FIRST AMENDMENT TO YARN SUPPLY AGREEMENT
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 Xxxxx, 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 XXXXX, INC. | ||||||
By: Name: |
/s/ Xxxxxxx X. Xxxxxx III
|
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Title: | Executive Vice President | |||||
PARKDALE AMERICA LLC | ||||||
By: Name: |
/s/ Xxxxxxx X. Xxxxxx III
|
|||||
Title: | Executive Vice President | |||||
DELTA APPAREL, INC. | ||||||
By: Name: |
/s/ Xxxxxx X. Xxxxxxxxx
|
|||||
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 Xxxxxxx |
||||||
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 Xxxxxxx |
||||||
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
xxxxx 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 xxxxx 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 xxxxx 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 xxxxx are fixed for the second period basis May at 50 cents and 5,000
xxxxx are fixed for the third period basis July at 52 cents. The actual cotton consumed for the
second period is 10,000 xxxxx. Delta may elect to utilize fixations for 2,000 xxxxx from the third
period at 52 cents. In this case, fixations for 2,000 xxxxx 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 xxxxx 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 xxxxx 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 XxXxxx | Xxx Xxxxxx | |||
Xxxx Xxxx | ||||
Xxxx Xxxxxxx |
* | 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 |