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Exhibit 2.2
Reorganization Agreement dated as of July 1, 1996 by and among Printpack
Holdings, Inc., Printpack, Inc., Printpack Enterprises, Inc. and Printpack
Illinois, Inc.
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ARTICLE 1 THE REORGANIZATION 2
1.1 Transfer of Equity Interests in U.K. 2
1.2 Transfer of Printpack Stock to Enterprises 2
1.3 Transfer of Intellectual Property and Empaques Equity
Interest to IHC 2
1.4 Transfer of North American Assets to Printpack 2
1.5 Assumption of Liabilities 2
1.6 Issuance of Enterprises Stock 3
1.7 Transfer of Printpack Intellectual Property and Illinois Assets 3
ARTICLE 2 ADDITIONAL AGREEMENTS 3
2.1 Intercorporate Services Agreement 3
2.2 Tax Allocation Agreement 3
2.3 License Agreement(s) 3
2.4 Transfer Taxes; Other Costs 3
2.5 Resale Restrictions 3
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF HOLDINGS 4
3.1 Organization, Power and Authority 5
3.2 Consents and Approvals; No Conflict or Violation 5
3.3 Capital Stock 5
3.4 Governmental Proceedings or Litigation 5
3.5 Investment Intent 5
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ENTERPRISES 6
4.1 Organization, Power and Authority 6
4.2 Consent and Approvals; No Conflict or Violation 6
4.3 Capital Stock 6
4.4 North American Assets 6
4.5 Enterprises' Intellectual Property 7
4.6 Title to Empaques Shares 7
4.7 Governmental Proceedings or Litigation 7
4.8 Investment Intent 7
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PRINTPACK 7
5.1 Organization, Power and Authority 7
5.2 Consents and Approvals; No Conflict or Violation 8
5.3 Capital Stock 8
5.4 Title to U.K. Entities Equity Interests 8
5.5 U.K. Entities Receivable 8
5.6 Printpack Intellectual Property; Illinois Assets 8
5.7 Governmental Proceedings or Litigation 9
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF IHC 9
6.1 Organization, Power and Authority 9
6.2 Consents and Approvals; No Conflict or Violation 9
6.3 Capital Stock 9
6.4 Governmental Proceedings or Litigation 9
6.5 Investment Intent 10
ARTICLE 7 CLOSING; CONDITIONS TO CLOSING 10
7.1 Time of Closing 10
7.2 Conditions to Closing 10
7.3 Transactions and Documents at Closing 11
ARTICLE 8 MISCELLANEOUS 12
8.1 Survival 12
8.2 Further Assurances 12
8.3 Amendment and Modification 13
8.4 Waiver of Compliance; Consents 13
8.5 Binding Effect; No Third Party Beneficiaries 13
8.6 Notices 13
8.7 Governing Law 13
8.8 Entire Agreement 13
8.9 Multiple Counterparts 13
8.10 Invalidity, Inconsistency or Conflict 13
8.11 Captions and References 14
8.12 Specific Performance 14
8.13 Assignment of Contracts, Rights, Etc. 14
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REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT (this "Agreement") is made and entered
into by and among PRINTPACK HOLDINGS, INC., a Delaware corporation
("Holdings"); PRINTPACK, INC., a Georgia corporation ("Printpack"); PRINTPACK
ENTERPRISES, INC., a Georgia corporation ("Enterprises"); and PRINTPACK
ILLINOIS, INC., an Illinois corporation ("IHC") to have effect from the
beginning of the parties' fiscal year 1997.
RECITALS:
Holdings owns approximately 99.7 percent of the outstanding common
stock of Printpack and approximately 90.8 percent of the outstanding common
stock of Enterprises. Printpack owns all of the outstanding common stock of
IHC.
The Boards of Directors of Holdings, Printpack, Enterprises and IHC
deem it advisable and in the best interests of Holdings, Printpack, Enterprises
and IHC and their respective shareholders and stockholders to undertake, among
other things, the following: (i) Printpack will distribute to Holdings
Printpack's interests (both the equity interest and the intercompany account
receivable) in the U.K. Entities (as hereinafter defined); (ii) Holdings will
transfer, convey and contribute to Enterprises all of the shares of Printpack
common stock held by Holdings as contemplated by ss.351 of the Internal Revenue
Code of 1986, as amended (the "Code"); (iii) Enterprises will issue additional
shares of its common stock to Holdings; (iv) Enterprises will transfer, convey
and contribute to IHC, as contemplated by ss. 351 of the Code, all of
Enterprises' intellectual property and Enterprises' one (1) percent equity
interest in Empaques Printpack De Mexico, S.A. De C.V., a Mexican corporation
("Empaques"); (v) Enterprises will transfer, convey and contribute to
Printpack, as contemplated by ss. 351 of the Code, all of Enterprises' North
American Assets (as hereinafter defined); (vi) Printpack will assume all of the
liabilities of Enterprises associated with the North American Assets and the
Enterprises Intellectual Property and issue to Enterprises additional shares of
Printpack's common stock; and (vii) Printpack will transfer, convey and
contribute to IHC, as contemplated by ss. 351 of the Code, Printpack's
intellectual property and the real estate constituting Printpack's Elgin,
Illinois plant and all tangible personal property located at or used in
connection with the operation of such plant.
The parties wish to provide for certain additional matters as described
herein; and
The transactions and additional matters described in this Agreement are
subject to receipt of required consents and approvals and the satisfaction of
certain other conditions, all as described in this Agreement.;
NOW, THEREFORE, in consideration of the foregoing and the mutual
warranties, representations, covenants and agreements set forth herein and
contained in
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any agreement or other document executed in connection with this Agreement, the
parties agree as follows:
ARTICLE 1
THE REORGANIZATION
1.1 TRANSFER OF EQUITY INTEREST IN U.K. Entities and Receivable from
U.K. Entities. Subject to the terms and conditions hereof, at Closing (as
hereinafter defined), Printpack agrees to distribute and convey to Holdings,
and Holdings agrees to acquire from Printpack, all right, title and interest of
Printpack in and to: (a) all of the issued and outstanding share capital of
Printpack Holdings, Ltd., organized under the laws of the United Kingdom
("PHL"), and Printpack Europe, Ltd., organized under the laws of the United
Kingdom ("PEL") (PHL and PEL are sometimes referred to collectively as the
"U.K. Entities") owned and held of record by Printpack, which has an estimated
fair value of zero; and (b) all amounts owed to Printpack by the U.K. Entities,
which amounts are reflected on the books and records of Printpack as
intercompany receivables and which have an aggregate face amount equal to
approximately $56,500,000 and an estimated fair value of zero (the "U.K.
Receivables").
1.2 TRANSFER OF PRINTPACK STOCK TO ENTERPRISES. Subject to the terms
and conditions hereof, at Closing, Holdings agrees to assign, transfer, convey,
deliver and contribute to Enterprises as contemplated by ss.351 of the Code,
and Enterprises agrees to acquire from Holdings, all right, title and interest
of Holdings in and to the 3,018,982 shares of the common stock of Printpack
(the "Printpack Common Stock") owned and held of record by Holdings.
1.3 TRANSFER OF INTELLECTUAL PROPERTY AND EMPAQUES EQUITY INTEREST
TO IHC. Subject to the terms and conditions hereof, at Closing, Enterprises
agrees to assign, transfer, convey, deliver and contribute to IHC as
contemplated by ss.351 of the Code, and IHC agrees to acquire from Enterprises:
(i) all right, title and interest of Enterprises in and to all trademarks (both
registered and unregistered), patents, inventions covered by patent
applications, copyrighted works, trade secrets, know-how, confidential
information and other intellectual property owned by Enterprises (collectively,
the "Enterprises Intellectual Property"); and (ii) all right, title and
interest of Enterprises in and to the outstanding equity capital of Empaques
owned and held of record by Enterprises.
1.4 TRANSFER OF NORTH AMERICAN ASSETS TO PRINTPACK. Subject to the
terms and conditions hereof, at Closing, Enterprises agrees to assign,
transfer, convey, deliver and contribute to Printpack as contemplated by ss.351
of the Code, and Printpack agrees to acquire from Enterprises, all right, title
and interest of Enterprises in and to the operating assets of Enterprises
located in the United States, other than the Enterprises Intellectual Property,
(collectively, the "North American Assets").
1.5 ASSUMPTION OF LIABILITIES; Issuance of Printpack Stock. In part
consideration of the transfers and conveyances contemplated hereinabove, at
Closing,
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Printpack agrees to: (a) assume and timely pay all liabilities and perform all
obligations of Enterprises associated with the North American Assets and the
Enterprises Intellectual Property (the "Assumed Liabilities"); and (b) issue to
Enterprises 1,189,850 shares of Printpack common stock.
1.6 ISSUANCE OF ENTERPRISES STOCK. In part consideration of the
transfers and conveyances contemplated hereinabove, at Closing, Enterprises
agrees to issue to Holdings 7,975,499 shares of the no par value per share
common stock of Enterprises (the "Enterprises Common Stock").
1.7 TRANSFER OF PRINTPACK INTELLECTUAL PROPERTY AND ILLINOIS ASSETS.
Subject to the terms and conditions hereof, at Closing, Printpack agrees to
assign, transfer, convey, deliver and contribute to IHC as contemplated by
ss.351 of the Code, and IHC agrees to acquire from Printpack, all right, title
and interest of Printpack in and to all: (i) trademarks (both registered and
unregistered), patents, inventions covered by patent applications, copyrighted
works, trade secrets, know-how, confidential information and other intellectual
property owned by Printpack (collectively, the "Printpack Intellectual
Property"); (ii) the real property constituting Printpack's Elgin, Illinois
plant, together with all tangible personal property and intangible property
located at such plant or used in connection therewith (collectively, the
"Illinois Assets").
ARTICLE 2
ADDITIONAL AGREEMENTS
2.1 INTERCORPORATE SERVICES AGREEMENT. At Closing, Printpack and
IHC shall enter into an Intercorporate Services Agreement in substantially the
form attached hereto as Exhibit 2.1 (the "Services Agreement").
2.2 TAX ALLOCATION AGREEMENT. At Closing, Holdings, Enterprises,
Printpack and IHC shall enter into a Tax Allocation Agreement in substantially
the form attached hereto as Exhibit 2.2 (the "Tax Allocation Agreement").
2.3 LICENSE AGREEMENT(S). At Closing, Printpack, Holdings,
Enterprises, Empaques, Printpack Receivables Funding Corp. and IHC shall enter
into license agreements in substantially the respective forms attached hereto
as Exhibit 2.3 (the "License Agreements").
2.4 TRANSFER TAXES; OTHER COSTS. Printpack shall be responsible
for any documentary transfer taxes and any sales, use or other taxes, other
than income taxes based on a party's income, imposed by reason of the
transactions contemplated hereunder.
2.5 RESALE RESTRICTIONS; Stock Legends. It is understood and
acknowledged that the shares of Printpack common stock and Enterprises common
stock to be issued or conveyed hereunder will not be registered under the
Securities Act of 1933, as amended (the "1933 Act"), the Georgia Securities Act
of 1973, as amended, or the securities or
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blue sky laws of any other state, but will be issued in reliance upon certain
exemptions from registration thereunder, that the statutory basis for such
exemption is dependent upon each party's undertaking to acquire such shares for
purposes of investment only and without the intent of participating directly or
indirectly in a distribution thereof, and that by reason of the exemptions to
be relied upon in connection with their issuance, such shares will not be
freely transferable, any proposed sale or other disposition of such shares may
be prohibited, and any resales or other dispositions will in any event be
subject to significant restrictions. Accordingly, each party acquiring shares
hereunder agrees that it will not dispose of any of any shares so acquired
unless such disposition does not violate the 1933 Act and any applicable state
securities or blue sky laws or regulations, or such shares have been validly
registered under the 1933 Act and any and all applicable state securities or
blue sky laws. Each certificate for shares of Printpack common stock or
Enterprises common stock issued or conveyed hereunder shall bear a legend in
substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("FEDERAL ACT"), THE
GEORGIA SECURITIES ACT OF 1973, AS AMENDED ("GEORGIA ACT") OR ANY OTHER
STATE SECURITIES OR BLUE SKY LAWS. THESE SECURITIES HAVE BEEN ISSUED IN
RELIANCE UPON EXEMPTIONS PROVIDED UNDER THE FEDERAL ACT AND UPON THE
EXEMPTION PROVIDED BY SECTION 10-5-9(13) OF THE GEORGIA ACT. THESE
SHARES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
OFFERED FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED IN THE ABSENCE OF
(I) AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SHARES
UNDER THE GEORGIA ACT, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT THE TRANSACTION BY WHICH SUCH SHARES WILL BE OFFERED
FOR SALE, HYPOTHECATED, SOLD OR TRANSFERRED IS EXEMPT UNDER THE GEORGIA
ACT OR IS OTHERWISE IN COMPLIANCE WITH THE GEORGIA ACT, AND (II) AN
EFFECTIVE REGISTRATION STATEMENT WITH RESPECT TO THE SHARES UNDER THE
FEDERAL ACT AND ANY OTHER APPLICABLE STATE LAW, OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS
NOT REQUIRED."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Holdings hereby represents and warrants as follows:
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3.1 ORGANIZATION, POWER AND AUTHORITY. Holdings is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Holdings has all necessary corporate power and authority and
has taken all requisite corporate action necessary to enter into this
Agreement, consummate the transactions contemplated hereby and perform its
obligations hereunder. This Agreement has been duly executed by Holdings and
constitutes the legal, valid and binding obligation of Holdings, enforceable
against Holdings in accordance with its terms (except to the extent that
enforcement is affected by laws pertaining to bankruptcy, reorganization,
insolvency, and creditors' rights and by the availability of injunctive relief,
specific performance, and other equitable remedies).
3.2 CONSENTS AND APPROVALS; NO CONFLICT OR VIOLATION. No consent,
approval or authorization of, or registration, declaration or filing with, any
governmental or regulatory authority, or any other person or entity, is
required to be made or obtained by Holdings in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in: (i) a violation of or a conflict with any provision of the
Certificate of Incorporation or the Bylaws of Holdings; (ii) a breach of, or a
default under, any term or provision of any contract, agreement, indebtedness,
lease, commitment, license, franchise, permit, authorization or concession to
which Holdings is a party; or (iii) a violation by Holdings of any statute,
rule, regulation, ordinance, code, order, judgment, writ, injunction, decree or
award applicable to it.
