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EXHIBIT 2.5
TECHNOLOGY AGREEMENT
This Technology Agreement (hereinafter "Agreement") dated as of
____________, 199__ by and among Ralcorp Holdings, Inc., a Missouri corporation
("Ralcorp"), NEW RALCORP HOLDINGS, INC., a Missouri corporation and a wholly
owned subsidiary of Ralcorp ("New Ralcorp"), and CHEX, INC., a Delaware
corporation and a wholly owned subsidiary of New Ralcorp ("Branded Subsidiary").
WITNESSETH THAT:
WHEREAS, Ralcorp, General Xxxxx, Inc., a Delaware corporation
("Acquiror"), and General Xxxxx Missouri, Inc., a Missouri corporation and
wholly owned subsidiary of Acquiror ("Merger Sub"), have heretofore entered into
an Agreement and Plan of Merger dated as of August 13, 1996 (as amended on
October ___, 1996, the "Merger Agreement") pursuant to which Merger Sub is being
merged with and into Ralcorp immediately after the consummation of the
transactions contemplated hereby (the "Merger").
WHEREAS, this Agreement is entered into in conjunction with the Merger
Agreement in order to facilitate the license or transfer of certain technical
information and know how to certain of the parties hereto.
WHEREAS, (i) Ralcorp wishes to assign its rights to certain of this
technical information and know how to New Ralcorp and each of Ralcorp and
Branded Subsidiary wish to license other of this technical information and know
how to New Ralcorp, and New Ralcorp wishes to accept such assignments and
licenses and (ii) New Ralcorp wishes to assign its rights to certain of this
technical information and know how to Branded Subsidiary, and Branded Subsidiary
wishes to accept such assignment, with all such assignments and licenses being
on the terms and conditions as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I - DEFINITIONS
1. The term "Branded Business" shall mean the business of manufacturing,
distributing and selling branded ready-to-eat cereal (excluding Non-Branded
Cereals) and branded cereal-based snacks and snack mixes, as ever conducted
by Ralcorp, New Ralcorp, Xxxxxxx Foods, Inc., the predecessor in interest
to New Ralcorp ("Foods"), or their predecessor in interest, Xxxxxxx Purina
Company ("RP Co."), prior to the Distribution Date.
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2. The term "Foods Business" shall mean any business (including any of
the same businesses as previously conducted by RP Co.) as ever
conducted by Ralcorp, New Ralcorp, Foods, or any of their Affiliates
prior to the Distribution Date, other than the Branded Business.
3. The term "Technical Information and Know How" shall mean any and all
information owned or licensed from third parties by Ralcorp and its
subsidiaries, and which, as of the date of this Agreement, has been
used or reduced to practice for use by the Branded Business or the
Foods Business or by RP Co. in connection with either of such
businesses, including trade secrets, product formulas, processing and
equipment design and information, specifications, know how,
manufacturing, research, software, inventions, patent applications,
patents and industrial property rights and other technical
information.
4. The term "Assigned Technical Information and Know How" shall mean any
and all Technical Information and Know How that is or has in the past
been used exclusively in, or reduced to practice for use exclusively
by, the Foods Business and that same business as it was previously
conducted by RP Co. The term "Assigned Technical Information and Know
How" shall specifically include, without limitation, the Technical
Information and Know How listed on Schedule A attached hereto (such
information designated on Schedule A referred to as the "Special
Assigned Technical Information and Know How") and shall specifically
exclude both the Branded Technical Information and Know How and the
Shared Technical Information and Know How.
5. The term "Shared Technical Information and Know How" shall mean any
and all Technical Information and Know How that is or has in the past
been used or reduced to practice for use by (a) the Branded Business
and that same business as it was previously conducted by RP Co. for
any products which are not Designated Products and (b) both the
Branded Business and the Foods Business and those same businesses as
they were previously conducted by RP Co. The term Shared Technical
Information and Know How" shall specifically exclude the Assigned
Technical Information and Know How and the Branded Technical
Information and Know How.
