1
TECHNICAL SERVICES AND LICENSE AGREEMENT
This AGREEMENT is made on 1998 between:
1. DYERSBURG CORPORATION, a company organized and existing under the laws
of the State of Tennessee with its registered office at 0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx, 00000-0000 Xxxxxx Xxxxxx of America
(DYERSBURG).
2. PT DYERSBURG TEXMACO FLEECE, a limited liability company established
and existing under the laws of the Republic of Indonesia, with its
principal office at [*], Indonesia (the Company).
RECITALS
A. Dyersburg and PT Texmaco Jaya entered into a Shareholders' Agreement on
[*] (the SHAREHOLDERS' AGREEMENT) pursuant to which they will establish the
Company as a joint venture company for the purpose of manufacturing and selling
circular knit fabric (the BUSINESS).
B. Dyersburg and its Affiliates have available to them extensive expertise
and certain technical know-how and technical information relating to the
Business.
C. The Parties agree that it is in the interests of the Company for
Dyersburg to provide technical and other forms of assistance to the Company from
time to time in connection with the conduct of the Business.
D. For that purpose Dyersburg has agreed to license to the Company the
Know-how (as hereinafter defined) and to provide the Company the Technical
Services (as hereinafter defined) on the terms and conditions set out in this
Agreement.
IT IS AGREED as follows.
2
2
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the Recitals and Schedule), the following
definitions shall apply unless the context requires otherwise.
FORCE MAJEURE EVENT means any event beyond the control of the Parties which was
not reasonably foreseeable at the relevant time and which prevents or hinders in
a material way the carrying out by either Party of its obligations under this
Agreement, including but not limited to, war, hostilities, revolution
(substitution of a new system of government by means of violent uprising), or by
reason of any law, decree, regulation or policy of the Government of the
Republic of Indonesia or any sub-division thereof or because of any act of God.
KNOW-HOW means the expertise, technical knowledge and technical information
possessed by Dyersburg with respect to the manufacture and sale of Licensed
Products set forth in Schedule 1 hereto.
LICENSED PRODUCTS shall mean the full range of circular knit fleece fabrics
produced by Dyersburg from time to time during the term hereof.
SECONDEE means each person employed by Dyersburg or by one of its Affiliates,
the services of whom are to be provided to the Company on secondment in
accordance with this Agreement.
TECHNICAL SERVICES means the advice, management resources, training, personnel,
information and other assistance set forth in Schedule 1 hereto.
1.2 IMPORTATION OF DEFINITIONS FROM SHAREHOLDERS' AGREEMENT
Unless the context otherwise requires, terms defined in the Shareholders'
Agreement have the same meaning when used in this Agreement.
3
3
1.3 INTERPRETATION
Clause 1.2 of the Shareholders' Agreement shall apply as if set out in full in
this Agreement.
2. LICENSE/TECHNICAL SERVICES
(a) From and after the date of this Agreement, Dyersburg agrees to
grant to the Company an exclusive license and permission to use the Know-how for
manufacture and sale of the Licensed Products in Indonesia.
(b) The Know-how and all documents, materials and other data and
information pertaining thereto shall be delivered by Dyersburg to the Company
during the term hereof.
(c) Dyersburg agrees to provide, or through its Affiliates procure the
provision of, Technical Services to the Company reasonably required in
connection with the Business.
(d) Modifications and improvements in the Know-how or Licensed Products
made by the Company or Dyersburg during the term hereof shall be made available
to the other and shall be deemed to be included in the definition of Know-how
and Licensed Products for the purposes of this Agreement.
3. REPRESENTATIONS OF DYERSBURG; INDEMNIFICATION
3.1 OWNERSHIP OF KNOW-HOW
Dyersburg is the owner of the Know-how and has full right, power and authority
to license the Know-how to the Company in accordance with the terms of this
Agreement. There is no infringement action, lawsuit or claim that asserts that
Dyersburg's use of the Know-how violates or infringes the rights of others and
Dyersburg is not in any way making use of any confidential information or trade
secrets of any person in connection with its use of the Know-how.
3.2 INDEMNIFICATION
Dyersburg agrees to defend, indemnify and hold harmless the Company for any
claim directly or indirectly relating to, resulting from or arising out of any
breach of its representations made in Clause 3.1 above.