3.3 CAPITAL STOCK. The shares of Printpack Common Stock to be
conveyed to Enterprises by Holdings hereunder have been duly authorized and
validly issued and are fully paid and nonassessable. Holdings has, and shall
convey to Enterprises, good and marketable title to the shares of Printpack
Common Stock, free and clear of all claims, liens, restrictions, security
interests or encumbrances of any kind (other than restrictions on transfer of
such shares under applicable securities laws).
3.4 GOVERNMENTAL PROCEEDINGS OR LITIGATION. No action by any
governmental authority has been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby.
3.5 INVESTMENT INTENT. With respect to the shares of Enterprises
common stock to be issued to Holdings as contemplated in Section 1.6 above,
and the outstanding shares of the U.K. Entities to be transferred to Holdings as
contemplated in Section 1.1 above, Holdings represents and warrants that it is
the sole party in interest in its participation in this Agreement and is
acquiring such shares of Enterprises common stock and such outstanding shares
of the U.K. Entities solely for investment for its own account, with no present
agreement, understanding, intent or arrangement to subdivide, sell, assign, or
transfer any part or all of such shares, or any interest therein, to any other
person.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ENTERPRISES
Enterprises hereby represents and warrants as follows:
4.1 ORGANIZATION, POWER AND AUTHORITY. Enterprises is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Georgia. Enterprises has all necessary corporate power and authority
and has taken all requisite corporate action necessary to enter into this
Agreement, consummate the transactions contemplated hereby and perform its
obligations hereunder. This Agreement has been duly executed by Enterprises and
is a legal, valid and binding obligation of Enterprises, enforceable against
Enterprises in accordance with its terms (except to the extent that enforcement
is affected by laws pertaining to bankruptcy, reorganization, insolvency, and
creditors' rights and by the availability of injunctive relief, specific
performance, and other equitable remedies).
4.2 CONSENTS AND APPROVALS; NO CONFLICT OR VIOLATION. Except as
specified in Exhibit 4.2 hereto, no consent, approval or authorization of, or
registration, declaration or filing with, any governmental or regulatory
authority, or any other person or entity, is required to be made or obtained by
Enterprises in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby. Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in: (i) a violation of or a
conflict with any provision of the Amended and Restated Articles of
Incorporation or the Bylaws of Enterprises; (ii) a breach of, or a default
under, any term or provision of any contract, agreement, indebtedness, lease,
commitment, license, franchise, permit, authorization or concession to which
Enterprises is a party; or (iii) a violation by Enterprises of any statute,
rule, regulation, ordinance, code, order, judgment, writ, injunction, decree or
award applicable to it.
4.3 CAPITAL STOCK. The authorized capital stock of Enterprises
consists of 15,000,000 shares of common stock, without par value. All of the
shares of Enterprises common stock to be issued to Holdings hereunder have
been and will be, upon issuance, duly authorized, validly issued, fully paid
and non assessable.
4.4 NORTH AMERICAN ASSETS. Enterprises has, and will convey to
Printpack, good and marketable title to the North American Assets, free and
clear of all claims, liens, restrictions, security interests or encumbrances of
any kind, except for those that do not, individually or in the aggregate,
materially adversely affect the use of the North American Assets in the
business of Enterprises and will not so affect the use of the North American
Assets in the business of Printpack. All of the North American Assets are
transferred "as is" and "where is" without warranty of any kind except for the
warranty of title contained in this Section 4.4.
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4.5 ENTERPRISES' INTELLECTUAL PROPERTY. Enterprises has, and will
convey to IHC, good and marketable title to the Enterprises Intellectual
Property, free and clear of all claims, liens, restrictions, security interests
or encumbrances of any kind, except for those that do not, individually or in
the aggregate, materially adversely affect the use of the Enterprises
Intellectual Property in the business of Enterprises and will not so affect the
use of the Enterprises Intellectual Property in the business of IHC. All of the
Enterprises Intellectual Property is transferred "as is" and "where is" without
warranty of any kind except for the warranty of title contained in this Section
4.5.
4.6 TITLE TO EMPAQUES SHARES. The equity capital of Empaques to be
conveyed to IHC by Enterprises hereunder has been duly authorized and validly
issued and is fully paid and nonassessable. Enterprises has, and shall convey
to Printpack, good and marketable title to the Empaques equity capital], free
and clear of all claims, liens, restrictions, security interests or
encumbrances of any kind (other than restrictions on transfer of such shares
under applicable securities laws).
4.7 GOVERNMENTAL PROCEEDINGS OR LITIGATION. No action by any
governmental authority has been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby.
4.8 INVESTMENT INTENT. With respect to the shares of Printpack
Common Stock to be transferred to Enterprises as contemplated in Section 1.2
above and the shares of Printpack common stock to be issued to Enterprises as
contemplated in Section 1.5 above, Enterprises represents and warrants that it
is the sole party in interest in its participation in this Agreement and is
acquiring the shares of Printpack common stock solely for investment for its
own account, with no present agreement, understanding, intent or arrangement to
subdivide, sell, assign, or transfer any part or all of such shares, or any
interest therein, to any other person.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PRINTPACK
Printpack hereby represents and warrants as follows:
5.1 ORGANIZATION, POWER AND AUTHORITY. Printpack is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Georgia. Printpack has all necessary corporate power and authority and
has taken all requisite corporate action necessary to enter into this
Agreement, to consummate the transactions contemplated hereby and to perform
its obligations hereunder. This Agreement has been duly executed by Printpack
and is a legal, valid and binding obligation of Printpack, enforceable against
Printpack in accordance with its terms (except to the extent that enforcement
is affected by laws pertaining to bankruptcy, reorganization, insolvency, and
creditors' rights and by the availability of injunctive relief, specific
performance, and other equitable remedies).
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5.2 CONSENTS AND APPROVALS; NO CONFLICT OR VIOLATION. Except as
provided in Exhibit 5.2 hereto, no consent, approval or authorization of, or
registration, declaration or filing with, any governmental or regulatory
authority, or any other person or entity, is required to be made or obtained by
Printpack in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby. Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will result in: (i) a violation of or a
conflict with any provision of the Amended and Restated Articles of
Incorporation or the Bylaws of Printpack; (ii) a breach of, or a default under,
any term or provision of any contract, agreement, indebtedness, lease,
commitment, license, franchise, permit, authorization or concession to which
Printpack is a party; or (iii) a violation by Printpack of any statute, rule,
regulation, ordinance, code, order, judgment, writ, injunction, decree or award
applicable to it.
5.3 CAPITAL STOCK. The authorized capital stock of Printpack
consists of 15,000,000 shares of common stock, $5.00 par value per share. All
of the shares of Printpack common stock to be issued to Enterprises have been
and will be, upon issuance, duly authorized, validly issued, fully paid and non
assessable.
5.4 TITLE TO U.K. ENTITIES EQUITY INTERESTS. Printpack is the
registered and beneficial owner of share capital representing a 30.96% equity
interest in PHL and a 5% equity interest in PEL. Printpack has, and shall
convey to Enterprises at Closing, good and marketable title to such share
capital], free and clear of all claims, liens, restrictions, security interests
or encumbrances of any kind (other than restrictions on transfer of such shares
under applicable securities laws).
5.5 U.K. ENTITIES RECEIVABLE. The U.K. Receivables are valid
obligations of the U.K. Entities and are not subject to any offset or
counterclaim. Printpack has, and shall convey to Holdings at Closing, good and
marketable title to the U.K. Receivables, free and clear of all claims, liens,
restrictions, security interests or other encumbrances of any kind. Except for
the warranty of title contained in this Section 5.5, Printpack makes no
warranty with respect to the U.K. Receivables and the U.K. Receivables were
conveyed "as is" and "where is."
5.6 PRINTPACK INTELLECTUAL PROPERTY; ILLINOIS ASSETS. Printpack
owns or holds a valid leasehold or license interest in and to, and will convey
(or cause to be conveyed) the same to IHC hereunder, in and to the Printpack
Intellectual Property and the Illinois Assets, free and clear of all liens,
restrictions, security interests or encumbrances of any kind, except for such
encumbrances as do not, individually or in the aggregate, materially and
adversely affect the use of the Printpack Intellectual Property and the
Illinois Assets by Printpack or that will, following such conveyance,
materially and adversely affect the use of the Printpack Intangible Property or
the Illinois Assets by IHC.
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5.7 GOVERNMENTAL PROCEEDINGS OR LITIGATION. No action by any
governmental authority has been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF IHC
IHC hereby represents and warrants as follows:
6.1 ORGANIZATION, POWER AND AUTHORITY. IHC is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois. IHC has all necessary corporate power and authority and has taken all
requisite corporate action necessary to enter into this Agreement, to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. This Agreement has been duly executed by IHC and is a legal, valid
and binding obligation of IHC, enforceable against IHC in accordance with its
terms (except to the extent that enforcement is affected by laws pertaining to
bankruptcy, reorganization, insolvency, and creditors' rights and by the
availability of injunctive relief, specific performance, and other equitable
remedies).
6.2 CONSENTS AND APPROVALS; NO CONFLICT OR VIOLATION. No consent,
approval or authorization of, or registration, declaration or filing with, any
governmental or regulatory authority, or any other person or entity, is
required to be made or obtained by IHC in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in: (i) a violation of or a conflict with any provision of the Articles
of Incorporation or the Bylaws of IHC; (ii) a breach of, or a default under,
any term or provision of any contract, agreement, indebtedness, lease,
commitment, license, franchise, permit, authorization or concession to which
IHC is a party; or (iii) a violation by IHC of any statute, rule, regulation,
ordinance, code, order, judgment, writ, injunction, decree or award applicable
to it.
6.3 CAPITAL STOCK. The authorized capital stock of IHC consists of
ten thousand (10,000) shares of common stock, no par value per share, of which,
as of the date of this Agreement and, as of the date of Closing and following
the consummation of the transactions contemplated hereby, one thousand (1,000)
shares will be issued and outstanding. All of the shares of IHC common stock
outstanding have been and will be, upon issuance, duly authorized, validly
issued, fully paid and non assessable.
6.4 GOVERNMENTAL PROCEEDINGS OR LITIGATION. No action by any
governmental authority has been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby.
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6.5 INVESTMENT INTENT. With respect to the equity interest in Empaques
to be acquired from Printpack as contemplated in Section 1.3 above, IHC
represents and warrants that it is the sole party in interest in its
participation in this Agreement and is acquiring the equity interest in
Empaques solely for investment for its own account, with no present agreement,
understanding, intent or arrangement to subdivide, sell, assign, or transfer
any part or all of such shares, or any interest therein, to any other person.
ARTICLE 7
CLOSING; CONDITIONS TO CLOSING
7.1 TIME OF CLOSING. The closing of the transactions contemplated
hereby (the "Closing") will be held at such time and place as the parties shall
agree promptly following the date on which all of the conditions precedent
specified in this Agreement have been (or can be at Closing) satisfied or
waived by the party or parties permitted to do so. The parties agree that each
of the transactions contemplated by this Agreement is intended to be effective
as of the beginning of each of the parties' fiscal year 1997 and that,
regardless of the date of execution of the instruments and other documents
giving effect to the transactions contemplated hereby, such transactions shall
have effect as of the first day of such fiscal year and as among the parties
hereto the Closing shall be deemed to have occurred as of the first day of such
fiscal year.
7.2 CONDITIONS TO CLOSING. The obligations of the parties to consummate
the transactions contemplated hereby are subject to the satisfaction or waiver,
on or prior to the Closing, of each of the following conditions:
(a) Governmental Consents and Approvals. All approvals and
authorizations of, filings and registrations with, and notifications
to, all federal, state and foreign governmental authorities required
for the consummation of the transactions contemplated hereby shall have
been duly obtained or made and shall be in full force and effect. All
waiting periods required by law shall have expired or been waived by
the appropriate governmental authorities.
(b) Other Consents. All consents and approvals as required
for the consummation of the transactions contemplated hereby shall have
been duly obtained and shall be in full force and effect.
(c) Corporate Action. The Board of Directors and, where
appropriate, shareholders of each of the parties shall have taken all
corporate action necessary to effectuate the transactions contemplated
hereby, and shall have furnished certified copies of the resolutions
duly adopted by such Boards of Directors and shareholders evidencing
the same.
(d) Representations and Warranties. The representations and
warranties of the parties set forth in this Agreement shall be true and
correct in all
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material respects as of the date of Closing with the same effect as
though all such representations and warranties had been made
thereon.
(e) No Injunction; Permissible Transactions. None of the
parties shall be prohibited by any order, ruling, consent decree,
judgment or injunction of a court or regulatory agency of competent
jurisdiction from consummating the transactions contemplated by this
Agreement, and consummation of the transactions contemplated hereby
shall be legally permissible pursuant to applicable law.
7.3 TRANSACTIONS AND DOCUMENTS AT CLOSING.
At the Closing:
(a) All North America Assets consisting of real estate owned by
Enterprises will be transferred and conveyed to Printpack by
appropriate deeds; such deeds will be recorded and the required filing
fees and transfer taxes paid;
(b) The real estate constituting Printpack's Elgin, Illinois
plant will be transferred and conveyed by Printpack to IHC by
appropriate deeds, such deeds will be recorded and the required filing
fees and transfer taxes paid;
(c) All intellectual property of Printpack and Enterprises will
be transferred to IHC and appropriate instruments prepared and executed
for recording in the U.S. Patent and Trademark Office and other
appropriate governmental offices with respect to patents and
trademarks;
(d) All North America Assets consisting of tangible personal
property or intangible personal property (other than intellectual
property) owned by Enterprises will be transferred and conveyed to
Printpack by means of a blanket xxxx of sale, with appropriate resale
certificates or other required documentation;
(e) All North American Assets consisting of real or personal
property leases will be assigned and transferred to Printpack together
with all required lessor and landlord consents and approvals;
(f) All North American Assets consisting of contracts to which
Enterprises is a party will be assigned and transferred to Printpack
together with all required third party consents and approvals.
(g) Existing collective bargaining agreements, if any, to which
Enterprises is a party will be assigned to Printpack, with appropriate
negotiation with the applicable unions;
-11-
14
(h) All licenses of intellectual property rights from third
parties to Enterprises or Printpack will be assigned and transferred to
IHC, together with all required licensor consents and approvals;
(i) To the extent assignable, any governmental licenses or
permits held by Enterprises and relating to the North American Assets
will be assigned or transferred to Printpack or IHC, as appropriate;
(j) Printpack and/or IHC will undertake to obtain new licenses,
permits, registrations and identification numbers, to the extent that
these cannot be transferred from Enterprises or Printpack, including,
without limitation:
(i) state qualifications to transact business as a
foreign corporation in each state other than in the
state of incorporation;
(ii) sales tax numbers and other tax identification
numbers;
(iii) business licenses; and
(iv) state and federal environmental permits and licenses.