6. The term "Branded Technical Information and Know How" shall mean any
and all Technical Information and Know How that is or has in the past
been used exclusively, or reduced to practice for use exclusively, by
Ralcorp, its subsidiaries or RP Co. to produce Designated Products,
including all cereal-based snacks and snack mixes that are Designated
Products, and shall include the technical information, know how and
equipment listed on Schedule B attached hereto, which shall not be
considered or form part of the Shared Technical Information and Know
How. The term "Branded Technical Information and Know How" shall
specifically exclude the Assigned Technical Information and Know How.
7. The term "Designated Products" shall have the meaning set forth in the
Trademark Agreement.
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8. The term "Reorganization Agreement" shall mean the agreement by this
name dated as of the date hereof by and among Ralcorp, New Ralcorp,
Foods, Acquiror, and Branded Subsidiary.
9. The term "Trademark Agreement" shall mean the agreement by this name
dated as of the date hereof by and among Ralcorp, New Ralcorp and
Branded Subsidiary.
10. All other capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Reorganization
Agreement.
ARTICLE II - ASSIGNMENTS
1. Ralcorp hereby assigns and transfers to New Ralcorp, its successors
and assigns, all of its right, title, and interest, effective as of
the Distribution Date, in the United States of America and all foreign
countries, in and to the Assigned Technical Information and Know How
and all income, royalties, fees, damages, and payments now or
hereafter due or payable in respect thereto, and in and to any and all
causes of action (either in law or in equity), and the right to
enforce any rights and file any causes of action, including the right
to recover damages, for any past, present, or future infringement or
misappropriation of any of said rights.
2. New Ralcorp hereby assigns and transfers to Branded Subsidiary, its
successors and assigns, all of its right, title and interest,
effective as of the Distribution Date, in the United States of America
and all foreign countries, in and to the Shared Technical Information
and Know How and the Branded Technical Information and Know How in
which New Ralcorp or any of its subsidiaries owns or possesses or
otherwise has rights, together with all income, royalties, fees,
damages and payments now or hereafter due or payable in respect
thereto, and in and to any and all causes of action (either in law or
in equity), and the right to enforce any rights and file any causes of
action, including the right to recover damages, for any past, present,
or future infringement or misappropriation of any of said rights.
3. All assignments made hereunder by Ralcorp and New Ralcorp are on a
quitclaim basis without contravening the representations or warranties
concerning such Technical Information and Know How contained in the
Merger Agreement or Reorganization Agreement.
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ARTICLE III - LICENSE GRANTS
1. Each of Ralcorp and Branded Subsidiary hereby grants to New Ralcorp,
effective as of the Distribution Date and subject to the terms,
covenants, conditions, and limitations set forth in this Agreement
(including, without limitation, those restrictions set forth in
Article IV hereof), that certain Technology Agreement dated as of
March 31, 1994 by and among RP Co., Xxxxxxx Purina International,
Inc., VCS Holding Company Inc. and Ralcorp, which agreement is
attached hereto as Exhibit A (the "Prior Technology Agreement"), the
Merger Agreement, and the Trademark Agreement:
(a) an irrevocable, non-exclusive, royalty-free, license to use,
employ, exercise, apply, or otherwise utilize, the Shared
Technical Information and Know How from and after the date
hereof until March 31, 1999 in the Western Hemisphere, but,
with no rights (except as expressly provided herein) during
the applicable time periods specified in Section 4(a) of
Article IV hereof to produce, have produced, or license to
produce the Designated Products or snack mixes which are not
Designated Products;
(b) an irrevocable, non-exclusive, royalty-free, license to use,
employ, exercise, apply, or otherwise utilize, the Shared
Technical Information and Know How from and after March 31,
