the Acquisition Target and, if Agent in its discretion elects, an appraisal of any acquired assets consisting of Inventory, each in scope and with results reasonably acceptable to Agent, or if such field exam and audit (and appraisal, if Agent so elects) are not conducted, then the assets of such Acquisition Target shall not be included in either the Tranche A Borrowing Base or the Tranche B Borrowing Base and shall be ineligible for borrowing purposes until such exam and audit (and appraisal, if Agent so elects) are conducted in scope and with results reasonably acceptable to Agent;
(f)    Borrowers shall have delivered to Agent a certificate executed by the chief financial officer of Borrowers which demonstrates to the reasonable satisfaction of Agent that:
(i)    at the time of such Acquisition Transaction, Borrowers shall have average Excess Availability for the thirty (30) day period immediately preceding the date of such Acquisition Transaction (calculated based on the amount of the Excess Availability on each date during such period) of not less than (A) if the Acquisition Consideration for such Acquisition Transaction is less than $10,000,000, an amount equal to or greater than twelve and one-half percent (12.5%) of the lesser of (1) the Tranche A Borrowing Base or (2) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, or (B) if the Acquisition Consideration for such Acquisition Transaction is equal to or greater than $10,000,000, an amount equal to or greater than seventeen and one-half percent (17.5%) of the lesser of (1) the Tranche A Borrowing Base or (2) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit;
(ii)    at the time of and after giving pro forma effect to such Acquisition Transaction, Borrowers shall have Excess Availability of not less than (A) if the Acquisition Consideration for such Acquisition Transaction is less than $10,000,000, an amount equal to or greater than twelve and one-half percent (12.5%) of the lesser of (1) the Tranche A Borrowing Base or (2) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, or (B) if the

10



Acquisition Consideration for such Acquisition Transaction is equal to or greater than $10,000,000, an amount equal to or greater than seventeen and one-half percent (17.5%) of the lesser of (1) the Tranche A Borrowing Base or (2) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit; and
(iii)    at the time of and after giving pro forma effect to such Acquisition Transaction (as if such Acquisition Transaction occurred on the first day of the twelve (12) fiscal month period that includes the most recent fiscal month for which Borrowers have delivered financial statements to Agent pursuant to Section 9.6 ), Borrowers shall demonstrate a Fixed Charge Coverage Ratio of at least 1.10 to 1.00 for the twelve (12) fiscal month period ending on the last day of such fiscal month, provided , however , that Borrowers' satisfaction of such ratio need not be demonstrated if, at the time of and after giving pro forma effect to such Acquisition Transaction, Excess Availability is equal to or greater than twenty-five percent (25%) of the lesser of (A) the Tranche A Borrowing Base or (B) the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit;
(e)    By deleting the definitions of "Borrowing Base," "Maturity Date"and "Maximum Credit" set forth in Section 1 of the Loan Agreement.
(f)    By deleting Section 2.1(a) and (c) of the Loan Agreement and by substituting in lieu thereof the following:
(a)    (i)    Subject to and upon the terms and conditions contained herein, each Lender severally (and not jointly) agrees to fund its Pro Rata Share of Tranche A Loans to Borrowers from time to time in amounts requested by Borrowers up to the amount outstanding at any time equal to the lesser of: (i) the Tranche A Borrowing Base or (ii) the Tranche A Maximum Credit at such time. Except as otherwise provided herein or permitted hereunder, (y) the aggregate principal amount of the sum of the Tranche A Loans and Letter of Credit Obligations outstanding at any time to Borrowers shall not exceed the lesser of the Tranche A Borrowing Base or the Tranche A Maximum Credit, and (z) the aggregate principal amount of the Tranche A Loans outstanding at any time to Borrowers based on the Eligible Inventory of Borrowers shall not exceed the Inventory Loan Limit. If Agent shall determine, in its sole discretion, that a material adverse change in the financial condition of any Borrower has occurred, or if a Default or Event of Default exists, then Agent shall have the right (exercisable at such time or times as Agent deems appropriate) to require that separate Tranche A Borrowing Base calculations be made for each Borrower, as well as the right to limit the use of proceeds of the Tranche A Loans by each Borrower to an amount equal to such Borrower's Tranche A Borrowing Base.
(ii)    Subject to and upon the terms and conditions contained herein, each Lender severally (and not jointly) agrees to fund its Pro Rata Share of Tranche B Loans to Borrowers from time to time in amounts requested by Borrowers up to the amount outstanding at any time equal to the lesser of: (i) the Tranche B Borrowing Base or (ii) the Tranche B Maximum Credit at such time. Except as otherwise provided herein or permitted hereunder, the aggregate principal amount of the sum of the Tranche B Loans outstanding at any time to

11



Borrowers shall not exceed the lesser of the Tranche B Borrowing Base or the Tranche B Maximum Credit. If Agent shall determine, in its sole discretion, that a material adverse change in the financial condition of any Borrower has occurred, or if a Default or Event of Default exists, then Agent shall have the right (exercisable at such time or times as Agent deems appropriate) to require that separate Tranche B Borrowing Base calculations be made for each Borrower, as well as the right to limit the use of proceeds of the Tranche B Loans by each Borrower to an amount equal to such Borrower's Tranche B Borrowing Base.
(c)    Notwithstanding anything to the contrary contained herein, (i) the aggregate amount of the Tranche A Loans and Letter of Credit Obligations 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, and (ii) the portion of the Tranche A Borrowing Base on any date calculated with reference to Eligible Real Property, Eligible Equipment, and Eligible Trademarks, collectively, shall not exceed twenty percent (20%) of the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit. In the event that (x) the outstanding amount of any component of the Tranche A Loans, or the aggregate amount of the outstanding Tranche A Loans and Letter of Credit Obligations, exceeds the amounts available under the applicable lending formulas, the Letter of Credit Limit, the Inventory Loan Limit or the Tranche A Maximum Credit, as applicable, or (y) the outstanding amount of any component of the Tranche B Loans exceeds the amounts available under the applicable lending formulas or the Tranche B Maximum Credit, as applicable, in each case, such event shall not limit, waive or otherwise affect any rights of Agent or Lenders in that circumstance or on any future occasions and Borrowers shall, upon demand by Agent, which may be made at any time or from time to time, immediately repay to Agent the entire amount of any such excess(es) for which payment is demanded.
(g)    By adding a new Section 2.1(e) to the Loan Agreement in correct alphabetical order as follows:
(e)    Notwithstanding anything to the contrary set forth herein, Borrowers shall not request, and no Lender shall be under any obligation to fund, any Tranche A Loan unless Borrowers have borrowed Tranche B Loans in an amount equal to the Tranche B Maximum Amount then in effect (to the extent that the Tranche B Commitments have not be terminated in accordance with this Agreement). If, at any time, the amount of Tranche B Loans outstanding exceeds the Tranche B Maximum Amount, Borrowers shall be deemed to have requested Tranche A Loans in an amount equal to such excess, the proceeds of such Tranche A Loans to be used to repay Tranche B Loans in an amount equal to such excess. If, at any time prior to the Tranche B Maturity Date that Tranche A Loans are outstanding, the amount of Tranche B Loans outstanding is less than the Tranche B Maximum Amount, Borrowers shall be deemed to have requested Tranche B Loans in an amount equal to the lesser of such shortfall and the amount of Tranche A Loans then outstanding, the proceeds of such Tranche B Loans to be used to repay Tranche A Loans in an amount equal to such shortfall or the amount of Tranche A Loans then outstanding, as applicable. If any Tranche B Loans are repaid pursuant to the terms of this Agreement, any Loans requested by Borrowers (including, without limitation, Tranche A Loans) shall be deemed to be requests for Tranche B Loans