(k) Existing insurance coverage held by Enterprises with
respect to the North American Assets (including but not limited to
casualty insurance for assets transferred, liability insurance of
various types, and obligations for coverage related to unemployment and
workers' compensation) will be transferred to Printpack and existing
insurance coverage held by Printpack with respect to the Illinois
assets (including but not limited to casualty insurance for assets
transferred, liability insurance of various types, and obligations for
coverage related to unemployment and worker's compensation) will be
transferred to IHC, or appropriate new insurance coverage obtained by
Printpack and/or IHC.
ARTICLE 8
MISCELLANEOUS
8.1 SURVIVAL. The covenants, agreements, representations and warranties
of the parties hereto contained herein or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive the
consummation of the transactions contemplated hereby.
8.2 FURTHER ASSURANCES. Both before and after the Closing, each party
will cooperate in good faith with the other and will take all appropriate
action and execute any documents, instruments or conveyances of any kind which
may be reasonably necessary or advisable to carry out any of the transactions
contemplated hereunder.
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15
8.3 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by written agreement of the parties hereto.
8.4 WAIVER OF COMPLIANCE; CONSENTS. Any failure of a party to comply
with any obligation, covenant, agreement or condition herein may be waived by
the other party; provided, however, that any such waiver may be made only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
8.5 BINDING EFFECT; NO THIRD PARTY BENEFICIARIES. This Agreement and
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any person other than the parties, any successors and
permitted assigns any rights, remedy or claim under or by reason of this
Agreement or any provision herein contained.
8.6 NOTICES. All notices or other communications to any party to this
Agreement required or permitted hereunder shall be in writing and shall be
deemed to have been duly given or made (i) five days after the date when
deposited, postage prepaid in the United States mail, by registered or
certified mail (return receipt requested) or (ii) when delivered if delivered
by hand or by facsimile (with receipt acknowledged) to a party hereto at the
address set forth below such party's signature on the signature page to this
Agreement (or at such other address for a party as shall be specified by like
notice).
8.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the Laws of the State of Georgia (without regard to its
conflicts of law doctrines).
8.8 ENTIRE AGREEMENT. This Agreement, together with all exhibits and
schedules and other documents and instruments referred to herein, embodies the
entire agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties.
8.9 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.10 INVALIDITY, INCONSISTENCY OR CONFLICT. In the event that any one
or more of the provisions contained in this Agreement or in any other
instrument referred to herein, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then to the maximum extent permitted
by law, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument. In the event of
any inconsistency or conflict between any provision of this Agreement and any
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provision of any other agreement, document or instrument referred to herein,
the provision of this Agreement shall govern.
8.11 CAPTIONS AND REFERENCES. The captions or headings of the Articles
and Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
8.12 SPECIFIC PERFORMANCE. Each of the parties acknowledges that money
damages would not be a sufficient remedy for any breach of this Agreement and
that irreparable harm would result if this Agreement were not specifically
enforced. Therefore, the rights and obligations of the parties under this
Agreement shall be enforceable by a decree of specific performance issued by
any court of competent jurisdiction, and appropriate injunctive relief may be
applied for and granted in connection therewith. A party's right to specific
performance shall be in addition to all other legal or equitable remedies
available to such party.
8.13 ASSIGNMENT OF CONTRACTS, RIGHTS, ETC. Notwithstanding anything
contained in this Agreement to the contrary, this Agreement shall not
constitute an agreement by any party hereto to assign any of its right, title
or interest in or to any contract, license, lease, commitment, sales order,
purchase order or other agreement or any claim or right of any benefit arising
thereunder or resulting therefrom if the attempted assignment thereof, without
the consent of a third party thereto, would constitute a breach thereof or in
any way adversely affect the rights of any party hereto. Each party hereto
shall use its reasonable efforts to obtain, and to cooperate with the other
parties hereto in obtaining, any required third party consent to the assignment
or transfer of any such right, title or interest as contemplated by this
Agreement. If such consent is not obtained, the parties hereto shall cooperate
in any reasonable arrangements designed to provide the intended transferee with
the benefits thereunder, including enforcement for the benefit of such intended
transferee of any and all rights of any other party hereto against such third
party arising out of the cancellation by such third party or otherwise.
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed on their respective behalf by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
[Signatures Appear on the Following Pages]
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17
PRINTPACK HOLDINGS, INC.
By: /s/
------------------------------------------
Its:
-------------------------------------
Address: 0000 Xxxxxxx Xxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
PRINTPACK, INC.
By: /s/
------------------------------------------
Its:
-------------------------------------
Address: 0000 Xxxxxxx Xxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
PRINTPACK ENTERPRISES, INC.
By: /s/
-----------------------------------------
Its:
-------------------------------------
Address: 0000 Xxxxxxx Xxxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
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18
PRINTPACK ILLINOIS, INC.
By: /s/
--------------------------------------
Its:
------------------------------
Address: 0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
-16-
19
Exhibit Description
------- -------------
2.1 Form of Services Agreement
2.2 Form of Tax AllocationAgreement
2.3 Forms of License Agreements
4.2 Consents Required by Enterprises
5.2 Consents Required by Printpack
20
EXHIBIT 2.1
INTERCORPORATE SERVICES AGREEMENT
This Intercorporate Services Agreement (the "Agreement"), is made and
entered into as of the first day of the parties' fiscal year 1997 by and
between PRINTPACK ILLINOIS, INC. ("Recipient"), an Illinois corporation, having
its principal offices in Elgin, Illinois and PRINTPACK, INC.("Provider"), a
Georgia corporation, having its principal offices in Atlanta, Georgia.
Recipient and Provider are each engaged in the business of converting
flexible packaging materials and marketing flexible packaging to customers for
various applications.
Recipient desires to obtain the services of Provider in connection
with the general management of the business of Recipient and in connection with
the generation of sales of Recipient's products and the purchasing of goods and
services, and Provider desires to provide such management services on the terms
and conditions provided in this Agreement.
Recipient does not separately maintain the full internal capability to
perform all the management, financial and administrative functions which
Recipient desires.
Recipient believes that the cost of procuring and maintaining the
additional personnel and other resources by Recipient necessary to perform the
functions provided for by this Agreement would exceed the amounts to be paid to
Provider pursuant to this Agreement and that the terms of this Agreement are no
less favorable to Recipient than could otherwise be obtained from a third party
for comparable services.
Recipient desires to receive the management, financial and
administrative services provided by Provider and its agents and Provider is
willing to provide such services under the terms of this Agreement.
In consideration of the foregoing and the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Services to be Provided. Subject to the general supervision of the
Board of Directors and Executive Officers of Recipient, Provider shall provide
Recipient the following services (the "Services") to be rendered by Provider
and its agents:
(a) General management supervision of all aspects of Recipient's
business, including, without limitation, manufacturing, sales,
marketing, technical, quality control, personnel, accounting and
financial functions, by providing the same general level of
supervision and review of each such function within Recipient's
organization as is provided to staff at the same level in
comparable functions within Provider's organization;
21
(b) Consultation and assistance in the development and
implementation of Recipient's corporate business strategies,
plans and objectives;
(c) Consultation and assistance in the management and conduct of
corporate affairs and corporate governance consistent with the
Articles of Incorporation and By-Laws of Recipient;
(d) Consultation, provision and assistance in connection with other
services, including but not limited to, cash applications,
internal and external financial reporting, employee benefits,
insurance and risk management;;
(e) Provision of such technical assistance in connection with the
business of Recipient as may be required from time to time;
(f) Determination of appropriate amounts of advances to be made from
time to time by Provider as provided in Section 3 of this
Agreement, and the timing and amounts for appropriate
repayments;
(g) Consultation and assistance with respect to the protection,
prosecution, maintenance and licensing of intellectual property;
and
(h) Such other services as may be requested by Recipient or deemed
necessary and proper from time to time.
2. Obligations of Recipient. Recipient, acting through its Board of
Directors and executive officers, shall:
(a) Provide Provider from time to time with such direction and
instructions in connection with the management of Recipient as
the Board of Directors or executive officers shall deem
appropriate;
(b) Comply promptly with all reasonable requests for instructions
which Provider may make in order to perform its duties
efficiently under this Agreement;
(c) Pay Provider, as compensation for all services rendered pursuant
to this Agreement, a fee determined as a fraction of the net
sales of Recipient the numerator of which fraction equals the
total costs of corporate services of Provider and the
denominator of which fraction equals the total combined net
sales of Provider and Recipient. The fee determined as provided
in the immediately preceding sentence shall be reduced by actual
costs incurred by Recipient for sales, technical, marketing,
quality control and general and administrative functions.
- 2 -
22
3. Working Capital Loans. Provider agrees from time to time during the
term of this Agreement to advance to Recipient such amounts as Recipient may
reasonably require for working capital purposes. All such advances shall be on
open account, without the necessity of any note or other writing, unless such
written evidence shall be requested by Provider. All such advances shall be
repayable upon demand by Provider, together with interest on the outstanding
principal balance of such advances calculated during each month at a rate equal
to Provider's weighted average cost of revolving credit funds as in effect for
each month. Accrued but unpaid interest only shall be payable to Provider with
respect to such advances on a semi-annual basis prior to demand. Upon any
termination of this Agreement, all outstanding advances, together with accrued
but unpaid interest thereon, shall immediately become due and payable as of the
date of termination, without demand by Provider.
4. Miscellaneous Services. It is the intent of the parties hereto that
Provider provide only the Services requested by Recipient in connection with
routine management, financial and administrative functions related to the
ongoing operations of Recipient and not with respect to special projects,
including corporate investments, acquisitions and divestitures. It is
expressly understood that Provider assumes no liability for any expenses or
services other than those stated in Section 1.
5. Term; Termination. The original term of this Agreement shall be for
the parties' fiscal year ending June 28, 1997. This Agreement shall be
extended on an annual basis after the expiration of its original and each
renewal term unless earlier terminated by either party. Either party may, at
its option, immediately terminate this Agreement without liability, if the
other party becomes insolvent or bankrupt, or admits in writing its inability
to pay its debts as they become due, or makes an assignment for the benefit of
creditors, or applies for or consents to the appointment of a trustee or
receiver for the major part of its property, or if bankruptcy, reorganization,
rearrangement, insolvency or liquidation proceedings or other proceedings for
relief under any law for the benefit of debtors are instituted by or against
such other party and, if so instituted against such other party, are consented
to or not abated within sixty (60) days after the commencement of such
proceedings. This Agreement may be terminated without cause by Provider upon
giving ninety (90) days advance written notice to Recipient or by Recipient
upon giving thirty (30) days advance written notice to Provider. Termination
of this Agreement shall not relieve either party of its liability for the
performance of obligations imposed upon said party during the effective period
of this Agreement if such obligations have not been performed or completed at
the time of termination.
6. Limitation of Liability. In providing its Services hereunder,
Provider shall have a duty to act, and to cause its agents to act, in a
reasonably prudent manner, but neither Provider, nor any officer, director,
employee or agent of Provider shall be liable to Recipient for any error of
judgment or mistake of law or for any loss incurred by Recipient in connection
with the matter to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Provider or
its agents.
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23
7. Indemnification of Provider by Recipient. Recipient shall indemnify
and hold harmless Provider, its officers, directors, employees and agents from
and against any and all losses, liabilities, claims, damages, costs and
expenses (including attorney's fees and other expenses of litigation) to which
such party may become subject to arising out of the Services provided by
Provider to Recipient hereunder, provided that such indemnity shall not protect
any such party against any liability to which such person would otherwise be
subject to by reason of willful misfeasance, bad faith or gross negligence.
8. Further Assurance. Each of the parties will make, execute,
acknowledge and deliver such other instruments and documents and take all such
other actions, as the other party may reasonably request and as may reasonably
be required in order to effectuate the purposes of this Agreement and to carry
out the terms hereof.
9. Ownership of Records. Recipient shall retain ownership in Illinois of
all books, records, reports and statistics produced by Provider or its agents
in rending services under this Agreement.
10. Authority. Provider shall have the authority to engage third party
accountants, attorneys, or other professions as necessary to aid in the
performance of Services pursuant to this Agreement, and the costs incurred by
Provider pursuant to such engagements shall be borne by Recipient. In
connection with the performance of the Services, Provider shall have the
authority, on behalf of Recipient, to accept orders for the purchase of goods
from Recipient, to purchase goods and services for the benefit of Recipient, to
receive payments due Recipient and to make payments owed by Recipient, and to
negotiate, settle, compromise and collect or pay, as appropriate, any
obligations owed to or by recipient. All authority of Provider pursuant to
this Agreement shall be exercised under the general direction of the Board of
Directors and the executive officers of Recipient, and subject to such control
and direction in any individual instance as the Board of Directors or executive
officers may provide.
11. Status. It is understood and agreed that the status of Provider under
this Agreement is that of an independent contractor to Recipient.
12. Notices. All communications hereunder shall be in writing and
sufficient if delivered personally or sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
If to Recipient, to:
Printpack Illinois, Inc.
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: President
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24
If to Provider, to:
Printpack, Inc.
0000 Xxxxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President - Finance
Notice given by mail shall be deemed given on the fifth (5th) day after deposit
in the United States mail as described above. Notice delivered personally
shall be deemed given and received. Either party may, by written notice,
change the address to which notices to such party are to be delivered or
mailed.
13. Amendment and Modification. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated other than by agreement
in writing signed by the parties hereto.
14. Successor and Assigns. This Agreement shall be binding upon and inure
to the benefit of Provider and Recipient and their respective successors and
assigns, except that neither party may assign its rights under this Agreement
without the prior written consent of the other party. Notwithstanding the
foregoing, Provider may fulfill its obligations under this Agreement by
subcontracting for various services with third parties to the extent it deems
advisable, subject to the approval of Recipient, which approval shall not be
unreasonably withheld.
15. Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first above written.
PRINTPACK ILLINOIS, INC.
By:
---------------------------------------
Title:
------------------------------------
PRINTPACK, INC.
By:
---------------------------------------
Title:
------------------------------------
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EXHIBIT 2.2
TAX ALLOCATION AGREEMENT
AGREEMENT effective as of the first day of the First Consolidated Return
Year by and among Printpack Holdings, Inc. ("Parent") and each of the following
subsidiaries ("Subsidiaries"):
Printpack Enterprises, Inc.