1999, worldwide, in perpetuity, but, with no rights (except as
expressly provided herein) during the applicable time periods
specified in Section 4(a) of Article IV hereof to produce,
have produced, or license to produce the Designated Products
or snack mixes which are not Designated Products;
(c) an irrevocable, non-exclusive, royalty free, license to use,
employ, exercise, apply or otherwise utilize the Branded
Technical Information and Know How to produce, but, except as
expressly provided herein, not to disclose or sublicense the
same to third parties (including, without limitation, to
contract manufacturers, other than as is necessary for Foods
Copacking (as defined below)), (i) any products (including,
without limitation, all Designated Products and all
cereal-based snacks and snack mixes) exclusively for Ralcorp
alone or for RP Co. as provided in and in accordance with
Article V, Section 1 hereinbelow, in each case, commencing as
of the Distribution Date; (ii) (A) any products, other than
snack mix products and Designated Products which are COOKIE
CRISP type ready to eat cereals commencing on the Distribution
Date and (B) any Designated Products which are COOKIE CRISP
type ready to eat cereals, commencing eighteen (18) months
after the Distribution Date, in each case (A) and (B) in
the United States, its territories, possessions, military
installations and the Commonwealth of Puerto Rico for any
third parties; (iii) any Products which are Cookie Crisp type
ready to eat cereals, other than snack mix products,
commencing five (5) years after the Distribution Date, in all
other countries for any third parties; (iv) any snack mix
products other than those referred to in Section 4(a)(iii) of
Article IV, commencing two (2) years after the Distribution
Date, worldwide for any third parties; and (v) any snack mix
products referred to in Section 4(a)(iii) of Article IV
hereof, commencing five (5) years after the Distribution Date,
worldwide, for any third parties.
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(d) an irrevocable, non-exclusive, royalty-free, license to use
the invention claimed in U.S. Patent No. 5,188,860 entitled
"Process for the Production for a Fiber Containing Cereal
Product", worldwide, in perpetuity.
For purposes of the foregoing paragraph (c), the term "Foods
Copacking" shall mean the right of New Ralcorp (subject to all of the
restrictions and obligations set forth herein and provided that all use of
Branded Technical Information and Know How and the Shared Technical Information
and Know How by any such contract manufacturer is on the same basis and subject
to the same restrictions as set forth in Section 1 of Article III and Section 4
of Article IV as they apply to New Ralcorp) to have contract manufacturers
pack, or mix with other ingredients and pack, only for New Ralcorp itself,
ready to eat cereals that are Designated Products and cereal based snacks and
snack mix products as described in Section 4(a) of Article IV, but shall not
include any right of any contract manufacturer to produce or make any of such
products for itself or other third parties.
2. New Ralcorp hereby agrees and acknowledges that the Shared Technical
Information and Know How and the Branded Technical Information and
Know How is subject to all limitations, undertakings and liabilities
contained in the Prior Technology Agreement, including, without
limitation, each of the following:
(a) New Ralcorp shall not disclose any of the Shared Technical
Information and Know How and Branded Technical Information and
Know How to any third party during the term of the license
without the written consent of RP Co.; and
(b) New Ralcorp shall obtain a written agreement from each of its
employees, agents, officers and/or directors that the Shared
Technical Information and Know How and the Branded Technical
Information and Know How will be kept confidential at all
times by such parties and that such information will not be
disclosed to any third parties.
ARTICLE IV - OBLIGATIONS OF THE PARTIES
1. New Ralcorp hereby agrees to assume from Ralcorp and fulfill all of
the technical assistance obligations owed to RP Co. by Ralcorp as
described in Article III of the Prior Technology Agreement, and
Ralcorp hereby consents to such assumption by New Ralcorp.
