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Exhibit 10.17

                                   YARN PURCHASE AGREEMENT


        This YARN PURCHASE AGREEMENT is entered into as of January 1, 1999
between PARKDALE AMERICA, LLC, hereinafter referred to as "Parkdale", and CONE
MILLS CORPORATION, hereinafter referred to as "Cone".

        Parkdale agrees to sell and Cone agrees to purchase yarns meeting the
specifications spelled out in attached Schedule A beginning April 1, 1999 and
continuing through December 31, 2004.

IT IS AGREED:

1.      QUANTITIES.

               Cone's projected weekly requirements for each of the yarn counts
        are stated in Schedule A for karded cotton ringspun. Parkdale agrees to
        supply up to these quantities at the conversion prices set forth in
        Schedule A plus any additional requirements at those prices. Actual
        weekly shipments will be coordinated by the schedulers for the parties.
        Cone agrees to purchase from Parkdale all requirements for these yarns
        in excess of internal production. Cone is not required to order any
        minimum amount of yarn while this agreement remains in effect.

               Should Cone's requirements increase significantly over
        projections stated in Schedule A or should Cone desire additional denim
        yarns in excess of its internal production at the expiration of its
        other outside denim yarn contracts, Parkdale shall have a right of first
        refusal for all such additional denim yarns that it is willing to supply
        at competitive prices and quality in the quantity desired.
        Notwithstanding the above, the parties agree that nothing contained
        herein prevents Cone from entering into a joint venture outside the
        United States which manufactures these yarns. However, should Cone
        invest in such a joint venture it will not use its production of these
        yarns in the manufacture of denim in the United States unless Cone owns
        50% or more of the joint venture so as to make the joint venture the
        equivalent of internal capacity. Moreover, the parties agree that
        nothing contained herein prevents Cone from otherwise increasing its
        internal yarn capacity for these yarns. Should Cone decide to build a
        new plant to increase such capacity, it will give Parkdale written
        notice of at least one year prior to





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        the expected completion date. In addition, the parties agree that
        nothing contained herein prevents Cone from contracting with third
        parties for the purchase of fabric containing karded cotton ringspun
        yarn without regard to the yarn source or from contracting with third
        parties to weave fabric containing karded cotton ringspun yarn supplied
        to Cone or assigned by Cone pursuant to this agreement.

               Cone will provide Parkdale with a rolling three months projection
        of yarn requirements covered by this agreement. The parties agree that
        such projections are good faith estimates only and actual requirements
        may vary significantly from the projections. Therefore, nothing in this
        agreement constitutes a "take or pay" obligation on the part of Cone.

2.      PRICES.

        Yarn prices per pound shall be determined as follows:

        o      Cost of cotton content is based upon cotton price as fixed by
               Cone plus no basis points times waste factor as stated in
               Schedule A.

        o      Conversion costs as listed in Schedule A.

3.      COTTON PRICE FIXATIONS AND REIMBURSEMENT PAYMENTS.

               Except as otherwise may be agreed by the parties for the year
        1999, Parkdale is responsible for purchasing the cotton. Cone is
        responsible for fixing the cotton price. For 1999, the transition from
        Cone's previously acquired cotton position to Parkdale's responsibility
        for purchasing cotton shall be managed by Marvin Woolen of Cone or as
        otherwise designated in writing by Cone.

        3.A    All fixation orders and executions of orders must be confirmed in
               writing. Cone will provide fixation orders by contract months
               that are currently being traded and in multiples of 100 bales.

        3.B    In the event that the cotton content of the yarn deliveries are
               less than the number of bales fixed for the quarter, the average
               of the excess cotton fixation will be rolled forward to the next
               quarter having an open cotton position. If the cotton content of
               the yarn






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               deliveries is greater than the bales fixed for the quarter,
               cotton fixation will be rolled back from the upcoming quarter.

        3.C.   Should Cone fail to exercise its right to fix the price as
               contemplated by paragraph 3.A above, Parkdale has the right to
               fix the cotton price for the coming quarter's yarn requirements.

        3.D    The individual responsible for price fixation orders and
               executions shall be Marvin Woolen or as otherwise designated in
               writing by Cone.

        3.E    Parkdale agrees to provide a status report each week of yarn
               deliveries against cotton price fixations.

        3.F.   With respect to any cotton rebate or reimbursement
               program, such as the Step 2 program, which may be or become in
               effect during this agreement, the parties agree as follows:
               Cone shall receive the benefit as it relates to cotton
               contained in the yarn purchased by Cone pursuant to this
               agreement.  Each month Parkdale will send Cone a report
               detailing the net pounds of cotton contained in these yarns
               eligible for payment reimbursement.  Net pounds will be
               calculated by subtracting returned pounds from shipped pounds.
               The net pounds will then be multiplied by the reimbursement
               payment to determine the total amount payable to Cone each
               week.  Within ten (10) days of the end of each quarter,
               Parkdale will write Cone a check reimbursing the total payment
               reimbursement for the quarter.  Should any cotton rebate or
               reimbursement program be in effect for which this calculation
               and reimbursement to Cone is not workable, then the parties
               agree that a procedure will be developed to assure that Cone
               shall receive an economic benefit as close to what would be
               realized under this paragraph as possible.