Printpack, Inc.
Printpack Illinois, Inc.
Flexible Funding Corp.
W I T N E S S E T H :
WHEREAS, the parties hereto intend to file Consolidated Returns for
periods ending subsequent to the date hereof; and
WHEREAS, it is the intent and desire of the parties hereto that a method
be established for allocating the Consolidated Tax Liability (as determined
under Section 1.1502-2 of the Regulations) of the Group among the parties (as
required by Section 1552(a) of the Code); for reimbursing the Parent for
payment of such tax liability; and to provide for the allocation and payment of
any refund arising from a carryback of net operating losses or tax credits from
subsequent taxable years.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
1. Definitions
The following terms as used in this Agreement shall have the meanings set
forth below:
(a) "Code" shall mean the Internal Revenue Code of 1986 as amended from
time to time.
26
(b) The "Group" shall mean the affiliated Group of corporations within the
meaning of Section 1504(a) of the Code of which Parent is the common parent.
(c) "Consolidated Return" shall mean a consolidated Federal income tax
return filed pursuant to Section 1501 of the Code.
(d) "Regulations" shall mean the Treasury regulations as in effect from
time to time.
(e) "IRS" shall mean the Internal Revenue Service.
(f) "Consolidated Tax Liability" shall mean the consolidated Federal
income tax liability of the Group for any taxable year for which the Group
files a Consolidated Return.
(g) "Separate Tax Liability" shall mean that percentage of the
Consolidated Tax Liability equal to the ratio that such Subsidiary's taxable
income bears to the consolidated taxable income (as determined pursuant
Regulation 1.1552-1(a)(1)(ii)), but only if such Subsidiary has positive
taxable income. If a Subsidiary does not have positive taxable income, such
Subsidiary's Separate Tax Liability shall be deemed to be zero.
2. Payments
For each taxable year with respect to which Parent files a Consolidated
Return which includes the Subsidiaries, payment to Parent of the Separate Tax
Liability attributable to each Subsidiary with respect to such taxable year
shall be made as follows:
(a) On or before the first due date for Parent to make payment of
estimates of its Federal income taxes for each taxable year, Parent and each
Subsidiary shall estimate the Subsidiary's Separate Tax Liability for such
taxable year (the "Estimated Amount").
(b) Each Subsidiary shall pay one-fourth of the Subsidiary's Estimated
Amount to Parent within a reasonable period before or after each of the due
dates for Parent to make payment of estimates of its Federal income taxes for
such taxable year.
(c) In the case of a Subsidiary leaving the Group ("Departing
Subsidiary"), the Parent and the Departing Subsidiary shall estimate such
Departing Subsidiary's
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Separate Tax Liability for such taxable year ("The Departing Estimated Amount")
and such amount shall be paid to Parent by the Departing Subsidiary before
leaving the Group.
(d) If, after the end of each such taxable year, it is determined that any
Subsidiary's actual Separate Tax Liability for such taxable period differs from
the aggregate amount paid pursuant to subparagraphs (b) or (c), as applicable,
above with respect to such taxable period (the "Aggregate Estimated Amount"),
then such difference shall be reconciled and paid to P arent or the affected
Subsidiary within a reasonable period after the day the Consolidated Return for
such taxable period is filed unless such reconciliation is waived in writing by
both Parent and the affected Subsidiary.
3. Carryback/Carryforward Reimbursement
Parent shall reimburse a Subsidiary for any of the Subsidiary's current
losses used to compute the Group's Consolidated Tax Liability, but only to the
extent the Subsidiary would be able to carry back such losses to prior years,
or carryforward such losses for subsequent years, to offset the Subsidiary's
separate taxable income used in computing the Separate Tax Liability for those
years. For purposes of this Paragraph, the term "current losses" means the
separate taxable income determined by the Subsidiary for purposes of computing
the Subsidiary's current Separate Tax Liability if such separate taxable income
is a negative amount. Reimbursement shall be an amount equal to the
Consolidated Tax Liability that would have been computed but for the Group's
use of the Subsidiary's current losses, less the Group's actual Consolidated
Tax Liability. Reimbursement shall be made within a reasonable time after the
close of the taxable year.
4. Subsequent Adjustments
If any adjustments are made to the income, gains, losses, deductions or
credits of the Group for a taxable year during which the Subsidiary is a
member, whether by reason of the filing of an amended return or a claim for
refund with respect to such taxable year or an audit with respect to such
taxable year by the IRS, the amounts due under this Agreement for such taxable
year shall be redetermined by taking into account such
- 3 -
28
adjustments. If, as a result of such redetermination, any amounts due under
this Agreement shall differ from the amounts previously paid, then appropriate
payment of such difference shall be made within a reasonable period after the
date on which such additional taxes are paid, credit is allowed or refund is
received with respect to such adjustment, and shall include any interest
attributable thereto and any penalties or additions to tax which may be imposed.
5. Procedural Matters
Parent shall prepare and file the Consolidated Return and any other
returns, documents or statements required to be filed with the IRS with respect
to the determination of the Federal income tax liability of the Group. In its
sole discretion, Parent shall have the right with respect to any Consolidated
Returns which it has filed or will file,
(a) to determine
(i) the manner in which such returns, documents or statements shall be
prepared and filed, including, without limitation, the manner in which any item
of income, gain, loss, deduction or credit shall be reported,
(ii) whether any extension may be requested, and
(iii) the elections that will be made by the Subsidiaries,
(b) to contest, compromise or settle any adjustment or deficiency
proposed, asserted or assessed as a result of any audit of such returns by the
IRS,
(c) to file, prosecute, compromise or settle any claim for refund, and
(d) to determine whether any refunds, to which the Group may be entitled,
shall be paid by way of refund or credited against the tax liability of the
Group. The Subsidiaries hereby appoint Parent as their agent and
attorney-in-fact to take such action (including the execution of documents) as
Parent may deem appropriate to effect the foregoing.
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6. Subsidiaries
All subsidiaries of Parent, except foreign subsidiaries not eligible to be
included in a consolidated return under the Code, shall be subject to this
Agreement. If at any time Parent or a Subsidiary acquires or creates one or
more new subsidiary corporations that are includable corporations of the Group,
they shall be subject to this Agreement and shall be deemed a "Subsidiary" for
all purposes of this Agreement. Any Subsidiary which leaves the Group shall be
bound by this Agreement unless released from the Agreement by Parent in
writing. The Subsidiaries specifically agree that it will not be necessary for
all other Subsidiaries to re-sign the Agreement.
7. Miscellaneous Provisions
(a) A Consolidated Return shall be filed by Parent for its year ended June
27, 1997 ("First Consolidated Return Year"), and for each subsequent taxable
year in respect of which this Agreement is in effect and for which the Group is
required or permitted to file a Consolidated Return. The Parent and each
Subsidiary shall execute and file such consents, elections, and other documents
that may be required or appropriate for the proper filing of such returns.
(b) Any alteration, modification, addition, deletion, or other change in
the consolidated income tax return provisions of the Code or the Regulations
thereunder shall automatically be applicable to this Agreement mutatis
mutandis.
(c) This Agreement has been made in and shall be construed and enforced in
accordance with the laws of the State of Delaware from time to time obtaining.
(d) This Agreement shall be binding upon and inure to the benefit of each
party hereto and their respective successors and assigns.
(e) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deeded an original, but all of which
together shall constitute one and the same instrument.
- 5 -
30
(f) The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not constitute a part hereof.
In witness whereof, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be affixed hereto as of
the dates set forth below.
PRINTPACK HOLDINGS, INC.
By:
---------------------------
Title:
------------------------
Date:
------------------------
PRINTPACK, INC.
By:
---------------------------
Title:
-------------------------
Date:
-------------------------
PRINTPACK ENTERPRISES, INC.
By:
----------------------------
Title:
------------------------
Date:
-------------------------
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31
PRINTPACK ILLINOIS, INC.
By:
----------------------------
Title:
-------------------------
Date:
-------------------------
FLEXIBLE FUNDING CORP.
By:
----------------------------
Title:
-------------------------
Date:
--------------------------
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EXHIBIT 2.3
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This INTELLECTUAL PROPERTY LICENSE AGREEMENT (hereinafter the
"Agreement") is made and entered into as of the begining of the parties' fiscal
year 1997, by and between PRINTPACK ILLINOIS, INC., an Illinois corporation
having its principal place of business at Elgin, Illinois ("Licensor") and
PRINTPACK, INC., a Georgia corporation having its principal place of business
at 0000 Xxxxxxx Xxxxx, XX, Xxxxxxx, Xxxxxxx 00000 ("Licensee").
W I T N E S S E T H
WHEREAS, Licensor is now, and in the future may become, the owner of
certain Patents, Works, Marks, Trade Secrets, Confidential Information (as
defined below) and other know-how and technology (the "Intellectual Property")
for use in connection with the operation of the flexible packaging conversion
business; and
WHEREAS, Licensee is also engaged in the operation of a flexible
packaging conversion business in the United States and elsewhere and is
desirous of using the Intellectual Property in connection therewith; and
WHEREAS, Licensor is desirous of granting to Licensee a limited,
non-exclusive right to use the Intellectual Property in connection with its
business in accordance with the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following terms have the meanings
set forth below:
(a) "Confidential Information" means data and information now or
in the future relating to the business of Licensor which is or has been
disclosed to Licensee or of which Licensee became aware as a consequence of or
through its relationship to a party to this Agreement and which has value to
Licensor and is not generally known to its competitors. Confidential
Information shall not include any data or information that has been voluntarily
disclosed to the public by Licensor (except where such public disclosure has
been made by Licensee without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the public domain
through lawful means. Certain of the Confidential Information disclosed
pursuant to this Agreement may also constitute Trade Secrets (as defined
below).
(b) "Marks" means those certain trademarks, service marks, trade
names and other logos now, or at any time in the future, owned, used or
licensed to others by Licensor, in both stylized and un-stylized versions and
with and without design, including both common law uses and uses under federal
and state registrations. Licensor and Licensee agree that the Marks shall not
include the xxxx "PRINTPACK" which, if licensed to Licensee by Licensor, shall
be subject to a separate license agreement between the parties.
33
(c) "Patents" means all patents and patent applications that have
been, or at any time in the future are, filed by or assigned to Licensor, as
well as any and all continuations, continuations-in-part, divisionals,
substitutes, reexaminations and reissues thereof, and any foreign counterparts
issued thereon.
(d) "Trade Secrets" means current or future information of
Licensor including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, product plans or lists of
actual or potential customers or suppliers which (1) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (2) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
(e) "Works" means all current and future copyrightable works of
authorship of Licensor, whether or not registered, including without
limitation, any designs, drawings, graphics, technical descriptions for
products, users' guides, illustrations, advertising materials and computer
software.
2. GRANT OF LICENSES
(a) Patents: Subject to the terms of this Agreement, Licensor
hereby grants to Licensee a non-exclusive, nontransferable worldwide license to
practice the Patents, which shall remain in effect for the life of any
applicable Patents (if more than one Patent, then the license will remain in
effect only with respect to the unexpired Patent(s)) unless terminated sooner
as set forth herein, including but not limited to, the right to make, use,
distribute and sell, and to have others make, use, distribute and sell,
products and services covered by such Patents.
(b) Marks: Subject to the terms of this Agreement, Licensor
hereby grants to Licensee a non-exclusive, nontransferable worldwide license to
use the Marks in connection with the operation of its business, including but
not limited to, the identification and promotion of its services and products.
(c) Works: Subject to the terms of this Agreement, Licensor
hereby grants to Licensee a non-exclusive, nontransferable worldwide license
(under any copyrights or other proprietary rights) to use, display, distribute
(internally and externally), perform, reproduce, and prepare derivative works
based on, the Works in connection with the operation of its business.
(d) Trade Secrets and Confidential Information: Subject to the
terms of this Agreement, Licensor hereby grants to Licensee a non-exclusive,
nontransferable worldwide license to use the Trade Secrets and Confidential
Information, and any other Intellectual Property not specifically licensed
above, internally in connection with the operation of its business.
(e) No Right of Sublicense: The licenses granted pursuant to this
Section 2 shall not include the right to grant sublicenses, unless approved by
Licensor.
(f) Delivery: Upon execution of this Agreement and continuing
throughout its term, Licensor shall deliver to Licensee copies of all tangible
embodiments of the Intellectual Property in Licensor's then-current possession
and otherwise disclose to Licensee any information related to the Intellectual
Property, as reasonably requested by Licensee.
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34
(g) Reservation of Rights: Nothing herein shall be construed to
prevent Licensor from using the Intellectual Property in any manner, and
Licensor reserves all rights in the Intellectual Property not expressly granted
in this Agreement.
3. TERM
The Term of this Agreement shall commence on the date of execution of
this Agreement and shall continue until terminated as provided in Section 8.
4. LICENSE FEE
(a) In consideration of the foregoing grant of rights, Licensee
shall pay Licensor an annual license fee (the "License Fee") calculated in the
manner provided on Exhibit A attached hereto.
(b) The License Fee for a given fiscal year of Licensee ("Fiscal
Year") shall be paid within twenty (20) business days following the receipt by
Licensee of the audited financial statements reflecting Licensee's revenues for
such Fiscal Year. Any payment of the License Fee that is not timely remitted
as provided for in this paragraph shall bear interest at the annual rate of ten
percent (10%), with such interest beginning to accrue as of the first day when
said payment was initially due. In the event Licensee fails to make timely
payment to Licensor, of any payment due hereunder within thirty (30) days of
the date such payment is due, then Licensee's failure to make such payment
shall be deemed to constitute a material breach of this Agreement, and Licensor
may terminate this Agreement pursuant to the terms of Section 8 below.
5. OWNERSHIP OF INTELLECTUAL PROPERTY
(a) Licensee acknowledges that Licensor is the sole owner of all
right, title and interest in and to the Intellectual Property in any form or
embodiment thereof. Licensee shall not, at any time, do or suffer to be done
any act or thing which will in any way impair the rights of Licensor in and to
the Intellectual Property or which will depreciate the value of the
Intellectual Property. Licensee agrees that it will not, directly or
indirectly, challenge Licensor's ownership of or the validity of the
Intellectual Property or any registrations or applications for registration
thereof. Licensee agrees to do whatever acts Licensor may deem necessary or
advisable, including the execution of any instruments, to confirm and maintain
ownership by Licensor of the Intellectual Property.
