SECOND AMENDMENT TO SUPPLY AGREEMENT
THIS IS A SECOND AMENDMENT TO SUPPLY AGREEMENT dated as of May 13, 2002
(the "Second Amendment"), between CONE XXXXX CORPORATION, a North Carolina
corporation ("Cone"), and LEVI XXXXXXX & CO., a Delaware corporation ("LS&CO.").
B A C K G R O U N D
Cone and LS&CO. are parties to a Supply Agreement, dated as of March
30, 1992, as amended by a First Amendment to Supply Agreement dated as of April
15, 1992 (as amended, the "1992 Agreement"). In view of the increasing
globalization of fabric and apparel product manufacturing, potential changes in
duty and tariff policies and other developments in their respective businesses,
they wish to amend the 1992 Agreement to modify the requirements and exclusivity
features of the 1992 Agreement. This Second Amendment is intended to be and is
an "instrument in writing signed by both parties" as contemplated by Section 9
of the 1992 Agreement.
CONE AND LS&CO. AGREE AS FOLLOWS:
1. AMENDMENT TO SECTION 1
1.1 AMENDMENT TO SECTION 1.6. Section 1.6 of the Agreement is amended
by replacing "XXX Denim" with "01 Denim." As a result of this amendment to a
defined term, all uses in the Agreement of "XXX Denim" are now changed to "01
Denim."
2. AMENDMENTS TO SECTION 2
2.1 AMENDMENT TO HEADING. The heading of Section 2 of the Agreement is
amended by replacing "Requirements Agreement" with "01 Denim Supply".
2.2 AMENDMENT TO SECTION 2.1. Section 2.1 of the Agreement is amended
in its entirety as follows:
(a) Cone agrees to manufacture and sell to LS&CO. all 01 Denim LS&CO.
may order from Cone.
(b) From the date of this Second Amendment until March 30, 2003, Cone
shall sell 01 Denim only to LS&CO. After March 30, 2003, Cone may sell
01 Denim to customers other than LS&CO.
(c) From the date of this Second Amendment until March 30, 2003,
LS&CO. shall purchase from Cone all 01 Denim that LS&CO. may require
in its worldwide businesses. After March 30, 2003, LS&CO. may purchase
and accept deliveries of 01 Denim from suppliers other than Cone, and
use such denim in 501(R)jeans and other products for sale in any or
all of its worldwide businesses. In addition, if at any time prior to
March 30, 2003 material additional tariffs, duties, imposts or other
charges are imposed on the import of 01 Denim from the United States
to locations where denim is imported for use in producing 501(R)jeans
to be sold in LS&CO.'s European, Middle East and Africa region, LS&CO.
may purchase and accept deliveries of 01 Denim from suppliers other
than Cone, and use such denim in 501(R)jeans and other products for
sale in that region.
(d) Notwithstanding Sections 2.1(a) and 2.1(c), and for clarity,
LS&CO. may at any time engage in identifying alternative suppliers in
all regions of 01 Denim or other denims for 501(R)jeans ("Alternative
Suppliers"), developing with and evaluating fabrics from those
Alternative Suppliers, purchasing and accepting deliveries of fabric
from Alternative Suppliers for pre-production and production testing,
constructing prototype and other jeans of such fabric during such
evaluation and testing processes and ultimately distributing those
test products through whatever means LS&CO. may choose. In addition,
LS&CO. may at any time pre-book capacity and place orders with
Alternative Suppliers; the limitations on alternative sourcing
described in Sections 2.1(a) and 2.1(c) limit only acceptance of
deliveries from Alternative Suppliers for commercial production
purposes.
(e) Affiliates and licensees of LS&CO., including, without limitation,
Levi Xxxxxxx & Co. Europe S.A., buy 01 Denim from Cone. In addition,
Cone may create subsidiaries or enter into joint ventures, alliances
or other arrangements through which entities other than Cone Xxxxx
Corporation produce and/or sell 01 Denim. For example, Cone and LS&CO.
are concurrently with this Second Amendment concluding arrangements
relating to production of 01 Denim by a party in Europe with whom Cone
intends to enter into a joint venture. For clarity, it is understood
that, for purposes of this Section 2, "LS&CO." means LS&CO. and its
affiliates, and "Cone" means Cone and any subsidiaries or other third
parties who produce and sell 01 Denim under agreement with Cone.
3. REPRESENTATIONS AND WARRANTIES
3.1 BY LS&CO. LS&CO. represents and warrants to Cone that: (i) LS&CO.
has full corporate power and authority to enter into and perform its obligations
under this Second Amendment and the Agreement; (ii) each of this Second
Amendment and the Agreement as amended by this Second Amendment has been duly
executed and delivered by LS&CO. and constitutes the legal, valid and binding
obligation of LS&CO., enforceable against it in accordance with its terms; and
(iii) LS&CO. is not a party to, subject to or bound by any agreement, contract,
lease, mortgage, indenture or other document of any kind (including any credit,
note purchase, stock purchase, receivables purchase, receivables servicing or
other financing agreement) or any law, judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body that would prevent,
or that would be breached or violated by, or require the consent of any third
party to, the execution and delivery of this Second Amendment or the
consummation of the transactions contemplated by the Agreement as amended by
this Second Amendment.
3.2 BY CONE. Cone represents and warrants to LS&CO. that: (i) Cone has
full corporate power and authority to enter into and perform its obligations
under this Second Amendment and the Agreement; (ii) each of this Second
Amendment and the Agreement as amended by this Second Amendment has been duly
executed and delivered by Cone and constitutes the legal, valid and binding
obligation of Cone enforceable against it in accordance with its terms; and
(iii) Cone is not a party to, subject to or bound by any agreement, contract,
lease, mortgage, indenture or other document of any kind (including any credit,
note purchase, stock purchase, receivables purchase, receivables servicing or
other financing agreement) or any law, judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body that would prevent,
or that would be breached or violated by, or require the consent of any third
party to, the execution and delivery of this Second Amendment or the
consummation of the transactions contemplated by the Agreement as amended by
this Second Amendment. Cone acknowledges that nothing in this Agreement commits
LS&CO. to order or buy from Cone any 01 Denim or any other product, in any
quantity or at any time, in the future, or to continue to produce and market
products containing 01 Denim.
4. NO OTHER MODIFICATIONS
Except as expressly described in this Second Amendment, Cone and
LS&CO. do not intend to and are not modifying any other provisions of the
Agreement, and the Agreement, as amended by this Second Amendment, remains in
full force and effect.
* * * *
IN WITNESS WHEREOF, the parties have caused this Second Amendment to
be executed by their duly authorized officers as of the date and year first
above written.
CONE XXXXX CORPORATION
By: /s/Xxxx X. Xxxxx
Xxxx X. Xxxxx
Executive Vice President
and Chief Financial Officer
LEVI XXXXXXX & CO.
By: /s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Senior Vice President
and Chief Financial Officer
