EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is entered into as of
December 21, 2001 by and among PLANET POLYMER TECHNOLOGIES, INC., a California
corporation ("Seller"), and XXXX INDUSTRIES, LLC, a Delaware limited liability
company ("Buyer"), with reference to the following facts:
A. Seller is engaged in the business of developing and licensing unique
hydrosoluble polymer and biodegradable materials with broad applications in the
fields of agriculture and industrial manufacturing and other related business
activities; and
B. Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller, all of Seller's right, title and interest in and to those of Seller's
Assets (as hereinafter defined) relating to the business which are described in
more detail in Section 1 below.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing facts and the
mutual promises set forth below, the parties agree as follows:
1. Purchase and Sale of Assets. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell to Buyer, and Buyer hereby
agrees to purchase from Seller, all of Seller's assets ("Assets"), together with
Seller's operations relating to its AQUAMIM metal injection molding business
(the "Business") listed below:
1.1 All of the equipment ("Equipment") as set forth in more detail on
Exhibit "A," attached hereto and incorporated by reference;
1.2 All right, title and interest of Seller in all issued patents,
patent applications, trademarks, existing intellectual property (including trade
secrets), knowledge, know-how and ongoing intellectual property being developed
relating to its AQUAMIM Metal Injection Molding ("MIM") technology and the
manufacture and composition thereof ("AQUAMIM Technology"), including without
limiting the generality of the foregoing, the patents, patent applications,
trademarks and tradenames set forth on Exhibit "B," attached hereto and
incorporated by reference, and all rights as an inventor or co-inventor and all
knowledge relating to the feedstock for tungsten-carbide MIM products now being
supplied by Seller to Buyer. As used in this Agreement, the term "AQUAMIM
Technology" includes without limitation all feedstocks and other materials for
MIM that has been or is in the process of being developed and/or manufactured by
Seller (including feedstocks made with tungsten, tungsten-carbide,
copper-tungsten, tool steel, rhenium and TCHPs); and
1.3 All right, title and interest of Seller in all existing business
relationships, development projects, business development programs, files, books
and records, customer lists and customer information, existing orders and
contracts, computer software and similar data, information, contacts and related
supplier and third-party information relating to the AQUAMIM Technology
(collectively, "AQUAMIM Relationships").
2. Purchase Price. The purchase price (the "Purchase Price") for the
Assets shall consist of the following consideration:
2.1 Cash. Buyer shall pay Seller Two Hundred Fifty Thousand Dollars
($250,000.00), payable in the following installments: (a) Thirty Thousand
Dollars ($30,000.00) on the Closing Date, and (b) Twenty Thousand Dollars
($20,000.00) on or before the first day of each and every month in the year
2002, commencing on February 1, 2002, as set forth in more detail in Exhibit
"C," attached hereto and incorporated by reference. Buyer shall also pay Seller
Fifty Thousand Dollars ($50,000.00) in installments of Twenty-Five Thousand
Dollars ($25,000.00) each, the first payment being due on or before August 15,
2002 and the subsequent payment being due no later than October 15, 2002 as set
forth in more detail in Exhibit "D," attached hereto and incorporated by
reference.
2.2 Royalty. During the eight-year period beginning on January 1,
2002, and ending on December 31, 2009 (the "Term"), Buyer shall pay a six
percent (6%) royalty to Seller with respect to Royalty Sales (as defined herein)
by Buyer, or any affiliate, independent contractor or licensee of Buyer, of (i)
all feedstock product sold to all active accounts transferred from Seller to
Buyer pursuant to this Agreement; (ii) any products or services relating to or
arising from the AQUAMIM Relationships transferred from Seller to Buyer pursuant
to this Agreement; and (iii) any other product or service created or developed
that uses any aspect of the AQUAMIM Technology (other than in a tangential or
immaterial manner).
In lieu of the six percent (6%) royalty based upon Royalty Sales,
during the eight-year period beginning on July 1, 2002, and ending on June 30,
2010, Buyer shall pay Seller a Two Dollar Fifty Cent ($2.50) per pound royalty
(calculated in accordance with the formula stated herein) on any and all
tungsten-based feedstock product (excluding scrap) which is embodied in finished
products sold (or provided to customers without charge) by Buyer or any
affiliate, independent contractor or licensee of Buyer ("Tungsten Sales") based
upon, using or substantially related to Seller's technology or formulations
developed for and transferred to Buyer by Seller, or arising from Seller's
technology or formulations or any natural derivatives thereof.
For purposes of this Agreement, (i) "Royalty Sales" shall mean all sales other
than Tungsten Sales, (ii) Tungsten Sales shall not include scrap of
tungsten-based feedstock product and any tungsten-based feedstock manufactured,
used or consumed by Buyer in connection with research and development
activities, and (iii) Royalty Sales and Tungsten Sales are collectively referred
to herein as "Overall Sales".
The royalty based upon Tungsten Sales shall be calculated as follows:
Tungsten Sales Royalty = $2.50 per net pound produced. Buyer shall maintain
records of the tungsten-based feedstock product, including the net pounds
produced, and allow Seller access to such records upon reasonable request to
verify and/or reconcile Buyer's calculations of Tungsten Sales Royalties paid
hereunder. The parties agree and acknowledge that Buyer shall not be required to
pay Tungsten Sales Royalties on any unsalable, unusable or defective
tungsten-based feedstock products or batches produced; provided however, Buyer
shall provide reasonable
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evidence to Seller upon Seller's reasonable request that such products are in
fact unsalable, unusable or defective for resale purposes.
Buyer shall pay the above-referenced royalties with respect to all
cash proceeds from sales that relate to Overall Sales during the Term. Seller
recognizes that, from time to time, Royalty Sales may be returned to Buyer and
Buyer may be required to return (or credit) any sales revenues received with
respect to such returned Royalty Sales. In such events, Buyer shall receive a
credit (or refund) in the amount of all royalty payments made to Seller with
respect to such returned Royalty Sales. Buyer shall make royalty payments to
Seller of the Royalty Sales on or before the 15th of the month following the
close of any three-month quarter, consistent with Buyer's calendar or fiscal
accounting year.
2.3 Allocation. The Purchase Price shall be allocated to the Assets
as set forth on Exhibit "E," attached hereto and incorporated by this reference.
Each of the parties shall report this transaction for tax purposes in accordance
with such allocation.
2.4 No Assumption of Seller Obligations. Buyer shall assume no
liability, claim or obligation (contingent or otherwise) of Seller (the
"Retained Obligations"), including without limitation the following:
(a) Accounts payable, product warranty obligations and customer
deposits.
(b) Any amount due and payable prior to or on account of the period
preceding the Closing Date, or any liabilities, claims or obligations arising
out of, or attributable to events, circumstances, acts or omissions occurring
prior to the Closing Date (even if asserted after the Closing Date).
(c) Any liabilities arising out of or in connection with any employment
agreement, executive compensation agreement, or any bonus, pension, benefit,
welfare, vacation, sick pay, severance, retirement, disability, insurance,
collective bargaining, deferred compensation or other employee benefit plan or
labor agreement relating to Seller employees, whether oral or written, or any
liabilities arising out of or in connection with the termination of employment
of any Seller employee.
(d) Any Federal, state or local income, sales, property, real estate or
other taxes or imposts payable by Seller.
3. Closing Date. The closing of the transaction contemplated by this
Agreement (the "Closing") shall take place at the offices Seller in San Diego,
California on December 28, 2001, at 10:00 a.m., local time (the "Closing Date").
3A. Closing Deliveries. At the Closing, each party shall make the
deliveries called for on the part of such party below, in form and content
satisfactory to the other party.
