EXHIBIT 10.21
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AGREEMENT AND PLAN OF MERGER
dated as of March 7, 2005
by and among
Planet Technologies, Inc.
a California corporation
and
Allergy Control Products
and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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AGREEMENT AND PLAN OF MERGER, dated as of March 7, 2005 (this
"Agreement"), by and between Allergy Control Products, Inc., a Delaware
corporation ("ACP"),\ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Shareholder"), and Planet
Technologies, Inc., a California corporation ("Planet").
RECITALS
A. Intentions of the Parties. It is the intention of the parties to this
Agreement that the business combination contemplated hereby be accounted for
under the purchase accounting method and be treated as a "reorganization" under
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
B. Board Action. The respective Boards of Directors of each of Planet, and
ACP have determined that it is in the best interests of their respective
companies and their shareholders to consummate the strategic business
combination transaction provided for herein.
C. Non-Competition Agreements. As a condition to, and simultaneously with,
the execution of this Agreement Shareholder, and each director and executive
officer of ACP, are entering into non-competition agreements with Planet in the
form of Exhibit A, hereto (collectively, the "Non-Competition Agreements").
D. Repayment of Shareholder Debt. As a condition to, and simultaneously
with, Effective Time of the Merger, Planet shall cause to be paid to Shareholder
the sum of $1,500,000.00 cash in full repayment of all indebtedness of ACP to
its Shareholder.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01. Certain Definitions. The following terms are used in this Agreement
with the meanings set forth below:
"ACP Common Stock" means the common stock, no par value of ACP.
"ACP Stock Options" means the options to acquire ACP Common Stock issued
under ACP's Stock Option Plans.
"Acquisition Proposal" has the meaning set forth in Section 6.07.
"Agreement" means this Agreement, as amended or modified from time to time
in accordance with Section 9.02.
"Agreement of Merger" has the meaning set forth in Section 2.01(b).
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"Articles" means the Articles of Incorporation of ACP or Planet, as
amended, as the context requires.
"Benefit Plans" has the meaning set forth in Section 5.03(l).
"Board" means the Board of Directors of ACP or Planet, as the context
requires.
"Business Combination" has the meaning set forth in Section 3.06.
"Business Day" means Monday through Friday of each week, except a legal
holiday recognized as such by the U.S. Government or any day on which banking
institutions in the State of California are authorized or obligated to close.
"By-Laws" means the By-Laws of ACP or Planet, as the context requires.
"California Secretary" means the California Secretary of State.
"CGCL" means the California General Corporation Law.
"Closing Financial Statements" has the meaning set forth in Section
7.03(g).
"Code" has the meaning set forth in the recitals to this Agreement.
"Disclosure Schedule" has the meaning set forth in Section 5.01.
"Effective Date" has the meaning set forth in Section 2.02.
"Effective Time" has the meaning set forth in Section 2.02.
"Employees" has the meaning set forth in Section 5.03(l).
"Environmental Laws" has the meaning set forth in Section 5.03(n).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.03(l).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Exchange Ratio" has the meaning set forth in Section 3.02.
"GAAP" means generally accepted accounting principles.
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"Hazardous Substance" has the meaning set forth in Section 5.03(n).
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"Insurance Policies" has the meaning set forth in Section 5.03(r).
"Lien" means any charge, mortgage, pledge, security interest, restriction,
claim, lien or encumbrance.
"Material Adverse Effect" means, with respect to Planet or ACP any effect
that (i) is material and adverse to the financial position, results of
operations, business or prospects of Planet or ACP, as the case may be, or (ii)
would materially impair the ability of either Planet or ACP to perform its
obligations under this Agreement or otherwise materially threaten or materially
impede the consummation of the Merger and the other transactions contemplated by
this Agreement; provided, however, that Material Adverse Effect shall not be
deemed to include the impact of (a) changes in laws of general applicability to
the business of Planet and ACP or interpretations thereof by Governmental
Authorities, (b) changes in GAAP (c) changes in general economic conditions, (d)
any modifications or changes to valuation policies and practices in connection
with the Merger or restructuring charges taken in connection with the Merger, in
each case in accordance with GAAP and (e) with respect to ACP the effects of any
action or omission taken with the prior consent of Planet.
"Merger" has the meaning set forth in Section 2.01(a).
"Merger Consideration" has the meaning set forth in Section 2.01(a).
"NASD" means the National Association of Securities Dealers.
"Nasdaq" means The Nasdaq Stock Market, Inc.'s National Market System.
"National Labor Relations Act" means the National Labor Relations Act, as
amended.
"Non-Competition Agreements" has the meaning set forth in the recitals to
this Agreement.
"Pension Plan" has the meaning set forth in Section 5.03(l).
"Person" means any individual, bank, corporation, partnership,
association, joint-stock company, business trust, limited liability company or
unincorporated organization.
"Planet Common Stock" means the common stock, no par value per share, of
Planet.
"Principal Shareholder" shall mean any person who directly or indirectly
owns or controls ten percent (10%) or more of the issued and outstanding stock
of a corporation.
"Proxy Statement" has the meaning set forth in Section 6.02.
"Registration Statement" has the meaning set forth in Section 6.03(a).
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, or
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any options, calls or commitments relating to, or any stock appreciation right
or other instrument the value of which is determined in whole or in part by
reference to the market price or value of, shares of capital stock of such
Person.
"SEC" means the United States Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 5.04(g).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Shareholder" means ▇▇▇ ▇▇▇▇▇▇.
"Shareholder Meeting" has the meaning set forth in Section 6.02.
"Stock Option Plans" means any plan or arrangement that provides for the
grant of stock options by ACP.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed to
those terms in Rule 1-02 of Regulation S-X of the SEC.
"Tax" and "Taxes" mean all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, imposed on the income, properties or operations
of ACP or its Subsidiary by any taxing authority whether arising before, on or
after the Effective Date, together with any interest, additions or penalties
thereto and any interest in respect of such interest and penalties.
"Tax Returns" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed on or before the Effective Date with respect to
any Taxes of ACP.
"Termination Fee" has the meaning set forth in Section 8.02.
"Treasury Shares" shall mean shares of ACP Common Stock held by ACP or by
Planet or any of its Subsidiaries, in each case other than in a fiduciary
(including custodial or agency) capacity or as a result of debts previously
contracted in good faith.
ARTICLE II
THE MERGER
2.01. The Merger (a) The Combination. At the Effective Time, ACP shall
merge with and into Planet (the "Merger"), the separate corporate existence of
ACP shall cease and Planet
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shall survive and continue to exist as a corporation under the laws of the State
of California (Planet, as the surviving corporation in the Merger, sometimes
being referred to herein as the "Surviving Entity"). Planet may, at any time
prior to the Effective Time (including, to the extent permitted by applicable
law, after ACP's shareholders have approved this Agreement), change the method
of effecting the combination of Planet with ACP (including, without limitation,
the provisions of this Article 2 and including, without limitation, by electing
not to merge ACP with Planet, but rather with a merger subsidiary of Planet) if
and to the extent it deems such change to be necessary, appropriate or
desirable; provided, however, that no such change shall (i) alter or change the
amount or kind of consideration to be issued to holders of ACP Common Stock as
provided for in this Agreement (the "Merger Consideration"), (ii) adversely
affect the tax treatment of ACP's shareholders as a result of receiving the
Merger Consideration, (iii) impede or delay consummation of the transactions
contemplated by this Agreement or (iv) otherwise be materially prejudicial to
the interests of the shareholders of ACP.
(b) Filings. Subject to the satisfaction or waiver of the conditions set
forth in Article 7, the Merger shall become effective on the Effective Date upon
filing of an executed agreement of merger ("Agreement of Merger") in form
acceptable to Planet with the California Secretary of State.
(c) Articles of Incorporation and By-Laws. The articles of incorporation
and by-laws of the Surviving Entity immediately after the Merger shall be those
of Planet as in effect immediately prior to the Effective Time.
(d) Directors and Officers of the Surviving Entity. The directors and
officers of Planet immediately after the Merger shall be the directors and
officers of Planet immediately prior to the Effective Time, until such time as
their successors shall be duly elected and qualified.
(e) Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the CGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of ACP shall vest in the Surviving Entity, and
all debts, liabilities, obligations, restrictions, disabilities and duties of
ACP shall become the debts, liabilities, obligations, restrictions, disabilities
and duties of the Surviving Entity.
2.02. Effective Date and Effective Time. Subject to the satisfaction or
waiver of the conditions set forth in Article 7 (other than those conditions
that by their nature are to be satisfied at the consummation of the Merger, but
subject to the fulfillment or waiver of those conditions), the parties shall
cause the filing contemplated by Section 2.01(b) to be made (i) no later than
the third Business Day after such satisfaction or waiver or (ii) such other date
to which the parties may agree in writing. The Merger provided for herein shall
become effective upon such filing or on such date as may be specified therein in
accordance with the CGCL. The date of such effectiveness is herein called the
"Effective Date". The "Effective Time" of the Merger shall be the time as set
forth in such filing.
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ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01. Effect on Capital Stock. Subject to the other provisions of this
Article 3, at the Effective Time of the Merger, by virtue of the Merger and
without any additional action on the part of the holders of shares of Planet
Common Stock:
(a) Planet Common Stock. Each share of Planet Common Stock, issued and
outstanding immediately prior to the Effective Time of the Merger shall remain
an issued and outstanding share of common stock of Planet, and shall not be
affected by the Merger; and
(b) ACP Common Stock. Each share of ACP Common Stock, issued and
outstanding immediately prior to the Effective Time of the Merger (other than
shares of Dissenters' Shares and Treasury Shares, as defined below) shall be
converted into the right to receive Planet Common Stock as provided in Section
3.02(a).
