STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement"), is entered into as of
October 3, 2003, by and among DELTA APPAREL, INC., a Georgia corporation
("Delta"), MJS ACQUISITION COMPANY, a North Carolina corporation ("MJS";
together with Delta, each a "Pledgor" and collectively, the "Pledgors"), and
CONGRESS FINANCIAL CORPORATION (SOUTHERN), a Georgia corporation, as agent for
Delta Lenders (as defined below) and as agent for Soffe Lenders (as defined
below) (in either or both capacities, "Secured Party").
W I T N E S S E T H:
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WHEREAS, Secured Party, the financial institutions party thereto as
lenders (collectively, "Soffe Lenders") and MJS are parties to that certain Loan
and Security Agreement, dated the date hereof (as the same now exists and may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced from time to time, the "Soffe Loan Agreement"), and other agreements,
documents and instruments referred to therein or at any time executed and/or
delivered in connection therewith or related thereto, including, but not limited
to, the Financing Agreements (as defined in the Soffe Loan Agreement) and this
Agreement (all of the foregoing, together with the Soffe Loan Agreement, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced from time to time, being collectively referred to
herein as the "Soffe Financing Agreements") pursuant to which Soffe Lenders may
make loans and advances and provide other financial accommodations to MJS as set
forth therein; and
WHEREAS, as an inducement to Secured Party and Soffe Lenders to enter
into the Soffe Loan Agreement and to make the loans thereunder, Delta has agreed
to guarantee the obligations of MJS to Secured Party and Soffe Lenders pursuant
to that certain Guarantee dated the date hereof (as amended, modified,
supplemented, extended or restated from time to time, the "Soffe Loan Agreement
Guarantee"), by Delta and SAIM, LLC in favor of Secured Party, on behalf of
Secured Party and Soffe Lenders, and has agreed to secure its obligations under
the Soffe Loan Agreement Guarantee as provided herein; and
WHEREAS, Secured Party, the financial institutions party thereto as
lenders (collectively, "Delta Lenders"; together with Soffe Lenders,
collectively, "Lenders") and Delta are parties to that certain Amended and
Restated Loan and Security Agreement, dated the date hereof (as the same now
exists and may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time, the "Delta Loan Agreement"; together
with the Soffe Loan Agreement, each a "Loan Agreement" and collectively, the
"Loan Agreements"), and other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, including, but not limited to, the Financing Agreements (as
defined in the Delta Loan Agreement) and this Agreement (all of the foregoing,
together with the Delta Loan Agreement, as the same now exist or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced from
time to time, being collectively referred to herein as the "Delta Financing
Agreements"; together with the Soffe Financing Agreements, each a "Financing
Agreement" and collectively, the "Financing Agreements") pursuant to which Delta
Lenders may make loans and advances and provide other financial accommodations
to Delta as set forth therein; and
WHEREAS, as an inducement to Secured Party and Delta Lenders to enter
into the Delta Loan Agreement and to make the loans thereunder, MJS has agreed
to guarantee the obligations of Delta to Secured Party and Delta Lenders
pursuant to that certain Guarantee dated the date hereof (as amended, modified,
supplemented, extended or restated from time to time, the "Delta Loan Agreement
Guarantee"; together with the Soffe Loan Agreement Guarantee, each a "Guarantee"
and collectively, the "Guarantees"), by MJS and SAIM, LLC in favor of Secured
Party, on behalf of Secured Party and Delta Lenders, and has agreed to secure
its obligations under the Delta Loan Agreement Guarantee as provided herein; and
WHEREAS, MJS is a Subsidiary of Delta, and each Pledgor has determined
that it will realize substantial direct and indirect benefits as a result of the
loans and other financial accommodations extended to the other Pledgor pursuant
