Document:

exv10w2w1

EXHIBIT 10.2.1

March 30, 2009

Delta Apparel, Inc.

M.J. Soffe, LLC

Junkfood Clothing Company

322 South Main Street

Greenville, South Carolina 29601

Attention: Ms. Deb Merrill

The CIT Group/Commercial Services

301 South Tryon Street

Charlotte, North Carolina 28202

Attention: Mr. Jeff Lewis

IDB Bank

511 Fifth Avenue

New York, New York 10017

Attention: Mr. Andrew Ballta

PNC Bank, National Association

4720 Piedmont Row Drive, Suite 300

Charlotte, North Carolina 28210

Attention: Mr. Alex Council

Ladies and Gentlemen:

     Reference is made to that certain Third Amended and Restated Loan and Security Agreement dated
September 21, 2007, among Delta Apparel, Inc., a Georgia corporation (“Delta”), M.J. Soffe,
LLC, a North Carolina limited liability company and successor to M.J. Soffe Co. (“Soffe”),
Junkfood Clothing Company, a Georgia corporation (“JCC”; Delta, Soffe and JCC being
hereinafter collectively referred to as “Borrowers” and each individually as a
“Borrower”), Wachovia Bank, National Association, a national banking association, in its
capacity as agent (together with its successors in such capacity, “Agent”) for the
financial institutions party thereto from time to time as lenders (collectively, “Lenders”)
and such Lenders (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. All capitalized terms used in this letter amendment, unless
otherwise defined herein, shall have the meaning ascribed to such terms in the Loan Agreement.

     Borrowers have requested, pursuant to Section 2.5 of the Loan Agreement, that the Commitments
under the Loan Agreement be increased by $10,000,000 to $110,000,000 (the “Commitment
Increase”).

     Each of the existing Lenders has informed Agent that it has elected not to fund its respective
Pro Rata Share of the amount of the Commitment Increase, and as a result, Borrowers have requested
that PNC Bank, National Association (“New Lender”) become a Lender and fund the full amount
of the requested Commitment Increase.

     Pursuant to that certain Joinder Agreement dated as of the date hereof (the “New Lender
Joinder Agreement”), New Lender has agreed to be joined to the Loan Agreement as a Lender, has
assumed all of the responsibilities of a Lender thereunder, and has accepted the full amount of the
Commitment Increase as its Commitment under the Loan Agreement.

     In connection with Borrowers’ request to increase the Commitments and New Lender’s execution
and delivery of the New Lender Joinder Agreement, Agent and Borrowers have agreed that the Increase
Effective Date for such requested Commitment Increase shall be the date set forth below in this
letter amendment and, with the

 

 

consent and approval of Borrowers, Agent hereby confirms to Lenders by delivery of this letter
amendment the final allocation of such increase as of the Increase Effective Date.

     Agent, New Lender and Borrowers are entering into this letter amendment in order to reflect
the joinder of New Lender as a Lender under the Loan Agreement and the corresponding changes to the
Commitments thereunder set forth on Schedule 1.21 to the Loan Agreement.

     The parties hereto desire to amend the Loan Agreement as hereinafter set forth.

     NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and valuable
consideration, the receipt and sufficiency of which are hereby severally acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:

     1. Amendments to Loan Agreement, Financing Agreements. Subject to the satisfaction of
the conditions precedent set forth herein, the Loan Agreement is hereby amended, pursuant to the
terms of Section 2.5 thereof, by deleting Schedule 1.21 to the Loan Agreement in
its entirety and by substituting in lieu thereof the Schedule 1.21 attached to this
Amendment, and pursuant to the requirements of Section 2.5 of the Loan Agreement, Agent
hereby delivers to Lenders and Borrowers a copy of this amendment. In furtherance of the
foregoing, upon the effectiveness of this letter amendment, all references to “Lender” or “Lenders”
contained in the Loan Agreement and the other Financing Agreements shall be deemed to include PNC
Bank, National Association, in its capacity as a Lender under the Loan Agreement.

     2. Determination of Increase Effective Date; Confirmation to Lenders Thereof. Subject
to the satisfaction of the conditions precedent set forth herein, Agent and Borrowers have
determined that the Increase Effective Date for the Borrowers’ requested Commitment increase shall
be March 30, 2009, and by delivery of this letter amendment to Lenders, with the consent and
approval of Borrowers (as indicated by their signatures below), Agent hereby confirms in writing to
Lenders the final allocation of such increase as of the Increase Effective Date. New Lender agrees
that it shall make and extend Loans and Letter of Credit Obligations to Borrowers in an amount such
that the amount of outstanding Loans and Letter of Credit Obligations from each Lender shall equal
such Lender’s respective Pro Rata Share of the Commitments, as modified in this letter amendment to
give effect to such increase, multiplied by the aggregate amount of Loans outstanding and Letter of
Credit Obligations from all Lenders.