3A.1 Delivery of Purchased Assets. Buyer shall receive all of the
Assets together with the following instruments of conveyance:
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(a) A Xxxx of Sale conveying to Buyer the Equipment, raw
materials, finished goods and any tangible personal property.
(b) An Assignment of the AQUAMIM Technology, the AQUAMIM
Relationships and any other intangible or intellectual property, together with
originals of all documents evidencing such intangible and intellectual property,
and together with recordable instruments of transfer and assignment sufficient
to effect a transfer of record to Buyer of each registered item thereof.
(c) Such other instruments of conveyance as Buyer reasonably
determines are necessary to transfer to Buyer the Assets in accordance with this
Agreement.
3A.2 Authorization. (a) Buyer shall receive certified copies of all
of the actions taken by the board of directors of Seller authorizing and
approving the execution and delivery of this Agreement and the consummation of
the transaction contemplated hereby.
(b) Seller shall receive certified copies of all of the actions
taken by the managers of Buyer authorizing and approving the execution and
delivery of this Agreement and the consummation of the transaction contemplated
hereby.
3A.3 Certificate. (a) Seller shall deliver to Buyer a certificate,
executed by the Chief Executive Officer of Seller, certifying to the truth and
accuracy of all of Seller's covenants, agreements, representations and
warranties contained herein as of the Closing Date.
(b) Buyer shall deliver to Seller a certificate, executed by a
manager of Buyer, certifying to the truth and accuracy of all of Buyer's
covenants, agreements, representations and warranties contained herein as of the
Closing Date
3A.4 Books, etc. Seller shall deliver to Buyer originals or copies
of all books and records of Seller in any way relating or pertaining to the
Assets and such other documents, instruments, deliveries and possession as are
required by this Agreement, or are otherwise necessary to effectuate fully the
transactions provided for herein.
3A.5 Promissory Notes. Buyer shall deliver to Seller the promissory
notes, duly executed, as set forth in Section 2.1.
3A.6 Consulting Agreement. Each party shall deliver a properly
executed counterpart of the Consulting Agreement.
3A.7 Non-Compete Agreements. Seller shall deliver the Non-Compete
Agreement referred to in Section 4.8, below.
4. Conditions Precedent to the Closing by Buyer. The obligations of
Buyer to consummate this Agreement are subject to the fulfillment, at or prior
to the Closing Date of the conditions set forth below, unless waived by Buyer in
a writing delivered to Seller:
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4.1 Representations and Warranties. The representations and
warranties of Seller shall be true and correct in all material respects as of
the Closing Date as though made on that date and Seller shall have performed or
complied with all of its covenants, terms and conditions to be performed prior
to Closing Date.
4.2 Absence of Litigation. Prior to or at the Closing Date, no
litigation, investigation, inquiry or proceeding shall be pending or threatened
(i) to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or to obtain damages or other relief by reason of such
consummation; (ii) involving any of the Assets of Seller; or (iii) involving any
contractual relationship pertaining to the acquisition by Buyer of the Assets,
the results of which could prevent, materially delay or make illegal the
consummation of such purchase.
4.3 Material Damage. Prior to the Closing Date, no material damage,
destruction, casualty or loss (whether or not covered by insurance) and no other
event or condition materially and adversely affecting the Assets shall have
occurred.
4.4 Authorization by the Seller. The execution and delivery of this
Agreement by the Seller and the performance of the transactions contemplated
herein shall have been duly authorized by the Seller's board of directors and
Buyer shall have received copies of all resolutions of the board of directors
pertaining to such authorization, certified by the Seller's secretary.
4.5 Covenants and Agreements. Seller shall have performed and
complied with each and all of the covenants, agreements, terms and conditions to
be performed and complied with by Seller on or before the Closing Date, pursuant
to the provisions of this Agreement, and Seller shall so certify in writing
delivered to Buyer at the Closing Date.
4.6 Physical Inventory. On or before the Closing Date, Buyer shall
have conducted a physical inventory of all Equipment as held by Seller as of the
Closing Date and shall be satisfied that such Equipment is in working order,
subject only to those agreements previously disclosed to Buyer, and that such
Equipment fully comply with the representations and warranties set forth herein
with respect to such Equipment. After the Closing Date, Buyer shall be solely
responsible for rigging, shipping to, and delivery and installation of the
Equipment at Buyer's facilities.
4.7 Employment Agreements. Buyer shall have received Employment
Agreements and Confidentiality and Nondisclosure Agreements, in form acceptable
to Buyer, each duly executed by Xxxx Xxxxx and Xxxx Xxxxxxxxx.
4.8 Non-Compete Agreements. Seller shall execute and deliver the
Non-Compete Agreement in the form attached hereto as Exhibit "I", attached
hereto and incorporated by reference.
4.9 Due Diligence Review. A due diligence review of Seller, Seller's
business and the Assets shall be completed by Buyer, its legal counsel, its
outside consultants, or others
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appointed by Buyer. Buyer shall be satisfied in its sole and absolute discretion
with the results of Buyer's due diligence review of Seller, Seller's Business
and the Assets.
4.10 Consents and Approvals. All consents, waivers, releases,
authorizations and approvals required in connection with the execution, delivery
and performance of this Agreement and the transfer to Buyer of all of the Assets
shall have been duly obtained.
5. Conditions Precedent to the Closing by Seller. The obligations of
Seller to consummate this Agreement are subject to the fulfillment, before or on
the Closing Date, of the conditions set forth below, unless waived by Seller in
a writing delivered to Buyer:
5.1 Representations and Warranties. The representations and
warranties of Buyer shall be true and correct in all material respects as of the
Closing Date as though made on that date and Buyer shall have performed or
complied with all of its covenants, terms and conditions to be performed prior
to the Closing Date.
5.2 Absence of Litigation. Prior to or at the Closing Date, no
litigation, investigation, inquiry or proceeding shall be pending or threatened
(i) to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or to obtain damages or other relief by reason of such
consummation; or (ii) involving any contractual relationship pertaining to the
acquisition by Buyer of the Assets, the results of which could prevent,
materially delay or make illegal the consummation of such purchase.
5.3 Authorization by Buyer. The execution and delivery of this
Agreement by Buyer and the performance of the transactions contemplated herein
shall have been duly authorized by the Buyer's managers and Seller shall have
received copies of all resolutions of the managers pertaining to such
authorization, certified by the Buyer's secretary.
5.4 Covenants and Agreements. Buyer shall have performed and complied
with each and all of the covenants, agreements, terms and conditions to be
performed and complied with by Buyer on or before the Closing Date, pursuant to
the provisions of this Agreement, and Buyer shall so certify in writing
delivered to Seller at the Closing Date.
5.5 Consulting Agreement. On or before the Closing Date, Buyer shall
have duly executed and delivered the Consulting Agreement to Seller in the form
attached hereto as Exhibit "F," attached hereto and incorporated by reference.
6. Termination. This Agreement may be terminated at any time prior to
the Closing Date by: (i) the mutual consent of the parties hereto or (ii) Buyer
or Seller, if events occur which render impossible compliance with one or more
of the conditions set forth in Section 4 or Section 5, respectively, and which
are not waived by the other party. In the event of the termination of this
Agreement as provided in this Section 6, upon written notice to Seller by Buyer,
this Agreement shall become void and have no effect, without any liability on
the part of any party or its members, managers, directors, officers or
shareholders.