12



until the amount of Tranche B Loans outstanding is equal to the Tranche B Maximum Amount.
(h)    By deleting the reference to the term "Borrowing Base" set forth in Section 2.2(c) of the Loan Agreement and by substituting in lieu thereof a reference to the term "Tranche A Borrowing Base."
(i)    By deleting Section 2.4 of the Loan Agreement and by substituting in lieu thereof the following:
2.4      Commitments . The aggregate amount of each Lender's (a) Pro Rata Share of the Tranche A Loans and Letter of Credit Obligations shall not exceed the amount of such Lender's Tranche A Commitment, and (b) Pro Rata Share of the Tranche B Loans shall not exceed the amount of such Lender's Tranche B Commitment, in each case, as the same may from time to time be amended in accordance with the provisions hereof.
(j)    By deleting Section 3.2(b) of the Loan Agreement and by substituting in lieu thereof the following:
(b)    for the benefit of Lenders, on the first day of each month in arrears while this Agreement is in effect and for so long thereafter as any of the Obligations are outstanding, an unused line fee at a rate equal to: (i) for the period beginning on the Closing Date through and including September 30, 2011, 0.25% per annum calculated upon the amount by which the Maximum Credit (as such term was defined in this Agreement prior to the First Amendment Date) exceeds the average daily principal balance of the outstanding Loans and Letter of Credit Obligations during the immediately preceding fiscal quarter (or part thereof), (ii) at all other times, (A) if the average Excess Availability for the most recently completed fiscal quarter is less than an amount equal to fifty percent (50%) of the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, 0.25% per annum calculated upon the amount by which the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit exceeds the average daily principal balance of the outstanding Loans and Letter of Credit Obligations during the immediately preceding fiscal quarter (or part thereof) (the "Average Daily Balance"), and (B) if the average Excess Availability for the most recently completed fiscal quarter is greater than or equal to an amount equal to fifty percent (50%) of the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, 0.375% per annum calculated upon the Average Daily Balance, which fee shall in each case be payable on the first day of each month in arrears and shall be fully earned when due. Any adjustment to the unused line fee rate pursuant to the immediately preceding sentence shall take effect on the first day of the fiscal quarter immediately following the fiscal quarter with respect to which such rate is determined; and
(k)    By deleting Section 6.4(a) of the Loan Agreement and by substituting in lieu thereof the following:
(a)     So long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all principal and interest payments received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses received by Agent

13



(other than fees or expenses that are for Agent's separate account or for the separate account of the Issuing Bank) shall be apportioned ratably among the Lenders having a Pro Rata Share of the Commitment or Obligation to which a particular fee or expense relates. All payments to be made hereunder by Borrowers shall be remitted to the Agent Payment Account as provided in Section 6.3 or such other place as Agent may designate from time to time, and all such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing, first, to reduce the balance of the Tranche A Loans outstanding, then, to reduce the balance of the Tranche B Loans outstanding, and, thereafter, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.
(l)    By deleting clauses (ix) to (xiii) of Section 6.4(b) of the Loan Agreement and by substituting in lieu thereof the following:
(ix)     ninth , ratably, to pay interest accrued in respect of the Tranche A Loans (other than Special Agent Advances),
(x)     tenth , ratably (A) to pay the principal of all Tranche A Loans until paid in full, (B) to Agent, to be held by Agent, for the benefit of Issuing Bank (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of the Issuing Bank, a share of each payment made by Issuing Bank pursuant to a Letter of Credit), as cash collateral in an amount up to one hundred five percent (105%) of the Letter of Credit Obligations (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any payment made by Issuing Bank pursuant to a Letter of Credit as and when such disbursement occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 6.4(b) , beginning with tier (i) hereof), and (C) ratably, to the Bank Product Providers based upon amounts then certified by the applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to such Bank Product Providers on account of Hedge Obligations as to which a Reserve has been established for the Current Hedge Exposure applicable thereto,
(xi)     eleventh , ratably, to pay interest accrued in respect of the Tranche B Loans (other than Special Agent Advances),
(xii)     twelfth , ratably, to pay the principal of all Tranche B Loans until paid in full,
(xiii)     thirteenth , to pay any other Obligations other than Obligations owed to Defaulting Lenders (including being paid, ratably, to the Bank Product Providers on account of all amounts then due and payable in respect of Banking Relationship Debt (including all Hedge Obligations for which no Reserve has been established for the Current Hedge Exposure applicable thereto and the portion of any Hedge Obligations in excess of the Reserve created therefor)), with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Banking Relationship Debt owed to the applicable Bank Product Provider as and when such amounts first become due and