4
4
4. OBLIGATION OF THE PARTIES
4.1 OBLIGATION OF DYERSBURG
Without limiting Clause 2, as part of the Technical Services, Dyersburg shall
provide, or cause to be provided by one or more of its Affiliates, to the
Company (on secondment or otherwise) the assistance of management personnel as
agreed between the parties from time to time during the term hereof.
4.2 OBLIGATIONS OF THE COMPANY
Except to the extent that Dyersburg may otherwise be permitted to do so under
Indonesian law, the Company shall:
(a) obtain and at all times maintain all licences of the Company;
(b) obtain all visas, work permits, resident, exit and re-entry
permits, and all appropriate government permits for each person provided under
Clause 4.1 while in Indonesia; and
(c) obtain and at all times maintain its corporate existence and all
necessary registration, licences and approvals needed to carry out the Business
in Indonesia
5. TERM
Subject to any clauses which are expressed to survive termination, this
Agreement shall remain in full force and effect from the date hereof unless and
until terminated pursuant to Clause 10.
6. REMUNERATION
6.1 TECHNICAL SERVICES FEES FOR FUTURE PRODUCTION
The Company shall:
(a) reimburse Dyersburg and/or its Affiliates for all out-of-pocket
costs and expenditures incurred by it with respect to the Technical Services
provided to the Company under this Agreement including, but not by way of
limitation, travel and related expenses of Dyersburg
5
5
personnel providing services to the Company and the cost of any raw materials
purchased by Dyersburg for the benefit of the Company; and
(b) for a period of three years from the Commencement Date, and
thereafter, as agreed between Dyersburg and the Company, pay to Dyersburg a fee
of $0.25 per meter of fabric manufactured by the Company; provided, such fee
shall not apply to waste and trial production fabric and fabric which is not
consistent with commercially acceptable standards that is sold for less than its
standard cost to produce.
This Clause 6.1 shall survive termination of this Agreement. For the avoidance
of any doubt, the Parties agree that if this Agreement is terminated within the
first three years following the Commencement Date and the Company or any
Affiliate of the Company continues to produce fabric anywhere in the World, the
Company shall pay to Dyersburg a fee of $0.25 per meter of circular knit fabric
manufactured by the Company or any Affiliate of the Company anywhere in the
World for a period of three years from the Commencement Date.
6.2 CURRENCY OF PAYMENT
Reimbursement pursuant to Clause 6.1 shall be in United States Dollars or any
other currency agreed by the Parties, and shall be made by telegraphic transfer
to a bank account designated by Dyersburg from time to time or in such other
manner as may be agreed by the Parties from time to time.
6.3 RECORDS
The Company shall maintain adequate and proper records and accounts of revenues
and expenses of its operation and the Business.
7. LIMITATION ON LIABILITY
Neither Dyersburg nor any of its Affiliates shall be liable for any loss or
damage caused by or in the provision of its services (whether by its employees,
Secondees or otherwise).
6
6
8. INDEMNITY
8.1 INDEMNITY AGAINST LIABILITIES FOR INJURY OR DEATH OF SECONDEE
The Company shall indemnify Dyersburg on demand against any loss, cost, charge,
liability or expense Dyersburg (or any Affiliate, or officer or employee of
Dyersburg or its Affiliates) may sustain or incur as a direct or indirect
consequence of the personal injury or death of any Secondee.
8.2 INDEMNITY AGAINST ACTIONS
The Company shall indemnify on demand Dyersburg, its Affiliates and any
Secondees against, including but not limited to, all actions, proceedings,
damages, costs, charges or expenses taken against, or payable by, Dyersburg in
arising from the provision of Technical Services under this Agreement.
8.3 CLARIFICATION OF PERSONAL INJURY AND THIRD PARTY
In this Clause 8, for the avoidance of any doubt, PERSONAL INJURY includes fatal
injury and disease and THIRD PARTY means any person other than the parties to
this Agreement, and includes without prejudice to the generality of the
foregoing, servants and agents of Dyersburg.
9. ASSIGNMENT
Dyersburg shall be entitled to assign all its rights and obligations under this
Agreement to an Affiliate of Dyersburg by giving written notice to the Company.