3.02. Conversion of ACP Common Stock.
(a) Subject to the other provisions of this Article 3, each share of the
2,000 ACP Common Stock issued and outstanding immediately prior to the Effective
Time of the Merger (other than Dissenters' Shares and Treasury Shares) shall, by
virtue of the Merger, be converted into the right to receive 300 shares of
Planet Common Stock (the "Exchange Ratio").
3.03. Rights as Shareholder; Stock Transfers. At the Effective Time,
holders of ACP Common Stock shall cease to be, and shall have no rights as,
shareholders of ACP other than to receive the consideration provided under this
Article 3. After the Effective Time, there shall be no transfers on the stock
transfer books of ACP or the Surviving Entity of shares of ACP Common Stock.
3.04. Intentionally left blank.
3.05. Exchange Procedures. (a) Exchange. At the Effective Time of the
Merger, Planet shall deliver to Shareholder the number of shares of Planet
Common Stock issuable in the Merger and the amount of cash payable pursuant to
Section 6.20 of this Agreement.
(b) Surrender of Certificates. At the Effective Time, Shareholder shall
surrender each certificate evidencing ACP Common Stock together with a duly
executed stock power.
(c) Withholding Rights. Planet shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of ACP Common Stock such amounts as Planet is required to
deduct and withhold with respect to the making of such payment under the Code,
or any provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Planet, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
ACP Common Stock in respect of which such deduction and withholding was made by
Planet.
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3.06. Anti-Dilution Provisions. In the event Planet or ACP changes (or
establishes a record date for changing) the number of shares of Planet Common
Stock or ACP Common Stock issued and outstanding prior to the Effective Date as
a result of a stock split, stock dividend, recapitalization or similar
transaction with respect to the outstanding Planet Common Stock or ACP Common
Stock, as the case may be, and the record date therefore shall be prior to the
Effective Date, the Exchange Ratio shall be proportionately adjusted. If,
between the date hereof and the Effective Time, Planet shall merge, be acquired
or consolidate with, by or into any other corporation (a "Business Combination")
and the terms thereof shall provide that Planet Common Stock shall be converted
into or exchanged for the shares of any other corporation or entity, then
provision shall be made as part of the terms of such Business Combination so
that shareholders of ACP who would be entitled to receive shares of Planet
Common Stock pursuant to this Agreement shall be entitled to receive, in lieu of
each share of Planet Common Stock issuable to such shareholders as provided
herein, the same kind and amount of securities or assets as shall be
distributable upon such Business Combination with respect to one share of Planet
Common Stock (provided that nothing herein shall be construed so as to release
the acquiring entity in any such Business Combination from its obligations under
this Agreement as the successor to Planet).
ARTICLE IV
ACTIONS PENDING ACQUISITION
4.01. Forebearances of ACP and Planet. From the date hereof until the
Effective Time, except as expressly contemplated by this Agreement and except as
set forth in the Disclosure Schedule of a Party, without the prior written
consent of the other party, neither ACP nor Planet will:
(a) Ordinary Course. Conduct business other than in the ordinary and usual
course or fail to use its best efforts to preserve intact its business
organizations and assets and maintain its rights, franchises and existing
relations with customers, suppliers, employees and business associates, take any
action that would adversely affect or delay the ability of ACP or Planet to
perform any of their obligations on a timely basis under this Agreement, or take
any action that would be reasonably likely to have a Material Adverse Effect on
ACP or Planet.
(b) Capital Stock. Other than pursuant to the Rights set forth in the
Disclosure Schedule of such party and outstanding on the date hereof and except
for the completion by Planet of a private placement of capital stock of up to an
additional $2.0 million after the date hereof, (i) issue, sell or otherwise
permit to become outstanding, or authorize the creation of, any additional
shares of stock or any Rights, (ii) enter into any agreement with respect to the
foregoing or (iii) permit any additional shares of stock to become subject to
grants of employee or director stock options, other Rights or similar
stock-based employee rights.
(c) Dividends; Etc. (i) Make, declare, pay or set aside for payment any
dividend on or in respect of, or declare or make any distribution on any shares
of stock or (ii) directly or
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indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise
acquire, any shares of its capital stock.
(d) Compensation; Employment Agreements; Etc. Enter into or amend or renew
any employment, consulting, severance or similar agreements or arrangements with
any director, officer or employee or grant any salary or wage increase or
increase any employee benefit (including incentive or bonus payments), except
(i) for normal individual increases in compensation to employees in the ordinary
course of business consistent with past practice, provided that no such increase
shall result in an annual adjustment of more than 5%, (ii) for other changes
that are required by applicable law, (iii) to satisfy contractual obligations
existing as of the date hereof and set forth in the Disclosure Schedule of such
party or (iv) for grants of awards to newly hired employees consistent with past
practice.
(e) Hiring. Hire any person as an employee or promote any employee, except
(i) to satisfy contractual obligations existing as of the date hereof and set
forth in the Disclosure Schedule of such party and (ii) persons hired to fill
any vacancies arising after the date hereof and whose employment is terminable
at the will, other than any person to be hired who would have a base salary,
including any guaranteed bonus or any similar bonus, considered on an annual
basis of more than $50,000.
(f) Benefit Plans. Enter into, establish, adopt or amend (except (i) as
may be required by applicable law or (ii) to satisfy contractual obligations
existing as of the date hereof and set forth in the Disclosure Schedule of such
party) any pension, retirement, stock option, stock purchase, savings, profit
sharing, deferred compensation, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or arrangement, or any
trust agreement (or similar arrangement) related thereto, in respect of any
director, officer or employee or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder.
(g) Dispositions. Sell, transfer, mortgage, encumber or otherwise dispose
of or discontinue any of its assets, deposits, business or properties except in
the ordinary course of business and in a transaction that, together with all
other such transactions, is not material to such party.
(h) Acquisitions. Acquire (other than in satisfaction of debts previously
contracted in good faith, in each case in the ordinary and usual course of
business consistent with past practice) all or any portion of the assets,
business, deposits or properties of any other entity except in the ordinary
course of business consistent with past practice and in a transaction that,
together with all other such transactions, is not material to ACP or Planet.
(i) Capital Expenditures. Make any capital expenditures other than capital
expenditures in the ordinary course of business consistent with past practice in
amounts not exceeding $25,000 individually or $50,000 in the aggregate.
(j) Governing Documents. Amend its Articles of Incorporation or By-Laws.
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(k) Accounting Methods. Implement or adopt any change in its accounting
principles, practices or methods, other than as may be required by GAAP.
(l) Contracts. Except as set forth in the Disclosure Schedule of such
party, enter into, renew or terminate, or make any payment not then required
under, any contract or agreement that calls for aggregate annual payments of
$25,000 or more and which is not terminable at will or with 60 days or less
notice without payment of a premium or penalty, other than transactions made in
the ordinary course of business.
(m) Claims. Enter into any settlement or similar agreement with respect
to, or take any other significant action with respect to the conduct of, any
action, suit, proceeding, order or investigation to which it is or becomes a
party after the date of this Agreement, which settlement, agreement or action
involves payment by it of an amount, individually or for all such settlements,
that is material to it and/or would impose any material restriction on the
business of the Surviving Entity or create precedent for claims that are
reasonably likely to be material to the Surviving Entity.
(n) Adverse Actions. (a) Take any action which could result in (i) any of
its representations and warranties set forth in this Agreement being or becoming
untrue at any time at or prior to the Effective Time, (ii) any of the conditions
to the Merger set forth in Article 7 not being satisfied or (iii) a material
violation of any provision of this Agreement except as may be required by
applicable law or regulation.
(o) Indebtedness. Incur any indebtedness for borrowed money or assume,
guarantee, endorse or otherwise as an accommodation become responsible for the
obligations of any other Person, other than draws on existing credit facilities
in the ordinary course of business or indebtedness incurred by Planet to repay
the debt of ACP to its Shareholder as provided in Section 6.20.
(p) Loans. Make any loan, loan commitment or renewal or extension thereof
to any Person.
(q) Investments. (i) Other than in the ordinary course of business
consistent with past practice in individual amounts not to exceed $25,000, make
any investment either by contributions to capital, property transfers or
purchase of any property or assets of any Person or (ii) other than purchases of
direct obligations of the United States of America or obligations of U.S.
government agencies which are entitled to the full faith and credit of the
United States of America, in any case with a remaining maturity at the time of
purchase of two years or less, purchase or acquire securities of any type.
(r) Taxes. Take any action which would materially adversely affect the tax
position of the Surviving Entity.
(s) Commitments. Agree or commit to do any of the foregoing.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01. Disclosure Schedules. Concurrently with the execution of this
Agreement, each party shall deliver to the other a schedule (the "Disclosure
Schedule") setting forth, among other things, items the disclosure of which is
necessary or appropriate either in response to an express disclosure requirement
contained in a provision hereof or as an exception to one or more
representations or warranties contained in this Article 5 or to one or more of
its covenants contained in Article 4.
5.02. Standard. No representation or warranty of ACP or Planet contained
in Sections 5.03 or 5.04, respectively, shall be deemed untrue or incorrect, and
no party hereto shall be deemed to have breached a representation or warranty,
as a consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.03 or 5.04, has had or is reasonably likely to have a
Material Adverse Effect on the party making such representation or warranty. Any
representation or warranty that a party is in "compliance" or has "complied"
shall mean substantial compliance in all material respects.
5.03. Representations and Warranties of ACP. Subject to Sections 5.01 and
5.02 and except as set forth in the Disclosure Schedule, ACP hereby represents
and warrants to Planet:
(a) Organization, Standing and Authority. ACP is duly organized, validly
existing and in good standing under the laws of the State of Delaware. ACP is
duly qualified to do business and is in good standing in the states of the
United States and foreign jurisdictions where its ownership or leasing of
property or assets or the conduct of its business requires it to be so
qualified. ACP has in effect all federal, state, local, and foreign governmental
authorizations necessary for it to own or lease its properties and assets and to
carry on its business as it is now conducted.