2. Ralcorp, Branded Subsidiary and New Ralcorp each agree to treat as
confidential all Technical Information and Know How, including the
Branded Technical Information and Know How, the Assigned Technical
Information and Know How, the Special Assigned Technical Information
and Know How and the Shared Technical Information and Know How; and
shall not at any time disclose or permit to be disclosed any portion
thereof to any other person, firm, or entity; provided, however, (i)
that New Ralcorp shall have the
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right to license or disclose, in confidence, but only in accordance
with the terms of the Prior Technology Agreement and this Agreement,
the Shared Technical Information and Know How and, as to the Branded
Technical Information and Know How, in accordance with Section 2 of
Article V of this Agreement, and that this provision shall not
otherwise limit or preclude New Ralcorp from doing so and (ii) that
each of Ralcorp and Branded Subsidiary shall have the right to license
or disclose, in confidence, but only in accordance with the terms of
the Prior Technology Agreement, the Shared Technical Information and
Know How and the Branded Technical Information and Know How, and that
this provision shall not otherwise limit or preclude Ralcorp or
Branded Subsidiary from doing so. Notwithstanding the foregoing, New
Ralcorp shall not be under any obligation pursuant to this Agreement
to treat as confidential any of the Assigned Technical Information and
Know How or Special Assigned Technical Information and Know How.
3. The obligation of nondisclosure, contained in Paragraph 2 above, shall
not apply in the event that any of such confidential information:
(a) was known to the public or generally available to the public
prior to the date it was received from the disclosing party;
(b) became known to the public or generally available to the
public subsequent to the date it was received from the
disclosing party without any fault of the receiving party; or
(c) is, subsequent to the date of this Agreement, disclosed to the
receiving party from a third party who is under no obligation
of confidentiality regarding the same.
4. New Ralcorp, on behalf of itself and its successors in interest and
present and future subsidiaries and Affiliates other than Branded
Subsidiary, agrees and shall cause such subsidiaries and Affiliates to
agree, that (except as otherwise provided in the Supply Agreement) New
Ralcorp, its successors and such subsidiaries and Affiliates shall not
directly or indirectly:
(a) make, have made, produce, market, contract pack, sell or
license, or contract with, any third party to produce (except
as provided in and in accordance with Article V, Section 1,
hereinbelow for RP Co. and Article V, Section 3 for Ralcorp):
(i) (A) any ready-to-eat cereals that are COOKIE CRISP-type
Designated Products in the United States, its
territories, possessions, military installations or the
Commonwealth of Puerto Rico for the eighteen (18) month
period commencing upon the Distribution Date and (B) any
ready to eat cereals that are Designated Products
outside of the United States, its territories,
possessions, military installations or the Commonwealth
of Puerto Rico for the five (5) year period commencing
upon the Distribution Date (which shall preclude,
without limitation, any
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sales made to third parties of such Designated Products which
New Ralcorp knows are likely, based on reasonable information
and knowledge, to be sold or resold outside the United
States, its territories, possessions or military
installations, or the Commonwealth of Puerto Rico);
(ii) any snack mix, cereal-based or otherwise, anywhere in the
world for the two (2) year period commencing upon the
Distribution Date; and
(iii) any snack mix containing those products, or a product
substantially similar to, or identical to, products
which have been, prior to the date hereof, offered
for sale in connection with any form of the CHEX
trademark, which shall include products sold under
the Crispy Hexagon designation but which shall not
include those wheat cereals denominated or described
as SHREDDED WHEAT and similar in nature to other
shredded wheat products currently offered by other
cereal manufacturers, for the five (5) year period
commencing upon the Distribution Date; provided,
however, that this Section 4(a)(iii) and Section
4(a)(ii) hereinabove shall not apply to snack mix
products of an enterprise acquired by New Ralcorp in
which the snack mix business generates less than 20%
of the annual gross revenues of such enterprise and
less than seven (7) million dollars in annual sales;
or
(b) use, print, disseminate, display or publish on packaging for
cereals, or in any related advertising, sales or promotional
materials, any snack recipes which are essentially identical
to the snack mix recipes that have been used by Foods or New
Ralcorp in connection with CHEX products in the three (3)
years prior to the Distribution Date.
5. Ralcorp and Branded Subsidiary, and their Affiliates and subsidiaries,
hereby agree that Sections 4(a) and (b) of this Article IV shall not
apply to, and shall not restrict in any manner whatsoever, the
existing business of any third party (including the Affiliates and
subsidiaries of such third party prior to such acquisition) which may
acquire New Ralcorp or any of its Affiliates or subsidiaries, as such
existing business is conducted at the time of such acquisition.