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7. Seller's Representations and Warranties. Seller represents and
warrants to Buyer the accuracy and completeness of the matters set forth in this
Section 7 as of the date hereof and as of the Closing Date:
7.1 Organization and Standing. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California, and has full and complete power and authority together with all
licenses, permits and certificates from agencies and public authorities as are
necessary to own its properties and to conduct its business where such
properties are now owned and such business is now conducted, and has full power
and authority to enter into and accomplish the transactions herein contemplated,
to enter into this Agreement and to carry out the provisions hereof.
7.2 No Breach. The execution, delivery, performance and compliance by
Seller with this Agreement will not (with or without the giving of notice or
passage of time) result in any material breach of, constitute a default under,
or result in the imposition of any lien or encumbrance upon the Assets of Seller
pursuant to any material agreement or other instrument to which Seller is a
party or by which Seller or its Assets are bound or affected.
7.3 Authorization and Binding Effect. The execution, delivery and
performance of this Agreement by Seller and the consummation of the transactions
contemplated by this Agreement have been all duly authorized by the directors of
the Seller and all the corporate acts, proceedings and approvals required of
Seller, its officers, directors and shareholders for all of the foregoing have
been duly taken and remain in effect. This Agreement constitutes the legal,
valid and binding obligation of Seller, enforceable against Seller in accordance
with its terms.
7.4 Compliance with Laws and Other Instruments. Seller has, complied
in all material respects with all laws, regulations and orders applicable to the
Assets and has all material permits and licenses required thereby. There is no
term or provision of any mortgage, indenture, contract, agreement or instrument
to which Seller is a party or by which it is bound, or of any provision of any
state or federal judgment, decree, order, statute, rule or regulation applicable
to or binding upon Seller or the Assets which materially adversely affects or,
so far as Seller may now foresee, in the future is reasonably likely to
materially adversely affect, the Assets.
7.5 Proprietary Rights. Seller is not using any trademark, trademark
registration or application, service xxxx or trade name, patent, patent
registration or application, copyright or copyright registration or application,
the use of which is necessary or contemplated in connection with the operation
of Seller's Business or in connection with the performance of any contract to
which Seller is a party, in violation of the rights of the owner thereof.
7.6 Title to and Condition of Properties. Except as set forth on
Exhibit "G," attached hereto and incorporated by reference, Seller will have on
the Closing Date good and marketable title to all of the Assets, subject to no
liens or encumbrances, whether by mortgage, security interest, pledge, lien,
conditional sale agreement, encumbrance, charge and any other claim, including
any obligation to pay license fees, royalties or other payments to any other
person or entity (collectively, a "Lien"), and at the Closing will deliver to
Buyer full legal title
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thereto free and clear of all Liens. All properties and equipment which are
subject to this Agreement will on the Closing Date be in good operating
condition and will have been serviced and maintained, where applicable,
substantially in accordance with manufacturers' recommendations. Except as
specifically represented or warranted in this Agreement, the Assets are being
sold to Buyer "as is" without any further representation or warranty being made
by Seller.
7.7 Brokers or Finders. Seller has retained no broker or finder in
connection with the transactions contemplated by this Agreement.
7.8 Intangible Property. With regard to the AQUAMIM Technology and
any intangible property constituting part of the Assets (collectively, the
"Intangible Property"):
(a) To Seller's knowledge, all of the Intangible Property is
currently in compliance with formal legal requirements (including payment of
filing, examination, and maintenance fees and proofs of working or use), are
valid and enforceable, and are not subject to any maintenance fees or taxes or
actions falling due within 120 days after the Closing Date.
(c) None of the Intangible Property is involved in, any
interference, cancellation, reissue, reexamination, challenge, infringement or
opposition proceeding. Seller has not received any written notice of any
interference, cancellation, reissue, reexamination, challenge, infringement or
opposition proceeding regarding the Intangible Property. To Seller's knowledge,
there is no potentially interfering patent or patent application of any third
party and no such action is threatened with the respect to any of the Intangible
Property.
(d) To Seller's knowledge, no patent is infringed or has been
challenged or threatened in any way by the Intangible Property. To Seller's
knowledge, none of the products manufactured and sold, nor any process or
know-how used, by Seller in the Business infringe or is alleged to infringe any
patent or other proprietary right of any other person. Seller has not received
any written notice that any of the products manufactured and sold, nor any
process or know-how used, by Seller in the Business infringe or is alleged to
infringe any patent or other proprietary right of any other person.
(e) To the extent applicable, all products made, use, or sold
relating to the Business under any patents have been marked with the proper
patent notice.
(f) To Seller's knowledge, the AQUAMIM trademark has not been
infringed or challenged or threatened in any way. To Seller's knowledge, none of
the marks used by Seller in the Business infringes or is alleged to infringe any
trade name, trademark, or service xxxx of any third party. The AQUAMIM xxxx has
been registered with the United States Patent and Trademark Office is currently
in compliance with all formal legal requirements (including the timely
post-registration filing of affidavits of use and incontestability and renewal
application), are valid and enforceable, and are not subject to any maintenance
fee or taxes or actions falling due within 120 days after the Closing Date.
(g) If applicable, all products and materials containing a xxxx
xxxx the proper federal registration notice where permitted by law.
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(h) With respect to each trade secret, the documentation relating
to such trade secret is current, accurate, and sufficient in detail and content
to identify and explain it and to allow its full and proper use without reliance
on the knowledge or memory of any individual.
(i) Seller has taken all reasonable precautions to protect the
secrecy, confidentiality, and value of its trade secrets related to the AQUAMIM
Technology.
(j) To Seller's knowledge, the trade secrets and proprietary
information related to the AQUAMIM Technology, including without limitation the
formulations used in connection therewith, are not part of the public knowledge
or literature, and, to Seller's knowledge, have not been used, divulged, or
appropriated either for the benefit of any person (other than Seller) or to the
detriment of Seller. Seller has used its best efforts to protect the
confidentiality and non-disclosure of trade secrets and proprietary information
related to the Business. No trade secret is subject to any adverse claim or has
been challenged or threatened in any way.
(k) The Intangible Property is all that is necessary for the
operation of the Business as it is currently conducted.
(l) All former and current employees of Seller have executed
written contracts with Seller that assign to Seller all rights to any
inventions, improvements, discoveries, or information relating to the business
of Seller. No employee of Seller has entered into any contract or agreement that
restricts or limits in any way the scope of work in which the employee may be
engaged or requires the employee to transfer, assign, or disclose information
concerning his work to anyone other than the Seller.
7.9 Litigation. There is no claim, litigation, proceeding or
investigation of any nature pending or threatened against the Business or the
Assets; including without limitation any such item which seeks to enjoin,
prohibit or otherwise challenge the transactions contemplated hereby; and no
judgment, award, order or decree has been rendered against or affecting Seller,
the Business or the Assets. To Seller's knowledge, Seller has not violated and
is not in default under any statute, ordinance, rule, regulation or other law,
or under any order, rule, regulation, policy, writ or decree of any court or
other agency or governmental body which may affect the Assets.
7.10 Reports and Licenses. To Seller's knowledge, all returns,
reports, filings, registrations and statements currently required to be filed by
Seller with any governmental or other agency pertaining to or affecting the
Assets have been properly and timely filed. To Seller's knowledge, Seller has
procured, complied with and maintained in full force and affect all licenses,
permits, consents, approvals and other authorizations necessary in connection
with and material to the operation and ownership of the Assets.