to the Loan Agreements, and such Pledgor's execution, delivery and performance
of this Agreement are within such Pledgor's corporate or other purposes and are
in the best interests of such Pledgor; and
WHEREAS, it is a condition precedent to the execution and delivery of
the Soffe Loan Agreement by Secured Party and Soffe Lenders and the execution
and delivery of the Delta Loan Agreement by Secured Party and Delta Lenders and
the extension of the loans and other financial accommodations to the Pledgors
under the Loan Agreements that each Pledgor execute and deliver this Agreement
to Secured Party; and
WHEREAS, in consideration for, among other things, the execution and
delivery of the Soffe Loan Agreement by Secured Party and Soffe Lenders and the
execution and delivery of the Delta Loan Agreement by Secured Party and Delta
Lenders, and to secure the full and prompt payment and performance of all of the
Secured Obligations (as hereinafter defined), each Pledgor has agreed to pledge
to Secured Party, for the benefit of Secured Party, Soffe Lenders and Delta
Lenders, the Capital Stock owned by such Pledgor (collectively, the "Pledged
Interests") set forth next to such Pledgor's name on Schedule 1 attached hereto
in each of the Persons referenced thereon (collectively, the "Pledged
Companies"), which are all the equity interests owned by such Pledgor in the
Pledged Companies, except as set forth herein, in order to ensure and secure the
prompt performance of all covenants, agreements and liabilities of the parties
under the Financing Agreements (each, a "Financing Party" and collectively, the
"Financing Parties") and the prompt repayment of any and all now existing or
hereafter arising Obligations (as defined in the Loan Agreements) and other
obligations of the Financing Parties under the Financing Agreements (including,
without limitation, any interest, fees or other charges in respect of the Loan
Agreements and the other Financing Agreements that would accrue but for the
filing of an insolvency proceeding with respect to any Pledgor, whether or not
such claim is allowed in such insolvency proceeding);
NOW, THEREFORE, for and in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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1. Defined Terms. Capitalized terms used herein shall have the meanings
ascribed to such terms in the Delta Loan Agreement to the extent not otherwise
defined or limited herein; provided, however, that upon the termination of the
Delta Loan Agreement, capitalized terms used herein shall have the meanings
ascribed to such terms in the Soffe Loan Agreement.
2. Warranty. Each Pledgor hereby represents and warrants to Secured
Party that (a) such Pledgor owns the Pledged Interests as set forth on Schedule
1, which Pledged Interests constitute the percentage of the issued and
outstanding equity interests of the Pledged Companies shown on Schedule 1
attached hereto, and are, except for the security interest created hereby and
the security interest granted in favor of Sellers in the Pledged Interests owned
by Delta in MJS, free and clear of all liens; (b) the Pledged Interests set
forth on Schedule 1 constitute all of the Capital Stock owned by any Pledgor,
except for (a) Delta's equity interests in Delta Apparel Honduras, S.A., a
Honduras corporation, Delta Cortes, S. A., a Honduras corporation ("Cortes") and
Delta Campeche, S.A. de C.V., a Mexico corporation ("Campeche"), of which only
sixty-five percent (65%) of the Capital Stock of such entity owned by Delta is
being pledged by Delta; (c) such Pledged Interests are duly authorized, validly
issued, fully paid and nonassessable; (d) such Pledgor has the unencumbered
right and power to pledge such Pledged Interests; and (e) upon execution and
delivery of this Agreement and delivery of the certificates representing the
Pledged Interests owned by Pledgors, all actions necessary or desirable, in the
opinion of Secured Party, to be taken by Pledgors to perfect, establish the
first priority of, or otherwise protect, the security interest of Secured Party
in the Pledged Interests, and the proceeds thereof, have been duly taken.