     3. 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.

     4. 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;
and the unpaid principal amount of the Loans as of the opening of business on March 30, 2009,
totaled $90,571,073.21.

     5. Representations and Warranties. Each Borrower represents and warrants to Agent and
the Lenders, to induce Agent and New Lender 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.

     6. Conditions Precedent. The amendments set forth in Section 2 of this letter
amendment shall be effective as of the Increase Effective Date set forth above, subject to the
satisfaction of each of the following

- 2 -

 

conditions precedent, in form and substance satisfactory to Agent, on such Increase Effective
Date unless satisfaction thereof is specifically waived in writing by Agent:

     (a) No Default or Event of Default shall be in existence;

     (b) Agent shall have received a duly executed counterpart of this Amendment from each
of the parties hereto;

     (c) Agent shall have received a duly executed counterpart of the New Lender Joinder
Agreement from each of the parties thereto;

     (d) Agent shall have received a duly executed counterpart of that certain Certificate
Regarding Commitment Increase from each of the parties thereto; and

     (e) Agent and Lenders shall have received a legal opinion from counsel to Borrowers in
form and substance acceptable to Agent that the requested Commitment Increase provided for
herein does not violate any Material Contract of any Borrower.

     7. No Novation, etc. Except as otherwise expressly provided in this letter 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 letter
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.

     8. Release of Claims. To induce Agent and New Lender to enter into this letter
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.

     9. 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 letter amendment.

     10. Miscellaneous. This letter amendment shall be part of the Loan Agreement and a
breach of any representation, warranty or covenant herein shall constitute an Event of Default.
Upon the effectiveness of this letter 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 letter amendment. In consideration of Agent’s and the New Lender’s
willingness to enter into this letter amendment, Borrowers jointly and severally, agree to pay, on
demand, all costs and expenses incurred by Agent in connection with the preparation, negotiation
and execution of this letter 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. This
letter amendment shall be effective upon acceptance by Agent (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. This letter amendment shall be binding upon and inure to the benefit of
Agent, Lenders, and Borrowers and their respective successors and assigns. This letter 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 manually executed signature
delivered by a party by facsimile or electronic mail transmission shall be deemed to be an original
signature hereto. Each Borrower agrees to take such further actions as Agent shall

- 3 -

 

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.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL

ASSOCIATION, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:

Title:
	 	/s/ Dan Denton
 

Dan Denton

Director
	 	 

[Acknowledgment and Agreement on following page.]

- 4 -

 

	 	 	 	 	 
	ACKNOWLEDGED AND AGREED:	 	 
	 
	 	 	 	 
	BORROWERS:	 	 
	 
	 	 	 	 
	DELTA APPAREL, INC.	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Deborah H. Merrill
 

Deborah H. Merrill
	 	 
	Title:

	 	VP and CFO	 	 
	 
	 	 	 	 
	M.J. SOFFE, LLC	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Deborah H. Merrill
 

Deborah H. Merrill
	 	 
	Title:

	 	VP and CFO	 	 
	 
	 	 	 	 
	JUNKFOOD CLOTHING COMPANY	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Deborah H. Merrill
 

Deborah H. Merrill
	 	 
	Title:

	 	VP and CFO	 	 
	 
	 	 	 	 
	NEW LENDER:	 	 
	 
	 	 	 	 
	PNC BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Virginia L. Kiseljack
 

Virginia L. Kiseljack
	 	 
	Title:

	 	Senior Vice President	 	 

 

 

SCHEDULE 1.21

to

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

Commitments

	 	 	 	 	 
	Name of Lender	 	Commitment	 
	 
	1. Wachovia Bank, National Association
	 	$	60,000,000	 
	 
	2 The CIT Group/Commercial Services, Inc.
	 	$	20,000,000	 
	 
	3. IDB Bank
	 	$	20,000,000	 
	 
	4. PNC Bank, National Association
	 	$	10,000,000exv10w7w1

EXHIBIT 10.7.1

FIRST AMENDMENT TO YARN SUPPLY AGREEMENT

          This First Amendment to Yarn Supply Agreement (this “First Amendment”) is made as of the 26th
day of June, 2009, by and between Parkdale Mills, Inc., a North Carolina corporation, and Parkdale
America, LLC, a North Carolina limited liability company (collectively, “Parkdale”), and Delta
Apparel, Inc., a Georgia corporation (“Delta”).