7.11 Environmental Matters. To Seller's knowledge, Seller and the
Assets are and always have been in compliance with all applicable Environmental
Laws, and Seller has obtained all permits and other authorizations from, and
submitted all forms, fees,
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registrations, reports and similar filings to, the appropriate person or
governmental agency needed, or required, to operate its facilities and Assets in
compliance with the applicable Environmental Law. To Seller's knowledge, neither
Seller nor the Assets have violated any applicable Environmental Law. Seller has
not received any written notice that Seller or the Assets have violated,
allegedly or otherwise, any Environmental Law with respect to the Business.
Seller is unaware of any present requirement of any applicable Environmental Law
which is due to be imposed upon it which will increase its cost of complying
with the Environmental Laws. All past on-site generation, treatment, processing,
storage and disposal of Waste, including Hazardous Waste, by Seller has been
done in compliance with all applicable Environmental Laws. Seller has not
released, spilled, leaked or otherwise discharged into the environment any
Regulated Substance except as expressly authorized by the applicable
Environmental Law. There is no civil, criminal, administrative or other action,
suit, demand, claim, hearing, notice of violation or investigation based on, nor
to Seller's knowledge, any pending, received or threatened against Seller or the
Assets relating in any way to any Environmental Laws.
As used in this Agreement, the terms (i) "Environmental Laws" include
but are not limited to any federal, state, foreign or local law, statute,
charter or ordinance, and any rule, regulation, binding interpretation, binding
policy, permit, order, court order or consent decree issued pursuant to any of
the foregoing, which pertains to, governs or otherwise regulates any of the
following activities: (a) the emission, discharge, release or spilling of any
Regulated Substance into the air, surface water, groundwater, soil or substrata
and (b) the manufacturing, processing' sale, generation, treatment,
transportation, storage, disposal, labeling or other management of any Waste,
including any Hazardous Waste or Regulated Substance; (ii) "Waste" and
"Hazardous Waste" include any substance defined as such by any applicable
Environmental Law; and (iii) "Regulated Substances" include any substance the
manufacturing, processing, sale, generation, treatment, transportation, storage,
disposal, labeling or other management or use of which is regulated by any
applicable Environmental Law.
7.12 Product Warranties. There are no outstanding written or express
guarantees, warranties or service agreements on Seller's part to be performed
with respect to any products or services sold by Seller and related to the
Business, other than warranties implied in law which cannot legally be
disclaimed. To Seller's knowledge, there are no claims pending or threatened
under or pursuant to any warranty, whether expressed or implied, on products or
services sold by Seller in connection with the Business.
7.13 Transactions with Affiliates. There are no contracts, agreements
or other arrangements (formal or informal, written or oral) related directly or
indirectly to the Business of Seller or the Assets between Seller and any other
persons controlling, under common control with or controlled by Seller.
7.14 Completeness and Accuracy. None of the representations,
warranties or statements contained in this Agreement (including the exhibits and
schedules hereto) or, to the best of Seller's knowledge, in any other agreement,
instrument or document executed or delivered by or on behalf of Seller in
connection with any of the transactions contemplated hereby or thereby contains
any untrue statement of material fact or omits to state a material fact
necessary in order to make any of such representations, warranties or statements
not
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misleading. Copies of all documents furnished by or on behalf of Seller to Buyer
pursuant to the terms of this Agreement are complete and accurate. All documents
referenced to in the exhibits and schedules have been delivered to Buyer. There
is no fact that Seller has not disclosed to Buyer that materially affects or is
reasonably likely to materially affect the Business of Seller or the Assets or
the ability of Seller to perform this Agreement.
8. Buyer's Representations and Warranties. Buyer represents and warrants
to Seller the accuracy and completeness of the matters set forth in this Section
8, as of the date hereof and as of the Closing Date:
8.1 Organization and Standing. Buyer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware, and has full and complete power and authority to enter into
and accomplish the transactions herein contemplated, to enter into this
Agreement and to carry out the provisions hereof.
8.2 Authorization and Binding Effect. The execution, delivery and
performance of this Agreement by Buyer and the consummation of the transactions
contemplated by this Agreement have been all duly authorized by the managers of
Buyer and all the acts, proceedings and approvals required of Buyer and its
managers for all of the foregoing have been duly taken and remain in effect.
This Agreement constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms.
8.3 Brokers or Finders. Buyer has retained no broker or finder in
connection with the transactions contemplated by this Agreement.
8.4 Survival of Representations. The covenants, representations and
warranties made by Buyer herein, except as they may be fully performed prior to
or contemporaneously with the Closing, shall remain in effect for the Term.
9. Covenants of Seller. Seller covenants to Buyer as set forth below.
9.1 Conduct of Business. Between the date hereof and the Closing
Date, Seller:
(a) Shall maintain the Assets in good condition and repair, and
shall not, without the prior written consent of Buyer, incur expenses in the
maintenance or repair of any Assets which could result in a lien upon or other
liability against any of the Assets;
(b) Shall duly observe and conform to all legal requirements
applicable to such Assets and the business conducted in connection therewith;
(c) Shall use its best efforts to cause all of the conditions set
forth in Section 9 of this Agreement to be satisfied, and has not and shall not
undertake any course of action which would be inconsistent with either a prompt
consummation of the Closing or satisfaction of the conditions of the Closing set
forth in this Agreement;
11
(d) Shall use its best efforts to assist Buyer in obtaining
minimum one-year employment agreements with Xx. Xxxx Xxxxx and Xx. Xxxx
Xxxxxxxxx;
(e) shall preserve the goodwill of the customers, suppliers and
others having relationships with the Business or the Assets; and
(f) Shall give and continue to give Buyer and Buyer's counsel,
accountants, engineers and other authorized representatives reasonable access
during normal business hours throughout the period prior to the Closing Date to
the Assets and to the books and records relating thereto and to Seller generally
and shall promptly furnish Buyer with such information concerning the affairs of
Seller as Buyer may reasonably request.
9.2 Sale of Goods. At the Closing, Seller shall sell to Buyer and
Buyer may buy from Seller, at Buyer's option, the raw materials and finished
goods in the quantities and at the prices as set forth in more detail on Exhibit
"H," attached hereto and incorporated by reference.
9.3 Survival of Representations. (a) Except as set forth in Sections
9.3(b) and (c), below, the covenants, representations and warranties made by
Seller herein, except as they may be fully performed prior to or
contemporaneously with the Closing Date, shall survive for one year after the
Closing Date.
(b) With respect to those representations, warranties,
covenants, indemnities, and agreements for the benefit of Buyer relating to (i)
the authorization of the Seller to enter into this Agreement, (ii) title matters
with regard to the Assets, (iii) the Retained Obligations of Seller; they shall
survive indefinitely.
9.4 Negotiations. Neither Seller or its directors, officers,
employees or agents shall, directly or indirectly, encourage, solicit, engage in
discussions with, or provide any information to, any person or entity (other
than Buyer or its representatives) concerning any merger, sale of assets,
business venture or similar transaction involving the Assets or the Business.
10. Covenants of Buyer. Buyer covenant to Seller as set forth below:
10.1 License. For the life of the patents included in the AQUAMIM
Technology, and in the event Buyer or its assigns decide not to supply AQUAMIM
products or services to Pacific Sintered Products, Inc., and/or Polyalloys, Inc.
and their respective successors in interest, Buyer shall provide to Seller a
limited non-royalty bearing, non-exclusive and non-transferable license for such
patents to be used only in connection with the manufacture and sale of AQUAMIM
feedstock to Pacific Sintered Products, Inc., and/or Polyalloys, Inc. and their
respective successors in interest for their internal consumption and use. The
license referred to in this Section 10.1 only includes a license for the patents
used in connection with the AQUAMIM Technology and shall not include a license
for Seller to use any tungsten-carbide feedstocks or any other feedstocks
developed by Seller for Buyer.