14



payable and, if and at such time as all such Banking Relationship Debt is paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Banking Relationship Debt shall be reapplied pursuant to this Section 6.4(b) , beginning with tier (i) hereof),
(xiv)     fourteenth , ratably, to pay any Obligations owed to Defaulting Lenders; and
(xv)     fifteenth , to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.
(m)    By adding a new Section 6.12(f) to the Loan Agreement in proper numerical sequence as follows:
(f)    Each Qualified ECP Obligor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Obligor to be jointly and severally liable for, guarantee and otherwise honor all Obligations in respect of Swap Obligations (provided, however, that each Qualified ECP Obligor shall only be liable under this Section 6.12(f) for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 6.12(f) , or otherwise under the Loan Documents, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Obligor under this Section shall remain in full force and effect until payment in full of the Obligations. Each Qualified ECP Obligor intends that this Section 6.12(f) constitute, and this Section 6.12(f) shall be deemed to constitute, a "keepwell, support, or other agreement" for the benefit of each other Obligor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
(n)    By deleting Section 7.1(a)(ii) of the Loan Agreement and by substituting in lieu thereof the following:
(ii)    on a monthly basis, a report detailing the calculation of each of the Tranche A Borrowing Base and the Tranche B Borrowing Base certified by the chief financial officer of Delta or an authorized designee thereof, in form and substance satisfactory to Agent; provided , that , if Excess Availability at any time is less than an amount equal to twelve and one-half percent (12.5%) of the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, in Agent's discretion and at Agent's request, Borrowers shall deliver to Agent such calculation of each of the Tranche A Borrowing Base and the Tranche B Borrowing Base and certification on a weekly basis until such time that Excess Availability is greater than or equal to twelve and one-half percent (12.5%) of the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit, for a period of sixty (60) consecutive days, at which time the delivery requirements shall revert to a monthly basis;
(o)    By deleting Section 7.8 of the Loan Agreement and by substituting in lieu thereof the following:
7.8      Appraisals . Agent shall be entitled to conduct, and Borrowers shall be obligated to reimburse Agent for:

15



(a)    (i) one (1) Inventory appraisal per calendar year so long as Excess Availability is equal to or greater than $15,000,000 (such amount to be increased pro rata with the amount of any increase in the Commitments pursuant to Section 2.5 ), and (ii) at Agent's discretion, two (2) Inventory appraisals per calendar year so long as Excess Availability is less than $15,000,000 (such amount to be increased pro rata with the amount of any increase in the Commitments pursuant to Section 2.5 ); provided, however, that there shall be no limit on the number of Inventory appraisals that Agent may conduct or request or for which Borrowers are obligated to reimburse Agent at any time Default or Event of Default exists or has occurred and is continuing;
(b)    one (1) trademark/Intellectual Property appraisal per calendar year;
(c)    at Agent's discretion, one (1) Real Property appraisal for each parcel of Real Property constituting Eligible Real Property per calendar year, so long as Excess Availability is less than $20,000,000 (such amount to be increased pro rata with the amount of any increase in the Commitments pursuant to Section 2.5 ); provided, however, that there shall be no limit on the number of Real Property appraisals for each parcel of Real Property constituting Eligible Real Property that Agent may conduct or request or for which Borrowers are obligated to reimburse Agent at any time a Default or Event of Default exists or has occurred and is continuing; and
(d)    at Agent's discretion, one (1) Equipment appraisal per calendar year so long as Excess Availability is less than $20,000,000 (such amount to be increased pro rata with the amount of any increase in the Commitments pursuant to Section 2.5 ); provided, however, that there shall be no limit on the number of Equipment appraisals that Agent may conduct or request or for which Borrowers are obligated to reimburse Agent at any time a Default or Event of Default exists or has occurred and is continuing.
(p)     By deleting Section 9.7(b)(iv) of the Loan Agreement and by substituting in lieu thereof the following:
(iv)    the disposition of assets owned by Borrowers during the term of this Agreement having a fair market value of not greater than $5,000,000, provided that, (A) no Default or Event of Default shall exist at the time of and after giving effect to such disposition, and (B) none of such assets shall have been included in the calculation of the either the Tranche A Borrowing Base or the Tranche B Borrowing Base in the monthly reporting submitted to Agent pursuant to Section 7.1(a)(ii) hereof immediately prior to the consummation of the disposition of assets;

(q)    By deleting Section 9.8(g) of the Loan Agreement and by substituting in lieu thereof the following:
(g)    Liens in the assets of the Honduras Subsidiaries to secure the Permitted Central American Debt and the Permitted First Amendment Honduran Debt to the extent permitted under Section 9.9(g) hereof and Liens in the assets of other Foreign

16



Subsidiaries to secure Permitted Foreign Debt to the extent permitted under Section 9.9(h) hereto;
(r)    By deleting Sections 9.9(g) and (j) of the Loan Agreement and by substituting in lieu thereof the following, respectively:
(g)    (i) Permitted Central American Debt, in an aggregate principal amount not to exceed $11,000,000, and (ii) Permitted First Amendment Honduran Debt, in an aggregate principal amount not to exceed $10,000,000;
(j)    (i) Indebtedness of Delta and Art Gun consisting of Earnout Amounts under (and as defined in) the Art Gun Purchase Agreement, provided that the Art Gun Subordination Agreement is in full force and effect, and (ii) Indebtedness of TTG consisting of each of (x) the Indebtedness evidenced by the Promissory Note and (y) the Contingent Consideration, each under (and as defined in) the Salt Life Purchase Agreement, provided that the Salt Life Subordination Agreement is in full force and effect; and
(s)    By deleting the reference to "$15,000,000" set forth in Section 9.11(b)(i) of the Loan Agreement and by substituting in lieu thereof a reference to "$18,125,000."
(t)    By deleting Section 11.3(a)(xii) of the Loan Agreement and by substituting in lieu thereof the following:
(xii)    amend, modify, or eliminate the definition of either Tranche A Borrowing Base or Tranche B Borrowing Base, or any of the defined terms (including the definitions of Eligible Account, Eligible Inventory, and Eligible In-Transit Inventory) that are used in one or both such definitions to the extent that any such change results in more credit being made available to Borrowers based upon the either the Tranche A Borrowing Base or the Tranche B Borrowing Base, but not otherwise, or the definitions of Tranche A Maximum Credit or Tranche B Maximum Credit.
(u)    By deleting each reference to the term "Maximum Credit" set forth in Section 12.11(a) of the Loan Agreement and by substituting in lieu thereof, in each case, a reference to the term "Commitments."
(v)    By deleting the reference to the term "Borrowing Base" set forth in Section 12.11(b)(vi)(B) of the Loan Agreement and by substituting in lieu thereof a reference to the term "Tranche A Borrowing Base."
(w)    By deleting Section 12.17 of the Loan Agreement and by substituting in lieu thereof the following:
12.17      Additional Loans . Agent shall not make any Loans or provide any Letters of Credit to Borrowers on behalf of Lenders intentionally and with actual knowledge that such Loans or Letters of Credit would cause the aggregate amount of the total outstanding Loans and Letter of Credit Obligations to Borrowers to exceed the sum of the Tranche A Borrowing Base and the Tranche B Borrowing Base, without the prior consent of all Lenders, except, that, Agent may make such additional Loans or provide such additional Letters of Credit on behalf of Lenders, intentionally and with actual knowledge that such Loans or Letters of Credit will cause the total outstanding Loans and Letters of Credit to Borrowers to exceed the sum of the Tranche A Borrowing