Notwithstanding the foregoing, New Ralcorp, on behalf of itself and
its successors in interest and present and future subsidiaries and
Affiliates, agrees and shall cause such subsidiaries and Affiliates to
agree, that Sections 4(a) and (b) shall prevent any such acquiring
third party from using the Shared Technical Information and Know How
related to snack mixes or the Designated Products and the Branded
Technical Information and Know How in violation of the terms of
Sections 4(a) and (b) of this Article IV.
ARTICLE V - CERTAIN AGREEMENTS
1. Each of Ralcorp and Branded Subsidiary hereby agrees that, except as
set forth in this Section 1, nothing contained in this Agreement shall
interfere with the ability of New
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Ralcorp to meet the obligations of New Ralcorp, if any, to RP Co., as
set forth in the Distributorship Agreement. Each of Ralcorp and
Branded Subsidiary hereby agrees that New Ralcorp shall have the right
to produce ready to eat cereals for RP Co. in accordance with the
terms of the Distributorship Agreement, up to, but not beyond,
September 1, 1999, by which time New Ralcorp agrees that it shall
have terminated the Distributorship Agreement insofar as it may
require the production or sale of any Designated Products. New
Ralcorp also agrees that New Ralcorp shall not use any of the
Branded Trademarks in connection with such production for RP Co.,
unless such usage is specifically authorized in writing by Ralcorp.
2. Each of Ralcorp and Branded Subsidiary hereby agrees that New Ralcorp
shall have the right to license in accordance with the terms of the
Prior Technology Agreement, or, at its option, request that Ralcorp and
Branded Subsidiary each license in accordance with the terms of the
Prior Technology Agreement, if applicable, the Shared Technical
Information and Know How and the Branded Technical Information and Know
How, or any parts thereof, from and after the Distribution Date to any
subsidiaries or Affiliates of New Ralcorp (regardless of when any such
relationship with New Ralcorp may arise), for so long as such entity
continues to be a subsidiary or Affiliate of New Ralcorp, and to any
"Successor Third Party" on the same terms as set forth herein and
specifically subject to the requirement that each such entity shall
assume and be subject to and be bound by all restrictions set forth in
this Agreement and the Trademark Agreement, provided that, upon the
granting of a license of the Shared Technical Information and Know How
and the Branded Technical Information and Know How, or any parts
thereof, by Ralcorp or Branded Subsidiary to a Successor Third Party,
the then existing licenses to New Ralcorp (and its subsidiaries and
Affiliates) relating exclusively to the business transferred or to be
transferred to such Successor Third Party shall be terminated and New
Ralcorp shall only retain, if any, licenses of the Shared Technical
Information and Know How and Branded Technical Information and Know How
relating to that part of the ready to eat cereal, cereal based snack
and cereal based snack mix businesses of which it retains ownership
immediately after such transfer. It is hereby understood that any such
license will (i) provide the licensee with rights no greater than the
rights of New Ralcorp as set forth in this Agreement and (ii) be
subject in all respects to the terms of this Agreement and the Prior
Technology Agreement. Each of Ralcorp and Branded Subsidiary hereby
agrees that it shall, or, if necessary to fulfill its obligations
hereunder, it shall cause its Affiliates and subsidiaries to, promptly
comply with (in no case, more than fourteen (14) days after its receipt
of) any such request by New Ralcorp by providing any such subsidiary or
Affiliate of New Ralcorp with all documentation necessary to provide
such Affiliate or subsidiary with the same rights as transferred to New
Ralcorp by this Agreement. For purposes of this Agreement, "Successor
Third Party" shall mean any entity to whom New Ralcorp transfers (by
way of asset transfer, stock transfer, merger or otherwise) following
the date hereof all or substantially all of (x) its ready to eat
cereal, cereal based snack and cereal based snack mix business as a
whole, (y) substantially all of its assets, title, properties,
interests, rights and privileges, tangible and intangible, to
manufacture and sell cereals that are identical to or substantially
similar in form or overall appearance to cereal products bearing the
CHEX trademark, or (z) after a transfer of the business as described in
(y), the ready to eat cereal, cereal based snack and cereal based snack
mix business then remaining, including any entity that is a subsidiary
or Affiliate of New Ralcorp, and any entity which is a subsequent
transferee of any of the businesses described in (x), (y) or (z) of
this section V.2; it being understood that any license of the Shared
Technical Information and Know How and the Branded Technical
Information and Know How to a subsequent transferee shall be on the
same terms and conditions as set forth in this section V.2.