12
10.2 Maintenance of Records. During the Term, Buyer shall maintain
current, accurate and complete books and records relating to the Overall Sales
and the payment of the above-referenced royalties to Seller, and the performance
of its obligations under this Agreement. Seller or its designee may (at its sole
cost and expense), during the Term and for a period of twenty-four (24) months
thereafter, upon at least ten (10) days' prior written notice to Buyer and
during reasonable business hours, examine, inspect and audit such books and
records and any source documents pertaining thereto for the purposes of
verifying the accuracy and completeness of records, reports and payments
provided hereunder. Notwithstanding the foregoing, if Seller discovers during
the course of any such audit that royalty payments to Seller for any six-month
period are ninety-seven percent (97%) or less of the royalty payments that
should have been paid ("Material Discrepancy"), Seller may thereafter conduct
audits on a quarterly basis until there shall have been two (2) consecutive
years without a Material Discrepancy and Buyer shall pay all reasonable costs of
the audits. Seller or its designee may, during the course of such examination,
review or audit, make copies and/or extracts of books and records relating to
Overall Sales and royalty payments thereof and Buyer's compliance with the
provisions of this Agreement. Seller shall treat all such information reviewed
during an audit as confidential and will not disclose the same to any third
party without the written consent of Buyer.
11. Option to Repurchase. (a) If, during the Term, Buyer decides for any
reason to vacate, close or discontinue (collectively, the "Discontinuation")
(which includes, but is not limited to, any reorganization, reconstitution,
merger, sale or consolidation where a change of control of fifty percent (50%)
or more of Buyer will occur, such that the Purchase Price for the Assets as
described in Section 2.1 herein is endangered in any way, according to the
reasonable discretion of Seller) the business associated with the use and
application of the AQUAMIM Technology and AQUAMIM Relationships , then at least
30 days before the proposed Discontinuation, Buyer shall give written notice to
Seller so that Seller may have the option to purchase the Business (the
"Option"); provided, however, a Discontinuation shall not include a sale
transaction of substantially all of the assets or capital stock of Buyer or an
initial public offering of Buyer whereby substantially all of the operations and
business of Buyer as a whole will be continued by Buyer or by the successor or
transferee of Buyer's business and/or assets. Seller shall have ten (10) days
after such notice is received to exercise the Option to purchase the Business.
If Seller does elect to exercise the Option and purchase the Business, the
parties shall determine the fair market value ("Fair Market Value") of the
Business. The procedure for determining the Fair Market Value shall be as
follows: Seller shall designate, in writing, a person to act as its appraiser
for the purpose of establishing the Fair Market Value of the Business. Within
ten (10) days after Seller gives notice of its appraiser's estimation of the
Fair Market Value, Seller and Buyer shall either reach agreement on the Fair
Market Value of the Business, or if Buyer does not agree, Buyer shall promptly
designate, in writing, a person to act as a second appraiser. If any appraiser
so designated by Seller or by Buyer shall die, be disqualified, become
incapacitated or shall fail or refuse to act before the initial Fair Market
Value shall have been determined, the party so designating such appraiser shall
designate a new appraiser. All appraisers so designated shall be independent and
shall have at least ten (10) years experience in appraising business or
companies similar to the Business. The appraiser or appraisers shall meet
promptly to determine the Fair Market Value. If, within thirty (30) days after
the designation of the second appraiser, the two (2) appraisers shall fail to
agree upon the Fair Market Value of the Business, the appraisers shall, within
ten (10) days thereafter, designate in writing a third appraiser. If the
appraisers shall fail to designate the third appraiser in the manner and the
time
13
provided above, the appraiser of Buyer shall request a recognized and accredited
appraisal organization to designate a third appraiser who shall satisfy the
qualifications described above. If, within thirty (30) days after the
designation of the third appraiser, the three (3) appraisers are unable to agree
on the Fair Market Value, the Fair Market Value suggested by the two (2)
appraisers whose determination of the initial Fair Market Value are closest in
amount shall be averaged and said average shall be deemed the amount of the Fair
Market Value for purposes of determining the Fair Market Value of the Business.
The fees and expenses of the appraisers shall be borne by Seller and Buyer
equally.
(b) The parties hereby agree and acknowledge that if Seller
purchases the Business pursuant to subsection (a), above, Buyer shall retain an
exclusive license and right to use the AQUAMIM Technology in connection with
tungsten-carbide feedstocks or feedstocks developed by Seller for Buyer. In
connection with such license as aforesaid, Buyer shall pay to Seller a six
percent (6%) royalty with respect to such sales utilizing the AQUAMIM
Technology.
12. Sales and Use Taxes. Seller and Buyer shall each pay one-half (1/2)
of all taxes arising out of the transfer of the Assets to Buyer pursuant to this
Agreement. Seller shall file all necessary reports and other documents with the
appropriate governing bodies in California in connection with the transfer of
Assets and Seller shall pay all amounts of such taxes due in connection with the
sale and transfer of the Assets. Within 15 days after Seller has provided copies
of the transfer or sales tax returns and evidence of payment, Buyer shall
reimburse Seller for one-half (1/2) of all such taxes. Buyer shall not be
responsible for any sales, use, business, occupation, withholding or similar tax
or any taxes of any kind related to the Assets or the Business for any period
prior to the Closing Date.
13. Indemnification; Set-Off
13.1 Indemnification. (a) Each of the parties hereto agrees to
indemnify and hold the other (and its managers, officers, directors, members,
shareholders, employees and affiliates) harmless from and against any and all,
claims, loss, cost, liability, damage and expense (including reasonable
attorneys' fees and costs) (collectively, "claims"), arising from, in connection
with or relating to any breach of or inaccuracy in its representations,
warranties, covenants and agreements contained in this Agreement or in any
documents, instrument or agreement, executed in connection herewith.
(b) Seller agrees to indemnify and hold Buyer (and its
managers, members, officers, employees and affiliates) harmless from and against
any Retained Obligations. Buyer agrees to indemnify and hold Seller (and its
directors, officers, employees and affiliates) harmless from and against any
claims arising from or in connection with the operation of the Assets and the
Business subsequent to the Closing Date.
(c) Knowledge of the basis for a claim or of a claim at the
time of execution of this Agreement or at the Closing Date shall not waive,
limit or otherwise modify the rights and obligations of the parties as set forth
in this Section 13.
(d) In the event that any claim is asserted by a third party
against a party hereto as to which such party is entitled to indemnification
hereunder, such party (the "Indemnified Party") shall as promptly as possible
and in any case within 20 days after learning
14
of such claim notify the party obligated to indemnify it (the "Indemnifying
Party") thereof in writing. In the event the Indemnified Party shall fail to
give notice of such claim as aforesaid, the Indemnifying Party shall not be
required to indemnify the Indemnified Party to the extent the Indemnifying Party
is prejudiced as a result of such delay in notification. The Indemnifying Party
shall have the right, upon written notice to the Indemnified Party within 10
days after receipt of its notice to conduct the defense against such claim at
its expense in its own name or, if necessary, in the name of the Indemnified
Party using counsel reasonably acceptable to the Indemnified Party. In the event
that the Indemnifying Party shall fail to give such notice, it shall be deemed
to have elected not to conduct the defense of the subject claim, and in such
event the Indemnified Party shall have the right to conduct such defense and to
compromise and settle the claim with the prior consent of the Indemnifying Party
(which shall not be unreasonably withheld). In the event that the Indemnifying
Party does elect to conduct the defense of the subject claim, the Indemnified
Party will cooperate with and make available to the Indemnifying Party such
assistance and materials as may be reasonably requested by it, all at the
expense of the Indemnifying Party, and the Indemnified Party shall have the
right at its expense to participate in the defense, provided that the
Indemnifying Party shall have the right to compromise and settle the claim only
with the prior written consent of the Indemnified Party (which shall not be
unreasonably withheld). Any judgment entered or settlement agreed upon in the
manner provided herein shall be binding upon the Indemnifying Party, and shall
conclusively be deemed to be an obligation with respect to which the Indemnified
Party is entitled to indemnification hereunder; provided, however, that any
settlement agreement or agreed order shall be subject to the prior written
consent of the Indemnified Party.