(b) Licensee expressly agrees and understands that all derivative
works, improvement inventions and other modifications of the Intellectual
Property created by Licensee or its employees or agents ("Licensee
Developments") shall be owned exclusively by Licensor and shall be included
within the definition of Intellectual Property, and therefore licensed to
Licensee, as set forth herein. Licensee hereby assigns, agrees to assign and
upon creation automatically assigns, to Licensor in perpetuity all right, title
and interest that Licensee may have in any Licensee Developments, including
without limitation all copyrights and the rights to apply for, and legal title
to, any form of patent, utility model, industrial design or similar property
right recognized by any country or jurisdiction. Licensee represents and
warrants that it is not and will not become a party to any agreement that would
require it to assign to any other person or entity the copyrights, patent
rights or other such rights to any Licensee Developments, without the consent
of Licensor. Should
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35
Licensor elect to file any applications for patent protection or to register
claims of copyright to any Licensee Developments, Licensee will, at the request
of Licensor, do all things and sign all documents or instruments reasonably
necessary in the opinion of Licensor to register such claims, file such
applications and obtain, defend and enforce such copyrights and patent rights.
In addition, Licensee hereby irrevocably appoints Licensor its attorney in fact
to act for it and represent it in performing the foregoing obligations if
Licensee fails to perform same.
(c) Licensee expressly agrees and understands that all uses of the
Marks by Licensee, and any goodwill created in the Marks thereby, shall inure
solely to the benefit of, and be owned exclusively by, Licensor.
(d) This Section 5 shall survive the termination or expiration of
this Agreement.
6. RESTRICTIONS AND LIMITATIONS
(a) Licensee agrees that the operation of its business, including
but not limited to, its development of products and performance of services,
shall be of high quality and in compliance with those standards, if any,
promulgated by Licensor from time to time ("Standards"). Licensee also agrees
that its use of the Marks shall be in compliance with those guidelines, if any,
promulgated by Licensor from time to time ("Guidelines"). Licensee's agreement
to comply with these Standards and Guidelines shall constitute a material
element of this Agreement.
(b) Licensor shall have the right of periodic inspection of
Licensee and each of its facilities to review compliance with the Standards and
Guidelines. Licensor or its duly authorized representatives shall have the
right, during regular business hours and upon reasonable prior notice to
Licensee, to examine all documents, materials and records in the possession or
under the control of Licensee relating to compliance with the Standards and
Guidelines by or for Licensee. Should Licensor notify Licensee that its
business operations fail in any manner to comply with the Standards or
Guidelines, Licensee shall promptly correct such defects in accordance with
instructions from Licensor with respect thereto.
(c) Licensee shall use and display the Marks only as authorized in
Section 2(b) above and in such form and manner as are specifically approved by
Licensor under the following procedure. If Licensee plans to use the Marks in
a form or manner that has not previously been approved by Licensor, Licensee
shall submit its proposed form or manner of use, or both, to Licensor in
writing, and if Licensor has not rejected such form or manner, or both, in
writing within fifteen (15) days after its submission by Licensee, then such
form or manner shall be deemed approved. Licensor shall not unreasonably
reject a proposed form or manner of use of the Marks.
(d) Licensee agrees not to use any other trademarks, service marks
or trade names in connection with its business or services which are
substantially similar to or which so nearly resemble the Marks as to be likely
to cause deception or confusion.
(e) If either party discovers that any of the Intellectual
Property is infringed, it shall communicate the details to the other party.
Licensor shall thereupon have the exclusive right, but not the obligation, to
take whatever action it deems necessary, including the filing of lawsuits, to
protect the rights of the parties to this Agreement and to terminate such
infringement. The parties shall cooperate with one another if Licensor takes
any such action and shall split the expenses
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36
associated therewith as mutually agreed. If Licensor does not wish to take any
action hereunder, Licensee shall also have the right, but not the obligation,
to take any such action, provided Licensor consents thereto.
(f) For the term of this Agreement plus five (5) years, Licensee
will not disclose to others or use for any purpose of its own, other than as
permitted under this Agreement, any Confidential Information, financial or
business data, technical data, or other confidential or proprietary information
obtained from Licensor, or from an affiliated entity of Licensor. With respect
to Trade Secrets, Licensee agrees not to use for any purpose whatsoever, other
than as permitted under this Agreement, or to disclose Trade Secrets at any
time during or after the term of this Agreement or until such Trade Secrets
lose their status as such by becoming generally available to the public by
independent discovery, development, or publication. Licensee shall take
reasonable measures, at least consistent with those taken to protect its own
similar types of Confidential Information and Trade Secrets, to protect
Licensor's Confidential Information and Trade Secrets against disclosures
prohibited by this Agreement. This Section 6(f) shall survive the termination
or expiration of this Agreement as set forth herein.
(g) Licensee agrees that the operation of its business shall in
all respects be performed in accordance with all applicable federal, state and
local laws and regulations.
7. INDEMNIFICATION BY LICENSEE
Licensor assumes no responsibility to Licensee or to any third parties
with respect to the quality of the services or products offered by Licensee.
Licensee agrees to defend, indemnify, and hold harmless, forever, Licensor, its
subsidiaries and affiliates, successors and assigns, and their respective
officers, directors, agents, employees and affiliates against every claim,
suit, loss, liability, or damage, whatsoever, including the expenses of
investigating and defending against any claim or suit, and any amount paid in
settlement thereof, arising out of or relating to any products or services
offered by Licensee. Notwithstanding the foregoing, Licensor shall notify
Licensee, within thirty (30) days after receipt by Licensor of notice of any
claim, suit, loss, liability, or damage ("Indemnified Claim"), that it is
tendering such claim to Licensee for defense, settlement, resolution and/or
indemnification. Licensee shall keep Licensor reasonably advised of the
progress of the matter, including providing Licensor with copies of all
pleadings and correspondence. Licensee has the right to settle, compromise or
discharge any Indemnified Claim only with the prior written consent of Licensor
after advising Licensor as to the complete terms of such settlement, which
consent will not be unreasonably withheld or delayed. This Section 7 shall
survive any expiration or termination of this Agreement.
8. TERMINATION
This Agreement shall terminate upon thirty (30) days express written
notice by certified mail from Licensor to Licensee in the event Licensee is in
breach or default of any of its material obligations under this Agreement.
Licensee, within such thirty (30) day period, may remedy the default and
provide evidence satisfactory to Licensor that such default has been remedied,
in which case this Agreement shall continue as if no notice of breach or
default had been given. Licensor may, at its sole discretion, extend the time
during which Licensee may remedy the breach or default.
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37
9. EFFECT OF EXPIRATION OR TERMINATION
Upon expiration or termination of this Agreement:
(a) Licensee will forthwith cease and desist from any and all uses
of the Intellectual Property, and will destroy all copies of the Intellectual
Property under Licensee's then-current control. Notwithstanding the foregoing,
if this Agreement terminates not by any breach or default by Licensee of any of
its obligations hereunder, Licensee shall have three (3) months after the date
of such termination to exhaust its then current supply of materials and
products containing the Intellectual Property.
(b) Termination of this Agreement for any reason shall not affect
Licensee's obligation to pay Licensor any license fees which have accrued as of
the date of termination.
10. WARRANTY OF LICENSOR
Licensor warrants that it has the right to use and license the
Intellectual Property as set forth in this Agreement. In the event Licensee is
found liable in a court of law to any third party for infringement based upon
Licensee's use of the Intellectual Property in accord with the provisions of
this Agreement, Licensor shall indemnify Licensee against any and all damages
for which Licensee is held liable, and for all costs and expenses incurred by
Licensee in connection with the defense of the lawsuit. EXCEPT FOR THE
FOREGOING, ALL INTELLECTUAL PROPERTY IS PROVIDED "AS IS" WITHOUT ANY EXPRESS OR
IMPLIED WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED
WARRANTIES OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE. This
Section 10 shall survive the termination or expiration of this Agreement.
11. EXHIBITS
Each Exhibit to this Agreement shall be considered a part hereof as if
set forth herein in full.
12. LEGAL FEES AND COSTS
In the event a party elects to incur legal expenses to enforce or
interpret any provision of this Agreement by judicial proceedings, the
prevailing party will be entitled to recover such legal expenses, including,
without limitation, reasonable attorney's fees, costs and necessary
disbursements at all court levels, in addition to any other relief to which
such party shall be entitled.
13. CHOICE OF LAW
The parties agree that this Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
reference to conflict of laws principles.
14. BENEFIT/ASSIGNMENT
Subject to provisions herein to the contrary, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives, successors and
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38
assigns; provided, however, that no party may assign this Agreement without the
prior written consent of the other party, which consent may not be unreasonably
withheld. This Agreement is intended solely for the benefit of the parties
hereto and is not intended to, and shall not, create any enforceable third
party beneficiary rights.
15. WAIVER OF BREACH
The waiver by any party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to constitute, a waiver of
any subsequent breach of the same or any other provision hereof.
16. NOTICE
Any notice, demand or communication required, permitted, or desired to
be given hereunder shall be deemed effectively given when personally delivered,
when received by telegraphic or other electronic means (including telecopy and
telex) or overnight courier, or five (5) days after being deposited in the
United States mail, with postage prepaid thereon, certified or registered mail,
return receipt requested, addressed as set forth above or to such other address
or fax number, and to the attention of such other person or officer as any
party may designate.
17. SEVERABILITY
In the event any provision of this Agreement is held to be invalid,
illegal or unenforceable for any reason and in any respect, such invalidity,
illegality, or unenforceability shall in no event affect, prejudice or disturb
the validity of the remainder of this Agreement, which shall be and remain in
full force and effect, enforceable in accordance with its terms.
18. DIVISIONS AND HEADINGS
The divisions of this Agreement into sections and subsections and the
use of captions and headings in connection therewith are solely for convenience
and shall have no legal effect in construing the provisions of this Agreement.
19. ENTIRE AGREEMENT
This Agreement supersedes all previous contracts, and constitutes the
entire agreement of whatsoever kind or nature existing between or among the
parties respecting the within subject matter and no party shall be entitled to
benefits other than those specified herein. As between or among the parties,
no oral statements or prior written material not specifically incorporated
herein shall be of any force and effect. The parties specifically acknowledge
that in entering into and executing this Agreement, the parties rely solely
upon the representations and agreements contained in this Agreement and no
others. All prior representations or agreements, whether written or verbal,
not expressly incorporated herein are superseded and no changes in or additions
to this Agreement shall be recognized unless and until made in writing and
signed by all parties hereto. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
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39
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
LICENSOR: PRINTPACK ILLINOIS, INC.
By:
----------------------------
Title:
----------------------------
LICENSEE: PRINTPACK, INC.
By:
----------------------------
Title:
----------------------------
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EXHIBIT A
LICENSE FEE
The License Fee payable by Licensee to Licensor for a Fiscal Year shall be 3%
of Licensee's Net Sales for such Fiscal Year. The term "Net Sales" shall mean
total sales revenue for such Fiscal Year reduced by applicable and customary
credits, discounts, rebates and sales returns and allowances, as determined by
generally accepted accounting principles and reflected in Licensee's annual
financial statements for such Fiscal Year. Notwithstanding the foregoing, the
minimum License Fee payable by Licensee for any Fiscal Year shall be
$_____________________.
41
TRADEMARK LICENSE AGREEMENT
This TRADEMARK LICENSE AGREEMENT (hereinafter the "Agreement") is made
and entered into as of the begining of the parties' fiscal year 1997, by and
between PRINTPACK ILLINOIS, INC., an Illinois corporation having its principal
place of business at Elgin, Illinois ("Licensor") and PRINTPACK HOLDINGS, INC.,
a Delaware corporation having its principal place of business at 0000 Xxxxxxx
Xxxxx, XX, Xxxxxxx, Xxxxxxx 00000 ("Licensee").
W I T N E S S E T H
WHEREAS, Licensor is the owner of the trademark and trade name
PRINTPACK (the "Xxxx"), in both stylized and un-stylized versions and with and
without design, including both common law uses and uses under federal and state
registrations (United States reg. no. 1,217,574), for use in connection with
the operation of its flexible packaging business; and
WHEREAS, Licensor has established significant goodwill in the Xxxx as
a result of the substantial and continuous use of the Xxxx in the United States
and elsewhere, in connection with the operation of the flexible packaging
business of Licensor and its predecessors; and
WHEREAS, Licensee is also engaged in the operation of a flexible
packaging related business in the United States and elsewhere and is desirous
of using the Xxxx in connection therewith; and
WHEREAS, Licensor is desirous of granting to Licensee a limited,
non-exclusive right to use the Xxxx in connection with its business in
accordance with the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. GRANT OF LICENSE
(a) Licensor hereby grants to Licensee a non-exclusive,
nontransferable worldwide license to use the Xxxx in its corporate and business
name as follows:
"PRINTPACK".
Licensee is not licensed to use the Xxxx in any other format or
manner, including use of the Xxxx by itself or in combination with any other
words, names or symbols.
(b) Nothing herein shall be construed to prevent Licensor from
using the Xxxx in any manner.
2. TERM
The Term of this Agreement shall commence on the date of execution of
this Agreement and shall continue until terminated as provided in Section 10.
42
3. LICENSE FEE
(a) In consideration of the foregoing grant of rights, Licensee
shall pay Licensor an annual license fee (the "License Fee") calculated in the
manner provided on Exhibit A attached hereto.
(b) The License Fee for a given fiscal year of Licensee ("Fiscal
Year") shall be paid within twenty (20) business days following the receipt by
Licensee of the audited financial statements reflecting Licensee's revenues for
such Fiscal Year. Any payment of the License Fee that is not timely remitted
as provided for in this paragraph shall bear interest at the annual rate of ten
percent (10%), with such interest beginning to accrue as of the first day when
said payment was initially due. In the event Licensee fails to make timely
payment to Licensor, of any payment due hereunder within thirty (30) days of
the date such payment is due, then Licensee's failure to make such payment
shall be deemed to constitute a material breach of this Agreement, and Licensor
may terminate this Agreement pursuant to the terms of Section 10 below.
4. OWNERSHIP OF XXXX
(a) Licensee acknowledges that Licensor is the sole owner of all
right, title and interest in and to the Xxxx and all registrations thereof in
any form or embodiment thereof and is also the sole owner of all goodwill
attached to the Xxxx in connection with its use by Licensee. Licensee shall
not, at any time, do or suffer to be done any act or thing which will in any
way impair the rights of Licensor in and to the Xxxx or any registrations
thereof or which will depreciate the value or reputation of the Xxxx. Licensee
agrees that it will not, directly or indirectly, challenge Licensor's ownership
of or the validity of the Xxxx or any registrations or applications for
registration thereof. Licensee agrees to do whatever acts Licensor may deem
necessary or advisable, including the execution of any instruments, to confirm
and maintain ownership by Licensor of the Xxxx.