17



Base and the Tranche B Borrowing Base, as Agent may deem necessary or advisable in its discretion, provided, that: (a) the total principal amount of the additional Loans or additional Letters of Credit to Borrowers which Agent may make or provide after obtaining such actual knowledge that the aggregate principal amount of the Loans equal or exceed the sum of the Tranche A Borrowing Base and the Tranche B Borrowing Base shall not exceed the aggregate amount equal to $5,000,000 outstanding at any time and shall not cause the total principal amount of the Loans and Letter of Credit Obligations to exceed the sum of the Tranche A Maximum Credit and the Tranche B Maximum Credit and (b) no such additional Loan or Letters of Credit shall be outstanding more than thirty (30) days after the date such additional Loan or Letter of Credit is made or issued (as the case may be), with five (5) days thereafter during which no such new Loans or Letters of Credit are made or exist, except as the Required Lenders may otherwise agree. Each Lender shall be obligated to pay Agent the amount of its Pro Rata Share of any such additional Loans or Letters of Credit provided that Agent is acting in accordance with the terms of this Section 12.17 .
(x)    By deleting Section 13.1(a) of the Loan Agreement and by substituting in lieu thereof the following:
(a)    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, (i) with respect to the Tranche A Loans, for a term ending on May 27, 2017 (the "Tranche A Maturity Date") and (ii) with respect to the Tranche B Loans, for a term ending on the earlier to occur of (x) August ___, 2015 and (y) the first day of the calendar month after which Borrowers deliver written notice to Agent of Borrowers' desire to terminate the Tranche B Commitments(the "Tranche B Maturity Date"), unless sooner terminated pursuant to the terms hereof. Upon the effective date of termination of the Financing Agreements, Borrowers shall pay to Agent, in full, all outstanding and unpaid Obligations and shall furnish cash collateral to Agent in such amounts as Agent determines are reasonably necessary to secure Agent and Lenders from loss, cost, damage or expense, including reasonable attorneys' fees actually incurred and legal expenses, in connection with any contingent Obligations, including issued and outstanding Letters of Credit and checks or other payments provisionally credited to the Obligations and/or as to which Agent or any Lender has not yet received final and indefeasible payment and any continuing obligations of Agent or any Lender pursuant to any Deposit Account Control Agreement. The amount of such cash collateral (or letter of credit, as Agent may determine) as to any Letter of Credit Obligations shall be in the amount equal to one hundred five (105%) percent of the amount of the Letter of Credit Obligations plus the amount of any fees and expenses payable in connection therewith through the end of the latest expiration date of the Letters of Credit giving rise to such Letter of Credit Obligations. Such payments in respect of the Obligations and cash collateral shall be remitted by wire transfer in Federal funds to such bank account of Agent, as Agent may, in its discretion, designate in writing to Administrative Borrower for such purpose. Interest shall be due until and including the next Business Day, if the amounts so paid by Borrowers to the bank account designated by Agent are received in such bank account later than 12:00 noon, Atlanta, Georgia time.
(y)    By deleting Exhibits A and B to the Loan Agreement and by substituting in lieu thereof Exhibits A and B hereto.

18



(z)    By deleting Schedule 1.21 to the Loan Agreement and by substituting in lieu thereof Schedule 1.21 hereto.
3.      Consent to Salt Life Acquisition . Subject to the satisfaction of the conditions precedent set forth in Section 9 hereof, Agent and Lenders consent to the Salt Life Acquisition. For avoidance of doubt, Borrowers do not have to satisfy any conditions set forth in the definition of Permitted Acquisition with respect to the Salt Life Acquisition.
4.      Ratification and Reaffirmation . Each Borrower hereby ratifies and reaffirms the Obligations, each of the Financing Agreements and all of such Borrower's covenants, duties, indebtedness and liabilities under the Financing Agreements.
5.      Acknowledgments and Stipulations . Each Borrower acknowledges and stipulates that the Loan Agreement and the other Financing Agreements 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; the unpaid principal amount of the Loans as of the opening of business on August 22, 2013 totaled $93,306,055.41; and, as of the First Amendment Date, the applicable margin with respect to the Interest Rate payable by Borrowers with respect to all Loans is Level II, as set forth on Exhibit B to the Loan Agreement.
6.      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 Loan Agreement are true and correct on and as of the date hereof.
7.      Reference to Loan Agreement . Upon the effectiveness of this Amendment, each reference in the Loan Agreement to "this Agreement,""hereunder," or words of like import shall mean and be a reference to the Loan Agreement, as amended by this Amendment.
8.      Breach of Amendment . This Amendment shall be part of the Loan Agreement and a breach of any representation, warranty or covenant herein shall constitute an Event of Default.
9.      Conditions Precedent . The effectiveness of the amendments contained in Section 2 hereof is 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)    all requisite corporate action and proceedings in connection with the transactions contemplated by this Amendment shall be satisfactory in form and substance to Agent, and Agent shall have received all information and copies of all documents, including records of requisite corporate action and proceedings which Agent may have requested in connection therewith, such documents where requested by Agent or its counsel to be certified by appropriate corporate officers or Governmental Authorities;
(b)    this Amendment and the other Financing Agreements and all instruments and documents to be entered into in connection herewith, including amendments to the Mortgages, shall have been duly executed and delivered to Agent, in form and substance satisfactory to Agent;

19



(c)    Agent shall have received, in form and substance satisfactory to Agent, such opinion letters of counsel to Borrowers and Guarantors with respect to the Financing Agreements and such other matters as Agent may request;
(d)    Agent shall have reviewed and found satisfactory the terms and conditions of the Salt Life Acquisition and received true, correct and complete copies of each agreement, document and instrument entered into by any Borrower in connection therewith, certified as such by a responsible officer of each Borrower;and
(e)    Agent shall have received, reviewed and found acceptable fully paid endorsements to Agent's mortgagee title insurance policies (or binding commitments to issue endorsements to Agent's mortgagee title insurance policies, marked to Agent's satisfaction to evidence the form of such endorsements to be delivered after the date hereof) with respect to the title insurance policies that insure the Mortgages to create a valid Lien on all Real Property subject thereto, which endorsements (and commitments therefor) shall give effect to the transactions contemplated by this Agreement, shall "down-date" the effective date of the title insurance policy (or policies) to which they relate and shall not have a specific survey exception.
10.      Amendment Fee; Expenses of Agent . In consideration of Agent's and Lender's willingness to enter into this Amendment, Borrowers jointly and severally agree to pay to Agent, allocable to each Lender based on such Lender's Pro Rata Share, an amendment fee in the amount of $217,500 in immediately available funds on the date hereof. Additionally, 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 Financing Agreements executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the costs and fees of Agent's legal counsel and any taxes or expenses associated with or incurred in connection with any instrument or agreement referred to herein or contemplated hereby.
11.      Effectiveness; Governing Law . This Amendment shall be effective upon acceptance by Agent and Lenders (notice of which acceptance is hereby waived), whereupon the same shall be governed by and construed in accordance with the internal laws of the State of Georgia.
12.      Successors and Assigns . This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
13.      No Novation, etc. . Except as otherwise expressly provided in this Amendment, nothing herein shall be deemed to amend or modify any provision of the Loan Agreement or any of the other Financing Agreements, 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 Loan Agreement as herein modified shall continue in full force and effect.
14.      Counterparts; Telecopied Signatures . This Amendment may be executed in any number of counterparts and by different parties to this Amendment on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto.
15.      Further Assurances . Each Borrower agrees to take such further actions as Agent shall reasonably request from time to time in connection herewith to evidence or give effect to the amendments set forth herein or any of the transactions contemplated hereby.