3. Each of Ralcorp and Branded Subsidiary hereby agrees that nothing
contained in this Agreement shall interfere with the ability of New
Ralcorp to meet its obligations to Ralcorp under the Supply Agreement.
4. After the Distribution Date, none of New Ralcorp, Ralcorp nor Branded
Subsidiary shall have an ongoing obligation to assign, license, share
or provide to the other any Technical Information and Know How created
or developed after the Distribution Date.
5. Ralcorp, Branded Subsidiary and New Ralcorp each hereby acknowledges
that pursuant to the Reorganization Agreement it has agreed to
abide by certain limitations, undertakings and liabilities related to
the Assigned Technical Information and Know How, the Shared Technical
Information and Know How and the Branded Technical Information and
Know How, including those arising out of the Prior Technology
Agreement.
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ARTICLE VI - ASSIGNABILITY
New Ralcorp's rights herein as to the Shared Technical
Information and Know How and the Branded Technical Information and Know How
shall not be assignable except to its successor by operation of law and except
as otherwise expressly provided herein; otherwise, this Agreement and the
rights granted herein shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
ARTICLE VII - MISCELLANEOUS PROVISIONS
1. Should any provision of this Agreement be declared unenforceable for
any reason or found contrary to any law or statute, said provision
shall be adjusted in accordance with such decision or if it cannot be
so adjusted will automatically cease to be a part of this Agreement
without affecting any other provisions or obligation thereof.
2. This Agreement shall be construed and enforced in accordance with the
laws of the State of Missouri.
3. The headings used in this Agreement are for reference only and shall
not be relied upon or used in the interpretation of this Agreement.
4. The dispute resolution provisions contained in Article XII of the
Reorganization Agreement will control in the event of any dispute in
relation to this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representative effective on the day and year
set forth in this Agreement.
RALCORP HOLDINGS INC.
By:______________________________
Name:____________________________
Title:___________________________
CHEX, INC.
By:______________________________
Name:____________________________
Title:___________________________
NEW RALCORP HOLDINGS, INC.
By:______________________________
Name:____________________________
Title:___________________________
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SCHEDULE A TO THE TECHNOLOGY AGREEMENT
SPECIAL ASSIGNED TECHNICAL INFORMATION AND KNOW HOW
1. Twin screw extrusion technology and equipment currently and
historically associated exclusively with cereals not offered by and
not reduced to practice for use by cereal or snack mixes of the
Branded Business.
2. Cooking, shredding, baking and sugar frosting technology and equipment
at Xxxxxxx facility in Princeton, Kentucky currently and historically
associated exclusively with cereals (including cereals not yet in
commercial production) not offered by and not reduced to practice for
use by cereal or snack mixes of the Branded Business.
3. Crispy hexagon forming rolls and related technology currently and
historically associated exclusively with cereals not offered by the
Branded Business.
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SCHEDULE B TO THE TECHNOLOGY AGREEMENT
1. Formulas and processing steps, times and conditions for the Designated
Products
2. To the extent they are exclusively associated with the Designated
Products, the following, as well:
Material specifications
Machine and equipment settings
Equipment and manufacturing specifications and instructions
Plant operating procedures
Testing procedures
Sampling procedures
Safety protocols
Ingredient testing
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