(b) ACP Capital Stock. As of the date hereof, the authorized capital stock
of ACP consists solely of 20,000 shares of ACP Common Stock, of which 2,000
shares were outstanding as of the date hereof. As of the date hereof, no shares
of ACP Stock were held in treasury by ACP or otherwise owned by ACP. The
outstanding shares of ACP Common Stock have been duly authorized and are validly
issued and outstanding, and subject to no preemptive rights (and were not issued
in violation of any preemptive rights). Except as set forth in the Disclosure
Schedule, as of the date hereof, there are no shares of ACP Common Stock
authorized and reserved for issuance, ACP does not have any Rights issued or
outstanding with respect to ACP Common Stock, and ACP does not have any
commitment to authorize, issue or sell any ACP Common Stock or Rights.
(c) Subsidiaries.
(i) ACP has no subsidiaries.
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(ii) ACP does not own beneficially, directly or indirectly, any
equity securities or similar interests of any Person or any interests of
any Person or any interest in a partnership or joint venture of any kind.
(d) Corporate Power. ACP has the corporate power and authority to carry on
its business as it is now being conducted and to own all its properties and
assets; and ACP has the corporate power and authority and has taken all
corporate action necessary to execute, deliver and perform its obligations under
this Agreement and to consummate the transactions contemplated hereby.
(e) Corporate Authority. As of the date hereof, with respect to each of
clauses (i), (ii) and (iii) below, ACP's board of directors, by resolutions duly
adopted by unanimous vote at a meeting duly called and held, has duly (i)
determined that this Agreement and the Merger are advisable and fair to and in
the best interests of ACP and its shareholders, (ii) approved this Agreement and
the Merger and (iii) recommended that its shareholders approve this Agreement
and the Merger and that such matter be submitted for consideration by its
shareholders at a meeting of such shareholders. ACP has duly executed and
delivered this Agreement and this Agreement is a valid and legally binding
obligation of ACP, enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles).
(f) Regulatory Approvals; No Violations.
(i) No consents or approvals of, or waivers by, or filings or
registrations with, any Governmental Authority or with any third party are
required to be made or obtained by ACP in connection with the execution,
delivery or performance by ACP of this Agreement or to consummate the
Merger except for filings with the SEC and state securities authorities
and the approval of this Agreement by the holders of the outstanding
shares of ACP Common Stock.
(ii) Subject to required filings under federal and state securities
laws, the execution, delivery and performance of this Agreement by ACP and
the consummation of the transactions contemplated hereby and thereby do
not and will not (A) constitute a breach or violation of, or a default
under, or give rise to any Lien, any acceleration of remedies or any right
of termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or
instrument of ACP or to which ACP or any of its respective properties is
subject or bound, (B) constitute a breach or violation of, or a default
under, the articles of association or by-laws (or similar governing
documents) of ACP or (C) require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental permit or
license, agreement, indenture or instrument.
(g) Financial Reports; Undisclosed Liabilities. (i) The balance sheet of
ACP as of December 31, 2003, and the related statements of income, cash flow and
changes in financial position of ACP for the three years then ended, audited by
Venman & Co., LLC, and the balance
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sheet and related statements of income, cash flow and changes in financial
position of ACP for the nine months ended September 30, 2004, fairly present the
financial position of ACP as of such dates and the results of the operations of
ACP for the periods then ended, all in accordance with GAAP consistently applied
(except with respect to interim period statements normal year-end adjustments
and the lack of footnotes). The books and records of ACP have been, and are
being, maintained in accordance with GAAP and any other applicable legal and
accounting requirements.
(ii) Since September 30, 2004, ACP has not incurred any liability
other than in the ordinary course of business consistent with past
practice.
(iii) Since September 30, 2004, (A) ACP has conducted its business
in the ordinary and usual course consistent with past practice (excluding
the incurrence of expenses related to this Agreement and the transactions
contemplated hereby) and (B) no event has occurred or circumstance arisen
that, individually or taken together with all other facts, circumstances
and events (described in any paragraph of this Section 5.03 or otherwise),
has had or could be reasonably likely to have a Material Adverse Effect
with respect to ACP.
(h) Litigation. No litigation, claim or other proceeding before any court
or governmental agency is pending against ACP and, to ACP's knowledge, no such
litigation, claim or other proceeding has been threatened and there are no facts
which could reasonably give rise to such litigation, claim or other proceeding.
(i) Compliance With Laws. ACP:
(i) is in substantial compliance with all applicable federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees applicable thereto or to the employees
conducting such businesses, including, without limitation, Federal and
State "Do Not Call," USA Patriot Act and all other applicable fair lending
laws and other laws relating to consumer sales and rights of privacy;
(ii) has all permits, licenses, authorizations, orders and approvals
of, and has made all filings, applications and registrations with, all
Governmental Authorities that are required in order to permit it to own or
lease its properties and to conduct its businesses as presently conducted;
all such permits, licenses, certificates of authority, orders and
approvals are in full force and effect and, to ACP's knowledge, no
suspension or cancellation of any of them is threatened; and
(iii) has received, since December 31, 2001, no notification or
communication from any Governmental Authority (A) asserting that ACP is
not in compliance with any of the statutes, regulations or ordinances
which such Governmental Authority enforces or (B) threatening to revoke
any license, franchise, permit or governmental authorization (nor, to
ACP's knowledge, do any grounds for any of the foregoing exist).
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(j) Material Contracts; Defaults. The Disclosure Schedule sets forth a
list of each material contract to which ACP is a party, bound by or subject to,
and except as set forth therein ACP is not a party to, bound by or subject to
any agreement, contract, arrangement, commitment or understanding (whether
written or oral) (i) that is a "material contract" within the meaning of Item
601(b)(10) of the SEC's Regulation S-K or (ii) that materially restricts the
conduct of business by ACP. ACP is not in default under any contract, agreement,
commitment, arrangement, lease, insurance policy or other instrument to which it
is a party, by which its assets, business, or operations may be bound or
affected, or under which it or its assets, business, or operations receives
benefits, and there has not occurred any event that, with the lapse of time or
the giving of notice or both, would constitute such a default. No power of
attorney or similar authorization given directly or indirectly by ACP is
currently outstanding. The Disclosure Schedule sets forth a true and complete
list of all third party consents or waivers required to be obtained so as not to
be in default under any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which ACP is a party as a result of the
transaction contemplated hereby.
(k) No Brokers. No action has been taken by ACP that would give rise to
any valid claim against any party hereto for a brokerage commission, finder's
fee or other like payment with respect to the transactions contemplated by this
Agreement.
(l) Employee Benefit Plans. (i) All benefit and compensation plans,
contracts, policies or arrangements covering current or former employees of ACP
(the "Employees") and current or former directors of ACP including, but not
limited to, "employee benefit plans" within the meaning of Section 3(3) of
ERISA, and deferred compensation, stock option, stock purchase, stock
appreciation rights, stock based, incentive and bonus plans (the "Benefit
Plans"), are set forth in the Disclosure Schedule. True and complete copies of
all Benefit Plans including, but not limited to, any trust instruments and
insurance contracts forming a part of any Benefit Plans and all amendments
thereto have been provided or made available to Planet.
(ii) All Benefits Plans, to the extent subject to ERISA, are in
substantial compliance with ERISA. Each Benefit Plan which is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA
("Pension Plan") and which is intended to be qualified under Section
401(a) of the Code, has received a favorable determination letter from the
Internal Revenue Service, and ACP is not aware of any circumstances likely
to result in revocation of any such favorable determination letter or the
loss of the qualification of such Pension Plan under Section 401(a) of the
Code. There is no material pending or threatened litigation relating to
the Benefits Plans. ACP has not engaged in a transaction with respect to
any Benefit Plan or Pension Plan that, assuming the taxable period of such
transaction expired as of the date hereof, could subject ACP to a tax or
penalty imposed by either Section 4975 of the Code or Section 502(i) of
ERISA in an amount which would be material.
(iii) No liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by ACP with respect to any ongoing,
frozen or terminated "single-employer plan", within the meaning of Section
4001(a)(15) of ERISA, currently
13
or formerly maintained by it, or the single-employer plan of any entity
which is considered one employer with ACP under Section 4001 of ERISA or
Section 414 of the Code (an "ERISA Affiliate"). ACP has not incurred, and
does not expect to incur, any withdrawal liability with respect to a
multiemployer plan under Subtitle E of Title IV of ERISA (regardless of
whether based on contributions of an ERISA Affiliate). No notice of a
"reportable event," within the meaning of Section 4043 of ERISA for which
the 30-day reporting requirement has not been waived, has been required to
be filed for any Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof or will be required to be filed
in connection with the transactions contemplated by this Agreement.
(iv) All contributions required to be made under the terms of any
Benefit Plan have been timely made. Neither any Pension Plan nor any
single-employer plan of an ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA and no ERISA Affiliate has an outstanding
funding waiver. ACP has not provided, or is required to provide, security
to any Pension Plan or to any single-employer plan of an ERISA Affiliate
pursuant to Section 401(a)(29) of the Code.
(v) Under each Pension Plan which is a single-employer plan, as of
the last day of the most recent plan year ended prior to the date hereof,
the actuarially determined present value of all "benefit liabilities,"
within the meaning of Section 4001(a)(16) of ERISA (as determined on the
basis of the actuarial assumptions contained in the Pension Plan's most
recent actuarial valuation), did not exceed the then current value of the
assets of such Pension Plan, and there has been no material change in the
financial condition of such Plan since the last day of the most recent
plan year.
(vi) ACP does not have any obligations for retiree health and life
benefits under any Benefit Plan. ACP may amend or terminate any such
Benefit Plan at any time without incurring any liability thereunder.