20



16.      Section Titles . Section titles and references used in this Amendment shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreements among the parties hereto.
17.      Release of Claims . To induce Agent and Lenders to enter into this Amendment, each Borrower hereby releases, acquits and forever discharges Agent and Lenders, and all officers, directors, agents, employees, successors and assigns of Agent and Lenders, from any and all liabilities, claims, demands, actions or causes of action of any kind or nature (if there be any), whether absolute or contingent, disputed or undisputed, at law or in equity, or known or unknown, that such Borrower now has or ever had against Agent or any Lender arising under or in connection with any of the Financing Agreements or otherwise. Each Borrower represents and warrants to Agent and Lenders that such Borrower has not transferred or assigned to any Person any claim that such Borrower ever had or claimed to have against Agent or any Lender.
18.      Waiver of Jury Trial .To the fullest extent permitted by applicable law, the parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim or proceeding arising out of or related to this Amendment .

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


21



- 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/ Deborah H. Merrill
Name: Deborah H. Merrill
Title: VP, CFO and Treasurer
 
M.J. SOFFE, LLC , successor-by-merger to TCX, LLC
 
By: /s/ Deborah H. Merrill
Name: Deborah H. Merrill
Title: VP, CFO and Treasurer
 
JUNKFOOD CLOTHING COMPANY
 
By: /s/ Deborah H. Merrill
Name: Deborah H. Merrill
Title: VP, CFO and Treasurer
 
TO THE GAME, LLC
 
By: /s/ Deborah H. Merrill
Name: Deborah H. Merrill
Title: VP, CFO and Treasurer
 
ART GUN, LLC
 
By: /s/ Deborah H. Merrill
Name: Deborah H. Merrill
Title: VP, CFO and Treasurer

[Signatures continued on following page.]



22



AGENT:
 
WELLS FARGO NATIONAL BANK, NATIONAL ASSOCIATION
 
By: /s/ Daniel Denton
Name: Daniel Denton
Title: Vice President
 
LENDERS:
 
WELLS FARGO BANK, NATIONAL ASSOCIATION
 
By: /s/ Daniel Denton
Name: Daniel Denton
Title: Vice President
 
[Signatures continued on following page.]


23




                        
BANK OF AMERICA, N.A.
 
By: /s/Steven L. Hipsman
Name: Steven L. Hipsman
Title: Senior Vice President
 



[Signatures continued on following page.]




24




PNC BANK, NATIONAL ASSOCIATION
 
By: /s/ Alex M. Council
Name: Alex M. Council
Title: Vice President
 


25



EXHIBIT A

ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance") dated as of _____________, 20__ is made between _____________________(the "Assignor") and ____________________________(the "Assignee").
WITNESSETH:
WHEREAS, Wells Fargo Bank, National Association, in its capacity as agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties thereto as lenders (in such capacity, "Agent"), and the financial institutions which are parties to the Loan Agreement as lenders (individually, each a "Lender" and collectively, "Lenders") have entered or are about to enter into financing arrangements pursuant to which Agent and Lenders may make loans and advances and provide other financial accommodations to Delta Apparel, Inc., M.J. Soffe, LLC, successor-by-merger to TCX, LLC, Junkfood Clothing Company, To The Game, LLC and Art Gun, LLC (collectively, "Borrowers") as set forth in the Fourth Amended and Restated Loan and Security Agreement, dated May 27, 2011, by and among Borrowers, Agent and Lenders (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Loan Agreement"), and the other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the "Financing Agreements");
WHEREAS, as provided under the Loan Agreement, Assignor committed to making Tranche A Loans (the "Committed Tranche A Loans") to Borrowers in an aggregate amount not to exceed $__________ (the "Tranche A Commitment");
WHEREAS, as provided under the Loan Agreement, Assignor committed to making Tranche B Loans (the "Committed Tranche B Loans"; together with the Committed Tranche A Loans, collectively, the "Committed Loans") to Borrowers in an aggregate amount not to exceed $__________ (the "Tranche B Commitment"; together with the Tranche A Commitment, the "Commitment");
WHEREAS, Assignor wishes to assign to Assignee [part of the] [all] rights and obligations of Assignor under the Loan Agreement in respect of its Tranche A Commitment in an amount equal to $_____________ (the "Assigned Tranche A Commitment Amount") and Tranche B Commitment in an amount equal to $_____________ (the "Assigned Tranche B Commitment Amount"; together with the Assigned Tranche A Commitment Amount, collectively, the "Assigned Commitment Amount") on the terms and subject to the conditions set forth herein and Assignee wishes to accept assignment of such rights and to assume such obligations from Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows:
1.     Assignment and Acceptance .
(a)    Subject to the terms and conditions of this Assignment and Acceptance, Assignor hereby sells, transfers and assigns to Assignee, and Assignee hereby purchases, assumes and undertakes from Assignor, without recourse and without representation or warranty (except as provided in this Assignment and Acceptance) an interest in (i) the Tranche A Commitment, the Tranche B Commitment and each of the Committed Loans of Assignor and (ii) all related rights, benefits, obligations, liabilities and indemnities of the Assignor under and in connection with the Loan Agreement and the other