Additionally, each Pledgor hereby represents and warrants to Secured Party that
this Agreement has been duly executed and delivered by such Pledgor and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
3. Security Interest. As security for the full and prompt payment and
performance of the Obligations (as defined in the Loan Agreements), the
Guaranteed Obligations (as defined in the Guarantees) and the other covenants,
agreements and liabilities of the Pledgors under the Loan Agreements and all of
the obligations of each Financing Party to Secured Party under (i) this
Agreement, (ii) the Delta Loan Agreement Guarantee, (iii) the Soffe Loan
Agreement Guarantee, and (iv) other Financing Agreements and any extensions,
renewals or amendments to any of the foregoing, however created, acquired,
arising or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing, or due or to become due, whether arising before, during or
after the initial or any renewal term of the Soffe Loan Agreement or the Delta
Loan Agreement or after the commencement of any case with respect to either
Pledgor under the United States Bankruptcy Code or any similar statute
(including, without limitation, the payment of interest and other amounts which
would accrue and become due but for the commencement of 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 Secured Party or Lenders, together with all other now
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existing or hereafter arising Guaranteed Obligations (as defined in the
Guarantees) (all of the foregoing now existing or hereafter arising obligations
being referred to, collectively, as the "Secured Obligations"), each Pledgor
hereby unconditionally pledges, transfers, conveys, grants and assigns to
Secured Party, for the benefit of Secured Party and Lenders, a continuing
security interest in and security title to all of the following property now
owned or at any time hereafter acquired by such Pledgor or in which such Pledgor
now has, or may acquire in the future, any right, title or interest thereto
(collectively, the "Pledged Collateral"):
(a) the Pledged Interests and all substitutions therefor and
replacements thereof, all proceeds and products thereof and all rights
relating thereto, including, without limitation, any certificates
representing the Pledged Interests, the right to receive any
certificates representing any of the Pledged Interests, all warrants,
options, share appreciation rights and other rights, contractual or
otherwise, in respect thereof and of all dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in addition to, in substitution of, on
account of or in exchange for any or all of the Pledged Interests;
(b) all of such Pledgor's rights, powers and remedies (but not
such Pledgor's obligations) under the limited liability company
operating agreements of the Pledged Companies that are limited
liability companies (collectively, the "Operating Agreements") and
under the partnership agreements of the Pledged Companies that are
general or limited partnerships (collectively, the "Partnership
Agreements"); and
(c) to the extent not otherwise included, all proceeds and
products of any and all of the foregoing.
Each Pledgor has delivered to and deposited with Secured Party (a) certificates
representing the Pledged Interests owned by such Pledgor, to the extent such
Pledged Interests are represented by certificates, and (b) undated stock powers
or certificate powers endorsed in blank with respect to such certificates as
security for the payment and performance of all of the Secured Obligations;
provided, however, that the certificates representing the Pledged Interests
owned by Delta in Cortes and Campeche and undated stock powers or certificate
powers endorsed in blank with respect to such certificates shall be provided as
required by the Delta Loan Agreement. In the case of uncertificated limited
liability company or partnership interests of any Pledgor, such Pledgor shall
cause the name of Secured Party to be registered on the books and records of
such limited liability company or partnership, using appropriate notations so
that any Person examining such books and records would be notified of such
Pledgor's pledge of its uncertificated interest in the limited liability company
or partnership as Pledged Collateral to Secured Party. In addition, each Pledgor
hereby authorizes the filing of appropriate Uniform Commercial Code financing
statements covering the Pledged Collateral and with such information required by
the Uniform Commercial Code for the sufficiency or filing office acceptance of
such financing statements. Each Pledgor agrees that a carbon, photographic or
other reproduction of this Agreement signed by such Pledgor or of a financing
statement shall be sufficient as a financing statement and may be filed as a
financing statement in any and all jurisdictions. It is the intention of the
parties hereto that record and beneficial ownership of the Pledged Collateral,
including, without limitation, all voting, consensual and dividend rights, shall
remain in the Pledgors until the occurrence of an Event of Default and until
Secured Party shall notify any Pledgor of Secured Party's exercise of voting and
consensual rights to the Pledged Collateral pursuant to Section 11 hereof.