(b) Licensee acknowledges that any use of the Xxxx shall not
create in Licensee's favor any right, title or interest in or to the Xxxx,
except as granted in this Agreement. Licensee expressly agrees and understands
that all uses of the Xxxx by Licensee, and any goodwill created in the Xxxx
thereby, shall inure solely to the benefit of, and be owned exclusively by,
Licensor.
(c) This Section 4 shall survive the termination or expiration of
this Agreement.
5. RESTRICTIONS AND LIMITATIONS
(a) Licensee shall use and display the Xxxx only as authorized in
Section 1(a) above and in such form and manner as are specifically approved by
Licensor under the following procedure. If Licensee plans to use the Xxxx in a
form or manner that has not previously been approved by Licensor, Licensee
shall submit its proposed form or manner of use, or both, to Licensor in
writing, and if Licensor has not rejected such form or manner, or both, in
writing within fifteen (15) days after its submission by Licensee, then such
form or manner shall be deemed approved. Licensor shall not unreasonably
reject a proposed form or manner of use of the Xxxx.
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43
(b) Licensee understands and agrees that this Agreement does not
authorize Licensee to use the Xxxx, or any part or simulation thereof, other
than in connection with its use as part of Licensee's corporate and business
name.
(c) Licensee agrees not to use any other trademarks, service marks
or trade names in connection with its business or services which are
substantially similar to or which so nearly resemble the Xxxx as to be likely
to cause deception or confusion.
(d) When using the Xxxx under this Agreement, Licensee shall
comply with all laws, rules and regulations pertaining to the use of trademarks
and service marks.
6. MAINTENANCE OF SERVICE STANDARDS AND INSPECTION
(a) Licensee agrees that the operation of its business, including
but not limited to, its development of products and performance of services,
shall be of high quality and in compliance with those standards, if any,
promulgated by Licensor from time to time ("Standards"). Licensee also agrees
that its use of the Xxxx shall be in compliance with those guidelines, if any,
promulgated by Licensor from time to time ("Guidelines"). Licensee's agreement
to comply with these Standards and Guidelines shall constitute a material
element of this Agreement.
(b) Licensor shall have the right of periodic inspection of
Licensee and each of its facilities to review compliance with the Standards and
Guidelines. Licensor or its duly authorized representatives shall have the
right, during regular business hours and upon reasonable prior notice to
Licensee, to examine all documents, materials and records in the possession or
under the control of Licensee relating to compliance with the Standards and
Guidelines by or for Licensee. Should Licensor notify Licensee that its
business operations fail in any manner to comply with the Standards or
Guidelines, Licensee shall promptly correct such defects in accordance with
instructions from Licensor with respect thereto.
(c) Licensee agrees that the operation of its business shall in
all respects be performed in accordance with all applicable federal, state and
local laws and regulations.
(d) Licensor shall take reasonable precautions to maintain the
confidentiality of any information provided to it by Licensee pursuant to this
Section 6 which is of a confidential or trade secret nature and which is
identified as such by Licensee.
7. ADVERTISING AND PROMOTIONAL MATERIALS
Upon request, Licensee shall promptly provide to Licensor, at no
expense to Licensor, copies of all advertising, promotional and marketing
materials, including but not limited to advertising copy, advertising layout,
publicity, promotional materials and other sales or trade literature utilizing
the Xxxx.
8. INDEMNIFICATION BY LICENSEE
Licensor assumes no responsibility to Licensee or to any third parties
with respect to the quality of the services or products offered by Licensee.
Licensee agrees to defend, indemnify, and hold harmless, forever, Licensor, its
subsidiaries and affiliates, successors and assigns, and their respective
officers, directors, agents, employees and affiliates against every claim,
suit, loss,
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44
liability, or damage, whatsoever, including the expenses of investigating and
defending against any claim or suit, and any amount paid in settlement thereof,
arising out of or relating to any products or services offered by Licensee.
Notwithstanding the foregoing, Licensor shall notify Licensee, within thirty
(30) days after receipt by Licensor of notice of any claim, suit, loss,
liability, or damage ("Indemnified Claim"), that it is tendering such claim to
Licensee for defense, settlement, resolution and/or indemnification. Licensee
shall keep Licensor reasonably advised of the progress of the matter, including
providing Licensor with copies of all pleadings and correspondence. Licensee
has the right to settle, compromise or discharge any Indemnified Claim only
with the prior written consent of Licensor after advising Licensor as to the
complete terms of such settlement, which consent will not be unreasonably
withheld or delayed. This Section 8 shall survive any expiration or
termination of this Agreement.
9. MAINTENANCE AND PROTECTION OF TRADEMARK
Licensee, at Licensor's expense, agrees to assist Licensor in the
protection of Licensor's rights to the Xxxx to the extent that Licensor may
commence or prosecute in its own name any claims or suits relating to the
Marks, and Licensee agrees, if reasonably required by Licensor and at
Licensor's expense, to join as a party thereto. Licensee shall immediately
notify Licensor of any threatened or actual unauthorized use or infringements,
imitations or dilutions by others of the Xxxx which may come to Licensee's
attention. Licensor shall have the sole right to determine whether or not any
action shall be taken against any such infringements, imitations or dilutions;
provided, however, that if Licensor elects not to take any action, Licensee may
institute suit or take action on its own behalf at its own expense. Licensee
agrees to preserve in the marketplace the integrity of Licensor's trademark so
as not to violate the law or to forfeit any rights in the Xxxx.
10. TERMINATION
This Agreement shall terminate upon thirty (30) days express written
notice by certified mail from Licensor to Licensee in the event Licensee is in
breach or default of any of its material obligations under this Agreement.
Licensee, within such thirty (30) day period, may remedy the default and
provide evidence satisfactory to Licensor that such default has been remedied,
in which case this Agreement shall continue as if no notice of breach or
default had been given. Licensor may, at its sole discretion, extend the time
during which Licensee may remedy the breach or default.
11. EFFECT OF EXPIRATION OR TERMINATION
Upon expiration or termination of this Agreement:
(a) Licensee will forthwith cease and desist from any and all uses
of the Xxxx, and will either destroy all uses of the Xxxx, or will deliver up
to Licensor or its duly authorized representative for destruction all materials
and signage bearing the Xxxx. In addition, Licensee agrees to make no
reference in its advertising or promotional materials as having been formerly
associated with or licensed by Licensor. Licensee will not subsequently adopt
or use any trademark, service xxxx, trade name or the like which would be
likely to cause confusion with the Xxxx. Notwithstanding the foregoing, if
this Agreement terminates not by any breach or default by Licensee of any of
its obligations hereunder, Licensee shall have three (3) months after the date
of such termination to exhaust its then current supply of materials bearing the
Xxxx and to remove all signage bearing the Xxxx.
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45
(b) Termination of this Agreement for any reason shall not affect
Licensee's obligation to pay Licensor any license fees which have accrued as of
the date of termination.
12. WARRANTY OF LICENSOR
Licensor warrants that it has the right to use and license the Xxxx as
set forth in this Agreement. In the event Licensee is found liable in a court
of law to any third party for service xxxx or trademark infringement based upon
Licensee's use of the Xxxx in accord with the provisions of this Agreement,
Licensor shall indemnify Licensee against any and all damages for which
Licensee is held liable, and for all costs and expenses incurred by Licensee in
connection with the defense of the lawsuit.
13. EXHIBITS
Each Exhibit to this Agreement shall be considered a part hereof as if
set forth herein in full.
14. LEGAL FEES AND COSTS
In the event a party elects to incur legal expenses to enforce or
interpret any provision of this Agreement by judicial proceedings, the
prevailing party will be entitled to recover such legal expenses, including,
without limitation, reasonable attorney's fees, costs and necessary
disbursements at all court levels, in addition to any other relief to which
such party shall be entitled.
15. CHOICE OF LAW
The parties agree that this Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
reference to conflict of laws principles.
16. BENEFIT/ASSIGNMENT
Subject to provisions herein to the contrary, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives, successors and assigns; provided, however,
that no party may assign this Agreement without the prior written consent of
the other party, which consent may not be unreasonably withheld. This
Agreement is intended solely for the benefit of the parties hereto and is not
intended to, and shall not, create any enforceable third party beneficiary
rights.
17. WAIVER OF BREACH
The waiver by any party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to constitute, a waiver of
any subsequent breach of the same or any other provision hereof.
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46
18. NOTICE
Any notice, demand or communication required, permitted, or desired to
be given hereunder shall be deemed effectively given when personally delivered,
when received by telegraphic or other electronic means (including telecopy and
telex) or overnight courier, or five (5) days after being deposited in the
United States mail, with postage prepaid thereon, certified or registered mail,
return receipt requested, addressed as set forth above or to such other address
or fax number, and to the attention of such other person or officer as any
party may designate.
19. SEVERABILITY
In the event any provision of this Agreement is held to be invalid,
illegal or unenforceable for any reason and in any respect, such invalidity,
illegality, or unenforceability shall in no event affect, prejudice or disturb
the validity of the remainder of this Agreement, which shall be and remain in
full force and effect, enforceable in accordance with its terms.
20. DIVISIONS AND HEADINGS
The divisions of this Agreement into sections and subsections and the
use of captions and headings in connection therewith are solely for convenience
and shall have no legal effect in construing the provisions of this Agreement.
21. ENTIRE AGREEMENT
This Agreement supersedes all previous contracts, and constitutes the
entire agreement of whatsoever kind or nature existing between or among the
parties respecting the within subject matter and no party shall be entitled to
benefits other than those specified herein. As between or among the parties,
no oral statements or prior written material not specifically incorporated
herein shall be of any force and effect. The parties specifically acknowledge
that in entering into and executing this Agreement, the parties rely solely
upon the representations and agreements contained in this Agreement and no
others. All prior representations or agreements, whether written or verbal,
not expressly incorporated herein are superseded and no changes in or additions
to this Agreement shall be recognized unless and until made in writing and
signed by all parties hereto. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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47
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
LICENSOR: PRINTPACK ILLINOIS, INC.
By:
-------------------------
Title:
-------------------------
LICENSEE: PRINTPACK HOLDINGS, INC.
By:
-------------------------
Title:
-------------------------
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EXHIBIT A
LICENSE FEE
The License Fee payable by Licensee to Licensor for a Fiscal Year shall be one
percent (1%) of Licensee's Net Sales for such Fiscal Year. The term "Net
Sales" shall mean total sales revenue for such Fiscal Year reduced by
applicable and customary credits, discounts, rebates and sales returns and
allowances, as determined by generally accepted accounting principles and
reflected in Licensee's annual financial statements for such Fiscal Year.
Notwithstanding the foregoing, the minimum License Fee payable by Licensee for
any Fiscal Year shall be $1,000.00.
49
TRADEMARK LICENSE AGREEMENT
This TRADEMARK LICENSE AGREEMENT (hereinafter the "Agreement") is made
and entered into as of the begining of the parties' fiscal year 1997, by and
between PRINTPACK ILLINOIS, INC., an Illinois corporation having its principal
place of business at Elgin, Illinois ("Licensor") and PRINTPACK ENTERPRISES,
INC., a Georgia corporation having its principal place of business at 0000
Xxxxxxx Xxxxx, XX, Xxxxxxx, Xxxxxxx 00000 ("Licensee").
W I T N E S S E T H
WHEREAS, Licensor is the owner of the trademark and trade name
PRINTPACK (the "Xxxx"), in both stylized and un-stylized versions and with and
without design, including both common law uses and uses under federal and state
registrations (United States reg. no. 1,217,574), for use in connection with
the operation of its flexible packaging business; and
WHEREAS, Licensor has established significant goodwill in the Xxxx as
a result of the substantial and continuous use of the Xxxx in the United States
and elsewhere, in connection with the operation of the flexible packaging
business of Licensor and its predecessors; and
WHEREAS, Licensee is also engaged in the operation of a flexible
packaging related business in the United States and elsewhere and is desirous
of using the Xxxx in connection therewith; and
WHEREAS, Licensor is desirous of granting to Licensee a limited,
non-exclusive right to use the Xxxx in connection with its business in
accordance with the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. GRANT OF LICENSE
(a) Licensor hereby grants to Licensee a non-exclusive,
nontransferable worldwide license to use the Xxxx in its corporate and business
name as follows:
"PRINTPACK".
Licensee is not licensed to use the Xxxx in any other format or
manner, including use of the Xxxx by itself or in combination with any other
words, names or symbols.
(b) Nothing herein shall be construed to prevent Licensor from
using the Xxxx in any manner.
2. TERM
The Term of this Agreement shall commence on the date of execution of
this Agreement and shall continue until terminated as provided in Section 10.
50
3. LICENSE FEE
(a) In consideration of the foregoing grant of rights, Licensee
shall pay Licensor an annual license fee (the "License Fee") calculated in the
manner provided on Exhibit A attached hereto.
(b) The License Fee for a given fiscal year of Licensee ("Fiscal
Year") shall be paid within twenty (20) business days following the receipt by
Licensee of the audited financial statements reflecting Licensee's revenues for
such Fiscal Year. Any payment of the License Fee that is not timely remitted
as provided for in this paragraph shall bear interest at the annual rate of ten
percent (10%), with such interest beginning to accrue as of the first day when
said payment was initially due. In the event Licensee fails to make timely
payment to Licensor, of any payment due hereunder within thirty (30) days of
the date such payment is due, then Licensee's failure to make such payment
shall be deemed to constitute a material breach of this Agreement, and Licensor
may terminate this Agreement pursuant to the terms of Section 10 below.
4. OWNERSHIP OF XXXX
(a) Licensee acknowledges that Licensor is the sole owner of all
right, title and interest in and to the Xxxx and all registrations thereof in
any form or embodiment thereof and is also the sole owner of all goodwill
attached to the Xxxx in connection with its use by Licensee. Licensee shall
not, at any time, do or suffer to be done any act or thing which will in any
way impair the rights of Licensor in and to the Xxxx or any registrations
thereof or which will depreciate the value or reputation of the Xxxx. Licensee
agrees that it will not, directly or indirectly, challenge Licensor's ownership
of or the validity of the Xxxx or any registrations or applications for
registration thereof. Licensee agrees to do whatever acts Licensor may deem
necessary or advisable, including the execution of any instruments, to confirm
and maintain ownership by Licensor of the Xxxx.