26



Financing Agreements, so that after giving effect thereto, the Tranche A Commitment and the Tranche B Commitment of Assignee shall be as set forth below and the Pro Rata Share of Assignee shall be (___%) percent.
(b)    With effect on and after the Effective Date (as defined in Section 5 hereof), Assignee shall be a party to the Loan Agreement and succeed to all of the rights and be obligated to perform all of the obligations of a Lender under the Loan Agreement, including the requirements concerning confidentiality and the payment of indemnification, with a Tranche A Commitment in an amount equal to the Assigned Tranche A Commitment Amount and a Tranche B Commitment in an amount equal to the Assigned Tranche B Commitment Amount. Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Agreement are required to be performed by it as a Lender. It is the intent of the parties hereto that the Tranche A Commitment of Assignor shall, as of the Effective Date, be reduced by an amount equal to the Assigned Tranche A Commitment Amount, the Tranche B Commitment of Assignor shall, as of the Effective Date, be reduced by an amount equal to the Assigned Tranche B Commitment Amount and Assignor shall relinquish its rights and be released from its obligations under the Loan Agreement to the extent such obligations have been assumed by Assignee; provided , that , Assignor shall not relinquish its rights under Sections 2.1, 6.4, 6.8 and 6.9 of the Loan Agreement to the extent such rights relate to the time prior to the Effective Date.
(c)    After giving effect to the assignment and assumption set forth herein, on the Effective Date Assignee's Tranche A Commitment will be $_____________ and Assignee's Tranche B Commitment will be $_____________.
(d)    After giving effect to the assignment and assumption set forth herein, on the Effective Date Assignor's Tranche A Commitment will be $ _____________ and Assignor's Tranche B Commitment will be $ _____________(in each case, as such amount may be further reduced by any other assignments by Assignor on or after the date hereof).
2.     Payments .
(a)    As consideration for the sale, assignment and transfer contemplated in Section 1 hereof, Assignee shall pay to Assignor on the Effective Date in immediately available funds an amount equal to $_____________, representing Assignee's Pro Rata Share of the principal amount of all Committed Loans.
(b)    Assignee shall pay to Agent the processing fee in the amount specified in Section 13.7(a) of the Loan Agreement.
3.     Reallocation of Payments . Any interest, fees and other payments accrued to the Effective Date with respect to the Commitment, Committed Loans and outstanding Letters of Credit shall be for the account of Assignor. Any interest, fees and other payments accrued on and after the Effective Date with respect to the Assigned Commitment Amount shall be for the account of Assignee. Each of Assignor and Assignee agrees that it will hold in trust for the other party any interest, fees and other amounts which it may receive to which the other party is entitled pursuant to the preceding sentence and pay to the other party any such amounts which it may receive promptly upon receipt.
4.     Independent Credit Decision . Assignee acknowledges that it has received a copy of the Loan Agreement and the Schedules and Exhibits thereto, together with copies of the most recent financial statements of Borrowers and their Subsidiaries, and such other documents and information as it has deemed appropriate to make its own credit and legal analysis and decision to enter into this Assignment and Acceptance and agrees that it will, independently and without reliance upon Assignor, Agent or any Lender and based on such documents and information as it shall deem appropriate at the time,

27



continue to make its own credit and legal decisions in taking or not taking action under the Loan Agreement.
5.     Effective Date; Notices .
(a)    As between Assignor and Assignee, the effective date for this Assignment and Acceptance shall be ___________, 20__ (the "Effective Date"); provided , that , the following conditions precedent have been satisfied on or before the Effective Date:
(i)
this Assignment and Acceptance shall be executed and delivered by Assignor and Assignee;
(ii)
the consent of Agent as required for an effective assignment of the Assigned Commitment Amount by Assignor to Assignee shall have been duly obtained and shall be in full force and effect as of the Effective Date;
(iii)
written notice of such assignment, together with payment instructions, addresses and related information with respect to Assignee, shall have been given to Administrative Borrower and Agent; Assignee shall pay to Assignor all amounts due to Assignor under this Assignment and Acceptance; and
(iv)
the processing fee referred to in Section 2(b) hereof shall have been paid to Agent.
(b)    Promptly following the execution of this Assignment and Acceptance, Assignor shall deliver to Administrative Borrower and Agent, for acknowledgment by Agent, a Notice of Assignment in the form attached hereto as Schedule 1 .
6.    [Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]
(a)    Assignee hereby appoints and authorizes Assignor in its capacity as Agent to take such action as agent on its behalf to exercise such powers under the Loan Agreement as are delegated to Agent by Lenders pursuant to the terms of the Loan Agreement.
(b)    Assignee shall assume no duties or obligations held by Assignor in its capacity as Agent under the Loan Agreement.]
7.     Withholding Tax . Assignee (a) represents and warrants to Assignor, Agent and Borrowers that under applicable law and treaties no tax will be required to be withheld by Assignee, Agent or Borrowers with respect to any payments to be made to Assignee hereunder or under any of the Financing Agreements, (b) agrees to furnish (if it is organized under the laws of any jurisdiction other than the United States or any State thereof) to Agent and Borrowers, prior to the time that Agent or Borrowers are required to make any payment of principal, interest or fees hereunder, duplicate executed originals of either U.S. Internal Revenue Service Form W-8BEN or W-8ECI, as applicable (wherein Assignee claims entitlement to the benefits of a tax treaty that provides for a complete exemption from U.S. federal income withholding tax on all payments hereunder) and agrees to provide new such Forms upon the expiration of any previously delivered form or comparable statements in accordance with applicable U.S. law and regulations and amendments thereto, duly executed and completed by Assignee, and (c) agrees to comply with all applicable U.S. laws and regulations with regard to such withholding tax exemption.
8.     Representations and Warranties .
(a)    Assignor represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any security interest, Lien, encumbrance or other adverse claim, (ii) it is duly organized and existing and it has the full power and authority to take, and has taken, all action necessary to execute and deliver this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection with this Assignment and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or

28



consents, authorizations or approvals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Loan Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance, and (iv) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of Assignor, enforceable against Assignor in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors' rights and to general equitable principles.
(b)    Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Agreement or any of the other Financing Agreements or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other instrument or document furnished pursuant thereto. Assignor makes no representation or warranty in connection with, and assumes no responsibility with respect to, the solvency, financial condition or statements of Borrowers, Guarantors or any of their respective Affiliates, or the performance or observance by Borrowers, Guarantors or any other Person, of any of their respective obligations under the Loan Agreement or any other instrument or document furnished in connection therewith.
(c)    Assignee represents and warrants that (i) it is duly organized and existing and it has full power and authority to take, and has taken, all action necessary to execute and deliver this Assignment and Acceptance and any other documents required or permitted to be executed or delivered by it in connection with this Assignment and Acceptance and to fulfill its obligations hereunder, (ii) no notices to, or consents, authorizations or approvals of, any Person are required (other than any already given or obtained) for its due execution, delivery and performance of this Assignment and Acceptance, and apart from any agreements or undertakings or filings required by the Loan Agreement, no further action by, or notice to, or filing with, any Person is required of it for such execution, delivery or performance, and (iii) this Assignment and Acceptance has been duly executed and delivered by it and constitutes the legal, valid and binding obligation of Assignee, enforceable against Assignee in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and other laws of general application relating to or affecting creditors' rights to general equitable principles.
9.     Further Assurances . Assignor and Assignee each hereby agree to execute and deliver such other instruments, and take such other action, as either party may reasonably request in connection with the transactions contemplated by this Assignment and Acceptance, including the delivery of any notices or other documents or instruments to Borrowers or Agent, which may be required in connection with the assignment and assumption contemplated hereby.
10.     Miscellaneous
(a)    Any amendment or waiver of any provision of this Assignment and Acceptance shall be in writing and signed by the parties hereto. No failure or delay by either party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof and any waiver of any breach of the provisions of this Assignment and Acceptance shall be without prejudice to any rights with respect to any other for further breach thereof.
(b)    All payments made hereunder shall be made without any set-off or counterclaim.
(c)    Assignor and Assignee shall each pay its own costs and expenses incurred in connection with the negotiation, preparation, execution and performance of this Assignment and Acceptance.

