Exhibit 10.5


 


LICENSE AGREEMENT (BFRTM)


 


AGREEMENT dated
May 14, 1999 (the “Agreement”) by and between Champion International
Corporation, a New York corporation (the “Seller”) and Blue Ridge Paper
Products Inc., a Delaware corporation (formerly known as Carolina Paper
Company) (the “Purchaser”).


 


W I T N E S S E T H:


 


WHEREAS,
the  Seller, the Purchaser and
Blue Ridge Holding Corp. (formerly known as Carolina Paper Products Holding
Corp.) have entered into an Asset Purchase Agreement dated as of March 29,
1999 (the “Asset Purchase Agreement”), pursuant to which the Seller has agreed
to sell to the Purchaser the Canton System (the “Business”) which includes the
Canton Mill (the “Mill”), as more particularly described in the Asset Purchase
Agreement; and


 


WHEREAS,
pursuant to the Asset Purchase Agreement, the Seller has agreed to grant to the
Purchaser a royalty-free, perpetual, irrevocable and non-exclusive license to
use the Intellectual Property (defined in the Asset Purchase Agreement) used in
both the Business and in another business or at another location of the Seller
(other than the Excluded Assets set forth in Sections 2.2(a) and (b) of the
Asset Purchase Agreement) (the “Licensed Intellectual Property”) in
substantially the same way as they were used in the Business as of the Closing
Date; and


 


WHEREAS,
Seller has developed and patented a process for recycling filtrates from a
bleach plant which include without limitation, the patents and patent
application listed on Schedule A attached hereto (“BFRTM Process”)
and has installed the BFRTM Process as a demonstration project at
the Mill; and


 


WHEREAS,
, pursuant to the Asset Purchase
Agreement the Seller has agreed to grant to the Purchaser a royalty-free,
perpetual, irrevocable and non-exclusive license to use the BFRTM
Process at the Mill in the same manner as the BFRTM Process is used
at the Mill as of the Closing Date and to expand its use at the Mill to comply
with the Settlement Agreement; and


 


WHEREAS,
the Seller is willing to grant such a license under the following terms and
conditions.


 

















 


NOW, THEREFORE,
in consideration of the premises and mutual covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:


 


1.                                       Definitions.  Any terms capitalized herein and not
otherwise defined shall have the meaning assigned to it in the Asset Purchase
Agreement.


 


2.                                       Grant
of License.


 


(a)                                  The
Seller hereby grants to the Purchaser a royalty-free, perpetual, irrevocable
and non-exclusive license, without the right to grant sublicenses (other than
as set forth in paragraph 2(b) below), to use the BFRTM Process at
the Mill in substantially the same manner as the BFRTM Process is
used at the Mill as of the Closing Date and to expand its use at the Mill to
comply with the Settlement Agreement.


 


(b)                                 The
Purchaser shall have the right to sublicense all or any part of its rights
granted under this Agreement to its Affiliates without consent of the Seller.


 


3.                                       Ownership.  The Purchaser agrees that the BFRTM
Process and all information, know-how, patents, patent applications and the
like pertaining thereto and existing as of the date of this Agreement are and
shall remain the Seller’s exclusive property and, except as expressly granted
hereunder, the Purchaser shall have no rights thereto whatsoever including but
not limited to the right to use the BFRTM Process in any of
Purchaser’s other facilities.


 


4.                                       Improvements.  Purchaser shall have the right to make
modifications, enhancements, improvements and create derivative works of the
BFRTM Process (the “Improvements”) but shall use such Improvements
solely at the Mill.  All Improvements
made by the Purchaser shall be owned solely by the Purchaser and all
improvements made by Seller shall be owned solely by Seller.  Each party grants to the other party a
royalty-free, world-wide, perpetual, irrevocable and non-exclusive license to
use any Improvements made by it during the three (3) year period beginning on
the Closing Date.


 


5.                                       Representations,
Warranties and Covenants.  All
representations, warranties and covenants of the Seller with respect to this
Agreement and the BFRTM Process licensed hereunder are set forth in
Section 5.6 of the Asset Purchase Agreement.


 


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6.                                       Confidentiality.  Except as required by the Settlement
Agreement, the Purchaser shall maintain in strict confidence and not disclose
to any third party any and all information relating to the BFRTM Process (the
“Confidential Information”) which may be present in the Mill or which may be
known to persons employed at the Mill, and shall not use the Confidential
Information except in the exercise of the license expressly granted under
Paragraph 2.  However, the Purchaser may
allow access to the Confidential Information to those of its employees who have
a need to access the Confidential Information during the normal course of their
employment; provided, however, that prior to having such access
such employees shall be informed of the Purchaser’s obligations hereunder and
shall be bound by appropriate written confidentiality agreements.


 


7.                                       Support.  Seller shall have no obligations whatsoever
to provide any technical or other support for the BFRTM Process.  Purchaser shall for a period of three (3)
year from the Closing, upon Seller’s request and during normal business hours,
(a) provide Seller with access to data regarding Purchaser’s use of the BFRTM Process and its
impact on mill operations and emissions (b) shall provide Seller and present
and prospective licensees and sublicensees of the BFRTM Process (other
than competitors of the business of the Canton System or the Purchaser) with
access to the Mill to observe the operation of the BFRTM Process at the
Mill provided, however, any information disclosed to the Seller or any such
prospective licensees and sublicensees under this Paragraph 7 and designated in
writing as confidential by the Purchaser shall be protected by the Seller and
any such prospective licensees and sublicensees on the same terms as set forth
in Paragraph 6 above, and such licensees and sublicensees shall be informed of
the confidentiality provisions hereunder and shall be bound by appropriate
written confidentiality agreement prior to having such access.