10. TERMINATION
10.1 EVENTS OF TERMINATION
(a) Either Party may terminate this Agreement with immediate effect by
written notice to the other Party if any of the following occurs:
7
7
(i) if the other Party breaches a provision of this
Agreement and has not remedied that breach within 30 days after service
of notice by the non-defaulting Party of its intention to terminate
this Agreement under this Clause 10.2 giving adequate particulars of
the alleged default;
(ii) if the other Party becomes insolvent or goes into
liquidation, including without limitation, any petition, application or
proceeding under applicable laws relating to bankruptcy or related
matters or, with respect to that Party, any event provided for in
Article 114 to Article 124 of the Law No. 1 of 1995 regarding Company
Law (other than a voluntary liquidation for the purposes of merger or
re-organization) or a receiver, liquidator (or equivalent official) is
appointed in respect of one third or more of that Party's assets; or
(iii) the other Party has any of its material assets,
operation or undertaking wholly or partially seized, confiscated or
expropriated by the court.
(b) Dyersburg may terminate this Agreement with immediate effect by
written notice to the Company if any of the following occurs:
(i) if Texmaco has committed a Default under the
Shareholders' Agreement and has not remedied such Default within 30
days after service of notice by Dyersburg of its intention to terminate
this Agreement under this Clause 10.1(b) giving adequate particulars of
the alleged Default; or
(ii) if Texmaco has terminated the Shareholders' Agreement
pursuant to Section 20.3 thereof.
10.2 ACCRUED RIGHTS
Termination of this Agreement in accordance with this Clause 10 shall not affect
the accrued rights and obligations of either Party hereto arising prior to the
date of such termination or expiration.
8
8
10.3 WAIVER OF ARTICLE 1266
The Parties waive Article 1266 of the Indonesian Civil Code to the extent that
if requires a judicial order to give effect to the termination of this
Agreement.
10.4 FORCE MAJEURE
Neither Party shall be liable for any delay in performance where a Force Majeure
Event exists for a period of 30 consecutive days and that Force Majeure Event
continues for a further consecutive period of 30 days after a Party has given
written notice to the other of the existence the Force Majeure Event. At the end
of such period the Parties agree to resume their respective obligations under
this Agreement.
11. TAXES
Should the Company be required to withhold under the laws and regulations of,
and applicable treaties entered into by, the Republic of Indonesia any taxes
with respect to any amounts due to be paid to Dyersburg hereunder, the Company
shall make such withholding and account to the competent Indonesian authority in
respect of the amount so withheld. Within 10 days following the date of payment
of such taxes to the competent Indonesian authority, the Company shall deliver
to Dyersburg an official receipt evidencing the payment of such taxes.
12. NO AGENCY OR PARTNERSHIP
In the performance of the Technical Services, Dyersburg and its Affiliates shall
act as an independent contractor and not as agent of the Company. This Agreement
does not constitute any Party the agent of another or imply that the Parties
intend constituting a partnership or other form of association in which any
Party may be liable for the acts or omissions of another. Neither Party has
authority to pledge the credit of the other.
9
9
13. NOTICES
Any notice given under this Agreement:
(a) must be in writing addressed to the intended recipient at the
address shown below or the address last notified by the intended recipient to
the sender:
DYERSBURG:
DYERSBURG CORPORATION
15720 Xxxx X. Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Xxxxxx Xxxxxx of America
Attention: Xxxxxxx X. Xxxxxxxxxx
Fax: x0 000 000-0000
THE COMPANY:
PT DYERSBURG TEXMACO FLEECE
[*]
[*]
[*]
Indonesia
Attention: [*]
Fax: [*]
(b) must be signed by a person duly authorized by the sender; and
(c) will be taken to have been given or made:
(i) in the case of delivery in person, when delivered;
(ii) in the case of delivery by post two business days after
the date of posting (if posted to an address in the same country) or
fourteen business days after the date of posting (if posted to an
address in another country); and
10
10
(iii) in the case of fax, on receipt by the sender of a
transmission control report from the despatching machine showing the
relevant number of pages and the correct destination fax machine number
and indicating that the transmission has been made without error, but
if delivery or receipt occurs on a day on which business is not
generally carried on in the place to which the communication is sent or
is later than 4 pm (local time) it will be taken to have been duly
given or made at the commencement of business on the next day on which
business is generally carried on in the place.
14. WAIVER
The failure of either Party hereto at any time to enforce any of the terms,
provisions or conditions of this Agreement shall not be construed as a waiver of
the same or of the rights of either Party to enforce the same on any subsequent
occasion.