4.      TERM.

               Unless terminated sooner upon the mutual agreement of the
        parties, this agreement shall remain in effect until December 31, 2004,
        and shall continue for successive renewal terms of one calendar year
        each thereafter, unless at least one year in advance of the commencement
        of the renewal term a party gives notice to the other party of its
        election to terminate the agreement.






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5.      ASSIGNMENT.

               None of the rights or obligations under this agreement shall be
        assigned or deleted without the express written consent of each party,
        which consent shall not be unreasonably withheld. Notwithstanding this,
        Cone shall have the right to assign all or a portion of the entitlements
        under this agreement to a third party greige weaver who will produce
        fabric for the account of Cone. Any such third party would be required
        to agree to abide by the confidentiality provisions of paragraph 15
        below, and Cone and Parkdale will otherwise develop a mutually agreeable
        procedure to protect the confidential nature of this transaction.

6.      SPECIFICATIONS.

               Any changes in specifications of the yarn counts covered in
        Schedule A that result in an increase or decrease in Parkdale's
        manufacturing costs must be mutually agreed to in writing upon before
        commencement of manufacture. These changes will also be reflected in the
        yarn prices.

7.      PAYMENT.

               All invoices are payable net cash thirty (30) days in U. S.
        dollars.  Terms are F.O.B. Parkdale's Hillsville, Virginia plant
        unless otherwise mutually agreed to by the parties.

8.      COVER OPTION.

               Should Parkdale for any reason be unable to fulfill the
        conditions of this contract, Parkdale will be responsible for purchasing
        yarn from a reliable supplier and delivering such yarn to Cone under the
        terms and conditions of this contract. Parkdale shall notify Cone thirty
        (30) days in advance should this become necessary.

9.      WARRANTY.

               Parkdale warrants that the yarn supplied hereunder shall conform
        to the specifications set forth in Schedule A. These specifications may
        be changed from time to time upon agreement in writing between the
        parties. In addition, yarn supplied hereunder will meet the requirements
        of Levi Strauss. Parkdale further represents and warrants that it shall
        pass good title to the yarn, free and clear of any liens, security
        interests, claims or other




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        encumbrances, to Cone and the yarn shall be free from defects of
        material and workmanship. With respect to any defects in the yarn used
        by Cone, Cone shall be entitled to damages in an amount necessary to
        make Cone whole limited to Cone's cost excluding profits. Parkdale
        further represents and warrants that the use or sale of the yarn
        delivered hereunder will not infringe the claims of any United States
        patent covering the yarn. Parkdale further represents and warrants that
        all yarn delivered hereunder is or will be produced in compliance with
        requirements of the Fair Labor Standards Act of 1938 as amended.

10.     INSPECTION AND REJECTION.

               Cone will notify Parkdale as soon as possible if yarn deliveries
        vary from the specifications contained herein. All non-conforming yarns
        will be returned to Parkdale.

11.     INVENTORY AVAILABILITY.

               Parkdale agrees to maintain an inventory of each of the yarns
        covered by this contract equal to three (3) days requirements.

12.     PACKAGING.

               Yarn shall be delivered on pallets. All packaging materials will
        be returned to Parkdale at their expense. Yarn performance data will
        accompany each shipment.

13.     ADDITIONS OR DELETIONS OF YARN COUNTS.

               Cone may elect to discontinue a given yarn count or to add a yarn
        count to this contract. However, negotiations on waste factors and
        conversion costs must be mutually agreed upon prior to adding a yarn
        count. All such changes will be reflected on a revised Schedule A.

14.     GOVERNING LAW.

               This agreement has been executed in the State of North Carolina
        and the parties agree that the rights and obligations of the parties
        shall be governed by North Carolina law.








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15.     CONFIDENTIALITY.

               Neither Parkdale nor Cone shall use or disclose to any third
        party (other than any assignee by Cone permitted under paragraph 5
        above) any information related to this agreement or the transactions
        contemplated hereby, except as is required to be disclosed by applicable
        law or becomes generally available to the public other than through a
        breach of this agreement, or for transactions specifically contemplated
        by this agreement.



        Each of the parties hereto has caused this Agreement to be executed by
its appropriate officer as of the day and year first above written.


PARKDALE AMERICA, LLC                       CONE MILLS CORPORATION

By:   /s/  W. Duke Kimbrell                 By:    /s/  John L. Bakane
      ---------------------                        -------------------
            W. Duke Kimbrell                            John L. Bakane

Title: Chief Executive Officer              Title:  Chief Executive Officer



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Schedule A containing technical specifications, committed quantities, and
conversion prices has been omitted because of its competitive nature. A copy
will be furnished to the Commission upon request.