ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement ("AGREEMENT") is made as of January 27, 2005, by

and between Delta Mills, Inc., a Delaware corporation ("SELLER"), and Gibbs

International, Inc., a South Carolina corporation ("BUYER").

RECITALS. Seller desires to sell, and Buyer or its assignee desire to buy,

certain land, improvements, equipment, machinery and related assets from Seller

on the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the recitals, the mutual promises in this

Agreement and other good and valuable consideration, the receipt and sufficiency

of which the parties acknowledge, the parties agree as follows:

1. DEFINITIONS. The following terms shall have the following meanings in this

Agreement:

a. "ASSIGNEE" means any Person that is a wholly-owned subsidiary of Buyer or

is wholly-owned by Jimmy I. Gibbs.

b. "BEATTIE PLANT" means Seller's plant located at 700 North Woods Drive,

Fountain Inn, South Carolina 29644.

c. "EASEMENT" means any recorded or unrecorded easement, right of way,

servitude, encroachment, covenant or condition with respect to the

particular real property.

d. "EFFECTIVE DATE" means January 12, 2005.

e. "ENCUMBRANCE" means any charge, claim, community or other marital property

interest, equitable interest, lien, option, pledge, security interest,

mortgage, deed of trust, right of first option, right of first refusal or

similar restriction.

f. "ENVIRONMENT" means soil, land surface or subsurface strata, surface

waters, groundwaters, drinking water supply, stream sediments, ambient air,

buildings, plant and animal life and any other environmental medium or

natural resource.

g. "ENVIRONMENTAL LAW" means any federal, state or local statute, law, rule,

regulation or order that relates to the protection of human health or the

Environment or that regulates, requires remediation of or requires notices

with respect to any Hazardous Material or the Release or threatened Release

of any Hazardous Material.

h. "ESCROW AGENT" means the law firm of Wyche Burgess Freeman & Parham, P.A.

that is serving as the escrow agent in connection with the transactions

described in this Agreement in accordance with the escrow agreement between

the parties dated January 11, 2005 ("ESCROW AGREEMENT").

i. "HAZARDOUS MATERIAL" means any substance, material or waste which is

regulated in any way by any federal, state or local governmental body,

including any material, substance or waste that is defined as a "hazardous

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waste," "hazardous material," "hazardous substance," "extremely hazardous

waste," "restricted hazardous waste," "contaminant," "toxic waste" or

"toxic substance" under any Environmental Law, and including petroleum,

petroleum products, asbestos, presumed asbestos-containing material or

asbestos-containing material, lead based paint, urea formaldehyde,

polychlorinated biphenyls, mold and any biological agent.

j. "LIABILITY" means any liability or obligation of any kind, character or

description, whether known or unknown, absolute or contingent, accrued or

unaccrued, disputed or undisputed, liquidated or unliquidated, secured or

unsecured, joint or several, due or to become due, vested or unvested,

executory, determined, determinable or otherwise, and whether or not the

same is required to be accrued on any financial statements.

k. "PERSON" means an individual, partnership, corporation, business trust,

limited liability company, limited partnership, joint stock company,

unincorporated association, joint venture, governmental agency or other

entity.

l. "RELEASE" means any release, spill, emission, leaking, pumping, pouring,

dumping, emptying, injection, deposit, disposal, discharge, dispersal,

leaching or migration on or into the Environment or into or out of any

property, including the presence of any Hazardous Material at any location.

2. PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions of this

Agreement, at the applicable Closing, Seller will sell and assign to Buyer,

and Buyer or its Assignee will purchase from Seller, the following assets

(collectively, the "ASSETS"):

a. REAL PROPERTY. The real property consisting of the following three

plants free and clear of all Encumbrances and Easements, except

recorded general utility Easements of non-specific width and location

that do not adversely affect the use or value of the plants

(collectively, the "PLANTS"):

i. The Estes Plant located at 750 Estes Drive, Piedmont, South

Carolina 29673, consisting of approximately 119 acres, and all

associated land, buildings, fixtures, improvements, as-built and

other plans and drawings and maintenance logs ("ESTES PLANT");

ii. The Furman Plant located at 710 North Woods Drive, Fountain Inn,

South Carolina 29644, consisting of approximately 15 acres, and

all associated land, buildings, fixtures, improvements, as-built

and other plans and drawings and maintenance logs (excluding,

however, Lot B shown on the Survey for Delta Mills, Inc. dated

September 7, 2004, a copy of which has been provided by Seller to

Buyer, which shall not be conveyed by Seller to Buyer) ("FURMAN

PLANT"); and

iii. The Catawba Plant located at 1007 West Finger Street Extension,

Maiden, North Carolina 28650, consisting of approximately 33

acres, and all associated land, buildings, fixtures,

improvements, as-built and other plans and drawings and

maintenance logs ("CATAWBA PLANT").

