EXHIBIT 2.1(b)
INTELLECTUAL PROPERTY LICENSE AGREEMENT
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This Intellectual Property License Agreement ("License Agreement")
dated ________ __, 1998 (the "Effective Time") is between Sealright Co., Inc., a
Delaware corporation ("Licensor") and [Flexible Co.], a Delaware corporation
("Licensee"). All capitalized terms used in this License Agreement and not
otherwise defined below in Section I shall have the respective meanings given
such terms in the Merger Agreement (defined below).
WHEREAS, Huhtamaki Oy, a corporation organized under the laws of
Finland, and its wholly owned subsidiary, Seal Acquisition Corporation, a
Delaware corporation ("Seal") have entered into the Merger Agreement dated March
2, 1998, (the "Merger Agreement") providing for the merger of Licensor with
Seal;
WHEREAS, the Merger Agreement provides that all the capital stock of
[Flexible Co.], a wholly owned subsidiary of Licensor, will be distributed to
the stockholders of Licensor as of the Effective Time;
WHEREAS, Licensor is the owner of and has the right to license the
trademarks, service marks and trade names and those registrations and
applications for registration related to any of the foregoing, listed on
Schedule A attached hereto and the goodwill associated therewith (individually,
a "Xxxx" and collectively, the "Marks") that prior to the Effective Time, have
been used by Licensor in connection with the Flexible Business;
WHEREAS, Licensee wishes to use the Marks only in the Flexible
Packaging Industry (defined below);
WHEREAS, Licensor has agreed to allow such usage on a limited basis on
the terms and conditions hereafter set forth in this License Agreement; and
WHEREAS, this License Agreement is a condition to the consummation of
the Transactions contemplated by the Merger Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this License Agreement as well as in the Merger Agreement, and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agrees as follows:
I. Definitions.
a. "Affiliate" means, with respect to any corporation, partnership,
organization or any other entity ("Person"), any other Person controlling,
controlled by or under common control with such Person, where "control" means
the possession, directly or indirectly, of the power to direct the management
and policies of a Person whether through the ownership of voting securities,
contract or otherwise.
b. "Competitor" means a Person that competes with the business of
Licensor (other than the Flexible Business) in effect as of the Effective Time
and that derived more than twenty-
five percent (25%) of its net revenues for the fiscal year immediately preceding
the attempted assignment of this License Agreement by Licensee to such Person
pursuant to Section VII from such competitive business.
c. "Flexible Packaging Industry" means the business of manufacturing and
selling (a) flexible packaging and labels for the food, dairy and beverage
market and (b) machines for the application of sleeve labels to plastic bottles.
II. License Grant.
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a. Scope. Subject to the terms and conditions set forth herein, Licensor
hereby grants to Licensee and its Affiliates a royalty-free worldwide,
indivisible right and license to use the Marks solely in the Flexible Packaging
Industry.
b. Term and Duration. This License Agreement shall come into effect on
the Effective Time and shall continue thereafter for a period of six (6) months
(the "License Period").
III. Termination.
a. Termination. In the event that one party determines that the other
has committed a material breach of a provision of this License Agreement, such
party may provide written notice to the breaching party ("Breach Notice")
specifying the material breach complained of in reasonable detail and requiring
the other party to rectify such breach. The breaching party shall then have
thirty (30) days from receipt of the Breach Notice to cure such breach (the
"Initial Cure Period") or, if such material breach is such that it cannot be
cured within the Initial Cure Period but is capable of being cured within a
reasonable time not to exceed thirty (30) days afterwards, to begin to cure such
breach within the Initial Cure Period and thereafter to proceed diligently to
complete the cure of the breach within a reasonable time period. If such
material breach is not cured pursuant to this Section III(a), this License
Agreement shall automatically terminate.
b. Termination Upon Bankruptcy. Notwithstanding the above, this License
Agreement shall terminate automatically with respect to Licensee and its
Affiliates without the Initial Cure Period if Licensee seeks protection from
creditors or enters into receivership or bankruptcy or in the event of any
affirmative act of insolvency by Licensee.
c. Effect of Termination. On or before the expiration or termination by
Licensee of this License Agreement, or within a commercially reasonable time
after termination of this License Agreement for breach by Licensee pursuant to
Section III(a): (i) Licensee and its Affiliates shall completely cease all use
of the Marks (or any of their formatives or derivatives or any modified Marks,
subject to Section IV(a)(iii) below), including but not limited to use of the
Marks in the Flexible Packaging Industry, and all use of any trademark,
servicemark, tradename or trade dress that is confusingly similar to the Marks
or the modified Marks; and (ii) Licensee and its Affiliates shall change any
internet site or local, state and national telephone or trade directories in the
next printing of such directories and to amend any registration or certificate
with any governmental authority and their corporate names so as to delete the
Marks or take any other commercially reasonable action so as to not lead anyone
to believe or confuse anyone into believing there is any services or goods or
source affiliation between Licensor and Licensee.