(b) Licensee acknowledges that any use of the Xxxx shall not
create in Licensee's favor any right, title or interest in or to the Xxxx,
except as granted in this Agreement. Licensee expressly agrees and understands
that all uses of the Xxxx by Licensee, and any goodwill created in the Xxxx
thereby, shall inure solely to the benefit of, and be owned exclusively by,
Licensor.
(c) This Section 4 shall survive the termination or expiration of
this Agreement.
5. RESTRICTIONS AND LIMITATIONS
(a) Licensee shall use and display the Xxxx only as authorized in
Section 1(a) above and in such form and manner as are specifically approved by
Licensor under the following procedure. If Licensee plans to use the Xxxx in a
form or manner that has not previously been approved by Licensor, Licensee
shall submit its proposed form or manner of use, or both, to Licensor in
writing, and if Licensor has not rejected such form or manner, or both, in
writing within fifteen (15) days after its submission by Licensee, then such
form or manner shall be deemed approved. Licensor shall not unreasonably
reject a proposed form or manner of use of the Xxxx.
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51
(b) Licensee understands and agrees that this Agreement does not
authorize Licensee to use the Xxxx, or any part or simulation thereof, other
than in connection with its use as part of Licensee's corporate and business
name.
(c) Licensee agrees not to use any other trademarks, service marks
or trade names in connection with its business or services which are
substantially similar to or which so nearly resemble the Xxxx as to be likely
to cause deception or confusion.
(d) When using the Xxxx under this Agreement, Licensee shall
comply with all laws, rules and regulations pertaining to the use of trademarks
and service marks.
6. MAINTENANCE OF SERVICE STANDARDS AND INSPECTION
(a) Licensee agrees that the operation of its business, including
but not limited to, its development of products and performance of services,
shall be of high quality and in compliance with those standards, if any,
promulgated by Licensor from time to time ("Standards"). Licensee also agrees
that its use of the Xxxx shall be in compliance with those guidelines, if any,
promulgated by Licensor from time to time ("Guidelines"). Licensee's agreement
to comply with these Standards and Guidelines shall constitute a material
element of this Agreement.
(b) Licensor shall have the right of periodic inspection of
Licensee and each of its facilities to review compliance with the Standards and
Guidelines. Licensor or its duly authorized representatives shall have the
right, during regular business hours and upon reasonable prior notice to
Licensee, to examine all documents, materials and records in the possession or
under the control of Licensee relating to compliance with the Standards and
Guidelines by or for Licensee. Should Licensor notify Licensee that its
business operations fail in any manner to comply with the Standards or
Guidelines, Licensee shall promptly correct such defects in accordance with
instructions from Licensor with respect thereto.
(c) Licensee agrees that the operation of its business shall in
all respects be performed in accordance with all applicable federal, state and
local laws and regulations.
(d) Licensor shall take reasonable precautions to maintain the
confidentiality of any information provided to it by Licensee pursuant to this
Section 6 which is of a confidential or trade secret nature and which is
identified as such by Licensee.
7. ADVERTISING AND PROMOTIONAL MATERIALS
Upon request, Licensee shall promptly provide to Licensor, at no
expense to Licensor, copies of all advertising, promotional and marketing
materials, including but not limited to advertising copy, advertising layout,
publicity, promotional materials and other sales or trade literature utilizing
the Xxxx.
8. INDEMNIFICATION BY LICENSEE
Licensor assumes no responsibility to Licensee or to any third parties
with respect to the quality of the services or products offered by Licensee.
Licensee agrees to defend, indemnify, and hold harmless, forever, Licensor, its
subsidiaries and affiliates, successors and assigns, and their respective
officers, directors, agents, employees and affiliates against every claim,
suit, loss,
- 3 -
52
liability, or damage, whatsoever, including the expenses of investigating and
defending against any claim or suit, and any amount paid in settlement thereof,
arising out of or relating to any products or services offered by Licensee.
Notwithstanding the foregoing, Licensor shall notify Licensee, within thirty
(30) days after receipt by Licensor of notice of any claim, suit, loss,
liability, or damage ("Indemnified Claim"), that it is tendering such claim to
Licensee for defense, settlement, resolution and/or indemnification. Licensee
shall keep Licensor reasonably advised of the progress of the matter, including
providing Licensor with copies of all pleadings and correspondence. Licensee
has the right to settle, compromise or discharge any Indemnified Claim only
with the prior written consent of Licensor after advising Licensor as to the
complete terms of such settlement, which consent will not be unreasonably
withheld or delayed. This Section 8 shall survive any expiration or
termination of this Agreement.
9. MAINTENANCE AND PROTECTION OF TRADEMARK
Licensee, at Licensor's expense, agrees to assist Licensor in the
protection of Licensor's rights to the Xxxx to the extent that Licensor may
commence or prosecute in its own name any claims or suits relating to the
Marks, and Licensee agrees, if reasonably required by Licensor and at
Licensor's expense, to join as a party thereto. Licensee shall immediately
notify Licensor of any threatened or actual unauthorized use or infringements,
imitations or dilutions by others of the Xxxx which may come to Licensee's
attention. Licensor shall have the sole right to determine whether or not any
action shall be taken against any such infringements, imitations or dilutions;
provided, however, that if Licensor elects not to take any action, Licensee may
institute suit or take action on its own behalf at its own expense. Licensee
agrees to preserve in the marketplace the integrity of Licensor's trademark so
as not to violate the law or to forfeit any rights in the Xxxx.
10. TERMINATION
This Agreement shall terminate upon thirty (30) days express written
notice by certified mail from Licensor to Licensee in the event Licensee is in
breach or default of any of its material obligations under this Agreement.
Licensee, within such thirty (30) day period, may remedy the default and
provide evidence satisfactory to Licensor that such default has been remedied,
in which case this Agreement shall continue as if no notice of breach or
default had been given. Licensor may, at its sole discretion, extend the time
during which Licensee may remedy the breach or default.
11. EFFECT OF EXPIRATION OR TERMINATION
Upon expiration or termination of this Agreement:
(a) Licensee will forthwith cease and desist from any and all uses
of the Xxxx, and will either destroy all uses of the Xxxx, or will deliver up
to Licensor or its duly authorized representative for destruction all materials
and signage bearing the Xxxx. In addition, Licensee agrees to make no
reference in its advertising or promotional materials as having been formerly
associated with or licensed by Licensor. Licensee will not subsequently adopt
or use any trademark, service xxxx, trade name or the like which would be
likely to cause confusion with the Xxxx. Notwithstanding the foregoing, if
this Agreement terminates not by any breach or default by Licensee of any of
its obligations hereunder, Licensee shall have three (3) months after the date
of such termination to exhaust its then current supply of materials bearing the
Xxxx and to remove all signage bearing the Xxxx.
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53
(b) Termination of this Agreement for any reason shall not affect
Licensee's obligation to pay Licensor any license fees which have accrued as of
the date of termination.
12. WARRANTY OF LICENSOR
Licensor warrants that it has the right to use and license the Xxxx as
set forth in this Agreement. In the event Licensee is found liable in a court
of law to any third party for service xxxx or trademark infringement based upon
Licensee's use of the Xxxx in accord with the provisions of this Agreement,
Licensor shall indemnify Licensee against any and all damages for which
Licensee is held liable, and for all costs and expenses incurred by Licensee in
connection with the defense of the lawsuit.
13. EXHIBITS
Each Exhibit to this Agreement shall be considered a part hereof as if
set forth herein in full.
14. LEGAL FEES AND COSTS
In the event a party elects to incur legal expenses to enforce or
interpret any provision of this Agreement by judicial proceedings, the
prevailing party will be entitled to recover such legal expenses, including,
without limitation, reasonable attorney's fees, costs and necessary
disbursements at all court levels, in addition to any other relief to which
such party shall be entitled.
15. CHOICE OF LAW
The parties agree that this Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
reference to conflict of laws principles.
16. BENEFIT/ASSIGNMENT
Subject to provisions herein to the contrary, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives, successors and assigns; provided, however,
that no party may assign this Agreement without the prior written consent of
the other party, which consent may not be unreasonably withheld. This
Agreement is intended solely for the benefit of the parties hereto and is not
intended to, and shall not, create any enforceable third party beneficiary
rights.
17. WAIVER OF BREACH
The waiver by any party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to constitute, a waiver of
any subsequent breach of the same or any other provision hereof.
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54
18. NOTICE
Any notice, demand or communication required, permitted, or desired to
be given hereunder shall be deemed effectively given when personally delivered,
when received by telegraphic or other electronic means (including telecopy and
telex) or overnight courier, or five (5) days after being deposited in the
United States mail, with postage prepaid thereon, certified or registered mail,
return receipt requested, addressed as set forth above or to such other address
or fax number, and to the attention of such other person or officer as any
party may designate.
19. SEVERABILITY
In the event any provision of this Agreement is held to be invalid,
illegal or unenforceable for any reason and in any respect, such invalidity,
illegality, or unenforceability shall in no event affect, prejudice or disturb
the validity of the remainder of this Agreement, which shall be and remain in
full force and effect, enforceable in accordance with its terms.
20. DIVISIONS AND HEADINGS
The divisions of this Agreement into sections and subsections and the
use of captions and headings in connection therewith are solely for convenience
and shall have no legal effect in construing the provisions of this Agreement.
21. ENTIRE AGREEMENT
This Agreement supersedes all previous contracts, and constitutes the
entire agreement of whatsoever kind or nature existing between or among the
parties respecting the within subject matter and no party shall be entitled to
benefits other than those specified herein. As between or among the parties,
no oral statements or prior written material not specifically incorporated
herein shall be of any force and effect. The parties specifically acknowledge
that in entering into and executing this Agreement, the parties rely solely
upon the representations and agreements contained in this Agreement and no
others. All prior representations or agreements, whether written or verbal,
not expressly incorporated herein are superseded and no changes in or additions
to this Agreement shall be recognized unless and until made in writing and
signed by all parties hereto. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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55
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
LICENSOR: PRINTPACK ILLINOIS, INC.
By:
--------------------------
Title:
--------------------------
LICENSEE: PRINTPACK ENTERPRISES, INC.
By:
--------------------------
Title:
--------------------------
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56
EXHIBIT A
LICENSE FEE
The License Fee payable by Licensee to Licensor for a Fiscal Year shall be one
percent (1%) of Licensee's Net Sales for such Fiscal Year. The term "Net
Sales" shall mean total sales revenue for such Fiscal Year reduced by
applicable and customary credits, discounts, rebates and sales returns and
allowances, as determined by generally accepted accounting principles and
reflected in Licensee's annual financial statements for such Fiscal Year.
Notwithstanding the foregoing, the minimum License Fee payable by Licensee for
any Fiscal Year shall be $1,000.00.
57
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This INTELLECTUAL PROPERTY LICENSE AGREEMENT (hereinafter the
"Agreement") is made and entered into as of the begining of the parties' fiscal
year 1997, by and between PRINTPACK ILLINOIS, INC., an Illinois corporation
having its principal place of business at Elgin, Illinois ("Licensor") and
EMPAQUES PRINTPACK DE MEXICO, S.A. DE C.V., a Mexican corporation having its
principal place of business at Col. Del Xxxxx Delegacion, Xxxxxx Xxxxxx, Xxxxxx
Xxxx, Xxxxxx 00000 ("Licensee").
W I T N E S S E T H
WHEREAS, Licensor is now, and in the future may become, the owner of
certain Patents, Works, Marks, Trade Secrets, Confidential Information (as
defined below) and other know-how and technology (the "Intellectual Property")
for use in connection with the operation of the flexible packaging conversion
business; and
WHEREAS, Licensee is also engaged in the operation of a flexible
packaging conversion business in the United States and elsewhere and is
desirous of using the Intellectual Property in connection therewith; and
WHEREAS, Licensor is desirous of granting to Licensee a limited,
non-exclusive right to use the Intellectual Property in connection with its
business in accordance with the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following terms have the meanings
set forth below:
(a) "Confidential Information" means data and information now or
in the future relating to the business of Licensor which is or has been
disclosed to Licensee or of which Licensee became aware as a consequence of or
through its relationship to a party to this Agreement and which has value to
Licensor and is not generally known to its competitors. Confidential
Information shall not include any data or information that has been voluntarily
disclosed to the public by Licensor (except where such public disclosure has
been made by Licensee without authorization) or that has been independently
developed and disclosed by others, or that otherwise enters the public domain
through lawful means. Certain of the Confidential Information disclosed
pursuant to this Agreement may also constitute Trade Secrets (as defined
below).
(b) "Marks" means those certain trademarks, service marks, trade
names and other logos now, or at any time in the future, owned, used or
licensed to others by Licensor, in both stylized and un-stylized versions and
with and without design, including both common law uses and uses under federal
and state registrations. Licensor and Licensee agree that the Marks shall not
include the xxxx "PRINTPACK" which, if licensed to Licensee by Licensor, shall
be subject to a separate license agreement between the parties.
58
(c) "Patents" means all patents and patent applications that have
been, or at any time in the future are, filed by or assigned to Licensor, as
well as any and all continuations, continuations-in-part, divisionals,
substitutes, reexaminations and reissues thereof, and any foreign counterparts
issued thereon.
(d) "Trade Secrets" means current or future information of
Licensor including, but not limited to, technical or nontechnical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, product plans or lists of
actual or potential customers or suppliers which (1) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (2) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
(e) "Works" means all current and future copyrightable works of
authorship of Licensor, whether or not registered, including without
limitation, any designs, drawings, graphics, technical descriptions for
products, users' guides, illustrations, advertising materials and computer
software.
2. GRANT OF LICENSES
(a) Patents: Subject to the terms of this Agreement, Licensor
hereby grants to Licensee a non-exclusive, nontransferable worldwide license to
practice the Patents, which shall remain in effect for the life of any
applicable Patents (if more than one Patent, then the license will remain in
effect only with respect to the unexpired Patent(s)) unless terminated sooner
as set forth herein, including but not limited to, the right to make, use,
distribute and sell, and to have others make, use, distribute and sell,
products and services covered by such Patents.
(b) Marks: Subject to the terms of this Agreement, Licensor
hereby grants to Licensee a non-exclusive, nontransferable worldwide license to
use the Marks in connection with the operation of its business, including but
not limited to, the identification and promotion of its services and products.
(c) Works: Subject to the terms of this Agreement, Licensor
hereby grants to Licensee a non-exclusive, nontransferable worldwide license
(under any copyrights or other proprietary rights) to use, display, distribute
(internally and externally), perform, reproduce, and prepare derivative works
based on, the Works in connection with the operation of its business.