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b. EQUIPMENT. The machinery, equipment and parts described on SCHEDULE 1

attached to this Agreement and all associated operations and other

manuals, layouts, plans, drawings and maintenance and operating logs

("EQUIPMENT"). Buyer shall have the right to abandon in place some or

all of the Equipment located at the Beattie Plant and described on

SCHEDULE 3 attached to this Agreement, and all such abandoned

Equipment shall remain the property of Seller. If Buyer or its

Assignee does not purchase the Estes Plant or the Catawba Plant, Buyer

shall have the right to abandon in place some or all of the Equipment

located at such Plant and described on SCHEDULE 3, and all such

abandoned Equipment shall remain the property of Seller.

c. AS IS SALE. Except as expressly provided otherwise in this Agreement,

Seller's sale of the Assets to Buyer shall be AS IS, WHERE IS. WITH

RESPECT TO THE EQUIPMENT, EXCEPT FOR THE WARRANTIES EXPRESSLY PROVIDED

IN THIS AGREEMENT, SELLER HEREBY DISCLAIMS ALL WARRANTIES, WHETHER

EXPRESS OR IMPLIED, WHETHER CREATED BY CONTRACT OR BY OPERATION OF

LAW, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS

FOR A PARTICULAR PURPOSE.

3. EXCLUDED ASSETS. Buyer is not purchasing the machinery and equipment

described on SCHEDULE 2 attached to this Agreement ("EXCLUDED ASSETS").

4. PURCHASE PRICE.

a. Subject to the potential reductions described in this SECTION 4, the

total purchase price for all of the Assets ("PURCHASE PRICE") shall be

$7,000,000.00. Seller has already deposited $700,000.00 with Escrow

Agent pursuant to the Escrow Agreement.

b. If Buyer gives Seller notice pursuant to SECTION 5.B. OR SECTION 7.F.

below that Buyer will not purchase one or more of the Plants, the

Purchase Price shall be reduced by the amount listed below for each

such Plant:

i. Estes Plant, $1,000,000.00;

ii. Furman Plant, $1,900,000.00; and

iii. Catawba Plant, $400,000.00.

c. If Buyer gives Seller notice pursuant to SECTION 7.F. below that Buyer

will not purchase the Equipment, the Purchase Price shall be reduced

by $3,700,000.00.

d. Seller shall pay and be responsible for all ad valorem property taxes

with respect to the Assets for all periods before the applicable

Closing; PROVIDED that Buyer and Seller shall pro rate the 2005 ad

valorem property taxes for the Plants Buyer purchases as of the date

of the applicable Closing. Seller shall pay its pro rated amount to

Buyer at the applicable Plant Closing.

e. Buyer shall be entitled to determine the allocation of the Purchase

Price to the Assets, and Seller and Buyer shall use that allocation

for all tax purposes, including the filing of IRS form 8594.

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f. Seller shall pay and shall be responsible for all recording fees, deed

stamps and other transfer taxes with respect to the sale of the

Plants.

g. Buyer is not assuming any Liabilities.

5. REVIEW PERIOD.

a. Buyer shall have a period of 90 days ("REVIEW PERIOD") after the

Effective Date to conduct its investigation and due diligence with

respect to the Plants and to close in accordance with SECTION 5.B.

below. During the Review Period, Seller shall provide to Buyer and its

contractors and agents at no charge reasonable access to all of the

Plants, including all buildings and other improvements, in order to

allow them to conduct, at Buyer's expense, surveys, environmental

studies and tests (including Phase I, and possible subsequent Phase

II, borings, reviews and reports) and other due diligence with respect

to the Plants. Promptly after the date hereof, Seller shall deliver to

Buyer all (i) surveys (to the extent in the possession of Seller or

its agents), (ii) environmental reports and other documents and

records evidencing, mentioning or relating to any environmental

condition, investigation, proceeding or any non-compliance with any

applicable Environmental Law, (iii) title commitments and policies (to

the extent in the possession of Seller or its agents), deeds vesting

title to the Plants in Seller (to the extent in the possession of

Seller or its agents), and ad valorem property tax notices with

respect to any of the Assets, and (iv) building plans and drawings

relating to the Plants (collectively, "DUE DILIGENCE DOCUMENTS");

PROVIDED that Buyer shall return to Seller all such documents relating

to any Plant Buyer does not purchase. Additionally, promptly after the

date hereof, Seller shall disclose to Buyer in writing all

environmental conditions, investigations, proceedings and

non-compliance with any applicable Environmental Law relating to the

Assets and not expressly disclosed in the Due Diligence Documents, to

the best of the knowledge of Seller's Director of Engineering, John

Hall ("SELLER'S CERTIFICATION").

b. Notwithstanding any other provision of this Agreement, Buyer may give

written notice to Seller during the Review Period that it will not

purchase one or more of the Plants based on an environmental matter, a

title matter or a survey-related matter that Buyer determines in its

reasonable judgment adversely affects the particular Plant, including

(i) any failure of a Plant to comply with applicable Environmental

Laws, (ii) any failure of Seller to remove in compliance with

applicable Environmental Law any barrel or other container of any

Hazardous Material, (iii) the existence of any Easement that adversely

affects the value or use of the particular Plant, and (iv) the

commencement of any condemnation proceedings, or the giving of any

notice of proposed condemnation proceedings, with respect to a Plant

or part of a Plant; PROVIDED that the existence of asbestos within the

buildings at a Plant shall not constitute a basis for Buyer to give

that notice; PROVIDED further that the absence of a "no further

action" letter from the applicable government agency with respect to

the remediation in connection with the oil tank leak at the Furman

Plant shall be a failure of the Furman Plant to comply with applicable

environmental law under SUBPART B.I. above and shall constitute a

basis for Buyer to give that notice. No such exclusion shall apply to

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any Equipment located at such Plant. If Buyer gives Seller such a

notice, the parties shall negotiate in good faith for at least 14 days

regarding a mutually satisfactory resolution of the matters set forth

in that notice.