(vii) None of the execution of this Agreement, shareholder approval
of this Agreement or consummation of the transactions contemplated by this
Agreement will (A) entitle any employees of ACP to severance pay or any
increase in severance pay upon any termination of employment after the
date hereof, (B) accelerate the time of payment or vesting or trigger any
payment or funding (through a grantor trust or otherwise) of compensation
or benefits under, increase the amount payable or trigger any other
material obligation pursuant to, any of the Benefit Plans, (C) result in
any breach or violation of, or a default under, any of the Benefit Plans
or (D) result in any payment that would be a "parachute payment" to a
"disqualified individual" as those terms are defined in Section 280G of
the Code, without regard to whether such payment is reasonable
compensation for personal services performed or to be performed in the
future.
(m) Labor Matters. ACP is neither a party to nor bound by any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor
14
organization, nor is it the subject of a proceeding asserting that it has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act) or seeking to compel ACP to bargain with any labor organization
as to wages or conditions of employment, nor is there any strike or other labor
dispute involving it or, to ACP's knowledge, threatened, nor is ACP aware of any
activity involving its employees seeking to certify a collective bargaining unit
or engaging in other organizational activity.
(n) Environmental Matters. (i) ACP has complied at all times with
applicable Environmental Laws; (ii) no real property (including buildings or
other structures) currently or formerly owned or operated by ACP has been
contaminated with, or has had any release of, any Hazardous Substance; (iii) ACP
is not subject to liability for any Hazardous Substance disposal or
contamination on any third party property; (iv) ACP has not received any notice,
demand letter, claim or request for information alleging any violation of, or
liability under, any Environmental Law; (v) ACP is not subject to any order,
decree, injunction or other agreement with any Governmental Authority or any
third party relating to any Environmental Law; (vi) there are no circumstances
or conditions (including the presence of asbestos, underground storage tanks,
lead products, polychlorinated biphenyls, prior manufacturing operations,
dry-cleaning, or automotive services) involving ACP, any currently or formerly
owned or operated property, that could reasonably be expected to result in any
claims, liability or investigations against ACP, result in any restrictions on
the ownership, use, or transfer of any property pursuant to any Environmental
Law, or adversely affect the value of any property and (vii) ACP has delivered
to Planet copies of all environmental reports, studies, sampling data,
correspondence, filings and other environmental information in its possession or
reasonably available to it relating to ACP, and any currently or formerly owned
or operated property.
As used herein, the term "Environmental Laws" means any federal, state or
local law, regulation, order, decree, permit, authorization, opinion, common law
or agency requirement relating to: (A) the protection or restoration of the
environment, health, safety, or natural resources, (B) the handling, use,
presence, disposal, release or threatened release of any Hazardous Substance or
(C) noise, odor, wetlands, indoor air, pollution, contamination or any injury or
threat of injury to persons or property in connection with any Hazardous
Substance and the term "Hazardous Substance" means any substance in any
concentration that is: (A) listed, classified or regulated pursuant to any
Environmental Law, (B) any petroleum product or by-product, asbestos-containing
material, lead-containing paint or plumbing, polychlorinated biphenyls,
radioactive materials or radon or (C) any other substance which is or may be the
subject of regulatory action by any Governmental Authority in connection with
any Environmental Law.
(o) Tax Matters. (i) (A) All Tax Returns that are required to be filed on
or before the Effective Date (taking into account any extensions of time within
which to file which have not expired) by or with respect to ACP, have been or
will be timely filed on or before the Effective Date, (B) all such Tax Returns
are or will be true and complete in all material respects, (C) all Taxes shown
to be due on the Tax Returns referred to in clause (A) have been or will be
timely paid in full, (D) the Tax Returns referred to in clause (A) have been
examined by the Internal Revenue Service or the appropriate Tax authority or the
period for assessment of the Taxes in
15
respect of which such Tax Returns were required to be filed has expired, (E) all
deficiencies asserted or assessments made as a result of such examinations have
been paid in full, (F) no issues that have been raised by the relevant taxing
authority in connection with the examination of any of the Tax Returns referred
to in clause (A) are currently pending and (G) no waivers of statutes of
limitation have been given by or requested with respect to any Taxes of ACP.
(ii) ACP has made available to Planet true and correct copies of the
United States federal income Tax Returns filed by ACP for each of the
three most recent fiscal years ended on or before December 31, 2003.
(iii) ACP does not have any liability with respect to income,
franchise or similar Taxes that accrued on or before the end of the most
recent period covered by Tax Returns filed prior to the date hereof in
excess of the amounts accrued with respect thereto that are reflected in
the financial statements delivered to Planet.
(iv) ACP is not a party to any Tax allocation or sharing agreement,
is not and has never been a member of an affiliated group filing
consolidated or combined Tax Returns (other than a group the common parent
of which is or was ACP) or otherwise has any liability for the Taxes of
any Person.
(v) No closing agreements, private letter rulings, technical advice
memoranda or similar agreement or rulings have been entered into or issued
by any taxing authority with respect to ACP.
(vi) As of the date hereof, ACP has no reason to believe that any
conditions exist that might prevent or impede the Merger from qualifying
as a reorganization within the meaning of Section 368(a) of the Code.
(vii) (A) No Tax is required to be withheld pursuant to Section 1445
of the Code as a result of the transaction contemplated by this Agreement
and (B) all Taxes that ACP is or was required by law to withhold or
collect have been duly withheld or collected and, to the extent required
by applicable law, have been paid to the proper Governmental Authority or
other Person.
(p) Intentionally left blank.
(q) Books and Records. The books and records of ACP have been fully,
properly and accurately maintained in all material respects, and there are no
material inaccuracies or discrepancies of any kind contained or reflected
therein, and they fairly present the financial position of ACP.
(r) Insurance. The Disclosure Schedule sets forth a true and complete list
of all of the insurance policies, binders, or bonds maintained by ACP
("Insurance Policies"). ACP is insured with reputable insurers against such
risks and in such amounts as the management of ACP reasonably has determined to
be prudent in accordance with industry practices. All the
16
Insurance Policies are in full force and effect; ACP and is not in material
default thereunder; and all claims thereunder have been filed in due and timely
fashion.
(s) Real Property. (i) the Disclosure Schedule contains a complete and
correct list of (A) all real property or premises owned on the date hereof, in
whole or in part by the ACP and all indebtedness secured by any encumbrance
thereof, and (B) all real property or premises leased in whole or in part by ACP
and together with a list of all applicable leases and the name of the lessor.
None or such premises or properties have been condemned or otherwise taken by
any public authority and no condemnation or taking is threatened or contemplated
and none thereof is subject to any claim, contract or law which might affect its
use or value for the purposes now made of it. None of the premises or properties
of ACP is subject to any current or potential interests of third parties or
other restrictions or limitations that would impair or be inconsistent in any
material respect with the current use of such property by ACP.
(t) Each of the leases referred to in the Disclosure Schedule is valid and
existing and in full force and effect, and no party thereto is in default and no
notice of a claim of default by any party has been delivered to ACP or is now
pending, and there does not exist any event that with notice or the passing of
time, or both, would constitute a default or excuse performance by any party
thereto, provided that with respect to matters relating to any party other than
ACP the foregoing representation is based on the knowledge of ACP.
(u) Title. ACP has good title to its properties and assets (other than
property as to which it is lessee) except (1) statutory liens not yet delinquent
which are being contested in good faith by appropriate proceedings, and liens
for taxes not yet due and (2) defects and irregularities of title and
encumbrances that do not materially impair the use thereof for the purposes for
which they are held.
5.04. Representations and Warranties of Planet. Subject to Section 5.01
and Section 5.02 and except as set forth in the Disclosure Schedule, Planet
hereby represents and warrants to ACP as follows:
(a) Organization, Standing and Authority. Planet is duly organized,
validly existing and in good standing under the laws of the State of California.
Planet is duly qualified to do business and is in good standing in the states of
the United States and foreign jurisdictions where its ownership or leasing of
property or assets or the conduct of its business requires it to be so
qualified. Planet has in effect all federal, state, local, and foreign
governmental authorizations necessary for it to own or lease its properties and
assets and to carry on its business as it is now conducted.
(b) Planet Stock. (i) As of the date hereof, the authorized capital stock
of Planet consists solely of 20,000,000 shares of Planet Common Stock, of which
no more than 2,160,368 shares were outstanding as of the date hereof, and
5,000,000 shares of Planet Preferred Stock, of which no shares were outstanding
as of the date hereof.
(ii) The shares of Planet Common Stock to be issued in exchange for
shares of ACP Common Stock in the Merger, when issued in accordance with
the terms of this
17
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable and the issuance thereof is not subject to any preemptive
right. The shares of Planet Common Stock to be issued in exchange for
shares of ACP Common Stock in the Merger will be issued (x) pursuant to an
effective registration statement or applicable exemption under the
Securities Act and (y) pursuant to effective registrations or exemptions
under state securities laws, as applicable.
(c) Subsidiaries. Planet has no subsidiaries.
(d) Corporate Power. Planet and each of its Significant Subsidiaries has
the corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets and has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby; and Planet has
the corporate power and authority to execute, deliver and perform its
obligations to consummate the transactions contemplated thereby.
(e) Corporate Authority. This Agreement and the transactions contemplated
hereby have been authorized by all necessary corporate action of the Planet
Board. This Agreement has been duly executed and delivered by Planet and this
Agreement is a valid and legally binding agreement of Planet enforceable in
accordance with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability relating to or affecting creditors' rights
or by general equity principles).
