Exhibit 2.2.1
FIRST AMENDMENT TO AMENDED AND RESTATED STOCK
PURCHASE
AGREEMENT AND AGREEMENT REGARDING EARNOUT AMOUNTS FOR BONUS
YEAR 2004 AND INDEMNIFICATION CLAIM
This FIRST
AMENDMENT TO AMENDED AND RESTATED STOCK PURCHASE AGREEMENT AND
AGREEMENT REGARDING EARNOUT AMOUNTS FOR BONUS YEAR 2004 AND
INDEMNIFICATION CLAIM (the “First Amendment”) is
entered into as of November 11, 2004 by and among Delta
Apparel, Inc., a Georgia corporation (“Delta”), M. J.
Soffe Co., a North Carolina corporation (the
“Company”), and James F. Soffe, John D. Soffe, and
Anthony M. Cimaglia (collectively, the
“Shareholders”).
WHEREAS, Delta,
the Company, and the Shareholders entered into that certain Amended
and Restated Stock Purchase Agreement (the “Stock Purchase
Agreement”), dated as of October 3, 2003, pursuant to
which the Shareholders agreed to sell, and Delta agreed to purchase
(through a wholly-owned subsidiary of Delta), all of the
outstanding shares of capital stock of M.J. Soffe Co.;
and
WHEREAS, Delta,
the Company, and the Shareholders desire to amend the definition of
EBITDA contained in the Stock Purchase Agreement and to make an
adjustment to the EBITDA calculation with respect to Bonus Year
2004 (as such term is defined in the Stock Purchase Agreement);
and
WHEREAS, Delta,
the Company, and the Shareholders desire to resolve Delta’s
claim for indemnification by the Shareholders with respect to the
understatement of current accrued liabilities set forth on the
Closing Financial Information (as such term is defined in the Stock
Purchase Agreement); and
WHEREAS,
capitalized terms used herein, unless otherwise defined herein,
shall have the same meanings as given such terms in the Stock
Purchase Agreement;
NOW, THEREFORE, in
consideration of the mutual covenants and conditions set forth
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Delta, the Company,
and the Shareholders hereby agree as follows:
1. The
definition of “EBITDA” contained in Exhibit L to
the Stock Purchase Agreement is hereby deleted in its entirety and
replaced with the following, effective as of October 3,
2003:
“EBITDA means the earnings of the Company
(including income received in the Ordinary Course of Business from
sources other than sales of inventory) before interest expense and
income Taxes, plus depreciation and amortization (including the
addition of depreciation expense that is capitalized in inventory
owned by the Company on the Closing Date and sold by the Company
during the applicable period, but not including any depreciation
expense that is capitalized in any other inventory), determined in
accordance with GAAP consistently applied and using methodologies
that are consistent with those used on the Company’s
opening
balance sheet (which opening balance sheet shall
be prepared in accordance with the methodologies set forth on
Schedule X attached hereto and made a part
hereof).”
2. Delta
hereby agrees that EBITDA with respect to Bonus Year 2004 shall be
increased (from the amount it otherwise would have been) by the
amount of $26,000 for purposes of calculating the EBITDA Earnout
Amount and the Return Rate Earnout Amount with respect to Bonus
Year 2004 (together, the “2004 Earnout
Amounts”).
3. The
Shareholders acknowledge and agree that the current accrued
liabilities of M.J. Soffe Co. at Closing, as reflected in the
Closing Financial Information, were understated by an amount equal
to $1,541,090, as further described in Exhibit A attached
hereto, and that such understatement constituted a breach by the
Shareholders of Section 8.11 of the Stock Purchase Agreement
(the “Breach”). The Shareholders further acknowledge
and agree that, pursuant to the terms of the Stock Purchase
Agreement, Delta is entitled to assert a Claim for indemnification
with respect to the Breach in the amount of $1,541,090 (the
“Clo
