EX-10 5 ex10.txt LICENSE AND MATERIALS PURCHASE AGREEMENT LICENSE AND MATERIALS PURCHASE AGREEMENT THIS AGREEMENT, made and entered into this 24th day of January, 2001, by and between Millennium Plastics Corporation, (referred to herein as "Millennium"), and T-PLEX TECHNOLOGIES, a Nevada corporation ("Licensee"). WHEREAS, Millennium has acquired and developed technology related to biodegradable plastics, which Millennium has named the SolplaxT Technology (collectively the "SolplaxT Technology"), and owns patents, copyrights, confidential information, trade secrets, and proprietary know-how relating to such technology; and WHEREAS, Millennium seeks the expanded development and mass marketing of the SolplaxT Technology as a commercial standard for biodegradable plastics and use; and WHEREAS, Licensee desires an exclusive license under Millennium's SolplaxT Technology for use in T-PlexT, a plastic stretch film to be utilized for protecting fully assembled vehicles while being transported, and Millennium is willing to grant such a license. NOW, THEREFORE, in consideration of the mutual covenants, terms, conditions and provisions set forth herein, the parties agree as follows: 1. DEFINITIONS 1.1. "SolplaxT Technology" shall mean all confidential or proprietary information, trade secrets and know how relating to the SolplaxT technology as such technology is further described on Exhibit A to this Agreement. The SolplaxT Technology is sometimes referred to herein as the "Licensed Technology." 1.2. "Licensed Rights" means all rights under any patent, copyright, confidential or proprietary information, trade secrets and know-how relating to the SolplaxT Technology. 1.3. "Licensed Tool(s)" shall include product chemistry systems, proprietary manufacturing systems, development methodologies, and documentation that encompass or incorporate or are based on any of the SolplaxT Technology, but do not include products, and services that result from "Authorized Use" of the SolplaxT Technology. Licensed Tools specifically excludes Licensee implementations of the SolplaxT Technology. 1.4. "Authorized Use" refers to those activities and Licensed Rights granted by Licensee under this Agreement to everyone who purchases or sub-licenses a Licensed Tool. 1.5. "Reasonable Effort" means a reasonable program of supporting technology improvements and marketing that expands industry adoptions, installed base, and commercial use of the SolplaxT Technology. 1.6. "Improvement(s)" shall mean inventions, modifications, adaptations or improvements, which relate to or are based on the SolplaxT Technology. 1.7. "Sublicensee" shall mean a person or entity to whom Licensee has granted the right under the SolplaxT Technology to develop, manufacture, have manufactured, use, market and/or sell the Licensed Tools. 2. GRANT OF LICENSE 2.1. Exclusive License. Millennium hereby grants to Licensee, subject to the conditions set forth in this Agreement, an exclusive non transferable license under the Licensed Rights to make, have made, use, market, import, have imported, lease, sell, distribute, offer for sale, or otherwise dispose of T- PlexT, as herein defined, utilizing Licensed Tools throughout the world, including the right to make copies of, make derivative works based on, and distribute any copyrighted works within the Solplax Technology. The license is strictly limited to Licensee's right to make, use, market, import, lease, sell, distribute, offer for sale, or otherwise dispose of T-PlexT, and such license may not be utilized for any other purpose without permission of Millennium. T-PlexT is a proprietary product developed by Licensee utilizing Licensed Tools. T-PlexT is a plastic transportation wrap material, produced in sheets, utilizing Licensed Tools, which creates a biodegradable plastic transportation wrap to assist in the protection of vehicles during transportation, such as cars, boats, trucks, airplanes, and other vehicles, which in shipment require special shipment and handling. 2.2. Sublicense. Licensee shall have the right to grant sublicenses to third parties, subject to the terms of this Agreement and subject to the written approval by Millennium. 2.3. Reservation of Rights. Millennium expressly reserves all rights not granted to Licensee in this Agreement for its own purposes. 3. CONSIDERATION 3.1. Material Purchases. Commencing on the date of this Agreement, Licensee shall purchase exclusively from Millennium any and all raw materials, including the "SolplaxT" formulated plastic and additives, that are used in the manufacture of T-PlexT using the Licensed Tool. A grant of a Sub-License by Licensee will carry the exact same requirements as defined in this agreement by the Sub-Licensee including the purchase of any and all raw materials, including the "SolplaxT" formulated plastic and additives, that are used in the manufacture of T-PlexT using the Licensed Tool from Millennium. Millennium will provide the SolplaxT formulated plastic material and additives in a combined pelletized form to the Licensee. 