(f) Regulatory Approvals; No Violations. (i) No consents or approvals of,
or waivers by, or filings or registrations with, any Governmental Authority or
with any third party are required to be made or obtained by Planet or any of its
Subsidiaries in connection with the execution, delivery or performance by Planet
of this Agreement or to consummate the Merger except for (A) filings with the
SEC and state securities authorities as are required to be obtained under the
securities or "Blue Sky" laws of various states in connection with the approval
by shareholders of, and the issuance of Planet Common Stock in the Merger and
(B) the filing of the executed Agreement of Merger with the Secretary of State
of California. As of the date hereof, Planet is not aware of any reason why the
approvals set forth in Section 7.01(b) will not be received in a timely manner
and without the imposition of a condition, restriction or requirement of the
type described in Section 7.01(b).
(ii) Subject to receipt, or the making, of the consents, approvals
and filings referred to in the preceding paragraph and elsewhere in this
Agreement, the execution, delivery and performance of this Agreement by
Planet and the consummation of the transactions contemplated hereby do not
and will not (A) constitute a breach or violation of, or a default under,
or give rise to any Lien, any acceleration of remedies or any right of
termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or Agreement, indenture or
instrument of Planet or of any of its Subsidiaries or to which Planet or
any of its Subsidiaries or properties is subject or bound, (B) constitute
a breach or violation of, or a default under, the articles of
18
incorporation or by-laws (or similar governing documents) of Planet or any
of its Subsidiaries or (C) require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental permit or
license, agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Material Adverse Effect. (i)
Planet's Annual Report on Form 10-KSB for the fiscal year ended December 31,
2003, and all other reports, registration statements, definitive proxy
statements or information statements filed or to be filed by it subsequent to
December 31, 2003, under the Securities Act, or under Section 13(a), 13(c), 14
or 15(d) of the Exchange Act in the form filed or to be filed (collectively,
Planet's "SEC Documents") with the SEC, as of the date filed or to be filed, (A)
complied or will comply in all material respects as to form with the applicable
requirements under the Securities Act or the Exchange Act, as the case may be
and (B) did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and each of the balance sheets contained in or
incorporated by reference into any such SEC Document (including the related
notes and schedules thereto) fairly presents, or will fairly present, the
financial position of Planet and its Subsidiaries as of its date, and each of
the statements of income and changes in shareholders' equity and cash flows or
equivalent statements in such SEC Documents (including any related notes and
schedules thereto) fairly presents, or will fairly present, the results of
operations, changes in shareholders' equity and changes in cash flows, as the
case may be, of Planet and its Subsidiaries for the periods to which they
relate, in each case in accordance with GAAP consistently applied during the
periods involved, except in each case as may be noted therein.
(ii) Except as described in the SEC Documents, since December 31,
2004, Planet and its Subsidiaries have conducted their respective
businesses in the ordinary and usual course consistent with past practice
(excluding the incurrence of expenses related to this Agreement and the
transactions contemplated hereby) and no event has occurred or
circumstance arisen that, individually or taken together with all other
facts, circumstances and events (described in any paragraph of this
Section 5.04 or otherwise), is reasonably likely to have a Material
Adverse Effect with respect to Planet or its Subsidiaries.
(h) Litigation. No litigation, claim or other proceeding before any court
or governmental agency is pending against Planet or its Subsidiaries and, to
Planet's knowledge, no such litigation, claim or other proceeding has been
threatened and there are no facts which could reasonably give rise to such
litigation, claim or other proceeding.
(i) No Brokers. No action has been taken by Planet that would give rise to
any valid claim against any party hereto for a brokerage commission, finder's
fee or other like payment with respect to the transactions contemplated by this
Agreement.
(j) Environmental Matters. (i) Planet has complied at all times with
applicable Environmental Laws; (ii) no real property (including buildings or
other structures) currently or formerly owned or operated by Planet has been
contaminated with, or has had any release of, any
19
Hazardous Substance; (iii) neither Planet nor any of its Subsidiaries is subject
to liability for any Hazardous Substance disposal or contamination on any third
party property; (iv) neither Planet nor any of its Subsidiaries has received any
notice, demand letter, claim or request for information alleging any violation
of, or liability under, any Environmental Law; (v) neither Planet nor any of its
Subsidiaries is subject to any order, decree, injunction or other agreement with
any Governmental Authority or any third party relating to any Environmental Law;
and (vi) to Planet's knowledge, there are no circumstances or conditions
(including the presence of asbestos, underground storage tanks, lead products,
polychlorinated biphenyls, prior manufacturing operations, dry-cleaning, or
automotive services) involving Planet any currently or formerly owned or
operated property that could reasonably be expected to result in any claims,
liability or investigations against Planet, result in any restrictions on the
ownership, use, or transfer of any property pursuant to any Environmental Law,
or adversely affect the value of any property.
(k) Insurance. Planet and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of Planet
reasonably has determined to be prudent in accordance with industry practices.
ARTICLE VI
COVENANTS
6.01. Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, ACP and Planet each agree to use its reasonable best efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Merger as promptly as practicable and
otherwise to enable consummation of the transactions contemplated hereby,
including the satisfaction of the conditions set forth in Article 7 hereof, and
shall cooperate fully with the other party hereto to that end.
6.02. Shareholder Approval. Planet agrees to take, in accordance with
applicable law and its Articles and By-Laws, all action necessary to convene as
soon as reasonably practicable a meeting of its shareholders to consider and
vote upon the approval of this Agreement and the Merger and any other matters
required to be approved by its shareholders for consummation of the Merger
(including any adjournment or postponement, the "Shareholder Meeting"), in no
event later than 45 calendar days after the Definitive Proxy Statement is filed
with the SEC by Planet ("Proxy Statement"). Shareholder of ACP hereby approves
and consents to this Agreement, the Merger and consummation of the Merger.
Except with the prior approval of the other party, no other matters shall be
submitted for the approval of the shareholders. The Board of Directors of each
party shall at all times prior to and during such meetings recommend such
approval and shall take all reasonable lawful action to solicit such approval by
its shareholders; provided that nothing in this Agreement shall prevent the
Board from withholding, withdrawing, amending or modifying its recommendation if
the Board determines, after consultation with its outside counsel, that such
action is legally required in order for the directors to comply with their
fiduciary duties to the shareholders under applicable law.
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6.03. Registration Statement. (a) Planet agrees to prepare a registration
statement on Form SB-2 or other applicable form (the "Registration Statement")
to be filed by Planet with the SEC in connection with the issuance of Planet
Common Stock in the Merger. ACP shall prepare and furnish such information
relating to it and its directors, officers and shareholders as may be reasonably
required in connection with the above-referenced documents based on its
knowledge of and access to the information required for said documents. ACP
agrees to cooperate with Planet and Planet's counsel and accountants in
requesting and obtaining appropriate opinions, consents and letters from its
financial advisor, if any, and independent auditor in connection with the
Registration Statement and the Proxy Statement. Provided that ACP has cooperated
as described above, Planet agrees to file, or cause to be filed, the
Registration Statement no later than 60 days after the Effective Date. Each of
ACP and Planet agrees to use all reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
reasonably practicable after filing thereof. Planet also agrees to use all
reasonable efforts to obtain all necessary state securities law or "Blue Sky"
permits and approvals required to carry out the transactions contemplated by
this Agreement.
(b) Each of ACP and Planet agrees that none of the information supplied or
to be supplied by it for inclusion or incorporation by reference in the
Registration Statement and/or Proxy Statement shall, at the time the
Registration Statement and each amendment or supplement thereto, if any, becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and the Proxy Statement
and any amendment or supplement thereto shall not, at the date of mailing to
shareholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading. Each of ACP and Planet further agrees that if
such party shall become aware prior to the Effective Date of any information
furnished by such party that would cause any of the statements in the
Registration Statement or the Proxy Statement to be false or misleading with
respect to any material fact, or to omit to state any material fact necessary to
make the statements therein not false or misleading, to promptly inform the
other parties thereof and to take the necessary steps to correct the
Registration Statement or the Proxy Statement.
(c) Planet agrees to advise ACP, promptly after Planet receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, of the issuance of any stop order or the
suspension of the qualification of Planet Common Stock for offering or sale in
any jurisdiction, of the initiation or, to the extent Planet is aware thereof,
threat of any proceeding for any such purpose, or of any request by the SEC for
the amendment or supplement of the Registration Statement or for additional
information.
6.04. Press Releases. ACP and Planet shall consult with each other before
issuing any press release with respect to the Merger or this Agreement and shall
not issue any such press release or make any such public statements without the
prior consent of the other party, which shall not be unreasonably withheld or
delayed; provided, however, that a party may, without the prior written consent
of the other party (but after such consultation, to the extent practicable in
the circumstances), issue such press release or make such public statements as
may upon the
21
advice of outside counsel be required by law or the rules or regulations of the
NASD. ACP and Planet shall cooperate to develop all public announcement
materials and make appropriate management available at presentations related to
the transactions contemplated by this Agreement as reasonably requested by the
other party.
6.05. Access; Information. (a) ACP agrees that, upon reasonable notice and
subject to applicable laws relating to the exchange of information, it shall
afford Planet and Planet's officers, employees, counsel, accountants and other
authorized representatives such access during normal business hours throughout
the period prior to the Effective Time to the books, records (including, without
limitation, Tax Returns and work papers of independent auditors), properties and
personnel and to such other information as Planet may reasonably request and,
during such period, it shall furnish promptly to Planet all information
concerning its business, properties and personnel as Planet may reasonably
request. Without limiting the generality of the preceding sentence, prior to the
Effective Time, Planet, and its representatives shall have the right to conduct
a review to determine (i) that the assets, books, records and operations of ACP
are in satisfactory condition and will not in a material way adversely impact
Planet after consummation of the transactions contemplated hereby and (ii) the
accuracy of the representations and warranties and the satisfaction of the
conditions to closing as provided hereunder.
(b) ACP agrees that, subject to applicable laws, it shall cooperate in
good faith with Planet on mutually agreed operating issues which the parties
agree have priority.