29



(d)    This Assignment and Acceptance may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
(e)    THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF GEORGIA. Assignor and Assignee each irrevocably submits to the non-exclusive jurisdiction of any State or Federal court sitting in Fulton County, Georgia over any suit, action or proceeding arising out of or relating to this Assignment and Acceptance and irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such Georgia State or Federal court. Each party to this Assignment and Acceptance hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding.
(f)    TO THE EXTENT PERMITTED BY APPLICABLE LAW, ASSIGNOR AND ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE LOAN AGREEMENT, ANY OF THE OTHER FINANCING AGREEMENTS OR ANY RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment and Acceptance to be executed and delivered by their duly authorized officers as of the date first above written.
[ASSIGNOR]
By:_____________________
Title:___________________    
[ASSIGNEE]
By:________________________
Title:_______________________

30





SCHEDULE 1
to
NOTICE OF ASSIGNMENT AND ACCEPTANCE
________________, 20__
Attn:________________________
Re:
Delta Apparel, Inc., M.J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC and Art Gun, LLC
Ladies and Gentlemen:
Wells Fargo Bank, National Association, in its capacity as agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties thereto as lenders (in such capacity, "Agent"), and the financial institutions which are parties to the Loan Agreement as lenders (individually, each a "Lender" and collectively, "Lenders") have entered or are about to enter into financing arrangements pursuant to which Agent and Lenders may make loans and advances and provide other financial accommodations to Delta Apparel, Inc., M.J. Soffe, LLC, successor-by-merger to TCX, LLC, Junkfood Clothing Company, To The Game, LLC and Art Gun, LLC(collectively, "Borrowers") as set forth in the Fourth Amended and Restated Loan and Security Agreement, dated May 27, 2011, by and among Borrowers, Agent and Lenders (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Loan Agreement"), and the other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the "Financing Agreements"). Capitalized terms not otherwise defined herein shall have the respective meanings ascribed thereto in the Loan Agreement.
l.    We hereby give you notice of, and request your consent to, the assignment by ____________________ (the "Assignor") to__________________ (the "Assignee") such that after giving effect to the assignment Assignee shall have an interest equal to______ (_%) percent of the total Commitments pursuant to the Assignment and Acceptance Agreement attached hereto (the "Assignment and Acceptance"). We understand that the Assignor's Tranche A Commitment shall be reduced by $___________, and Assignor's Tranche B Commitment shall be reduced by $_____________, in each case, as the same may be further reduced by other assignments on or after the date hereof.
2.    Assignee agrees that, upon receiving the consent of Agent to such assignment, Assignee will be bound by the terms of the Loan Agreement as fully and to the same extent as if Assignee were the Lender originally holding such interest under the Loan Agreement.

31




3.    The following administrative details apply to Assignee:
(A)    Notice address:___________________
Assignee name:___________________
Address:_________________________
_________________________
_________________________
Attention:________________________
Telephone:_______________________
Telecopier:_______________________

(B)    Payment instructions:

Account No.:_____________________
At:_____________________________
Reference:_______________________
Attention:________________________
4.    You are entitled to rely upon the representations, warranties and covenants of each of Assignor and Assignee contained in the Assignment and Acceptance.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Notice of Assignment and Acceptance to be executed by their respective duly authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,

[NAME OF ASSIGNOR]


By:________________________

Title:_______________________



[NAME OF ASSIGNEE]


By:_________________________

Title:________________________

32




ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:

AGENT :

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Agent

By:                        
Name:                         
Title:                        


BORROWERS : ** No signature of Borrowers required if a Default or Event of Default exists.

DELTA APPAREL, INC.
M.J. SOFFE, LLC, successor-by-merger to TCX, LLC

By:                             By:                         
Name:                             Name:                         
Title:                             Title:                         


JUNKFOOD CLOTHING COMPANY            TO THE GAME, LLC

By:                             By:                         
Name:                             Name:                         
Title:                             Title:                         


ART GUN, LLC                    

By:                             
Name:                             
Title:                             


33



EXHIBIT B
PRICING GRID
For the period after the Closing Date until Borrowers deliver the financial statements and compliance certificate required by Section 9.6 of the Agreement for the fiscal quarter ending December 31, 2011, the applicable margin for Base Rate Tranche A Loans will be 0.75% and the applicable margin for LIBOR Rate Tranche A Loans will be 1.75%. Thereafter, the applicable margin will be increased or decreased on a quarterly basis, based upon the following pricing grid:
 
 
Tranche A Loans
Tranche B Loans
Level
When Average Alternate Excess Availability is:
Applicable Base Rate Margin
Applicable LIBOR Rate Margin
Applicable Base Rate Margin
Applicable LIBOR Rate Margin
I
< 20.0% of the Commitments
1.25%
2.25%
2.75%
3.75%
II
≥ 20.0% of the Commitments but < 50.0% of the Commitments
1%
2%
2.75%
3.75%
III
≥ 50% of the Commitments
0.75%
1.75%
2.75%
3.75%