(d) Trade Secrets and Confidential Information: Subject to the
terms of this Agreement, Licensor hereby grants to Licensee a non-exclusive,
nontransferable worldwide license to use the Trade Secrets and Confidential
Information, and any other Intellectual Property not specifically licensed
above, internally in connection with the operation of its business.
(e) No Right of Sublicense: The licenses granted pursuant to this
Section 2 shall not include the right to grant sublicenses, unless approved by
Licensor.
(f) Delivery: Upon execution of this Agreement and continuing
throughout its term, Licensor shall deliver to Licensee copies of all tangible
embodiments of the Intellectual Property in Licensor's then-current possession
and otherwise disclose to Licensee any information related to the Intellectual
Property, as reasonably requested by Licensee.
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59
(g) Reservation of Rights: Nothing herein shall be construed to
prevent Licensor from using the Intellectual Property in any manner, and
Licensor reserves all rights in the Intellectual Property not expressly granted
in this Agreement.
3. TERM
The Term of this Agreement shall commence on the date of execution of
this Agreement and shall continue until terminated as provided in Section 8.
4. LICENSE FEE
(a) In consideration of the foregoing grant of rights, Licensee
shall pay Licensor an annual license fee (the "License Fee") calculated in the
manner provided on Exhibit A attached hereto.
(b) The License Fee for a given fiscal year of Licensee ("Fiscal
Year") shall be paid within twenty (20) business days following the receipt by
Licensee of the audited financial statements reflecting Licensee's revenues for
such Fiscal Year. Any payment of the License Fee that is not timely remitted
as provided for in this paragraph shall bear interest at the annual rate of ten
percent (10%), with such interest beginning to accrue as of the first day when
said payment was initially due. In the event Licensee fails to make timely
payment to Licensor, of any payment due hereunder within thirty (30) days of
the date such payment is due, then Licensee's failure to make such payment
shall be deemed to constitute a material breach of this Agreement, and Licensor
may terminate this Agreement pursuant to the terms of Section 8 below.
5. OWNERSHIP OF INTELLECTUAL PROPERTY
(a) Licensee acknowledges that Licensor is the sole owner of all
right, title and interest in and to the Intellectual Property in any form or
embodiment thereof. Licensee shall not, at any time, do or suffer to be done
any act or thing which will in any way impair the rights of Licensor in and to
the Intellectual Property or which will depreciate the value of the
Intellectual Property. Licensee agrees that it will not, directly or
indirectly, challenge Licensor's ownership of or the validity of the
Intellectual Property or any registrations or applications for registration
thereof. Licensee agrees to do whatever acts Licensor may deem necessary or
advisable, including the execution of any instruments, to confirm and maintain
ownership by Licensor of the Intellectual Property.
(b) Licensee expressly agrees and understands that all derivative
works, improvement inventions and other modifications of the Intellectual
Property created by Licensee or its employees or agents ("Licensee
Developments") shall be owned exclusively by Licensor and shall be included
within the definition of Intellectual Property, and therefore licensed to
Licensee, as set forth herein. Licensee hereby assigns, agrees to assign and
upon creation automatically assigns, to Licensor in perpetuity all right, title
and interest that Licensee may have in any Licensee Developments, including
without limitation all copyrights and the rights to apply for, and legal title
to, any form of patent, utility model, industrial design or similar property
right recognized by any country or jurisdiction. Licensee represents and
warrants that it is not and will not become a party to any agreement that would
require it to assign to any other person or entity the copyrights, patent
rights or other such rights to any Licensee Developments, without the consent
of Licensor. Should
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Licensor elect to file any applications for patent protection or to register
claims of copyright to any Licensee Developments, Licensee will, at the request
of Licensor, do all things and sign all documents or instruments reasonably
necessary in the opinion of Licensor to register such claims, file such
applications and obtain, defend and enforce such copyrights and patent rights.
In addition, Licensee hereby irrevocably appoints Licensor its attorney in fact
to act for it and represent it in performing the foregoing obligations if
Licensee fails to perform same.
(c) Licensee expressly agrees and understands that all uses of the
Marks by Licensee, and any goodwill created in the Marks thereby, shall inure
solely to the benefit of, and be owned exclusively by, Licensor.
(d) This Section 5 shall survive the termination or expiration of
this Agreement.
6. RESTRICTIONS AND LIMITATIONS
(a) Licensee agrees that the operation of its business, including
but not limited to, its development of products and performance of services,
shall be of high quality and in compliance with those standards, if any,
promulgated by Licensor from time to time ("Standards"). Licensee also agrees
that its use of the Marks shall be in compliance with those guidelines, if any,
promulgated by Licensor from time to time ("Guidelines"). Licensee's agreement
to comply with these Standards and Guidelines shall constitute a material
element of this Agreement.
(b) Licensor shall have the right of periodic inspection of
Licensee and each of its facilities to review compliance with the Standards and
Guidelines. Licensor or its duly authorized representatives shall have the
right, during regular business hours and upon reasonable prior notice to
Licensee, to examine all documents, materials and records in the possession or
under the control of Licensee relating to compliance with the Standards and
Guidelines by or for Licensee. Should Licensor notify Licensee that its
business operations fail in any manner to comply with the Standards or
Guidelines, Licensee shall promptly correct such defects in accordance with
instructions from Licensor with respect thereto.
(c) Licensee shall use and display the Marks only as authorized in
Section 2(b) above and in such form and manner as are specifically approved by
Licensor under the following procedure. If Licensee plans to use the Marks in
a form or manner that has not previously been approved by Licensor, Licensee
shall submit its proposed form or manner of use, or both, to Licensor in
writing, and if Licensor has not rejected such form or manner, or both, in
writing within fifteen (15) days after its submission by Licensee, then such
form or manner shall be deemed approved. Licensor shall not unreasonably
reject a proposed form or manner of use of the Marks.
(d) Licensee agrees not to use any other trademarks, service marks
or trade names in connection with its business or services which are
substantially similar to or which so nearly resemble the Marks as to be likely
to cause deception or confusion.
(e) If either party discovers that any of the Intellectual
Property is infringed, it shall communicate the details to the other party.
Licensor shall thereupon have the exclusive right, but not the obligation, to
take whatever action it deems necessary, including the filing of lawsuits, to
protect the rights of the parties to this Agreement and to terminate such
infringement. The parties shall cooperate with one another if Licensor takes
any such action and shall split the expenses
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associated therewith as mutually agreed. If Licensor does not wish to take any
action hereunder, Licensee shall also have the right, but not the obligation,
to take any such action, provided Licensor consents thereto.
(f) For the term of this Agreement plus five (5) years, Licensee
will not disclose to others or use for any purpose of its own, other than as
permitted under this Agreement, any Confidential Information, financial or
business data, technical data, or other confidential or proprietary information
obtained from Licensor, or from an affiliated entity of Licensor. With respect
to Trade Secrets, Licensee agrees not to use for any purpose whatsoever, other
than as permitted under this Agreement, or to disclose Trade Secrets at any
time during or after the term of this Agreement or until such Trade Secrets
lose their status as such by becoming generally available to the public by
independent discovery, development, or publication. Licensee shall take
reasonable measures, at least consistent with those taken to protect its own
similar types of Confidential Information and Trade Secrets, to protect
Licensor's Confidential Information and Trade Secrets against disclosures
prohibited by this Agreement. This Section 6(f) shall survive the termination
or expiration of this Agreement as set forth herein.
(g) Licensee agrees that the operation of its business shall in
all respects be performed in accordance with all applicable federal, state and
local laws and regulations.
7. INDEMNIFICATION BY LICENSEE
Licensor assumes no responsibility to Licensee or to any third parties
with respect to the quality of the services or products offered by Licensee.
Licensee agrees to defend, indemnify, and hold harmless, forever, Licensor, its
subsidiaries and affiliates, successors and assigns, and their respective
officers, directors, agents, employees and affiliates against every claim,
suit, loss, liability, or damage, whatsoever, including the expenses of
investigating and defending against any claim or suit, and any amount paid in
settlement thereof, arising out of or relating to any products or services
offered by Licensee. Notwithstanding the foregoing, Licensor shall notify
Licensee, within thirty (30) days after receipt by Licensor of notice of any
claim, suit, loss, liability, or damage ("Indemnified Claim"), that it is
tendering such claim to Licensee for defense, settlement, resolution and/or
indemnification. Licensee shall keep Licensor reasonably advised of the
progress of the matter, including providing Licensor with copies of all
pleadings and correspondence. Licensee has the right to settle, compromise or
discharge any Indemnified Claim only with the prior written consent of Licensor
after advising Licensor as to the complete terms of such settlement, which
consent will not be unreasonably withheld or delayed. This Section 7 shall
survive any expiration or termination of this Agreement.
8. TERMINATION
This Agreement shall terminate upon thirty (30) days express written
notice by certified mail from Licensor to Licensee in the event Licensee is in
breach or default of any of its material obligations under this Agreement.
Licensee, within such thirty (30) day period, may remedy the default and
provide evidence satisfactory to Licensor that such default has been remedied,
in which case this Agreement shall continue as if no notice of breach or
default had been given. Licensor may, at its sole discretion, extend the time
during which Licensee may remedy the breach or default.
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9. EFFECT OF EXPIRATION OR TERMINATION
Upon expiration or termination of this Agreement:
(a) Licensee will forthwith cease and desist from any and all uses
of the Intellectual Property, and will destroy all copies of the Intellectual
Property under Licensee's then-current control. Notwithstanding the foregoing,
if this Agreement terminates not by any breach or default by Licensee of any of
its obligations hereunder, Licensee shall have three (3) months after the date
of such termination to exhaust its then current supply of materials and
products containing the Intellectual Property.
(b) Termination of this Agreement for any reason shall not affect
Licensee's obligation to pay Licensor any license fees which have accrued as of
the date of termination.
10. WARRANTY OF LICENSOR
Licensor warrants that it has the right to use and license the
Intellectual Property as set forth in this Agreement. In the event Licensee is
found liable in a court of law to any third party for infringement based upon
Licensee's use of the Intellectual Property in accord with the provisions of
this Agreement, Licensor shall indemnify Licensee against any and all damages
for which Licensee is held liable, and for all costs and expenses incurred by
Licensee in connection with the defense of the lawsuit. EXCEPT FOR THE
FOREGOING, ALL INTELLECTUAL PROPERTY IS PROVIDED "AS IS" WITHOUT ANY EXPRESS OR
IMPLIED WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED
WARRANTIES OF MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE. This
Section 10 shall survive the termination or expiration of this Agreement.
11. EXHIBITS
Each Exhibit to this Agreement shall be considered a part hereof as if
set forth herein in full.
12. LEGAL FEES AND COSTS
In the event a party elects to incur legal expenses to enforce or
interpret any provision of this Agreement by judicial proceedings, the
prevailing party will be entitled to recover such legal expenses, including,
without limitation, reasonable attorney's fees, costs and necessary
disbursements at all court levels, in addition to any other relief to which
such party shall be entitled.
13. CHOICE OF LAW
The parties agree that this Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
reference to conflict of laws principles.
14. BENEFIT/ASSIGNMENT
Subject to provisions herein to the contrary, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives, successors and
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assigns; provided, however, that no party may assign this Agreement without the
prior written consent of the other party, which consent may not be unreasonably
withheld. This Agreement is intended solely for the benefit of the parties
hereto and is not intended to, and shall not, create any enforceable third
party beneficiary rights.
15. WAIVER OF BREACH
The waiver by any party of a breach or violation of any provision of
this Agreement shall not operate as, or be construed to constitute, a waiver of
any subsequent breach of the same or any other provision hereof.
16. NOTICE
Any notice, demand or communication required, permitted, or desired to
be given hereunder shall be deemed effectively given when personally delivered,
when received by telegraphic or other electronic means (including telecopy and
telex) or overnight courier, or five (5) days after being deposited in the
United States mail, with postage prepaid thereon, certified or registered mail,
return receipt requested, addressed as set forth above or to such other address
or fax number, and to the attention of such other person or officer as any
party may designate.
17. SEVERABILITY
In the event any provision of this Agreement is held to be invalid,
illegal or unenforceable for any reason and in any respect, such invalidity,
illegality, or unenforceability shall in no event affect, prejudice or disturb
the validity of the remainder of this Agreement, which shall be and remain in
full force and effect, enforceable in accordance with its terms.
18. DIVISIONS AND HEADINGS
The divisions of this Agreement into sections and subsections and the
use of captions and headings in connection therewith are solely for convenience
and shall have no legal effect in construing the provisions of this Agreement.
19. ENTIRE AGREEMENT
This Agreement supersedes all previous contracts, and constitutes the
entire agreement of whatsoever kind or nature existing between or among the
parties respecting the within subject matter and no party shall be entitled to
benefits other than those specified herein. As between or among the parties,
no oral statements or prior written material not specifically incorporated
herein shall be of any force and effect. The parties specifically acknowledge
that in entering into and executing this Agreement, the parties rely solely
upon the representations and agreements contained in this Agreement and no
others. All prior representations or agreements, whether written or verbal,
not expressly incorporated herein are superseded and no changes in or additions
to this Agreement shall be recognized unless and until made in writing and
signed by all parties hereto. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
LICENSOR: PRINTPACK ILLINOIS, INC.
By:
---------------------------
Title:
---------------------------
LICENSEE: EMPAQUES PRINTPACK DE MEXICO,
S.A. DE C.V.
By:
---------------------------
Title:
---------------------------
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EXHIBIT A
LICENSE FEE
The License Fee payable by Licensee to Licensor for a Fiscal Year shall be 3%
of Licensee's Net Sales for such Fiscal Year. The term "Net Sales" shall mean
total sales revenue for such Fiscal Year reduced by applicable and customary
credits, discounts, rebates and sales returns and allowances, as determined by
generally accepted accounting principles and reflected in Licensee's annual
financial statements for such Fiscal Year. Notwithstanding the foregoing, the
minimum License Fee payable by Licensee for any Fiscal Year shall be
$_____________________.
66
EXHIBIT 4.2
Consents Required by Enterprises
1. Consents of Lenders
2. Consents of Landlords under Leases
3. Consents of Other Parties to Contracts to be Assigned
4. Consents of Licenses Under Intellectual Property Licenses
67
EXHIBIT 5.2
Consents Required by Printpack
1. Consents of Lenders
2. Consents of Landlords Under Leases
3. Consents of Other Parties to Contracts to be Assigned
4. Consents of Licensors Under Intellectual Property Licenses.