(c) Planet agrees that upon reasonable notice and subject to applicable
laws relating to the exchange of information, it shall afford ACP and ACP's
officers, employees, counsel, accountants and other authorized representatives
such access during normal business hours throughout the period prior to the
Effective Time to the books, records (including, without limitation, Tax Returns
and work papers of independent auditors), properties and personnel and to such
other information as ACP may reasonably request and, during such period, it
shall furnish promptly to ACP all information concerning its business,
properties and personnel as ACP may reasonably request. Without limiting the
generality of the preceding sentence, prior to the Effective Time, ACP, and its
representatives shall have the right to conduct a review to determine (i) that
the assets, books, records and operations of Planet are in satisfactory
condition and will not in a material way adversely impact ACP after consummation
of the transactions contemplated hereby and (ii) the accuracy of the
representations and warranties and the satisfaction of the conditions to closing
as provided hereunder.
(d) Each party agrees that it will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 6.05 (as well as
any other information obtained prior to the date hereof in connection with the
entering into of this Agreement) for any purpose unrelated to the consummation
of the transactions contemplated by this Agreement. Subject to the requirements
of law, each party shall keep confidential, and shall cause its representatives
to keep confidential, all information and documents obtained pursuant to this
Section 6.05 (as well as any other information obtained prior to the date hereof
in connection with the entering into of this Agreement) unless such information
(i) was already known to such party, (ii) becomes
22
available to such party from other sources not known by such party to be bound
by a confidentiality obligation, (iii) is disclosed with the prior written
approval of the party to which such information pertains or (iv) is or becomes
readily ascertainable from publicly available sources. In the event that this
Agreement is terminated or the transactions contemplated by this Agreement shall
otherwise fail to be consummated, each party shall promptly cause all copies of
documents or extracts thereof containing information and data as to another
party hereto to be returned to the party which furnished the same. No
investigation by any party of the business and affairs of any other party shall
affect or be deemed to modify or waive any representation, warranty, covenant or
agreement in this Agreement, or the conditions to any party's obligation to
consummate the transactions contemplated by this Agreement.
6.06. Employment of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Planet and ACP shall use their best
efforts to cause Planet and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to enter into an employment
agreement for the employment of ▇▇.▇▇▇▇▇▇ by Planet as of the Effective Date
under terms and conditions substantially similar to those as provided in the
form of the employment agreement attached hereto as Exhibit B.
6.07. Acquisition Proposals. ACP agrees that its officers or directors
shall not, and that it shall direct and use its reasonable best efforts to cause
its employees, agents and representatives not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to a merger, reorganization, share
exchange, consolidation or similar transaction involving, or any purchase of all
or substantially all of the assets of ACP or more than 10% of the outstanding
equity securities, of ACP (any such proposal or offer being hereinafter referred
to as an "Acquisition Proposal"). ACP further agrees that neither ACP nor any of
its officers and directors shall, and that it shall direct and use its
reasonable best efforts to cause its employees, agents and representatives not
to, directly or indirectly, engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
Person relating to an Acquisition Proposal, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; provided, however, that
nothing contained in this Agreement shall prevent ACP or ACP Board from (A)
complying with its disclosure obligations under federal or state law; (B)
providing information in response to a request therefore by a Person who has
made an unsolicited bona fide written Acquisition Proposal if ACP Board receives
from the Person so requesting such information an executed confidentiality
agreement; (C) engaging in any negotiations or discussions with any Person who
has made an unsolicited bona fide written Acquisition Proposal; or (D)
recommending such an Acquisition Proposal to the shareholders of ACP, if and
only to the extent that, (i) in each such case referred to in clause (B), (C) or
(D) above, ACP Board determines in good faith (after consultation with outside
legal counsel) that such action would, in the absence of the foregoing
proscriptions, be legally required in order for its directors to comply with
their respective fiduciary duties under applicable law and (ii) in the case
referred to in clause (D) above, ACP Board determines in good faith (after
consultation with its financial advisor) that such Acquisition Proposal, if
accepted, is reasonably likely to be consummated, taking into account all legal,
financial and regulatory aspects of the proposal and the Person making the
proposal and would, if consummated, result in a transaction more favorable to
ACP's shareholders from a financial point of view than the Merger, ACP agrees
that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any
23
parties conducted heretofore with respect to any Acquisition Proposals. ACP
agrees that it will notify Planet immediately if any such inquiries, proposals
or offers are received by, any such information is requested from, or any such
discussions or negotiations are sought to be initiated or continued with, any of
its representatives.
6.08. Certain Policies. Prior to the Effective Date, ACP shall, consistent
with GAAP and the applicable rules and regulations of the SEC modify or change
its valuation and related policies and practices so as to be applied on a basis
that is consistent with that of Planet.
6.09. Benefit Plans. (a) From and after the Effective Time, Planet shall
provide former employees of ACP who remain as employees of Planet or any of its
Subsidiaries with employee benefit plans no less favorable in the aggregate than
those provided to similarly situated employees of Planet. Planet shall cause
each employee benefit plan, program, policy or arrangement of Planet in which
employees of ACP are eligible to participate to take into account for purposes
of eligibility and vesting thereunder the service of such employees with ACP to
the same extent as such service was credited for such purpose by ACP. Nothing
herein shall limit the ability of Planet to amend or terminate any of the
Benefit Plans in accordance with their terms at any time.
(b) If employees of ACP become eligible to participate in a medical,
dental or health plan of Planet, Planet shall cause each such plan to (i) waive
any preexisting condition limitations to the extent such conditions were covered
under the applicable medical, health or dental plans of ACP, (ii) honor under
such plans any deductible, co-payment and out-of-pocket expenses incurred by the
employees and their beneficiaries during the portion of the calendar year prior
to such participation and (iii) waive any waiting period limitation or evidence
of insurability requirement which would otherwise be applicable to such employee
on or after the Effective Time to the extent such employee had satisfied any
similar limitation or requirement under an analogous plan prior to the Effective
Time.
6.10. Non-competition Agreements. Each of the non-officer directors,
Principal Shareholder, and executive officers of ACP shall, simultaneously with
the execution and delivery hereof, execute and deliver to Planet non-competition
agreements substantially in the form of Exhibit A hereto.
6.11. Notification of Certain Matters. Each of ACP and Planet shall give
prompt notice to the other of any fact, event or circumstance known to it that
(i) is reasonably likely, individually or taken together with all other facts,
events and circumstances known to it, to result in any Material Adverse Effect
with respect to it or (ii) would cause or constitute a material breach of any of
its representations, warranties, covenants or agreements contained herein.
6.12. Human Resources Issues. ACP agrees to cooperate with Planet with
respect to any formal meetings or interviews with one or more employees called
or arranged by ACP and held for the purpose of discussing the transactions
contemplated by this Agreement or their effect on such employees, with Planet
given the opportunity to participate in such meetings or interviews. This
section is not intended to apply to casual conversations about the transaction
or informal meetings initiated by employees, or to prohibit discussion in
general, but rather to allow
24
Planet a role in the formal presentation of the transaction to employees, and an
opportunity to participate in the significant, formal meetings at which the
transaction is explained and discussed.
6.13. Assistance with Third-Party Agreements. (a) ACP shall cooperate with
and use all commercially reasonable efforts to assist Planet in (i) gaining
access to and obtaining any required consents from all of its third-party
vendors, landlords of all of their leased properties and other parties to
material agreements, promptly after the date of this Agreement, and (ii)
obtaining the cooperation of such third parties in a smooth transition in
accordance with Planet's timetable at or after the Effective Time of the Merger.
ACP shall cooperate with Planet in minimizing the extent to which any contracts
will continue in effect following the Effective Time of the Merger, in addition
to complying with the prohibition of Section 4.01(l) hereof.
(b) Without limiting Section 6.13(a), ACP shall use all reasonable efforts
to provide data processing and other processing support, outside contractors, to
assist Planet in performing all tasks reasonably required to result in a
successful merger of their data and other files and records. Among other things,
ACP and Planet shall:
(i) cooperate with each other to establish a mutually agreeable
project plan to effectuate the merger;
(ii) provide, or use its commercially reasonable efforts to obtain
from any outside contractors, all data or other files and layouts
requested by Planet for use in planning the merger, as soon as reasonably
practicable;
(iii) provide reasonable access to personnel and outside contractors
to enable the merger effort to be completed on schedule; and
(iv) Each agrees that all actions taken pursuant to this Section
shall be taken in a manner intended to minimize disruption to the
customary business activities of the other.
6.14. Shareholder Covenants. Shareholder hereby represents, warrants and
covenants to Planet as follows:
(a) Authority; No Violation. The Shareholder has all necessary power and
authority to enter into and perform all of such Shareholder's obligations
hereunder. The execution, delivery and performance of this Agreement by the
Shareholder will not violate any other agreement to which such Shareholder is a
party, including any voting agreement, shareholders' agreement, trust agreement
or voting trust.
(b) Ownership of Shares. The Shareholder is the beneficial and record
owner of all of the shares of ACP capital stock and Shareholder has sole voting
power and sole power to issue instructions with respect to the matters set forth
in this Agreement, and sole power of disposition, with no restrictions on the
voting rights, rights of disposition or otherwise, subject to applicable laws
and the terms of this Agreement.