4. Operating Agreements and Partnership Agreements. Anything herein to
the contrary notwithstanding, each applicable Pledgor shall for so long as it
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shall remain a member or liable under any Operating Agreement or a partner under
any Partnership Agreement, observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with and pursuant to the terms and provisions thereof. For Pledged Collateral
where the applicable Operating Agreement or Partnership Agreement provides that
all limited liability company or partnership interests, as applicable, issued
thereunder shall be certificated, the applicable Pledgor or Pledgors shall not
amend, supplement or otherwise modify (or consent to any such amendment,
supplement or modification of) the terms of such Operating Agreement or such
Partnership Agreement, as the case may be, so as to provide for the issuance of
uncertificated limited liability company or partnership interests, as
applicable, without the prior written consent of Secured Party. For Pledged
Collateral where the applicable Operating Agreement or Partnership Agreement, as
the case may be, does not provide that all limited liability company or
partnership interests, as applicable, issued thereunder shall be certificated,
the applicable Pledgor or Pledgors hereby represent and warrant to Secured Party
that such Pledged Collateral (a) is not dealt in or traded on securities
exchanges or in securities markets, (b) does not constitute investment company
securities, and (c) is not held by such Pledgor or Pledgors in a Securities
Account. In addition, the articles or certificates of organization, the
Operating Agreements, the Partnership Agreements and other agreements governing
any of the uncertificated Pledged Collateral do not provide that such Pledged
Collateral may be certificated or that such Pledged Collateral are securities
governed by Article 8 of the Uniform Commercial Code as in effect in any
relevant jurisdiction.
5. Additional Shares. In the event that, during the term of this
Agreement:
(a) any stock dividend, stock split, reclassification, readjustment or
other change is declared or made in the capital structure of any Pledged
Company, or any new Pledged Interests or other equity interests are issued by
such Pledged Company, all new, substituted, and additional shares, or other
securities, shall be issued to the applicable Pledgor and shall be promptly
delivered to Secured Party, together with a duly executed Pledge Agreement
Supplement in substantially the form of Annex 1 hereto (the "Pledge Agreement
Supplement") identifying such additional Pledged Interests to be held by Secured
Party under the terms of this Agreement, and with undated powers endorsed in
blank by the applicable Pledgor, and shall thereupon constitute additional
Pledged Interests to be held by Secured Party under the terms of this Agreement,
or in the case of a new uncertificated limited liability company interest or
uncertificated partnership interest, such Pledgor shall cause the name of
Secured Party to be registered on the books and records of such limited
liability company or partnership, as the case may be, using appropriate
notations so that any Person examining such books and records would be notified
of such Pledgor's pledge of its uncertificated interest in the limited liability
company or partnership interest as Pledged Collateral to Secured Party; and
(b) any subscriptions, warrants or any other rights or options shall be
issued in connection with the Pledged Interests, all new Capital Stock or other
securities acquired through such subscriptions, warrants, rights or options
shall thereupon constitute Pledged Interests to be held by Secured Party under
the terms of this Agreement, and, to the extent such Capital Stock or other
securities are represented by certificates, such certificates shall be promptly
delivered to Secured Party, together with appropriate undated powers endorsed in
blank by the applicable Pledgors and shall thereupon constitute Pledged
Interests to be held by Secured Party under the terms of this Agreement.
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6. Event of Default. Upon the occurrence and during the continuation of
an Event of Default (as defined in the Loan Agreements), Secured Party may sell
or otherwise dispose of any of the Pledged Interests at one or more public or
private sales or make other commercially reasonable disposition of the Pledged
Interests or any portion thereof after ten (10) calendar days' notice to any
Pledgor, and Secured Party may credit bid and purchase the Pledged Interests or
any portion thereof at any public sale. The proceeds of the public or private
sale or other disposition first shall be applied to the reasonable costs of
Secured Party incurred in connection with the sale, expressly including, without
limitation, any costs under Section 9 hereof, and then to the Obligations as
provided in the Loan Agreements, subject to the provisions of the Intercreditor
Agreement. In the event the proceeds of the sale or other disposition of the
Pledged Interests are insufficient to satisfy the Secured Obligations, each
Pledgor shall remain jointly and severally liable for any such deficiency.