3.2. Price List. Millennium will sell its formulated SolplaxT Plastic material to the Licensee at an initial bulk price of USD$14.50/lb. The basis for this price will be tied to the cost of raw PVA purchased by Millennium. Once a year Millennium will provide an index related to the cost of its raw PVA material to the Licensee. That index will be calculated by dividing the new year cost of PVA by the cost of PVA material as of January 1, 2001. The index will then be multiplied by the initial bulk price of USD$14.50/lb to arrive at the new price to be paid by the Licensee for the upcoming year. In addition any and all additives not included in the SolplaxT patents that are used in the formulation of T-PlexT will be provided at the current market price paid by Millennium plus 25%. 4. COMMITMENTS OF LICENSEE. Licensee agrees to use its reasonable efforts to achieve the development and commercialization of the Licensed Technology. 5. OWNERSHIP 5.1. Licensed Rights. Licensee acknowledges that Millennium is the sole owner of the Licensed Rights. Except as provided in this Agreement, Licensee agrees not to take any action challenging or opposing, on any grounds whatsoever, Millennium's ownership of the Licensed Rights, or the validity thereof. 5.2. Improvements. Licensee agrees that any Improvements or derivative works to T-PlexT shall be jointly developed by Licensee and Millennium and any Improvements or derivative works to or based on the SolplaxT Technology, whether or not patented or patentable, shall be the property of Millennium. Licensee shall be granted the first right to an additional license from Millennium for the new product(s) or technology. 6. TERM AND TERMINATION 6.1. Term. The term of the license granted hereunder shall commence as of the date of this Agreement and shall remain in force for 3 years or until terminated in accordance with the provisions of this Agreement 6.2. Termination by Licensee. Licensee shall have the right to terminate this Agreement upon written notice delivered to Millennium. The effective date of termination shall be the end of the quarter in which notice was delivered, or thirty (30) days whichever is longer, whereupon Licensee shall be relieved of all further obligations under this Agreement and all rights granted to Licensee under this Agreement shall be canceled and revert to Millennium. 6.3. Termination by Millennium; Conversion to Non-Exclusive License. 6.3.1. Should Licensee fail to perform any material covenant of this Agreement on its part to be performed, then upon written notice of such failure from Millennium, Licensee shall have thirty (30) days from the date of such notice to correct a breach which relates to the timely payment of funds to Millennium, and shall have ninety (90) days from the date of such notice to correct any other breach, and upon the failure of Licensee to do so, Millennium may terminate this Agreement upon ten (10) days further written notice. 6.3.2. Should Licensee fail to commence sales of Licensed Tools within twelve (12) months from the date of this Agreement, Millennium shall have the option to convert the license hereunder to a non-exclusive license upon sixty (60) days prior written notice to Licensee. 6.3.3. In the event of a substantial decrease in Licensee's continued commitment to the development, mass marketing, and commercial acceptance of this technology will be assessed annually, given the failure of Licensee to meet either of the milestones in Section 6.3.4, Millennium shall have the option to convert the license hereunder to a non-exclusive license upon sixty (60) days prior written notice. 6.3.4. MILESTONES. Annual growth in sales of Licensed Tools > 10 % Annual Sales of Licensed Tools > $1,000,000 by 2003. 6.3.5 In the event Licensee is "acquired," which term shall include any merger, consolidation, sale, reclassification, reorganization, asset purchase, share exchange or other disposition whereby Licensee's shares of common stock are purchased or exchanged with a third party with the intent of taking over Licensee's business, assets, management control and intellectual property rights, all rights granted under this Agreement shall be subject to immediate termination by Millennium. 