EXHIBIT 10.37.2
July 16, 2004
Xx. Xxxxx Xxxx
Chief Executive Officer
Tag-It Pacific, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Dear Colin:
Tag-It Pacific, Inc. ("TPI") and Levi Xxxxxxx & Co. ("LS&CO.") are
parties to an Exclusive Stretch Waist Band Component Supply Agreement, as
amended at various times (as amended, the "AGREEMENT"), under which TPI supplies
to LS&CO. and its manufacturing contractors components and equipment for the
manufacture of stretch waist bands. Capitalized terms used in this letter
agreement (this "EXTENSION LETTER") and not otherwise defined have the meanings
given them in the Agreement.
TPI and LS&CO. have agreed to extend and amend the exclusivity
provisions of the Agreement and to address certain other matters. This Extension
Letter sets out these agreements.
1. EXTENSION. As contemplated by Section 13(b) of the Agreement,
TPI and LS&CO. hereby agree to extend the exclusivity provisions of Section 7 of
the Agreement through November 1, 2006 with respect to all Product Categories
(as such term is amended as provided herein) other than those Product Categories
described in Section 7(b) of the Agreement.
2. NON-US SUPPLY. TPI hereby agrees to supply orders, if any, for
Products (including Additional Program Products) marketed by LS&CO. affiliates
in Europe and Asia. Notwithstanding the foregoing, TPI and LS&CO. recognize
that, under the Pro-Fit License, TPI's right to supply Products and Equipment
for use with respect to garments sold outside the United States may be limited,
and TPI's obligations under this Section 2 shall not extend beyond those
obligations that TPI is permitted to perform under the Pro-Fit License.
3. ADDITIONAL PROGRAM PRODUCTS. For purposes of the Agreement,
through November 1, 2006, "ADDITIONAL PROGRAM PRODUCTS" shall include all types
of waistband components purchased by LS&CO., or its manufacturing contractors
from TPI on or before the date hereof and used by LS&CO., or its contractors, to
manufacture stretch waistbands using the Pro-Fit Technology for inclusion in (i)
all LS&CO. products into which such stretch waistbands have been incorporated on
or before the date hereof (including, without limiting the foregoing, certain
Dockers(R) brand Original Khaki(TM) in addition to the 81 Waist Band Products,
certain Dockers(R) brand denim, and certain Dockers(R) brand proStyle(TM)
including the "46" Men's product lines), and (ii) all LS&CO. products or product
lines with different names for the same pant segments otherwise described in
clause (i). LS&CO. agrees to continue to purchase (or cause its contractors to
purchase) Products (including Additional Program Products, as defined in this
Amendment) from TPI through November 1, 2006, it being understood that LS&CO. is
not making any guarantee of Product volume purchases. LS&CO. also anticipates
that TPI and
LS&CO. will discuss, and that TPI will bring forward for LS&CO.'s evaluation,
other potential applications of the Pro Fit Technology licensed by TPI for
Dockers(r) products.
4. PRODUCT CATEGORIES. Exhibit E to the Agreement is hereby
amended to delete all Women's product categories, all Girl's product categories,
all Infant's product categories, all Men's jeans and all Boy's product
categories. TPI is willing to provide LS&CO. an exclusive with respect to
certain Women's product categories if a separate amendment to the Agreement
providing LS&CO. with an exclusive for such Women's product categories can be
negotiated to TPI's and LS&CO.'s mutual satisfaction and executed no later than
October 15, 2004.
5. DENIM. Section 7(b) of the Agreement is not affected by the
exclusivity extension provided for in Section 1 of this Extension Letter. LS&CO.
does not have exclusivity with respect to the Denim Product Categories, whether
marketed under the Levi's(r) brand, the Dockers(r) brand or otherwise. TPI will
continue, subject to the terms of the Agreement, to supply Products and make
Equipment available to LS&CO. and its contractors on a non-exclusive basis for
Dockers(r) brand garments in the Denim Product Categories on the terms contained
in Section 7(b). TPI is willing to provide LS&CO. an exclusive with respect to
all Denim Product Categories if a separate amendment to the Agreement providing
LS&CO. with an exclusive for the Denim Product Categories can be negotiated to
TPI's and LS&CO.'s mutual satisfaction and executed no later than December 7,
2004. If at any time prior to December 7, 2004, LS&CO. decides not to pursue an
exclusive for Denim Product Categories, LS&CO. shall promptly notify TPI of its
decision and, subject to the immediately following sentence, TPI may supply one
or more third parties with Products and/or Equipment for the Denim Product
Categories. It is understood, however, that TPI will not make waistband
components and Equipment available to be marketed in connection with the Pro-Fit
Technology under the following brands for any product in any of the Denim
Product Categories in any geography through the period ending November 1, 2006:
Xxx
Xxxxxx
Lands' End
JCP Private Label
6. PRODUCT SOURCING. TPI will source all Products and Additional
Program Products from U.S. suppliers or other suppliers who manufacture in
countries of origin such that LS&CO.'s finished goods incorporating Products or
Additional Program Products qualify for favorable duty, quota and tariff
treatment on import into the United States under the Caribbean Basin Initiative,
the Andean Trade Promotion and Drug Eradication Act and the African Growth and
Opportunity Act and in compliance with the Pro-Fit License. LS&CO. will notify
TPI at least three months before LS&CO. places production of relevant garments
with contract manufacturers located in countries where LS&CO. has not previously
placed such production and or where different trade regulations governing
country of origin matters apply.
7. PRIOR CLAIMS. As additional consideration, each of LS&CO. and
TPI agree that it will not xxx or otherwise bring litigation against the other
in respect of claims of any kind relating to the Agreement, the performance by
LS&CO. or TPI under the Agreement, or otherwise relating to the LS&CO./TPI
relationship based on events, transactions or
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communications up to the date of this Extension Letter, provided that this
Section 7 will not limit either party's responsibility, if any, for payment for
Products shipped prior to the date of this Extension Letter, for obsolete
inventory repurchase obligations or for indemnification obligations under the
Agreement or otherwise solely with respect to third party claims.
8. NO OTHER AMENDMENTS. It is understood that, except as
specifically provided, nothing in this Extension Letter amends, modifies or
limits in any way any provision of the Agreement except as specifically
described above, constitutes a waiver by either LS&CO. or TPI of any rights
under the Agreement or under applicable law or limits LS&CO.'s or TPI's ability
to exercise its rights under the Agreement or applicable law. This Extension
Letter is a writing signed by both LS&CO. and TPI amending the Agreement as
contemplated by Section 19 (e) of the Agreement.
* * * * * *
If the terms and provisions of this Extension Letter are acceptable to
you, please indicate your acceptance and approval by signing where indicated
below and returning the signed copy to LS&CO.
Very truly yours,
LEVI XXXXXXX & CO.
By: /S/ XXXXX XXXX
-----------------------------------
Xxxxx Xxxx
Vice President, Global Product
Development and Sourcing
Accepted:
TAG-IT PACIFIC, INC.
By: /S/ XXXXX XXXX
--------------------------
Xxxxx Xxxx
Chief Executive Officer
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