7. Additional Rights of Secured Party. In addition to its rights and
privileges under this Agreement or any other Financing Agreement, Secured Party
shall have all the rights, powers and privileges of a secured party under the
Uniform Commercial Code as in effect from time to time in any applicable
jurisdiction.
8. Continuing Security Interest; Termination; Return of Pledged
Interests to the Pledgors. This Agreement shall create a continuing security
interest in the Pledged Collateral and shall terminate only when (a) the Secured
Obligations have been indefeasibly paid in full in cash or otherwise satisfied
or collateralized to the satisfaction of Secured Party and Lenders and (b) the
financing arrangements of Secured Party and Lenders with Delta and MJS and the
Loan Agreements and the Commitments thereunder have been terminated, in each
case to the satisfaction of Secured Party and Lenders. Upon such termination,
this Agreement and Secured Party's security interest and security title
hereunder shall terminate, and Secured Party shall promptly return the remaining
Pledged Interests and all rights received by Secured Party as a result of its
possessory interest in the Pledged Interests to the appropriate Pledgors,
subject to the provisions of the Subordination Agreement.
9. Disposition of Pledged Interests by Secured Party. Some or all of
the Pledged Interests are not registered or qualified under the various Federal
or state securities laws of the United States and disposition thereof after an
Event of Default may be restricted to one or more private (instead of public)
sales in view of the lack of such registration. Each Pledgor understands that
upon such disposition, Secured Party may approach only a restricted number of
potential purchasers and further understands that a sale under such
circumstances may yield a lower price for the Pledged Interests than if the
Pledged Interests were registered and qualified pursuant to Federal and state
securities laws and sold on the open market. Each Pledgor, therefore, agrees
that:
(a) if Secured Party shall, pursuant to the terms of this Agreement,
sell or cause the Pledged Interests or any portion thereof to be sold at a
private sale, Secured Party shall have the right to rely, in good faith, upon
the advice and opinion of any nationally recognized brokerage or investment firm
(but shall not be obligated to seek such advice and the failure to do so shall
not be considered in determining the commercial reasonableness of such action)
as to the best manner in which to offer the Pledged Interests for sale and as to
the best price reasonably obtainable at the private sale thereof; and
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(b) such reliance shall be conclusive evidence that Secured Party has
handled such disposition in a commercially reasonable manner.
10. Pledgors' Obligations Absolute. The obligations of the Pledgors
under this Agreement shall be direct and immediate and not conditional or
contingent upon the pursuit of any remedies against any other Person, nor
against other security or liens available to Secured Party or any Lender. Each
Pledgor hereby waives any right to require that an action be brought against any
other Person or to require that resort be had to any security or to any balance
of any deposit account or credit on the books of Secured Party or Lender in
favor of any other Person prior to the exercise of remedies hereunder, or to
require action hereunder prior to resort by Secured Party to any other security
or collateral for the Secured Obligations.
11. Voting Rights.
(a) Upon the occurrence and during the continuation of an Event of
Default, subject to compliance with applicable law, (i) Secured Party may, at
its option, and without notice to or demand on any Pledgor and in addition to
all rights and remedies available to Secured Party under any other agreement, at
law, in equity, or otherwise, exercise all voting rights, and all other
ownership or consensual rights of the Pledged Collateral owned by such Pledgor,
but under no circumstances is Secured Party obligated by the terms of this
Agreement to exercise such rights, and (ii) each Pledgor hereby appoints Secured
Party as such Pledgor's true and lawful attorney-in-fact and IRREVOCABLE PROXY
to vote the Pledged Collateral owned by such Pledgor in any manner Secured Party
deems advisable for or against all matters submitted or which may be submitted
to a vote of shareholders, members or partners, as the case may be. The
power-of-attorney granted hereby is coupled with an interest and shall be
irrevocable.
(b) For so long as any Pledgor shall have the right to vote the Pledged
Collateral owned by it, such Pledgor covenants and agrees that it will not,
without the prior written consent of Secured Party, and without the receipt by
Secured Party of adequate protection, vote or take any consensual action with
respect to such Pledged Collateral which would adversely affect the rights of
Secured Party or the value of the Pledged Interests.