6.4.1 Rights After Termination. No termination of this Agreement shall affect the rights of Millennium to any royalties due and owing or to statements of account to and including the date of termination. Upon termination, all rights granted to Licensee in this Agreement, shall revert to Millennium. Notwithstanding anything herein to the contrary, upon Licensee's failure to meet the reasonable efforts requirements of Section4, Licensee shall maintain a non-exclusive license to the Licensed Technology, but shall not receive a license to new Improvements. Termination of this Agreement for any reason shall not release any party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination, nor preclude either party from pursuing any rights and rememdies it may have hereunder or at law or in equity which accrued or are based upon any event occurring prior to such termination. The rights provided for in this Section 6.4 shall be in addition and without prejudice to any other rights which the parties may have with respect to any breach or violations of the provisions of this Agreement. In the event that the license granted to Licensee under this Agreement is terminated, any granted Sublicenses shall remain in full force and effect, provided that the Sublicensee is not then in breach of its sublicense agreement, in which case Millennium and Sublicense shall enter into appropriate agreements or amendments. 7. REPRESENTATIONS AND WARRANTIES 7.1. Representations and Warranties of Millennium. Millennium represents, warrants and covenants to Licensee as follows: (a) Millennium has the full power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Millennium, enforceable in accordance with its terms and conditions. Millennium need not, give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. (b) Millennium has heretofore developed the Licensed Technology and owns the Licensed Technology free and clear of all liens, claims and encumbrances. (c) There are no pending, and to the knowledge of Millennium as of the Effective Date, any threatened, actions, suits, investigations, claims or proceedings in any way relating to the Licensed Technology. 7.2. Representations and Warranties of Licensee. Licensee represents, warrants and covenants to Millennium that: (a) Licensee is a corporation, duly organized, validly existing and in good standing under the laws of the State of Nevada having full corporate power to conduct its business as presently conducted, and to enter into and consummate the transactions contemplated by this Agreement. (b) The execution, delivery and performance under this Agreement by Licensee have been duly authorized by all required corporate action, do not constitute a breach, default or violation of any of the provisions of Licensee's articles of incorporation, bylaws or other charter documents, or any indenture, agreement, contract, order, law or regulation to which it may be a party or by the terms of which it may be bound. 8. CONFIDENTIALITY 8.1. Confidential Information. . Except as expressly provided herein, or as agreed by the Board of Directors of Licensee, the parties agree that, for the term of this Agreement and for five (5) years thereafter, the receiving party shall keep completely confidential and shall not publish or otherwise disclose and shall not use for any purpose except for the purposes contemplated by this Agreement any Confidential Information furnished to it by the disclosing party hereto pursuant to this Agreement, except to the extent that it can be established by the receiving party by competent proof that such Confidential Information: (a) was already known to the receiving party, other than under and obligation of confidentiality, at the time of disclosure; (b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party; (c) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving party in breach of this Agreement; (d) was independently developed by the receiving party as demonstrated by documented evidence prepared contemporaneously with such independent development; or (e) was subsequently lawfully disclosed to the receiving party by a person other than a party hereto. Each party hereto may use or disclose information disclosed to it by the other party to the extent such use or disclosure is reasonably necessary in filing or prosecuting patent applications, prosecuting or defending litigation, complying with applicable governmental regulations or otherwise submitting information to tax or other governmental authorities, or making a permitted sublicense or otherwise exercising its rights hereunder, provided that if a party is required to make any such disclosure of another party's Confidential Information, other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the latter party of such disclosure and, save to the extent inappropriate in the case of patent applications or compliance with federal and state securities laws, will use its best efforts to secure confidential treatment of such information prior to its disclosure (whether through protective orders or otherwise.) As used herein, "Confidential Information" shall mean (i) any proprietary or confidential information or material in tangible form disclosed hereunder that is marked as "confidential" at the time it is delivered to the receiving party, and/or (ii) any written reports furnished by either party to the other pursuant to the terms of this Agreement. 9. ENFORCEMENT OF LICENSED RIGHTS 9.1. Notice. Each party shall promptly give the other party written notice of any apparent infringement of any of the Licensed Rights of which such party becomes aware. 