13.2 Right of Setoff. If in the reasonable judgment of Buyer (which
judgment shall be exercised in good faith), Seller shall be indebted to Buyer
under this Agreement, including under Section 13.1, Buyer shall have the right
to setoff such indebtedness against any amount Buyer then or in the future may
owe to Seller, including without limitation amounts under the promissory notes
delivered to Seller at Closing and any royalties owed under Section 2.2, above.
13. General Provisions.
13.1 Jurisdiction. Each party hereto hereby consents to the
exclusive jurisdiction of the state and federal courts sitting in San Diego
County, California in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this
Agreement. Each party hereto further agrees that personal jurisdiction over it
may be effected by service of process by registered or certified mail addressed
as provided in Section 13.2 of this Agreement, and that when so made shall be as
if served upon it personally within the State of California.
13.2 Notices. All notices, requests, consents, and other
communications required or permitted hereunder shall be in writing and shall be
personally delivered or mailed by using first-class, registered, or certified
mail, postage prepaid, to the following addresses or to such other address as
the parties hereto may designate in writing:
15
Seller: Planet Polymer Technologies, Inc.
0000 Xxxxxxxx Xxxx Xxx
Xxx Xxxxx, Xxxxxxxxxx 00000
with a copy to: Xxxxxxxxx, Xxxxxxx & French, P.C.
000 Xxxxxxxxx Xx., 0xx Xxxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx
Buyer: Ryer Industries, LLC
42600 Rio Nedo
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
with a copy to: Levenfeld Xxxxxxxxxx
00 Xxxx Xxxxxx Xxxxxx, 00xx Xx.
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
All such notices, requests, consents and other communications shall be deemed to
be properly given if delivered personally, via facsimile, or, if sent by mail,
three business days after the same has been deposited in mail, addressed and
postage prepaid as set forth above.
13.3 Counterparts. This Agreement may be executed in any number of
counterparts, in person or by facsimile, each of which when executed by the
parties hereto and delivered shall be deemed to be an original, and all such
counterparts taken together shall be deemed to be but one and the same
instrument.
13.4 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of
California.
13.5 Integration and Construction. This Agreement together with all
Exhibits and Schedules referred to herein shall comprise the complete and
integrated agreement of the parties hereto and shall supersede all prior
agreements, written or oral, on the subject matter hereof. This Agreement has
been drafted with the joint participation of the parties hereto and shall be
construed to be neither against nor in favor of Seller or Buyer in accordance
with the fair meaning thereof. The parties further agree that this Agreement
will be construed to effectuate the normal and reasonable expectations of a
sophisticated seller and buyer.
13.6 Waivers and Amendments. No amendment, modification, supplement,
termination or waiver of any provision of this Agreement, and no consent to any
departure therefrom, may in any event be effective unless in writing and signed
by the party or parties affected thereby, and then only in the specific instance
and for the specific purpose given.
13.7 Attorneys' Fees. Each party to this Agreement shall bear its
own legal fees and any and all other expenses relating to the transactions
contemplated in this Agreement. If any party institutes any arbitration, action
or proceeding to enforce this Agreement or any
16
provision hereof or for damages by reason of any alleged breach of this
Agreement or of any provision hereof or for a declaration of rights hereunder,
then the prevailing party in any such arbitration, action or proceeding shall be
entitled to receive from the other party all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party in connection with
such action or proceeding.
13.8 Headings. The headings of this Agreement are for convenience of
reference only and shall not affect the construction of any provision of this
Agreement.
13.9 Exhibits and Schedules. Each Exhibit and Schedule referred to
herein and attached hereto is an integral part of this Agreement and is
incorporated herein by this reference.
13.10 Successors and Assigns. This Agreement and the provisions
hereof shall be binding upon and inure to the benefit of each of the parties and
their successors and assigns.
13.11 Opportunity to Consult Counsel. Each party hereto acknowledges
that it has had a sufficient opportunity to consult independent legal counsel
and independent accountants concerning the provisions of this Agreement and
entered into this Agreement intending to be legally bound. The parties hereto
are relying solely upon the advice of their own independent counsel and
accountants and are not relying in any manner or way on the advice or counsel of
the other party's counsel, accountants, or other advisors.
13.12 Time is of the Essence. All dates and times in this Agreement
are of the essence.
13.13 Severability. If any provision of this Agreement or the
application of such provision to any person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision to
persons or circumstances other than those to which it is held invalid shall not
be affected thereby.
13.14 Remedies. All rights and remedies provided herein shall be in
addition to and not in substitution of all rights and remedies available to a
party at law or in equity.
[Signature Page Follows]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first set forth above.
SELLER:
PLANET POLYMER TECHNOLOGIES, INC.,
a California corporation
By: _____________________________________
Its: ____________________________________
BUYER:
XXXX INDUSTRIES, LLC,
a Delaware limited liability company
By: _____________________________________
Xxxxxx Xxxxxxx, Manager
18
EXHIBIT "A"
EQUIPMENT
Weigh scales
Blender Mixer
Dessicant dryer
S/S extruder
Twin screw extruder
Melt pump
Powder feeders
Take off conveyors
Granulator
Pellitzer
Debinding tanks
Sinter furnace
Molding machine
Melt indexer
Pychometer
Mold tools
Fork Lift
Misc. equipment
EXHIBIT "B"
AQUAMIM TECHNOLOGY
Patent US 5,977,230
Patent Japan 3,142,828
Patent US 6,008,281
Pending -- Singapore of US 5,977,230
Applied - US Dense Metal Composites
AQUAMIM trademarks and tradenames
EXHIBIT "C"
$250,000 PROMISSORY NOTE
EXHIBIT "D"
$50,000 PROMISSORY NOTE
EXHIBIT "E"
ALLOCATION OF ASSETS
Equipment:
----------
Weigh scales $ 2,500
Blender Mixer 1,500
Dessicant dryer 8,000
S/S extruder 35,000
Twin screw extruder 80,000
Melt pump 500
Powder feeders 15,000
Take off conveyors 15,000
Granulator 8,500
Pellitzer 15,000
Debinding tanks 12,000
Sinter furnace 24,000
Molding machine 20,000
Melt indexer 7,500
Pychometer 10,500
Mold tools 2,000
Fork Lift 5,000
Misc. equipment 10,000 $ 272,000
--------
Intellectual Property & Patents:
-------------------------------
Patent US 5,977,230
Patent Japan 3,142,828
Patent US 6,008,281
Pending -- Singapore of US 5,977,230
Applied - US Dense Metal Composites
AQUAMIM trademarks and tradenames 28,000
----------
TOTAL PURCHASE PRICE $ 300,000
==========
EXHIBIT "F"
CONSULTING AGREEMENT
This Consulting Agreement is made and entered into this ____ day of
December, 2001, by and between Xxxx Industries, LLC, a Delaware limited
liability company (the "Company"), and Planet Polymer Technologies, Inc., a
California corporation ("Consultant") with respect to the following facts:
RECITALS
A. The Company desires to be assured of the association and services of
Consultant for the Company.