15. GOVERNING LAW
This Agreement is governed by the laws of the Republic of Indonesia.
16. LANGUAGE
This Agreement has been written in English and the English version shall be the
definitive text, even if for convenience or otherwise the Agreement is
translated into another language.
17. DISPUTES
Any disputes which may arise between the Parties in relation to this Agreement
shall be resolved in the same manner provided in Clause 30 of the Shareholders'
Agreement.
11
11
18. CONFIDENTIALITY
18.1 NO DISCLOSURE
The Company agrees that it will keep confidential and not disclose to any third
party for use for any purpose other than those permitted by this Agreement any
data, information or other property provided to it by Dyersburg or any of its
Affiliates under this Agreement unless Dyersburg grants its prior approval in
writing.
18.2 EXCEPTIONS
The obligations of the Parties under Clause 18.1 shall not apply to any data,
information or other property which:
(a) is obtained by the Company from other sources without breach of any
obligation of confidence owed (by the third party or any other party) to
Dyersburg, provided that the Company is aware, or should reasonably be aware, of
that obligation of confidence; or
(b) is already in the public domain.
12
12
EXECUTED on the date first stated above.
SIGNED for and on behalf of )
DYERSBURG CORPORATION )
In the presence of: )
-----------------------
Signature
-------------------------- -----------------------
Witness Print name
--------------------------
Print name
SIGNED for and on behalf of )
PT DYERSBURG TEXMACO FLEECE )
In the presence of: )
-----------------------
Signature
-------------------------- -----------------------
Witness Print name
--------------------------
Print name
13
SCHEDULE 1
TECHNICAL KNOW-HOW AND SERVICES
Know-how shall include technical data, information, drawings, designs,
standards, parameters, specifications, process sheets, inputs, advice and
assistance as regards (but not limited to) the following:
I. PLANNING STAGE
A. Manufacturing process sequence for each product from raw material to
finished fabric inspection.
B. Selection of the most appropriate raw materials, machinery and
equipment for all required manufacturing process including but not limited to:
Spinning
Knitting for circular knit fabrics and other related
items
Fabric dyeing, including preparatory processes Fabric
finishing processes, including normal and special
requirements
Fabric printing, including preparation for printing
Fabric packing/warehousing/dispatch
C. Quality standards, specifications, practices, norms, systems, etc.
required to be maintained during manufacturing at each stage of the production
cycle.
Quality standards and specifications for all fibers, yarn, dyes,
chemicals and other materials consumed in the production cycle.
D. Plant material handling and storage equipment and systems.
E. Plant layout for an efficient process flow and optimal space
utilization and utility consumption for proposed initial capacity and later
expansions.
F. Equipment for fabric design developments and sample preparation.
G. Productivity norms for various manufacturing operations, benchmark
for operations, computation of manpower including direct labor, supervisory and
plant management considering best practices followed.
14
H. Consumption standards for input materials, including fibers, dyes,
etc., norms for allowable rejections, and wastage.
II. START-UP STAGE
Dyersburg will provide meaningful assistance and guidance to the
Company at the plant commissioning and start up stage, including but not limited
to:
A. Approve the plant installation prior to start up trials of
machinery, or advise changes as necessary to be carried out.
B. Evaluate and approve the test runs carried out for each
process/stage so as to ensure process output/quality levels required, advise on
changes/modifications required to meet specific norms.
C. Install production and quality systems at each stage in the plant
with Company personnel, and secure their proper understanding of the same for
effective use.
D. Oversee the regular production start up of fabric. Advise/guide and
train in all aspects of plant operations until output, quality and productivity
norms are reached.
E. Issue initial benchmark for achievement in production, quality at
appropriate stages for highly efficient operations.
III. PRODUCTION STAGE
A. Assist in resolution of any major problems faced such as rejections,
low output, etc. by technical guidance.
B. Set progressive benchmark in production output, quality, machine
utilization and guide to help achieve the same.
MARKETING AND PRODUCT DEVELOPMENT
Dyersburg will provide know-how and assistance in product merchandising/product
development and marketing methods as below:
15
A. Assist in the development of a comprehensive design and/or sample
library for effective customer interfacing.
B. Provide assistance in design creation/adaptation/development to suit
respective markets.
C. Provide assistance in estimating product cost.
D. Provide assistance in training methods and systems of customer
servicing.
E. Assist in establishing a marketing plan.