At any time that an Event of Default exists or has occurred and is continuing, the applicable margin shall be adjusted immediately to the margin applicable for Level I.
The term "Average Alternate Excess Availability" shall mean, at any time, the average of the aggregate amount of the Alternate Excess Availability of Borrowers, as calculated by Agent, for the immediately preceding fiscal quarter.
The applicable margin shall be calculated and established once each fiscal quarter, effective as of the first day of the fiscal quarter following the fiscal quarter with respect to which Agent has received the required financial statements and compliance certificate, and shall remain in effect until adjusted thereafter as of the first day of a subsequent fiscal quarter.
In the event that any financial statement or compliance certificate delivered by Borrowers for any period is shown to be inaccurate (whether such inaccuracy is discovered at any time during the effectiveness of the Credit Facility or up to six months thereafter), and such inaccuracy, if corrected, would have led to the application of a higher applicable margin for any period than the applicable margin applied for such period, then (i) Borrowers shall immediately deliver to Agent a correct compliance certificate for such period, (ii) the applicable margin for such period shall be deemed to be the applicable margin that would have been in effect for such period had the financial statement or compliance certificate delivered by Borrowers not contained the inaccuracy, and (iii) Borrowers shall immediately pay to Agent the accrued additional interest owing as a result of such increased applicable margin for such period. Neither the recalculation of the applicable margin for such a period, nor the payment by Borrowers of the accrued additional interest required, shall limit the rights of Agent and Lenders with respect to their ability to charge interest at the Default Rate or to declare any Event of Default or exercise any of their remedies during the existence of such an Event of Default.

34



Schedule 1.21

Commitments
Name of Lender
Tranche A Commitment
Tranche B Commitment
 
On or before Tranche B Maturity Date
After Tranche B Maturity Date
On or before Tranche B Maturity Date
After Tranche B Maturity Date
Wells Fargo Bank, National Association
51.724138% of the Tranche A Maximum Credit
$75,000,000
51.724138% of the Tranche B Maximum Credit
$-0-
Bank of America, N.A.
31.034483% of the Tranche A Maximum Credit
$45,000,000
31.034483% of the Tranche B Maximum Credit
$-0-
PNC Bank, National Association
17.241379% of the Tranche A Maximum Credit
$25,000,000
17.241379% of the Tranche B Maximum Credit
$-0-




35


Delta Apparel Acquires Salt Life Brand
        
GREENVILLE, SC-August 28, 2013-Delta Apparel, Inc. (NYSE MKT: DLA) announced today that its wholly-owned subsidiary, To The Game, LLC, has acquired substantially all of the assets of Salt Life Holdings, LLC, including all of its domestic and international trademark rights in the Salt Life brand.

The purchase price for the transaction consists of $15 million in cash, two promissory notes in the aggregate principal amount of $22 million, and an additional payment contingent on certain performance targets being met with respect to sales of Salt Life products in calendar 2019. The Company financed the cash portion of the purchase price through an amendment to its asset-based secured revolving credit facility.

Salt Life is an authentic, aspirational and lifestyle brand that embraces those who love the ocean and everything associated with living the “Salt Life”. Founded in 2003 by four avid watermen from Jacksonville Beach, Florida, the Salt Life brand has widespread appeal with ocean enthusiasts worldwide. From fishing, diving and surfing, to beach fun and sun-soaked relaxation, the Salt Life brand says “I live the Salt Life”. From its first merchandise offerings in 2006, Salt Life has grown to more than $20 million in annual sales, with distribution in surf shops, specialty stores, department stores and sporting goods retailers.

“The Salt Life acquisition opens up another exciting chapter in the history of Delta Apparel, Inc.,” commented Robert W. Humphreys, Chairman and Chief Executive Officer. “This continues our strategy of building lifestyle brands that can take advantage of our creative capabilities, vertical manufacturing platform and international sourcing competencies. Since becoming the exclusive licensee for Salt Life apparel and other categories in 2011, Delta Apparel has broadened its core consumer appeal by developing authentic and compelling products that cater to a host of ocean and beach enthusiasts. During this time Salt Life has also expanded geographically from a nearly exclusive Florida brand to now having products available to consumers in over 1,500 retail doors from Texas up the coast to the Northeast. Delta Apparel also developed and launched an online store at www.saltlife.com which has experienced exceptional growth. Most recently product is being seeded in retailers in California and Hawaii and is receiving a great response from consumers.”

Humphreys continued, “While this acquisition will have minimal impact on our revenue and earnings in the upcoming year, it will be a key growth initiative in the future. As owner of the brand we will greatly increase our investment in consumer advertising and point-of-sale branding. We look forward to the many opportunities we see for strong continued growth with the Salt Life lifestyle brand.”






Salt Life will be operated as a division of To The Game, LLC, where it has been managed under a license agreement since 2011, growing annual sales from $6 million to over $20 million. Jeff Stillwell, President of To The Game, commented, “The experience we have had with the growth of Salt Life over the past two years gives us great confidence in the future potential of the brand. Our Jacksonville-based team does an outstanding job servicing our customers and promoting the Salt Life brand. The flagship Salt Life retail store, which opened in Jacksonville Beach, Florida during 2012, serves as a vision for retail customers to see product placements they can utilize in their stores. It also serves as a direct-to-consumer laboratory as we test new product concepts for broader retail distribution.”

About Delta Apparel, Inc.
Delta Apparel, Inc., along with its operating subsidiaries, M. J. Soffe, LLC, Junkfood Clothing Company, To The Game, LLC and Art Gun, LLC, is an international design, marketing, manufacturing, and sourcing company that features a diverse portfolio of lifestyle basic and branded activewear apparel and headwear. The Company specializes in selling casual and athletic products across distribution tiers, including specialty stores, boutiques, department stores, mid-tier and mass chains, college bookstores and the U.S. military. The Company's products are made available direct-to-consumer on its websites at www.soffe.com, www.junkfoodclothing.com, www.saltlife.com and www.deltaapparel.com. The Company's operations are located throughout the United States, Honduras, El Salvador, and Mexico, and it employs approximately 7,000 people worldwide. Additional information about the Company is available at www.deltaapparelinc.com.

Cautionary Note Regarding Forward Looking Statements
Statements and other information in this press release that are not reported financial results or other historical information are forward-looking statements subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These are based on our expectations and are necessarily dependent upon assumptions, estimates and data that we believe are reasonable and accurate but may be incorrect, incomplete or imprecise. Forward-looking statements are also subject to a number of business risks and uncertainties, any of which could cause actual results to differ materially from those set forth in or implied by the forward-looking statements. These risks and uncertainties are described from time to time in our reports filed with the Securities and Exchange Commission. Accordingly, any forward-looking statements do not purport to be predictions of future events or circumstances and may not be realized. Further, any forward-looking statements are made only as of the date of this press release and we do not undertake publicly to update or revise the forward-looking statements even if it becomes clear that any projected results will not be realized.

Company Contact:
Deborah Merrill
Chief Financial Officer
(864) 232-5200 x6620
                
Investor Relations Contact:
Sally Wallick, CFA
(404) 806-1398
investor.relations@deltaapparel.com