9.2. Legal Action. Licensee shall have the first right, but not the obligation, to bring any legal action with respect to any apparent infringement, at Licensee's own expense and for its own benefit. In such event, Millennium agrees to cooperate with Licensee and to join in such action as a party plaintiff if requested to do so by Licensee, and at Licensee's reasonable request, to give Licensee all needed information, assistance and authority to file and prosecute such suit; provided that Licensee shall reimburse Millennium for all verified out-of-pocket expenses incurred by it in providing such assistance, including attorney's fees, expenses and expert witness fees. To ensure that no rights of Millennium are compromised in any such action, Licensee shall not settle any such claim, or enter into any settlement agreement that admits that any third party product does not infringe the Licensed Rights or that any of the Licensed Rights is invalid or unenforceable, without Millennium's prior written consent, which consent shall not be unreasonably withheld. If there is a recovery in any such action, after recovery of all direct out of pocket expenses incurred by Licensee and Millennium in connection with any such legal action, Licensee shall pay Millennium an amount of monies received from any alleged infringer equivalent to royalties which Millennium would have received under this Agreement, if such alleged infringer had been a Sublicensee of Licensee. 10. INDEMNIFICATION 10.1. Indemnification by Licensee. Licensee shall indemnify and hold Millennium harmless from and against all losses, claims and damages arising out of or based upon the sale of the Licensed Products by Licensee. If a claim is made by any third party against Millennium and Millennium intends to seek indemnification from Licensee with respect to such claim, (i) Millennium shall promptly notify Licensee of such claim, and (ii) if Licensee acknowledges such right to indemnification, Licensee shall have sole control of the defense and all related settlement negotiations. 10.2. Indemnification by Millennium. Millennium shall indemnify and hold Licensee harmless from and against all losses, claims and damages to the extent that such loss, claim or damage arises out of or is based upon the breach of the representations and warranties granted by Millennium in Section 7.1. If a claim is made by any third party against Licensee and Licensee intends to seek indemnification from Millennium with respect to such claim, (i) Licensee shall promptly notify Millennium of such claim, and (ii) if Millennium acknowledges such right to indemnification, Millennium shall have sole control of the defense and all related settlement negotiations. 11. MISCELLANEOUS PROVISIONS 11.1. Prior Customer Projects. Licensee may utilize prior customer projects for marketing referenceable deployments of the SolplaxT Technology. 11.2. Successors And Assigns. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns, including, without limitation, any corporation which is the surviving corporation in the event of a merger involving Licensee. 11.3. Waiver. Any failure by either party to enforce at any time any term or condition of this Agreement shall not be considered a waiver of that party's right thereafter to enforce each and every term and condition of this Agreement. 11.4. Patent Marking. Licensee agrees to mark each Licensed Tool with a patent notice in compliance with applicable statutory requirement. If Millennium obtains any additional patents, on the SolplaxT Technology, Licensee agrees to mark each Licensed Tool with an additional patent notice in compliance with applicable statutory requirements. 11.5. Entire Agreement. This Agreement and the exhibits and schedules referred to herein sets forth the entire intent of and understanding between the parties with respect to the subject matter of this Agreement and supersedes all prior discussions, negotiations, and agreements between them. Neither party shall be bound by any agreement or representation other than as expressly provided herein or as subsequently set forth in writing and executed by each party. 11.6. Bankruptcy. In the event that either Licensee or Millennium is adjudged bankrupt, it is the intention of the parties that this Agreement shall be governed by and construed in accordance with the U.S. Bankruptcy Code. 11.7. Notices. All notices or other communications relating to this Agreement shall be deemed to be properly served when sent in written form by United States certified mail, postage prepaid, or, when delivered by courier to the respective party at the following address or to each substitute address as either party may from time-to-time designate in writing to the other. To Licensee: T-PLEX TECHNOLOGIES Attn: Ronald C. Robker 2950 E. Flamingo Rd, Suite B Las Vegas, NV 89121 To Millennium: Millennium Plastics Corporation Attn: Mr. Paul Branagan 6265 S. Stevenson Way Las Vegas, Nevada 89120 With a copy to: Donald J. Stoecklein, Esquire Law Offices of Donald J. Stoecklein 402 West Broadway, Suite 400 San Diego, CA 92101 11.8. Applicable Law. It is understood and agreed that this Agreement shall be construed, governed, and interpreted in accordance with the laws of the State of Nevada. 