B. Pursuant to that certain Purchase and Sale Agreement dated December
21, 2001 between the Company and Consultant (the "Purchase Agreement"), the
Company acquired certain assets of Consultant constituting Consultant's AQUAMIM
metal injection molding business, including certain confidential and proprietary
information ("Planet Polymer Confidential Information") related to the AQUAMIM
Technology and Relationships (as those terms are defined in the Purchase
Agreement).
C. The Planet Polymer Confidential Information has been the subject of a
confidentiality agreement between Consultant and certain employees of
Consultant, including without limitation Xx. Xxxxxx Xxxxxxxxx ("Petcavich"); and
D. In the course of the services being rendered pursuant to this
Agreement, the Company may disclose to Consultant and to employees of
Consultant, or Consultant or its employees may observe or be exposed to,
confidential and/or proprietary trade secret information concerning the Company
and its activities, including without limitation the MIM Information (as that
term is hereinafter defined); and
E. Consultant acknowledges that the Company would not enter into this
Agreement with Consultant, unless Consultant agrees to enter into a confidential
relationship with respect to Planet Polymer Confidential Information and the
confidential and/or proprietary information to be obtained by or disclosed to
Consultant in the course of the relationship contemplated by this Agreement.
F. The Company desires to engage the services of Consultant to perform
for the Company certain technical consulting services and to confer with the
Managers of the Company regarding any issues arising therewith.
G. Consultant is willing and desires to perform services for the
Company, upon the terms, covenants and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties agree as follows:
1. Term and Amount of Service. The Company hereby retains Consultant for
a period of one (1) year beginning as of January 1, 2002 and continuing until
December 31, 2002 unless further extended or sooner terminated as hereinafter
provided ("Term"). Upon request by the Company, and at times mutually agreed
upon by the Company and Consultant, Consultant shall devote a maximum of eight
(8) hours per week to providing consulting services to the Company pursuant to
this Agreement. Consultation may be sought by the Company over the telephone, in
person at Consultant's office, at the Company's offices or another reasonable
location or through written correspondence. Consultant will use its best efforts
for Petcavich to perform substantially all of the consulting services to be
provided by Consultant to Company pursuant to this Agreement. In addition,
Consultant shall enter into a written agreement with Petcavich whereby Petcavich
acknowledges this Agreement and agrees to be bound by the covenants set forth in
Sections
2. Services to Be Provided. Consultant agrees to provide consulting
services related to certain technical functions of the Company as more
specifically set forth on Exhibit "A" attached hereto and incorporated herein by
this reference. All services provided by Consultant for Company are performed
pursuant to the terms and conditions of this Agreement. Consultant's services
for Company will be limited to the specific work that Company and Consultant may
mutually agree from time to time. Consultant may elect to require that the
parties enter into a separate agreement or addendum to this Agreement for any
specific work as Consultant deems necessary.
3. Consulting Fees. During the Term, Company shall pay or provide to
Consultant the following consulting fees:
a. Monthly Rate. While this Agreement if in effect, Company agrees to
pay Consultant Three Thousand Five Hundred Dollars ($3,500.00) per month, paid
monthly at the beginning of each month.
b. Expense Reimbursement. Company shall reimburse promptly Consultant
for expenses reasonable incurred in the course of carrying out Consultant's
services for the Company. The Consultant shall apply for reimbursement monthly
by submitting a completed expense reimbursement form, with receipts for all
expenditures in excess of $10.00 attached thereto.
5. Termination. The Term shall cease only under the following
circumstances:
a. Termination for Cause. Company shall be entitled with or without
prior notice, to terminate this Agreement for cause, in which case no consulting
fees or other fees shall be payable to Consultant after such termination.
"Cause" means Consultant's (i) gross negligence in the performance or
non-performance of any material duties to Company; (ii) commission of any
material criminal act or fraud or of any act that affects adversely the
reputation of the Company; (iii) habitual neglect of its duties that it is
required to perform under this Agreement; (iv) dishonesty; (v) failure to have
Petcavich perform substantially all of the consulting services to Company
(except
for unavailability due to reasonable and customary vacation time or sick leave)
or (vi) gross or intentional misconduct. Such termination shall not prejudice
any other remedy under law or equity of Company and the failure of Company to
terminate Consultant when cause exists shall not constitute the waiver of
Company's right to terminate this Agreement at a later time. Termination under
this section shall be considered "for cause" for purposes of this Agreement.
6. Indemnification. In the event any person or entity who is not a party
to this Agreement makes any claim or demand, or brings any legal action,
arbitration, or other proceedings against Consultant (or its officers,
directors, employees or agents) relating to the services or work Consultant
performs for Company, Company hereby agrees to indemnify and hold Consultant
harmless from all such third party claims, or claims by Company for indemnity
regarding such third party claims, and all damages, expenses, losses, liability,
or attorneys' fees which Consultant may incur therefrom (hereinafter
collectively referred to as "liability"), except liability which results from
Consultant's negligence or Consultant's intentional torts. Company understands
that the foregoing covenant is a material inducement for Consultant to enter
this Agreement.
7. Definitions. For purposes of this Agreement, "Confidential
Information" shall include all information or material that has or could have
commercial value or other utility in the business or prospective business of the
Company or any subsidiary or affiliate of the Company. Confidential Information
also includes all Planet Polymer Confidential Information and all information of
which unauthorized disclosure could be detrimental to the interests of the
Company or its subsidiaries or affiliates, whether or not such information is
identified as Confidential Information by the Company. By example and without
limitation, Confidential Information includes, but is not limited to, any and
all information of the following or similar nature, whether or not reduced to
writing:
Business plans, strategies, forecasts and projections; budgets;
financial information; the existence and content of oral or written
contracts and agreements, or the fact that negotiations for any
potential contract or agreement are in process; customer and supplier
identities and characteristics; customer and supplier lists; marketing
knowledge and information; marketing plans; sales figures; pricing
information; cost information; procedures; routines; manufacturing and
quality control methods, processes, procedures and equipment; formulas;
profiles; parameters; research; innovations, inventions, discoveries and
improvements; research papers; test results; data; formats; plans,
drawings and sketches; specifications; models; trade secrets; know-how;
and any other information or procedures that are treated as or
designated secret or confidential by the Company or its customers or
vendors or potential customers or vendors.
Confidential Information also includes the following (the "MIM Information"):
(a) the fact that the Company is engaged in metal injection molding ("MIM") or
uses MIM to make any of its products; (b) any product that the Company makes or
intends or desires to make, or is contemplating making, using MIM; (c) the
composition, technology or formulation of any feedstock, including specifically
without limitation tungsten carbide feedstock, or the identity, quantity or
proportion of any material used in any feedstock, or the method of producing any
feedstock, or the shrinkage associated with any feedstock; (d) the design,
construction, composition or operation of any mold; (e) any molding equipment
owned or used by the Company or any molding parameter (shot size, barrel
temperature, injection speed, packing pressure, hold time, mold temperature,
cycle time, etc.); (f) the nature of any process used to remove ("Debind") any
binder or other material from any molded part, any equipment or material used in
any Debinding process, or any Debinding parameter (temperature, time, duration,
ramp rate, etc.) or profile; (g) any equipment or material used in any sintering
process, or any sintering parameter or profile; or (h) any confidential
information given to Xxxx. In addition, Confidential Information shall also
include all information that the Company acquired from Planet Polymer.