 


8.                                       Indemnity.  The indemnification rights and obligations
of the parties hereunder are contained in the Asset Purchase Agreement.


 


(a)                                  The purchaser
hereby agrees to indemnify, defend and hold the Seller harmless, from and
against any and all Losses arising out of or resulting from the Purchaser’s
exercise of the license granted hereunder or failure to perform or comply with
any term, condition, provision, covenant or obligation of this Agreement,
except to the extent any Losses arise from any breach of this Agreement by the
Seller; provided, however, that nothing in this Agreement shall
modify or limit either party’s indemnification rights or obligations pursuant
to the Asset Purchase Agreement.


 


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(b)                                 The Seller hereby
agrees to indemnify, defend and hold the Purchaser harmless, from any and all
Losses arising out of or resulting from (i) the Seller’s breach of any
representation, warranty, term, condition, provision, covenant or obligation of
this Agreement or (ii) any claim by third party that the BFRTM Process (but
specifically excluding from this indemnity any Improvements made by Purchaser)
infringes such third party’s intellectual property rights, except to the extent
any Losses arise from any breach of this Agreement by the Purchaser, provided,
however, that nothing in this Agreement shall modify or limit either
party’s indemnification rights or obligations pursuant to the Asset Purchase
Agreement.


 


(c)                                  Except as may
arise pursuant to the indemnification rights or obligations contained in the
Asset Purchase Agreement, neither party shall be liable for any incidental,
indirect, special or consequential damages, or for lost profits, savings or
revenues of any kind.


 


9.                                       Limitations.  EXCEPT AS EXPRESSLY PROVIDED IN THE ASSET
PURCHASE AGREEMENT AND UNDER PARAGRAPH 5 ABOVE, THE SELLER MAKES NO WARRANTIES
OR REPRESENTATIONS WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO A WARRANTY THAT USE OF THE BFRTM PROCESS OR THE
CONFIDENTIAL INFORMATION WILL PROVIDE CERTAIN RESULTS OR A WARRANTY THAT THE BFRTM PROCESS OR
CONFIDENTIAL INFORMATION, AND THE USE THEREOF, DOES NOT INFRINGE OR VIOLATE ANY
PATENT, COPYRIGHT, TRADE SECRET OR OTHER PROPRIETARY RIGHT OF ANY THIRD PARTY.


 


10.                                 Miscellaneous.


 


(a)                                  This Agreement is
delivered pursuant to the Asset Purchase Agreement and shall be construed
consistently therewith; provided, however, that in the event of
any conflict between the terms of this Agreement and the Asset Purchase
Agreement, the terms of this Agreement shall govern.


 


(b)                                 This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and any subsequent purchaser of (i)
substantially all of the Assets or the Facilities, (ii) the Canton Mill, (iii)
the DairyPak Facilities as a whole, or (iv) the Waynesville Facility; provided,
however, that this Agreement and the rights hereunder may not be
assigned (other than to a subsequent purchaser or as otherwise contemplated by
this Section 10(b)), without the prior consent of the other party and any
such purported assignment without consent is


 


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void; provided, however, that the Purchaser may assign
this Agreement and its rights hereunder to an Affiliate and may pledge, grant a
security interest in and/or assign this Agreement and its rights hereunder to
its lenders without the Seller’s consent, provided, further, that
Purchaser’s lenders may assign this Agreement and its rights hereunder to any
Person in the event of a foreclosure or any other action following the
occurrence and during the continuation of a default under the Senior Credit
Facility (as defined in the Asset Purchase Agreement). Notwithstanding the
foregoing, the Seller may assign this Agreement and its rights and obligations
hereunder as it in its sole discretion deems fit, provided that such successor
or assign assumes all of the obligations of the Seller hereunder and that such
assignment does not adversely affect the rights of the Purchaser hereunder.
Except as otherwise provided herein, this Agreement is not intended to confer
upon any Person other than the parties hereto any rights hereunder.


 


(c)                                  This
Agreement shall be interpreted and enforced in accordance with the internal
laws of the State of New York, without regard to the conflict of laws
principles.


 


(d)                                 This
Agreement and the Asset Purchase Agreement represent the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and merge and supersede all prior agreements, discussions and writing
with respect thereto, either express or implied, between the parties.  No modification or alteration of this
Agreement shall be effective unless made in writing and signed by both parties
hereto.


 


(e)                                  This
Agreement may be executed in counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute
one and the same instrument.


 


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IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed by their duly
authorized officers as of the day and year first written above.


 


	
   

  	
  CHAMPION INTERNATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BLUE RIDGE PAPER PRODUCTS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
						



 


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Schedule A


 


1) U.S. Patent No. 5,853,535;


 


2) U.S. Patent No. 5,352,332; and


 


3) U.S. Patent Appln. No. 08/224, 690, filed 4/8/94.


 


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