11.9. Severability of Provisions: Reformation. If any term, clause, word, condition, provision or agreement in this Agreement or the application thereof or any portion thereof to any person or circumstance, shall be held invalid, void or unenforceable, the remainder of the term, clause, word, condition, provision or agreement and the application thereof shall remain in full force and effect, and the invalid, void or unenforceable term, clause, word, condition, provision or agreement shall be reformed to the extent possible in order to give its intended effect and/or meaning. 11.10. Construction. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, the Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. 11.11. Further Assurances/Cooperation. At any time or from time to time on and after the date of this Agreement, each party agrees to (i) deliver to the other party such records, data or other documents consistent with the provisions of this Agreement, (ii) execute, and deliver or cause to be delivered, all such consents, documents or further instruments of transfer or license, and (iii) take or cause to be taken all such actions, as each party may reasonably deem necessary or desirable in order for such party to obtain the full benefits of this Agreement and the transactions contemplated hereby. [THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK] SIGNATURE PAGE FOLLOWS IN WITNESS WHEREOF, the parties have caused this Agreement to be signed in duplicate by their respective duly authorized officers, effective this 24th day of January, 2001. MILLENNIUM PLASTICS CORPORATION T-PLEX TECHNOLOGIES /s/ Paul Branagan /s/ Ronald C. Robker BY: Paul Branagan By: Ronald C. Robker Its: CEO and President Its: CEO and President Date: Date: EXHIBIT A Documentation & Patent Information for SolplaxT Technologies Invented in 1995, the patented SolplaxT technology is based on an improved method for manufacturing thermoplastic polyvinyl alcohol (PVA) in combination with other approved food-grade ingredients commonly used in commercial and consumer plastic products. Millennium chemists can manipulate the molecular structure and weights-and thus firmness and solubility-of the ultimate plastic product by varying the "recipe", i.e., by using different combinations and ratios of the basic constituent ingredients: PVA, Polyvinyl Acetate (PVAc), Selected Plasticizers, Stabilizers, Coloring, Fillers, and Customer Specific Additives. As a result, SolplaxT polymers offer manufacturers an attractive range of specifications, which can be tailored to their planned end-use application. Millennium Plastics currently has a family of base formulations. These base SolplaxT polymer formulations provide a broad range of water soluble conditions, some dissolve in cold water 20 C (70 F) while others are soluble only in hot water 68 C (155 F). Once dissolved, both hot and cold soluble SolplaxT PVA's are fully biodegradable by natural microbial action into the by-products of carbon dioxide and water. Neither the monomers, plasticisers and/or stabilisers are toxic. The rigidity of the final SolplaxT product can be controlled by varying the amounts of stabiliser and plasticiser incorporated into the base mixture. Similarly, the molecular weight of the plastic has direct bearing on the hardness of the plastic. The molecular weights of the SolplaxT polymer are in the range of 60,000 - 35,000 daltons. The preferred weight is in the range of 55,000 +/- 5,000 daltons. The softer and more pliable the plastic, the lower would be the molecular weight. Depending on the final product, that is, if the product is to be a flexible bag or a rigid eating utensil, different combinations of copolymers, plasticisers and stabilisers would be formulated. As previously mentioned Millennium Plastics has the technology to produce eight similar, but different, SolplaxT polymers which possess distinctive characteristics. The SolplaxT technologies are held by patents involving the process, compounding and manufacture of the SolplaxT plastics. Patents and patent pendings include those in the United States, Ireland, European Patent Cooperation Treaty (PCT), Canada, Thailand and India. The initial Irish patent is Patent # S71912 "Plastic Material And a Method for It's Manufacture" granted June 30, 1997 while the initial US patent is US Patent 5,948,848 "Biodegradable Plastic Material And a Method for It's Manufacture", granted September 7, 1999. More than a half dozen other patents are pending or in the application stages regarding additional claims to the process and coatings.