c. Seller discloses to Buyer that the Estes Plant and the Furman Plant

are currently subject to fee-in lieu of property taxes ("FILOT")

transactions and that legal title to each of the Estes Plant and the

Furman Plant is currently held in the name of the county in which such

Plant is located. Notwithstanding anything to the contrary set forth

in this Agreement, Seller's obligations under this Agreement are

contingent upon Seller's obtaining the approval of the applicable

county to release the applicable Plant from the existing FILOT

arrangements by quitclaiming the Plant to Seller. Seller shall use its

reasonable efforts to obtain those quitclaim deeds. If, despite

Seller's reasonable efforts, Seller is unable to obtain any such

quitclaim deed, Seller shall not be required to transfer the

particular Plant to Buyer, and Seller shall have no liability under

this Agreement with respect to that failure.

d. If Buyer gives Seller written notice under SECTION 5.B. above that

Buyer will not purchase one or more of the Plants based on a title

matter or a survey related matter (and that title matter or survey

related matter is "material" as defined below), or if Seller does not

obtain a quitclaim deed from the applicable county for one or more

Plants as provided in SECTION 5.C. above, Seller shall promptly

reimburse Buyer for all of Buyer's reasonable, documented,

out-of-pocket due diligence expenses with respect to the Plant or

Plants described in the notice, including the costs of environmental

tests and reports, title searches and surveys, up to a total of

$17,000.00 with respect to the Estes Plant, $10,000.00 with respect to

the Catawba Plant, and $10,000.00 with respect to the Furman Plant.

Notwithstanding the foregoing, if (i) Buyer's notice under SECTION

5.B. is based solely on Seller's failure to obtain one or both of the

quitclaim deeds, (ii) Seller delivers to Buyer a written request for

an extension of time to obtain one or both of the quitclaim deeds

within five days after Buyer gives the written notice under SECTION

5.B., and (iii) Buyer does not agree to delay the effectiveness of its

written notice under SECTION 5.B. for 90 days while Seller continues

to seek to obtain one or both of the quitclaim deeds, Seller shall not

be required to reimburse Buyer for any due diligence expenses with

respect to the Estes Plant or the Furman Plant. If Seller reimburses

Buyer for expenses under this SECTION 5.D., if requested by Seller,

Buyer shall deliver to Seller all environmental reports, title search

results and surveys covered by that reimbursement.

e. For purposes of SECTION 5.D., a title matter or survey related matter

shall be deemed to be "MATERIAL" if (i) it materially adversely

affects the use or value of the applicable Plant, (ii) it is Seller's

not having or not being able to transfer to Buyer in accordance with

this Agreement exclusive, good and marketable fee simple title to the

Plant, (iii) it is the existence of a condemnation or eminent domain

proceeding, (iv) it is the existence of any Encumbrance, or (v) it is

the existence of any Easement other than recorded general utility

Easements of non-specific width and location that do not adversely

affect the use or value of the Plant.

6. ACCESS.

a. During the period between the Effective Date and the applicable Plant

Closing with respect to the Estes, Furman and Catawba Plants, Seller

shall provide to Buyer and its potential customers, contractors and

agents at no charge reasonable access to the Plants and the Equipment

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in those Plants and adequate lighting and electricity to allow Buyer

to evaluate, show, market, disassemble and remove that Equipment and

to evaluate, show and market the Plants. With respect to any Plant

that Buyer does not purchase, at Buyer's request, Seller shall extend

the period described in the preceding sentence for up to 240 days

after the Equipment Closing Date, as determined by Buyer; PROVIDED

that as long as Seller continues to own one or more Plants, starting

180 days after the Equipment Closing Date, Buyer shall pay Seller in

advance each week an amount equal to the product of $1.00 and the

number of square feet in each such Plant that the Equipment continues

to occupy; PROVIDED further that if Buyer agrees to delay the

effectiveness of its written notice pursuant to SECTION 5.D. above,

Buyer's obligation to pay Seller the amounts specified in this

sentence shall not start until 270 days after the Equipment Closing

Date. Buyer shall not disassemble or remove any of the Equipment until

the Equipment Closing occurs.

b. From and after the Effective Date up to a period of 180 days after the

Equipment Closing Date, Seller shall provide to Buyer and its

potential customers, contractors and agents at no charge reasonable

access to the Equipment at the Beattie Plant and adequate lighting and

electricity to allow Buyer to evaluate, show, market, disassemble and

remove that Equipment. At Buyer's request, Seller shall extend that

180-day period for up to another 6