12. Notices. All notices, requests and demands hereunder shall be given
in the form and manner and to the addresses set forth in the Guarantees.
13. Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon Pledgors and
their respective successors and assigns and inure to the benefit of and be
enforceable by Secured Party, Lenders and their successors and assigns, except
that Pledgors may not assign its rights under this Agreement and any other
document referred to herein without the prior written consent of Secured Party.
14. Amendments in Writing. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of each
Pledgor and Secured Party. Secured Party shall not, by any act, delay, omission
or otherwise be deemed to have expressly or impliedly waived any of its rights,
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powers and/or remedies unless such waiver shall be in writing and signed by an
authorized officer of Secured Party. Any such waiver shall be enforceable only
to the extent specifically set forth therein. A waiver by Secured Party of any
right, power and/or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right, power and/or remedy which Secured Party would
otherwise have on any future occasion, whether similar in kind or otherwise.
15. Survival of Provisions. All representations, warranties and
covenants of each Pledgor contained herein shall survive the execution and
delivery of this Agreement.
16. Integration. This Agreement, any supplements hereto, and any
instruments or documents delivered or to be delivered in connection herewith
represents the entire agreement and understanding concerning the subject matter
hereof among the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.
17. Severability of Provisions. If any provision of this Agreement is
held to be invalid or unenforceable, such invalidity or unenforceability shall
not invalidate this Agreement as a whole, but this Agreement shall be construed
as though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
18. Section Headings. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
19. Governing Law. The validity, interpretation and enforcement of this
Agreement and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of Georgia without giving effect to principles of
conflicts of law or other rule of law that would result in the application of
the law of any jurisdiction other than the State of Georgia.
20. Secured Party. The powers conferred on Secured Party hereunder are
solely to protect its interest in the Pledged Collateral and shall not impose
any duty upon Secured Party to exercise any such powers. Except for the safe
custody of any Pledged Collateral in its actual possession and the accounting
for moneys actually received by Secured Party pursuant hereto, Secured Party
shall have no duty with respect to the Pledged Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any of the Pledged Collateral. Each reference herein to any right
granted to, benefit conferred upon or power exercisable, exercised, or action
taken by Secured Party shall be deemed to be a reference to, or be deemed to
have been so taken, as the case may be, by Secured Party in its capacity as
agent pursuant to the Loan Agreements for the benefit of itself and Lenders, all
as more fully set forth in the Loan Agreements.
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21. Counterparts, Etc. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Agreement by telefacsimile shall have the same force and
effect as the delivery of an original executed counterpart of this Agreement.
Any party delivering an executed counterpart of any such agreement by
telefacsimile shall also deliver an original executed counterpart, but the
failure to do so shall not affect the validity, enforceability or binding effect
of such agreement.
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IN WITNESS WHEREOF, the undersigned parties hereto have
executed this Agreement by and through their duly authorized officers, as of the
day and year first above written.
PLEDGORS: DELTA APPAREL, INC., a Georgia corporation
By: /s/ Herbert M. Mueller
---------------------------------------------
Title: Vice President and CFO
------------------------------------------
MJS ACQUISITION COMPANY, a North
Carolina corporation
By: /s/ Herbert M. Mueller
---------------------------------------------
Title: Vice President
------------------------------------------
SECURED PARTY: CONGRESS FINANCIAL CORPORATION
(SOUTHERN), as agent
By:
---------------------------------------------
Title:
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ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges receipt of a copy of the Stock
Pledge Agreement dated as of October 3, 2003 (the "Stock Pledge Agreement"),
(ii) waives any rights or requirement at any time hereafter to receive a copy of
the Stock Pledge Agreement in connection with the registration of any Pledged
Collateral (as defined therein) in the name of Congress Financial Corporation
(Southern), as agent for Soffe Lenders and as agent for Delta Lenders (in either
or both capacities, "Secured Party") or its nominee or the exercise of voting
rights by Secured Party, (iii) consents and agrees to the pledge by the Pledgors
(as defined therein) of the Pledged Collateral pursuant to the Stock Pledge
Agreement and to all of the other terms and provisions of the Stock Pledge
Agreement, (iv) irrevocably waives any breach or default under its articles of
incorporation, articles of organization, by laws or operating agreement, as
applicable, as a result of the execution, delivery and performance by the
Pledgors and Secured Party of the Stock Pledge Agreement, and (v) advises
Secured Party that a pledge of the Pledged Collateral has been registered on the
books and records of the undersigned and in the name of Secured Party and agrees
to so register any additional equity interests of the undersigned which may be
hereafter pledged to Secured Party as provided in the Stock Pledge Agreement.