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IV. Ownership Of The Marks; Quality Assurances.
a. Licensor's Ownership.
(i) Licensee acknowledges Licensor's right, title and interest in
and to the Marks and the goodwill associated with the Marks. Licensee shall
not represent in any manner that it has ownership in the Marks. Licensee
acknowledges that use of the Marks shall not create any ownership, rights,
goodwill, title or interest in Licensee, but that all such use by Licensee
shall inure to the sole benefit of Licensor. Licensee shall use the Marks
in such a manner as to preserve and protect the rights and interest of
Licensor therein. Licensee acknowledges that it will not during the term of
this License Agreement or anytime thereafter register or apply for
registration of the Marks anywhere in the world, or take any action
whatsoever to contest the validity of the Marks, Licensor's ownership of
the Marks or which in any way diminishes Licensor's ownership, validity or
use of the Marks.
(ii) Licensee agrees that upon the expiration or termination of this
License Agreement, Licensor shall hold all rights and goodwill to the
Marks, formatives, derivatives or modification (subject to Section
IV(a)(iii) below) for all services and goods. Licensee agrees to execute
such documents and consents to enter into agreements or assist in any
reasonable manner, at Licensor's expense, after the termination or
expiration of this License Agreement to insure the validity or ownership of
the Marks to Licensor.
(iii) Notwithstanding anything in this License Agreement to the
contrary, Licensee or its Affiliates' use of any of the Marks in
combination with a name, xxxx or logo that do not contain the word
"SEALRIGHT" to which the Licensee or its Affiliates otherwise have rights
shall not be deemed a grant to Licensor of any rights in or to such name,
xxxx or logo and Licensee and its Affiliates may continue to use such name,
xxxx or logo after the termination or expiration of this License Agreement.
Notwithstanding the above, Licensee shall not use the Marks in combination
with any name, xxxx or logo such that the total combination is likely to
cause confusion that Licensee does business outside of the Flexible
Packaging Industry.
b. Quality Standards. Licensee and its Affiliates shall use and display
the Marks (including in connection with the promotion and advertising of
products and services) only in accordance with the laws and regulations that are
applicable within the United States, Canada and such other places where the
Marks are or may hereafter be in use by Licensee and its Affiliates and further
agrees to never use the Marks in any manner which would reasonably be expected
to dilute or genericize or impair the validity of the Marks. Licensee shall use
the Marks in connection with goods and services of a quality, which at a
minimum, is equal to those previously manufactured, supplied or provided by
Licensor or its Subsidiaries in the Flexible Business.
c. Further Action. The parties shall execute such documents and consents
and take such other action as may be necessary to complete the registrations of
Marks pending with the respective registration authorities as of the Effective
Time.
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V. Warranties.
Licensor warrants that: (i) it has the full right, power and authority to
enter into this License Agreement; and (ii) it has not previously assigned,
transferred, conveyed or otherwise encumbered the rights granted in this License
Agreement.
VI. Infringement.
a. Notification. Each party shall notify the other pursuant to the
notification provision in Section IX in the event that such party learns of any
reasonably significant infringement of the Marks in the Flexible Packaging
Industry within ten business (10) days of such party's knowledge of such
infringement.
b. Infringement Within the Flexible Packaging Industry. Licensor may at
its sole option elect to bring an action against any apparent infringement of
the Marks within the Flexible Packaging Industry. In such event, and at
Licensor's expense, Licensee shall cooperate fully with Licensor and execute
such documents and consents and take all steps reasonably necessary to assist in
such action. Licensee, its Affiliates, officers, agents and employees shall be
fully indemnified and be held harmless by Licensor from any liability, loss,
damage or expense, including reasonable attorney's fees of any type arising from
Licensor brining such action. In the event that Licensor elects not to bring
such an action, it must promptly notify Licensee and Licensee shall have the
right to bring an action at its option and expense. Licensor, its Affiliates,
officers, agents and employees shall be fully indemnified and be held harmless
by Licensee from any liability, loss, damage or expense, including reasonable
attorney's fees of any type arising from Licensee bringing such action. In the
event that Licensee brings such action, at Licensee's expense, Licensor shall
cooperate fully with Licensee and execute such documents and consents and take
all steps reasonably necessary to assist in such action. Any proceeds which
either party receives by virtue of a successful action against or settlement
with an apparent infringer within the Flexible Packaging Industry shall first be
used to reimburse the costs (including legal fees) of the party that brought the
action, then to reimburse the costs (including legal fees) that the other party
bore, if any, in connection with the action, and any remaining proceeds shall be
for the benefit of the party that brought such action.