          WHEREAS, Parkdale and Delta entered into that certain Yarn Supply Agreement dated as of
January 5, 2005 with respect to the supply of yarn by Parkdale to Delta (the “Agreement”); and

          WHEREAS, Parkdale and Delta desire to amend the Agreement as set forth in this First
Amendment;

          NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

     1. Capitalized terms not otherwise defined in this First Amendment shall have the meanings
ascribed thereto in the Agreement;

     2. The Term of the Agreement is hereby extended until December 31, 2011.

     3. Effective as of July 1, 2009, Exhibits B and C to the Agreement are amended and replaced in
their entirety by Exhibits B and C attached to this First Amendment.

     4. Except as expressly set forth in this First Amendment, all terms and conditions of the
Agreement shall remain in full force and effect. In the event of any conflict between the terms
and conditions of this First Amendment and any of the terms and conditions of the Agreement, the
terms and conditions of this First Amendment shall control.

     5. This First Amendment shall be governed and controlled as to validity, enforcement,
interpretation, construction, and effect, and in all other respects, by the laws of the State of
North Carolina, without regard to principles of conflict of law.

     6. This First Amendment may be executed in multiple counterparts, each of which shall be
deemed to be an original, and all such counterparts shall constitute but one instrument.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective
duly authorized officers as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	PARKDALE MILLS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Charles S. Heilig III
 

Charles S. Heilig III
	 	 
	 

	 	Title:
	 	Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	PARKDALE AMERICA LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Charles S. Heilig III
 

Charles S. Heilig III
	 	 
	 

	 	Title:
	 	Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	DELTA APPAREL, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Robert W. Humphreys
 

Robert W. Humphreys
	 	 
	 

	 	Title:
	 	Chairman and CEO	 	 

 

 

Exhibit B

Purchase Price of Yarn:

     The purchase price for each pound of Yarn delivered shall be calculated in accordance with the
following formula: Purchase Price = [(A + B) ÷ C] + D

	 	 	 
	Where:

	 	A = Cost Price
	 

	 	B = Basis, as set forth in the table below
	 

	 	C = 1.00 — applicable waste factor set forth in the table below (in decimal format)
	 

	 	D = Applicable conversion price set forth in the table below

Basis, Waste Factors, and Conversion Prices

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Conversion
	 	 	 	 	 	 	$ per
	Polyester / Cotton	 	Basis	 	Waste	 	pound
	8/1 50/50 (OES Backing)
	 	*	 	*	 	*
	10/1 50/50 (OES Backing)
	 	*	 	*	 	*
	15/1 50/50 (OES Backing)
	 	*	 	*	 	*
	14/1 50/50 (OES)
	 	*	 	*	 	*
	16/1 50/50(OES)
	 	*	 	*	 	*
	18/1 50/50(OES)
	 	*	 	*	 	*
	20/1 50/50(OES)
	 	*	 	*	 	*
	22/1 50/50(OES)
	 	*	 	*	 	*
	26/1 50/50 (OES)
	 	*	 	*	 	*
	Air Jet
	 	 	 	 	 	 
	20/1 100% AJ
	 	*	 	*	 	*
	16/1 50/50 AJ
	 	*	 	*	 	*
	26/1 50/50 AJ
	 	*	 	*	 	*
	28/1 50/50 AJ
	 	*	 	*	 	*
	100% Open End
	 	 	 	 	 	 
	14/1 100% KPOE
	 	*	 	*	 	*
	16/1 100% KPOE
	 	*	 	*	 	*
	17/1 100% KPOE
	 	*	 	*	 	*
	17.5/1 100% KPOE
	 	*	 	*	 	*
	18/1 100% KPOE
	 	*	 	*	 	*
	19/1 100% KPOE
	 	*	 	*	 	*
	20/1 100% KPOE
	 	*	 	*	 	*
	22/1 100% KPOE
	 	*	 	*	 	*
	24/1 100% KPOE
	 	*	 	*	 	*
	26/1 100% KPOE
	 	*	 	*	 	*
	28/1 100% KPOE
	 	*	 	*	 	*
	30/1 100% KPOE
	 	*	 	*	 	*

 

			
	*	 	Portions of this exhibit have been omitted pursuant to a request for confidential information and
have been filed separately with the Securities and Exchange Commission.

