PILLOWTEX
CORPORATION
0000 Xxxx Xxx
Xxxxxx, Xxxxx 00000-0000
214/000-0000, FAX 214/000-0000
October 22, 1996
VIA FEDERAL EXPRESS
Mr. Xxx Xxxxxxxx
Span America Medical Systems, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
RE: LICENSE AND DISTRIBUTION AGREEMENT
Dear Xxx:
This letter will acknowledge and confirm our mutual agreement to terminate
the License and Distribution Agreement (the "Agreement") dated as of
September 30, 1986 by and between Pillowtex Corporation ("Pillowtex") and
Span America Medical Systems, Inc. ("Span"), such termination to be
effective as of October 31, 1996.
In consideration of such termination and the mutual convenants contained
herein, Span and Pillowtex agree as follows:
1. Pillowtex agrees, for a period of 24 months from the effective
date of the termination of the Agreement, not to manufacture or
sell any foam-related product to Target or JC Penney, or any of
their current affiliates other than those foam-related products
manufactured or sold by or for Span. In addition, Pillowtex
agrees that its cost from Span for products sold to JC Penney
and Target shall be increased effective as of November 4,1996 as
detailed on Attachment A hereto. Pillowtex further agrees to
fully absorb such cost increase.
2. Following termination of the Agreement, Pillowtex may place orders
for foam-related products from Span on such terms and conditions
as the parties agree, and Span agrees to use reasonable best efforts
to fill such orders according to the terms and conditions thereof.
3. Notwithstanding termination of the Agreement, Span agrees to fulfill
all unfilled purchase orders delivered to Span by Pillowtex prior
to termination of the Agreement.
Span America Medical Systems, Inc.
October 22, 1996
Page Two
4. The parties acknowledge that the Non-Employment provisions of
paragraph 17 and the Confidentiality provisions of paragraph 16
of the Agreement shall survive termination for a period of one
year following the effective date of such termination. All other
rights and obligations of the parties under the Agreement are
expressly terminable hereby.
If this letter correctly reflects our agreement, please so indicate in the
space below.
Sincerely,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
President, Pillowtex Division
CNB/ra
AGREED AND ACCEPTED:
Span America Medical Systems, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President/CEO