VII. Assignment/Sublicense.
Licensee shall not, without the prior written consent of Licensor (which
consent may be granted or withheld at Licensor's sole discretion) assign,
transfer, or sublicense this License Agreement or any of its rights or
obligations hereunder, except that Licensee, without Licensor's consent, may:
(i) grant sublicenses or assign any of its rights or obligations hereunder to
any of its controlled Affiliates for use in the Flexible Packaging Industry; and
(ii) assign or license the rights and obligations under this License Agreement
for collateral security purposes to any lender providing financing to Licensee
or its Affiliates, provided that such lender is bound by the termination
provisions contained in this License Agreement. In addition, Licensee may assign
its rights and obligations under this License Agreement to any purchaser of
Licensee's business to which this License Agreement relates ("Assignee"), other
than a "Prohibited Assignee" (as set forth below), upon thirty (30) days written
notice to Licensor informing it of the identity of such Purchaser. A "Prohibited
Assignee" shall be (x) a Competitor or (y) any Person that the Board of
Directors of Licensor determines in good faith after reasonable inquiry is
likely, as a result of such
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assignment, to significantly and adversely affect the reputation or goodwill of
Licensor or its Marks, provided, however, that such Person shall not be deemed
to be a Prohibited Assignee unless within thirty (30) days after receiving
notice from the Licensee of the identity of the Assignee, the Licensor's Board
of Directors shall (i) make the determination specified above and (ii) provide
Licensee with a list of all of its reasons for such determination. Licensor may
assign this License Agreement and its rights or obligations hereunder without
Licensee's prior consent, provided such assignment is in conjunction with
Licensor's assignment of the Marks as a whole and provided further that such
assignee agrees in writing to be bound by the terms and conditions of this
License Agreement.
VIII. Modification/Waiver.
a. Modification. This License Agreement may be modified only in writing
signed by both Licensor and Licensee. Neither Licensor's nor Licensee's failure
to enforce any of the provisions of this License Agreement shall constitute a
waiver of its rights to later enforce such terms or conditions.
b. Waiver. Any waiver under this License Agreement must be in writing
and signed by the party to be charged therewith.
IX. Notices.
Any notice, communications or payment given or required in connection with
this License Agreement shall be considered sufficient and effective as set forth
in Section 11.6 (Notices) of the Merger Agreement.
X. Governing Law.
This License Agreement shall be construed under the laws of the State of
Delaware without regard to its conflict of laws.
XI. Entire Agreement.
This License Agreement and the Merger Agreement, and any exhibits and
schedules attached hereto or thereto, constitute the entire agreement of the
parties with respect to the subject hereof, and supersede all prior
understandings, agreements and oral representations and warranties of the
parties with respect to the subject matter of this License Agreement. Any
reference in this License Agreement shall be deemed to include any exhibits and
schedules. If there is any conflict or inconsistency between the terms of this
License Agreement and the Merger Agreement, then the terms of this License
Agreement shall control.
XII. Severability Of Provisions.
In the event that any provision or paragraph of this License Agreement
shall be found to be unlawful or a violation of public policy or for any other
reason unenforceable in law, such finding shall in no way invalidate any other
provisions or sections of this License Agreement.
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XIII. Confidentiality.
Each party agrees that it will not use for its own purposes or disclose
to any third party (other than for purposes of enforcing this Agreement subject
to an appropriate confidentiality order) any confidential information (including
without limitation advertising or promotional materials, or other marketing or
business information) disclosed to it (the "Receiving Party") by the other party
pursuant to this Agreement unless and to the extent that the aforementioned
matters become generally known to and available for use by the public other than
as a result of the Receiving Party's acts or omissions to act or to the extent
otherwise required by law.
XIV. Headings.
All headings used in this License Agreement are for reference purposes only
and shall not be deemed to have any substantive effect.