 

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Conversion
	 	 	 	 	 	 	$ per
	Polyester / Cotton	 	Basis	 	Waste	 	pound
	Open End Heather
	 	 	 	 	 	 
	14/1 90/10 KPOE
	 	*	 	*	 	*
	16/1 90/10 KPOE
	 	*	 	*	 	*
	17/1 90/10 KPOE
	 	*	 	*	 	*
	18/1 90/10 KPOE
	 	*	 	*	 	*
	20/1 90/10 KPOE
	 	*	 	*	 	*
	22/1 90/10 KPOE
	 	*	 	*	 	*
	24/1 90/10 KPOE
	 	*	 	*	 	*
	28/1 90/10 KPOE
	 	*	 	*	 	*
	30/1 90/10 KPOE
	 	*	 	*	 	*
	14/1 99/1 KPOE
	 	*	 	*	 	*
	16/1 99/1 KPOE
	 	*	 	*	 	*
	17/1 99/1 KPOE
	 	*	 	*	 	*
	18/1 99/1 KPOE
	 	*	 	*	 	*
	20/1 99/1 KPOE
	 	*	 	*	 	*
	22/1 99/1 KPOE
	 	*	 	*	 	*
	Tri-Blend
	 	 	 	 	 	 
	14/1 50/40/10 Open End
	 	*	 	*	 	*
	16/1 50/40/10 Open End
	 	*	 	*	 	*
	18/1 50/40/10 Open End
	 	*	 	*	 	*
	22/1 50/40/10 Open End
	 	*	 	*	 	*
	26/1 50/40/10 Open End
	 	*	 	*	 	*
	14/1 50/49/1 Open End
	 	*	 	*	 	*
	16/1 50/49/1 Open End
	 	*	 	*	 	*
	18/1 50/49/1 Open End
	 	*	 	*	 	*
	22/1 50/49/1 Open End
	 	*	 	*	 	*
	26/1 50/49/1 Open End
	 	*	 	*	 	*
	Ring Spun
	 	 	 	 	 	 
	16/1 100% KPRS
	 	*	 	*	 	*
	17/1 100% KPRS
	 	*	 	*	 	*
	18/1 100% KPRS
	 	*	 	*	 	*
	19/1 100% KPRS
	 	*	 	*	 	*
	20/1 100% KPRS
	 	*	 	*	 	*
	22/1 100% KPRS
	 	*	 	*	 	*
	26/1 100% KPRS
	 	*	 	*	 	*
	28/1 100% KPRS
	 	*	 	*	 	*
	16/1 100% CPRS
	 	*	 	*	 	*
	18/1 100% CPRS
	 	*	 	*	 	*
	20/1 100% CPRS
	 	*	 	*	 	*
	22/1 100% CPRS
	 	*	 	*	 	*
	30/1 100% CPRS
	 	*	 	*	 	*
	18/1 100% CPRS 50/50
	 	*	 	*	 	*
	20/1 100% CPRS 50/50
	 	*	 	*	 	*
	26/1 100% CPRS 50/50
	 	*	 	*	 	*
	30/1 100% CPRS 50/50
	 	*	 	*	 	*
	40/1 100% CPRS
	 	*	 	*	 	*

 

			
	*	 	Portions of this exhibit have been omitted pursuant to a request for confidential information and
have been filed separately with the Securities and Exchange Commission.

 

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Conversion
	 	 	 	 	 	 	$ per
	Polyester / Cotton	 	Basis	 	Waste	 	pound
	Ring Spun Heather
	 	 	 	 	 	 
	28/1 99/1 KPRS
	 	*	 	*	 	*
	16/1 90/10 KPRS
	 	*	 	*	 	*
	17/1 90/10 KPRS
	 	*	 	*	 	*
	18/1 90/10 KPRS
	 	*	 	*	 	*
	19/1 90/10 KPRS
	 	*	 	*	 	*
	20/1 90/10 KPRS
	 	*	 	*	 	*
	30/1 90/10 KPRS
	 	*	 	*	 	*
	18/1 90/10 CPRS
	 	*	 	*	 	*
	30/1 90/10 CPRS
	 	*	 	*	 	*

 

			
	*	 	Portions of this exhibit have been omitted pursuant to a request for confidential information and
have been filed separately with the Securities and Exchange Commission.

This Exhibit B shall be amended from time to time to add basis, waste factors, and
conversion prices per pound for Yarn Counts required by Delta or any of its Subsidiaries not set
forth above, as agreed to by the parties in their reasonable discretion.

The Cost Price per pound shall be adjusted over the term of this Agreement as described on
Exhibit C and shall be calculated for any given period based on the weighted average of
cotton prices fixed for that period pursuant to Exhibit C. The Basis per pound shall be
adjusted over the term of this Agreement on an annual basis on each anniversary date of the
Agreement.

Cotton Prices:

Parkdale shall purchase cotton at prices determined by Delta in accordance with Exhibit C
attached hereto.