PLEDGED COMPANIES: MJS ACQUISITION COMPANY
By: /s/ Herbert M. Mueller
----------------------------------
Name: Herbert M. Mueller
Title: Vice President
SAIM, LLC
By: MJS Acquisition Company, its sole
member
/s/ Herbert M. Mueller
--------------------------------------
Name: Herbert M. Mueller
Title: Vice President
DELTA APPAREL HONDURAS, S.A.
By: /s/ Herbert M. Mueller
----------------------------------
Name: Herbert M. Mueller
Title: Vice Presdient
DELTA CORTES, S.A.
By: /s/ Herbert M. Mueller
-----------------------------------
Name: Herbert M. Mueller
Title: Vice President
DELTA CAMPECHE, S.A. DE C.V.
By: /s/ Herbert M. Mueller
------------------------------------
Name: Herbert M. Mueller
Title: Vice President
SCHEDULE 1
TO
STOCK PLEDGE AGREEMENT
PLEDGED INTERESTS
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Number Percentage of
of Shares/ Outstanding
Pledgor Name Pledged Company Type / Class of Certificate Units Shares / Units
Equity Interest Number(s) Pledged Pledged
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Delta Apparel, Inc. MJS Acquisition Company 100%
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MJS Acquisition Company SAIM, LLC 100%
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Delta Apparel, Inc. Delta Apparel Honduras, S.A. capital stock 1 1,622 65%
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Delta Apparel, Inc. Delta Cortes, S.A. 65%
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Delta Apparel, Inc. Delta Campeche, S.A., de C.V. 65%
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ANNEX 1
STOCK PLEDGE AGREEMENT SUPPLEMENT
This Pledge Agreement Supplement, dated as of _____________,
200__, is delivered pursuant to Section 5(a) of the Pledge Agreement described
below. The undersigned hereby agrees that this Pledge Agreement Supplement may
be attached to the Stock Pledge Agreement dated as of October 3, 2003 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Pledge Agreement;" the terms defined therein and not otherwise defined herein
are used herein as therein defined), by and among Delta Apparel, Inc., MJS
Acquisition Company (collectively, the "Pledgors") and Congress Financial
Corporation (Southern), a Georgia corporation, as agent for Soffe Lenders and as
agent for Delta Lenders (in either or both capacities, "Secured Party"), and
that the additional interests and the additional "Pledged Companies" listed on
this Pledge Agreement Supplement shall be and become part of the Pledged
Interests pledged by the Pledgors to Secured Party in the Pledge Agreement and
part of the Pledged Companies under the Pledge Agreement, respectively, and
shall secure all Secured Obligations thereunder.
The undersigned hereby certifies that the representations and
warranties set forth in Section 2 of the Pledge Agreement of the undersigned are
true and correct as to the Pledged Interests listed herein and as of the date
hereof.
[PLEDGOR], a ____________ corporation
By:
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Title:
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SCHEDULE 1(A)
TO
PLEDGE AGREEMENT SUPPLEMENT - ANNEX 1
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Pledgor Name Pledged Company Type / Class of Certificate Number
Equity Interest Number(s) of Shares/ Units Shares / Units
Pledged Pledged
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