XV. Counterparts.
This License Agreement may be executed in one or more counterparts each of
which shall be deemed to be an original and all of which shall be deemed to have
been executed simultaneously.
IN WITNESS WHEREOF, the parties have signed this License Agreement through
their duly authorized representatives, as of the date first hereinabove written.
SEALRIGHT CO., INC. [Flexible Co.]
By: By:
______________________ ______________________
Name: Name:
______________________ ______________________
Title: Title:
______________________ ______________________
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SCHEDULE A
Issued and Active Trademark Registrations
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Case ID # Registration # Issue Date Trademark Class Country Ownership
--------- -------------- ---------- --------- ----- ------- ---------
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SEACO 0,133,812 08/03/20 Sealright U.S.A. Sealright Co., Inc.
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SEACO 0,227,019 04/26/27 Liftright U.S.A. Sealright Co., Inc.
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SEACO 0,381,524 09/24/40 SSS & DES. U.S.A. Sealright Co., Inc.
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SEACO224 0,869,867 05/27/69 Sealright U.S.A. Sealright Co., Inc.
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SEACO386 1,007,407 03/25/75 SR DES. 21 U.S.A. Sealright Co., Inc.
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SEACO363 1,009,241 04/22/75 SR DES. U.S.A. Sealright Co., Inc.
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SEACO172 1,225,003 01/25/83 SR & DES. U.S.A. Sealright Co., Inc.
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SEACO311 1,887,480 04/04/95 Sealright 37 U.S.A. Sealright Co., Inc.
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SEACO312 1,890,194 04/18/95 SR Sealright & 37 U.S.A. Sealright Co., Inc.
Design
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Pending U.S. Trademark Applications
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Application
Case ID # Serial # File Trademark Class Country Ownership
--------- ----------- ---- --------- ----- ------- ---------
SEACO415 033,023 12/15/95 Sealright & Design 16, 20, 21 U.S.A. Sealright Co., Inc.
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SEACO416 038,697 12/29/95 Sealright & Design 7 U.S.A. Sealright Co., Inc.
-------------------------------------------------------------------------------------------------------
SEACO417 038,696 12/29/95 Sealright & Design 7 U.S.A. Sealright Co., Inc.
-------------------------------------------------------------------------------------------------------
SEACO419 038,698 12/29/95 Sealright & Design 37 U.S.A. Sealright Co., Inc.
-------------------------------------------------------------------------------------------------------
SEACO424 064,446 02/27/96 S Logo 20, 21 U.S.A. Sealright Co., Inc.
=======================================================================================================
Issued and Active Foreign Trademark Registrations
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Case ID # Registration # Issue Date Trademark Class Country Ownership
--------- -------------- ---------- --------- ----- ------- ---------
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SEACO920 64299 05/08/79 Sealright 4+ Austria
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SEACO945 82779 12/17/71 Sealright 6+ Benelux
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SEACO913 152/34240 09/21/23 Sealright Canada
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SEACO997 39112/11961 05/23/84 Sealright 00 Xxxxx Xxxx
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SEACO996 39146/11962 06/11/84 Sealright 7 Costa Rica
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SEACO944 3087/1969 11/07/69 Sealright 6+ Denmark
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SEACO998 57837 01/05/81 Sealright 6+ Finland
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SEACO801 1053011 06/09/78 Sealright 7+ France
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SEACO 1470409 06/09/88 Sealright 7+ France
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SEACO939 885971 02/05/79 Sealright 16+ Germany
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SEACO925 52870 07/29/68 Sealright 7+ Italy
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SEACO 546551 07/29/68 Sealright 7+ Italy
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SEACO810 1906816 10/28/86 Sealright J18 Japan
w/Katakana
=======================================================================================
===========================================================================================================
Case ID # Registration # Issue Date Trademark Class Country Ownership
--------- -------------- ---------- --------- ----- ------- ---------
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SEACO 39985 03/17/81 Cis-4 Lebanon
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SEACO811 77028 07/31/79 Sealright 6+ Norway
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SEACO984 580479 03/28/71 Sealright 20 Spain
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SEACO985 580480 03/31/71 Sealright 21 Spain
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SEACO983 580478 05/10/71 Sealright 17 Spain
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SEACO973 580477 05/10/72 Sealright 16 Spain
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SEACO915 580476 06/25/73 Sealright 7 Spain
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SEACO162 136072 08/06/81 Sealright 6+ Sweden
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