25
(c) No Conflicts. Neither the execution and delivery of this Agreement nor
the consummation by the Shareholder of the transactions contemplated hereby will
conflict with or constitute a violation of or default under any contract,
commitment, agreement, arrangement or restriction of any kind to which such
Shareholder is a party or by which the Shareholder is bound. Shareholder hereby
agrees to vote all of the Shares held by the Shareholder (i) in favor of the
Merger, this Agreement and the transactions contemplated by the Agreement; (ii)
against any action or agreement that would result in a breach in any material
respect of any covenant, representation or warranty or any other obligation or
agreement of ACP under the Agreement; and (iii) except with the prior written
consent of Planet, against the following actions (other than the Merger and the
transactions contemplated by this Agreement): (A) any extraordinary corporate
transactions, such as a merger, consolidation or other business combination
involving ACP; (B) any sale, lease or transfer of a material amount of the
assets of ACP; (C) any material change in the present capitalization of ACP; (E)
any amendment of ACP's Articles of Incorporation; (F) any other material change
in ACP's corporate structure or business; or (G) any other action which is
intended, or could reasonably be expected to, impede, interfere with, delay,
postpone, discourage or materially adversely affect the contemplated economic
benefits to Planet of the transactions contemplated by the Agreement. The
Shareholder shall not enter into any agreement or understanding with any person
or entity prior to the Termination Date (as defined below) to vote or give
instructions after the Termination Date in any manner inconsistent with clauses
(i), (ii) or (iii) of the preceding sentence.
(d) No Stock Transactions. Shareholder hereby agrees not to (i) sell,
transfer, assign or otherwise dispose of any of his ACP shares or any rights,
options, warrants or other securities to acquire shares of ACP without the prior
written consent of Planet, (ii) pledge, mortgage or encumber such shares; or
(iii) buy, sell, transfer, trade in, or otherwise dispose of, or enter into any
agreement to buy, sell, transfer, trade in, or dispose of, any securities or
right to acquire or dispose of any securities of Planet, or to authorize,
solicit, request or advise any other person to do any of the foregoing, directly
or indirectly. Shareholder agrees that he shall not sell, transfer, make any
short sale of, grant any option for the purchase of, or enter into any hedging
or similar transaction with the same economic effect as a sale, any Planet
Common Stock (or other securities) for a period specified by any representative
of the underwriters of Planet Common Stock (or other securities) not to exceed
one hundred eighty (180) days following the effective date of a registration
statement of Planet filed under the Securities Act; provided that: (I) such
agreement shall apply only to underwritten public offerings of Planet Common
Stock; and (II) all officers and directors of the Company and major holders of
Planet's voting securities enter into similar agreements. Shareholder agrees to
execute and deliver such other agreements as may be reasonably requested by
Planet or the underwriter which are consistent with the foregoing or which are
necessary to give further effect thereto. Shareholder agrees that any transferee
of Shareholder of any shares issued pursuant to this agreement in a private
transactions shall be bound by this Section.
26
(e) Cooperation. Shareholder agrees that he will not directly or
indirectly solicit any inquiries or proposals from any person relating to any
proposal or transaction for the disposition of the business or assets of ACP or
the acquisition of voting securities of ACP or any business combination between
ACP or any person other than Planet.
6.15. Additional Agreements. In case at any time after the Effective Time
of the Merger any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest Planet with full title to all properties,
assets, rights, approvals, immunities and franchises of ACP, the proper officers
and directors of each party to this Agreement shall take all necessary or
appropriate action.
6.16. Pre-Closing Adjustments. At or before the Effective Time of the
Merger, ACP shall make such accounting entries or adjustments, as Planet shall
direct as a result of its on-going review of ACP or in order to implement its
plans following the Closing or to reflect expenses and costs related to the
Merger; provided, however, that unless the adjustment would otherwise be
required by applicable law, rule or regulation, or by GAAP applied on a basis
consistent with the Financial Statements of ACP, (a) ACP shall not be required
to take such actions more than one day prior to the Effective Time of the Merger
or prior to the time Planet agrees in writing that all of the conditions to its
obligation to close as set forth in Section 7.02 have been satisfied or waived
and each of the approvals in Section 7.01(b) have been received, and (b) no such
adjustment shall (i) require any filing with any Governmental Authority, (ii)
violate any law, rule or regulation applicable to ACP or Planet, (iii) otherwise
materially disadvantage ACP if the Merger was not consummated or (iv) constitute
or be deemed to be a breach, violation of or failure to satisfy any
representation, warranty, covenant, condition or other provision of this
Agreement or otherwise be considered in determining whether any such breach,
violation or failure to satisfy shall have occurred.
6.17. ACP Stock Options and Rights. ACP shall take such actions as may be
necessary such that immediately prior to the Effective Time, each ACP Stock
Option or other Rights that were outstanding immediately prior to the Effective
Time, whether or not then exercisable, shall be cancelled.
6.18. Audited ACP Financial Statements. No later than fifteen (15)
Business Days after the execution of this Agreement, ACP shall provide Planet
with a copy of its financial statements presenting the financial condition of
ACP for the year ended December 31, 2004, as audited by ACP's auditors, and if
the Definitive Proxy Statement has not been mailed to Planet's Shareholders
prior to May 14, 2005, ACP shall provide Planet with a copy of its unaudited
interim financial statement for the quarter ended March 31, 2005, as soon as
reasonably available but not later than April 30, 2005.
6.19. Tax Treatment of the Merger. Planet and ACP intend the Agreement to
qualify as a tax-free reorganization for all U.S. federal income tax purposes.
Each party will (and will cause each of its Subsidiaries to) both before and
after the Effective Time (i) use reasonable efforts to cause the Agreement to so
qualify; (ii) refrain from taking any action that would
27
reasonably be expected to cause the Agreement to fail to so qualify; and (iii)
take the position for all purposes that the Agreement so qualifies.
6.20. Payment of Shareholder Debt. At the Effective Time, Planet shall
cause to be paid to Shareholder the sum of $1,500,000.00 cash in full repayment
of all indebtedness of ACP to its Shareholder.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each of the parties hereto to consummate the Merger is
subject to the fulfillment or written waiver by the parties hereto prior to the
Effective Time of each of the following conditions:
(a) Shareholder Approval. This Agreement, the Merger and the Certificate
of Merger shall have been duly approved by the requisite vote of the
shareholders of Planet and ACP under the laws of the state of their
organization.
(b) Approvals. All approvals required to consummate the transactions
contemplated hereby shall have been obtained and shall remain in full force and
effect and all statutory waiting periods in respect thereof shall have expired
and no such approvals shall contain any conditions, restrictions or requirements
which the Planet Board reasonably determines in good faith would (i) following
the Effective Time, have a Material Adverse Effect on Planet or (ii) reduce the
benefits of the transactions contemplated hereby to such a degree that Planet
would not have entered into this Agreement had such conditions, restrictions or
requirements been known at the date hereof.
(c) No Injunction. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and prohibits consummation of the
transactions contemplated by this Agreement.
7.02. Conditions to Obligation of ACP. The obligation of ACP to consummate
the Merger is also subject to the fulfillment or written waiver prior to the
Effective Time of each of the following additional conditions:
(a) Representations and Warranties. Except as otherwise provided in this
Agreement or the Disclosure Schedule, the representations and warranties of
Planet set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Effective Date as though made on and as of the
Effective Date (except that representations and warranties that by their terms
speak as of the date of this Agreement or some other date shall be true and
correct as of such date). For purposes of this paragraph, such representations
and warranties shall be deemed to be true and correct in all material respects
unless the failure or failures of such representations and warranties to be true
and correct in all material respects, either individually
28
or in the aggregate, and without giving effect to any materiality, material
adverse effect or similar qualifications set forth in such representations and
warranties, will have or would reasonably be expected to have a Material Adverse
Effect on Planet. ACP shall have received a certificate, dated the Effective
Date, signed on behalf of Planet by the Chief Executive Officer and the Chief
Financial Officer of Planet to such effect.
(b) Performance of Obligations of Planet. Planet shall have performed in
all material respects all obligations required to be performed by them under
this Agreement at or prior to the Effective Time, and ACP shall have received a
certificate, dated the Effective Date, signed on behalf of Planet by the Chief
Executive Officer and the Chief Financial Officer of Planet to such effect.
(c) No litigation or proceeding shall be pending against Planet brought by
any Governmental Authority seeking to prevent consummation of the transactions
contemplated thereby.
7.03. Conditions to Obligation of Planet. The obligation of Planet to
consummate the Merger is also subject to the fulfillment or written waiver prior
to the Effective Time of each of the following conditions:
(a) Representations and Warranties. Except as otherwise provided in this
Agreement or the Disclosure Schedule, the representations and warranties of ACP
set forth in this Agreement shall be true and correct as of the date of this
Agreement and as of the Effective Date as though made on and as of the Effective
Date (except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as of
such date). For purposes of this paragraph, such representations and warranties
shall be deemed to be true and correct in all material respects unless the
failure or failures of such representations and warranties to be true and
correct in all material respects, either individually or in the aggregate, and
without giving effect to any materiality, material adverse effect or similar
qualifications set forth in such representations and warranties, will have or
would reasonably be expected to have a Material Adverse Effect on ACP. Planet
shall have received a certificate, dated the Effective Date, signed on behalf of
ACP by the Chief Executive Officer and the Chief Financial Officer of ACP to
such effect.
(b) The Disclosure Schedule shall be updated and made current as of the
day prior to the Effective Time of the Merger and a draft of the updated
Disclosure Schedule shall have been delivered to Planet no later than 72 hours
prior to the Effective Time of the Merger; such update of the Disclosure
Schedule shall not in any way affect the representations and warranties set
forth in Section 5.03.
(c) Performance of Obligations of ACP. ACP shall have performed in all
material respects all obligations required to be performed by it under this
Agreement at or prior to the Effective Time, and Planet shall have received a
certificate, dated the Effective Date, signed on behalf of ACP by the Chief
Executive Officer and the Chief Financial Officer of ACP to such effect.
29
(d) Performance of Obligations of the Shareholder. Shareholder shall have
performed in all material respects all obligations required to be performed by
him under this Agreement, provided, however, that this condition shall be deemed
to be satisfied notwithstanding any failure to perform such obligations unless
any such failure or failures, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect on ACP or Planet and, if
requested by Planet, Planet shall have received a certificate, dated the
Effective Date, signed by each Shareholder to such effect with respect to such
Shareholder.