 

			
	*	 	Portions of this exhibit have been omitted pursuant to a request for confidential information and
have been filed separately with the Securities and Exchange Commission.

 

 

Exhibit C

Cotton Pricing:

Parkdale is responsible for purchasing the cotton. Delta is responsible for fixing the cotton
price in accordance with the existing yarn pricing formula in place with the Agreement and the
following procedure:

For each period during the term of the Agreement, Delta shall prior to the respective dates set
forth below (i) deliver fixation orders to Parkdale in writing for cotton at a price per pound or a
range of acceptable prices per pound for the applicable NY futures cover month in multiples of 100
bales or (ii) transfer to a brokerage account of Parkdale an equivalent number of ICE cotton
futures.

Schedule for Cotton Price Fixations

	 	 	 	 	 
	Months	 	Prices to be fixed no later than:	 	Cover Month
	 
	 	 	 	 
	Jan, Feb, Mar

	 	The latest business day closest to
but not exceeding December 25th
	 	March
	 
	 	 	 	 
	Apr, May

	 	The latest business day closest to
but not exceeding March 25th
	 	May
	 
	 	 	 	 
	Jun, Jul

	 	The latest business day closest to
but not exceeding May 25th
	 	July
	 
	 	 	 	 
	Aug, Sep

	 	The latest business day closest to
but not exceeding July 25th
	 	October
	 
	 	 	 	 
	Oct, Nov, Dec

	 	The latest business day closest to
but not exceeding September 24th
	 	December

In the event that the number of bales fixed for any pricing period exceeds the actual cotton
content of the yarn delivered by Parkdale during such period, the excess cotton fixation will be
rolled forward to the next period at the price for the current period and Delta shall reimburse
Parkdale’s carrying costs for the excess cotton fixation until such fixation is exhausted.
Carrying costs are * per bale per month and shall accrue after two weeks of the following period
(e.g. unused cotton on March 31st will be subject to carrying charges if still unused on
April 14th. Accrued carrying costs shall be paid by Delta on a pricing period basis or
upon demand by Parkdale.

 

			
	*	 	Portions of this exhibit have been omitted pursuant to a request for confidential information and
have been filed separately with the Securities and Exchange Commission.

In the event that the actual cotton content of the yarn delivered by Parkdale during such period
exceeds the number of bales fixed for that period Delta may elect to cover the shortfall using the
next period’s fixations at the next period’s price.

For example assume 8,000 bales are fixed for the second period basis May at 50 cents and 5,000
bales are fixed for the third period basis July at 52 cents. The actual cotton consumed for the
second period is 10,000 bales. Delta may elect to utilize fixations for 2,000 bales from the third
period at 52 cents. In this case, fixations for 2,000 bales would be rolled to the second period
making the second period’s price the average of .5040 (8,000 @ .5000 and 2,000 @ .5200). There
would then be fixations for 3,000 bales remaining for the third period at .5200.

In the event that Delta fails to fix the price of cotton for any period prior to the respective
date set forth above and Delta does not elect to roll fixations back, Parkdale shall have the right
to fix the cotton price for that period. If Delta fails to fix the price of cotton for any period
in quantities that are sufficient for Parkdale to fulfill the purchase orders for yarn issued by
Delta for delivery during that period the applicable market price for such excess yarn shall be
equal to the price fixed by Parkdale if Parkdale manufactures such excess yarn from cotton
delivered to it pursuant to futures contracts, or Parkdale’s cost to obtain cotton in the spot
market if Parkdale manufactures such excess yarn from cotton purchased by it in the spot market.

 

 

The amount of cotton bales consumed in the period shall be based on invoice date and shall be
derived using the following formula:

	 	 	 
	 

	 	      ((Y x P) / (1-W))/500
	 
	 	 
	 

	 	      Where:
	 
	 	 
	 

	 	Y = Pounds of Yarn
	 

	 	P = Percent of Cotton
	 

	 	W = Waste Factor in decimal format (for example: 5% would be .05)

	 	 	All fixation orders and executions must be promptly confirmed in writing by any of the respective
representatives listed below or otherwise designated by written notice.

Individuals Responsible for Fixation Orders/Execution:

	 	 	 	 	 
	 

	 	Delta
	 	Parkdale
	 
	 	 	 	 
	 

	 	Will McGhee
	 	Jim Martin
	 

	 	 	 	Gene Frye
	 

	 	 	 	Andy Warlick

 

			
	*	 	Portions of this exhibit have been omitted pursuant to a request for confidential information and
have been filed separately with the Securities and Exchange Commission

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]