For purposes of this Agreement: (1) the term "Consultant" shall include
Petcavich and any employee of Consultant and any person or entity who comes into
possession of Confidential Information by reason of, or as a direct or indirect
consequence of, the Company's disclosure of such Confidential Information to
Consultant; and (2) Confidential Information shall be deemed to have been
disclosed by the Company to Consultant, without limitation: if it is expressly
disclosed orally, in writing or in a pictorial, photographic or digital or other
electronic format; if it is observed by Consultant; if Consultant is exposed to
it; or if it is discovered by disassembling, decompiling or reverse engineering
any software, data file or tangible object.
8. Exclusions. Confidential Information does not include information
that Consultant can demonstrate: (a) was in Consultant's possession prior to its
being furnished to Employee under the terms of this Agreement, except for the
Planet Polymer Confidential Information which the parties acknowledge was
acquired by the Company under the Purchase Agreement; (b) is now, or hereafter
becomes, through no act or failure to act on the part of Consultant, generally
known to the public; (c) is rightfully obtained by Consultant from a third
party, without breach of any obligation to the Company or to Consultant; or (d)
is independently developed by Consultant without use of or reference to the
Confidential Information.
9. Confidentiality. Consultant shall not disclose any of the
Confidential Information in any manner whatsoever, except as provided in
Paragraph 10 of this Agreement, and shall hold and maintain the Confidential
Information in strictest confidence. Consultant hereby agrees to indemnify the
Company against any and all losses, damages, claims, expenses, and attorneys'
fees incurred or suffered by the Company as a result of a breach of this
Agreement by Consultant or any employee, agent or representative of Consultant.
10. Required Disclosures. Employee may disclose the Company's
Confidential Information if and to the extent that such disclosure is required
by court order, provided that Consultant provides the Company a reasonable
opportunity to review the disclosure before it is made and to interpose its own
objection to the disclosure.
11. Use. Consultant and any permitted additional disclosee shall use the
Confidential Information solely for the completion of its duties and services
hereunder, and shall not in any way use the Confidential Information to the
detriment of the Company, nor for any commercial purpose. Nothing in this
Agreement shall be construed as granting any rights to Consultant or to
any other person or entity, by license or otherwise, to any of the Company's
Confidential Information.
12. Non-Solicitation of the Company's Employees. Subject to any more
restrictive covenants to which Consultant is bound, Consultant shall not,
without the prior written approval of the Company, hire or enter into a contract
with any employee, agent or representative of the Company to provide services to
Consultant or, directly or indirectly, induce or attempt to induce or otherwise
counsel, discuss, advise or encourage any employee, agent or representative of
the Company to leave or otherwise terminate such person's relationship with the
Company for a period of twelve (12) months following the later of: (a) return of
any of the Confidential Information contained in any tangible form or medium
pursuant to Section 13 hereof; or (b) the Term.
13. Return of Documents. Upon the earliest of any of the circumstances
set forth in the next sentence, Consultant shall return to the Company all
Confidential Information previously furnished to Consultant and/or which has
come into Consultant's possession or control, including without limitation any
and all records, notes, and other written, printed or other tangible materials
and any and all computer programs, data files and digital or other electronic
images in Consultant's possession or control pertaining to the Confidential
Information, and Consultant shall keep no copies of such information. All such
materials shall be immediately tendered to the Company upon the earliest of any
of the following to occur: (a) upon the request of the Company at any time and
for any reason; and (b) upon termination of this Agreement. The returning of
materials containing Confidential Information shall not relieve Consultant from
compliance with all other terms and conditions of this Agreement, including the
obligation to keep all such Confidential Information known to Consultant in
strict confidence in accordance with Section 9, above.
14. Relationship of the Parties. Nothing contained herein shall be
construed to place the parties in the relationship of employer/employee,
partners, or joint venturers. Company shall have no power to obligate or bind
Consultant in any manner whatsoever. Consultant shall have no power to obligate
or bind Company in any manner whatsoever, other than as provided by this
Agreement.
15. Benefit and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors. The
rights of the Company and the Consultant hereunder may not be assigned.
16. Severability. Should any provision of this Agreement or application
thereof be declared invalid, void or unenforceable for any reason, the validity
and binding effect of the remaining portions shall not be affected and the
remaining portions of this Agreement shall remain in full force and effect as if
this Agreement had been executed with the invalid, void or unenforceable
provision eliminated. To this end, the provisions of this Agreement are
severable.
17. Governing Law. Except to the extent governed by the laws of the
United States, this Agreement is to be governed and construed under the internal
laws of the State of California and that venue shall be proper for all purposes
in San Diego County, California.
18. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall be the same document. Such counterparts may be executed and delivered in
person or via facsimile.
19. Entire Agreement. This Agreement and the exhibits attached hereto
constitutes the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes all prior oral or written
agreements, arrangements, and understandings with respect thereto. No
representation, promise, inducement, statement or intention has been made by any
party hereto that is not embodied herein, and no party shall be bound by or be
liable for any alleged representation, promise, inducement, or statement not set
forth herein.
20. Modification. This Agreement may not be modified, amended,
superseded, or cancelled, and none of the terms, covenants, representations,
warranties or conditions hereof may be waived, without a written instrument
executed by the party or parties to be bound by any such modification,
amendment, supersession, cancellation, or waiver.
21. Attorneys' Fees and Costs. In any arbitration or other action, the
prevailing party shall be entitled to recover from the losing party its
reasonable costs and actual attorneys' fees. The "prevailing party" means the
party determined by the arbitrator to have most nearly prevailed, even if such
party did not prevail in all matters, and not necessarily the one in whose favor
a judgment is rendered.
22. Waivers; Cumulative Remedies. The failure of any party to exercise
any of its rights hereunder or to enforce any of the terms or conditions of this
Agreement on any occasion shall not constitute or be deemed a waiver of that
party's rights thereafter to exercise any rights hereunder or to enforce any and
every term and condition of this Agreement. Any remedies provided for herein are
cumulative, and not in substitution for any other remedy any party may have at
law or in equity. No delay on the part of any party in exercising any right,
power or privilege granted hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof.
23. Representation. The parties hereto acknowledge each has read this
Agreement, that each fully understands its rights, privileges and duties under
this Agreement, and that each enters into this Agreement freely and voluntarily.
Consultant further acknowledges it has had the opportunity to consult with an
attorney of its choice who is completely independent of and in no way connected
with the Company, to explain the terms of this Agreement and the consequences of
signing it.
24. Headings. All paragraph headings herein are inserted for convenience
only and shall not modify or affect the construction or interpretation of any
provision of this Agreement.
25. Further Assurances. The parties agree that, from time to time
hereafter, and upon request, each of them will execute, acknowledge and deliver
such documents and other instruments and shall perform such acts and deed as may
be reasonably required or desirable to effectuate the
transactions contemplated by this Agreement or to otherwise carry out the terms
and conditions of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Consultant
Agreement to be executed as of the date first set forth above.
CONSULTANT:
Planet Polymer Technologies, Inc.
By:_________________________________
Its: _______________________________
COMPANY:
Xxxx Industries, LLC
By:_________________________________
Its: _______________________________
EXHIBIT A
SCOPE OF SERVICES TO BE PROVIDED
- Technical formulation expertise and implementation
- Technical service and customer support
- Intellectual property strategies, tactics and implementation support
- New product process and product development
- Sales development and support
- Product failure analysis
EXHIBIT "G"
EXCEPTIONS TO THE TITLE OF ASSETS
NONE.
EXHIBIT "H"
RAW MATERIALS AND FINISHED GOODS
EXHIBIT "I"
NON-COMPETE AGREEMENT