(e) Intentionally left blank.
(f) No Litigation. No litigation or proceeding shall be pending against
ACP brought by any Governmental Authority seeking to prevent consummation of the
transactions contemplated hereby.
(g) Closing Financial Statements. At least four Business Days prior to the
Effective Time of the Merger, ACP shall provide Planet with ACP's financial
statements presenting the financial condition of ACP as of the close of business
on the last day of the last month ended prior to the Effective Time of the
Merger. Such financial statements shall have been prepared in all material
respects in accordance with GAAP and other applicable legal and accounting
requirements, and reflect all period-end accruals and other adjustments. Such
financial statements shall be accompanied by a certificate of ACP's chief
financial officer, dated as of a date no earlier than two Business Days prior to
the Effective Time of the Merger, to the effect that such financial statements
continue to reflect accurately, as of the date of the certificate, the financial
condition of Planet in all material respects.
(h) Opinions of Counsel. Planet shall have received the opinion of
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & French or other reasonably acceptable counsel, as counsel
to Planet and the opinion of Brody, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇, P.C., as counsel to ACP,
each dated the Effective Time, including opinions in reasonable and customary
form and substance on such matters as Planet shall reasonably request, including
to the effect that, on the basis of facts, representations and assumptions set
forth in such opinion, which are consistent with the state of facts existing at
the Effective Time of the Merger, the Merger will be treated for federal income
tax purposes as a reorganization under Section 368(a) of the Code. In rendering
its opinion, counsel may require and rely upon representations contained in
letters from ACP, Planet and/or their officers or principal shareholders as are
customary for such opinions.
(i) Non-competition Agreements. Planet shall have received Non-competition
Agreements executed and delivered by the Shareholder, and each of the
non-officer directors and executive officers of ACP in the form of Exhibit A,
each of which shall remain in full force and effect.
(j) Consents. Planet shall have obtained each of the consents required to
consummate the Merger.
30
ARTICLE VIII
TERMINATION
8.01. Termination. This Agreement may be terminated, and the Merger may be
abandoned:
(a) Mutual Consent. At any time prior to the Effective Time, by the mutual
consent of Planet and ACP if the Board of Directors of each so determines by
vote of a majority of the members of its entire Board.
(b) Breach. At any time prior to the Effective Time, by Planet or ACP if
its Board of Directors so determines by vote of a majority of the members of its
entire Board, in the event of: (i) a breach by Planet or ACP, as the case may
be, of any representation or warranty contained herein (subject to the standard
set forth in Section 5.02), which breach cannot be or has not been cured within
30 days after the giving of written notice to the breaching party or parties of
such breach; (ii) a breach by Planet or ACP, as the case may be, of any of the
covenants or agreements contained herein, which breach cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
or parties of such breach or (iii) in the case of a termination by Planet, a
breach by a Shareholder or Shareholders of any of the covenants or agreements
contained in the Shareholder Agreements, which breach cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
or parties of such breach, provided that such breach (whether under (i), (ii) or
(iii)) would be reasonably likely, individually or in the aggregate with other
breaches, to result in a Material Adverse Effect with respect to Planet or ACP,
as the case may be.
(c) Delay. At any time prior to the Effective Time, by Planet or ACP if
its Board of Directors so determines by vote of a majority of the members of its
entire Board, in the event that the Merger is not consummated by September 30,
2005, except to the extent that the failure of the Merger then to be consummated
arises out of or results from the knowing action or inaction of (i) the party
seeking to terminate pursuant to this Section 8.01(c) or (ii) any of the
Shareholders (if ACP is the party seeking to terminate), which action or
inaction is in violation of its obligations under this Agreement or, in the case
of the Shareholders, his, her or its obligations under the relevant Shareholder
Agreement.
(d) Acquisition Proposal. By Planet, if ACP shall have exercised a right
specified in the provision set forth in Section 6.07 with respect to any
Acquisition Proposal and shall, directly or through agents or representatives,
continue discussion with any third party concerning such Acquisition Proposal
for more than 15 Business Days after the date of receipt of such Acquisition
Proposal.
8.02. Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article 8, no party to this Agreement shall have any liability or further
obligation to any other party hereunder except (i) as set forth in paragraphs
(b) and (c) below and Section 9.01, (ii) that termination will not relieve a
breaching party from liability if not provided for herein for any willful breach
of any covenant,
31
agreement, representation or warranty of this Agreement giving rise to such
termination and (iii) any other provision of this Agreement which expressly
survives the termination of this Agreement.
(b) If this Agreement is terminated by ACP pursuant to Section 8.01,
paragraph (b) upon such termination Planet shall pay to ACP a termination fee of
$150,000 (the "Termination Fee").
(c) If this Agreement is terminated (i) by ACP pursuant to Section 6.07
after a bona fide Acquisition Proposal for ACP shall have been publicly
disclosed, or any person or entity shall have publicly disclosed a bona fide
intention (whether or not conditional) to make an Acquisition Proposal or (ii)
by Planet pursuant to Section 8.01, paragraphs (b) or (d), upon such termination
ACP shall pay to Planet the Termination Fee.
(d) Any Termination Fee that becomes payable to Planet or ACP pursuant to
this Section 8.02 shall be paid by wire transfer of immediately available funds
to an account designated by ACP or Planet, as the case may be, if this Agreement
is terminated and the termination meets the conditions set forth in this Section
8.02 at or prior to such termination.
(e) ACP and Planet agree that the agreements contained in paragraphs (b),
(c) and (d) above are an integral part of the transactions contemplated by this
Agreement, that without such agreements ACP and Planet would not have entered
into this Agreement, and that such amounts do not constitute a penalty. If ACP
or Planet fails to pay the amounts due under paragraph (b) or (c) above within
the time periods specified in paragraph (d) above, the party obligated to pay
the Termination Fee shall pay all costs and expenses incurred by the other party
in connection with any action, including the filing of any lawsuit, taken to
collect payment of such amounts, together with interest on the amount of any
such unpaid amounts at the publicly announced prime rate of Bank of America,
N.A. from the date such amounts were required to be paid.
ARTICLE IX
MISCELLANEOUS
9.01. Survival. The representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time for a period of one
(1) year, except that all representations and warranties relating to tax matters
shall survive the Effective Time until the date thirty (30) days after
expiration of the applicable statute of limitation governing such tax matter.
9.02. Waiver; Amendment. Prior to the Effective Time, any provision of
this Agreement may be (i) waived in whole or in part by the party benefited by
the provision or by both parties or (ii) amended or modified at any time, by an
agreement in writing between the parties hereto executed in the same manner as
this Agreement, except that after ACP Meeting, this Agreement may not be amended
if it would reduce the consideration to be received by ACP shareholder in the
Merger without any subsequent approval by such shareholder or be in violation of
applicable law.
32
9.03. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original but all of
which together shall constitute one and the same instrument.
9.04. Governing Law, Jurisdiction and Venue. This Agreement shall be
governed by, and interpreted in accordance with, the laws of the State of
California (however, not to the exclusion of any applicable Federal law),
without regard to California statutes or judicial decisions regarding choice of
law questions. The parties hereby irrevocably submit to the jurisdiction of the
courts of the State of California and the federal courts of the United States of
America located in the Southern District of the State of California solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated herein and therein, and hereby waive, and agree to
assert, as a defense in any action, suit or proceeding for the interpretation or
enforcement hereof or of any such documents, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that the venue thereof may not be appropriate or that this
Agreement or any such document may not be enforced in or by such courts, and the
parties hereto irrevocably agree that all claims with respect to such action or
proceeding shall be heard and determined in such California state or federal
court. The parties hereby consent to and grant any such court jurisdiction over
the person of such parties and over the subject matter of such dispute and agree
that mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.06 or in such other manner as may
be permitted by law, shall be valid and sufficient service thereof.
9.05. Expenses. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby;
provided if this transaction closes, Planet or its subsidiary as the surviving
corporation will bear the cost of the audit of ACP's financial statements.
9.06. Notices. All notices, requests and other communications hereunder to
a party shall be in writing and shall be deemed given if personally delivered,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to such party at its address set forth below or such other
address as such party may specify by notice to the parties hereto.
If to ACP or Shareholder to:
Allergy Control Products
c/o ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Management, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
33
With copies to:
Brody, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇, P.C.
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Allergy Control Products
c/o ▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Planet to:
Planet Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & French
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.07 Entire Understanding; No Third Party Beneficiaries. This Agreement
(including the Disclosure Schedule attached hereto and incorporated herein), the
Shareholder Agreements and the Non-Competition Agreements represent the entire
understanding of the parties hereto and thereto with reference to the
transactions contemplated hereby and thereby and this Agreement, the Shareholder
Agreements and the Non-Competition Agreements supersede any and all other oral
or written agreements heretofore made. Nothing in this Agreement, expressed or
implied, is intended to confer upon any Person, other than the parties hereto or
their respective successors, any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
9.08 Effect. No provision of this Agreement shall be construed to require
ACP, Planet, or any Subsidiaries, affiliates or directors of any of them to take
any
34
action or omit to take any action which action or omission would violate
applicable law (whether statutory or common law), rule or regulation.
9.09 Severability. Except to the extent that application of this Section
9.09 would have a Material Adverse Effect on ACP or Planet any term or provision
of this Agreement which is invalid or unenforceable in any jurisdiction shall,
as to that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
9.10 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
9.11 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
PLANET TECHNOLOGIES, INC.
By:_________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and
Chief Executive Officer
ALLERGY CONTROL PRODUCTS
By:_________________________________
Name:
Title:
SHAREHOLDER
_____________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
36
EXHIBIT A
NON-COMPETE/NONDISCLOSURE AGREEMENT
THIS NON-COMPETE AGREEMENT (this "AGREEMENT") is effective as of the
Effective Date, as defined in that Agreement and Plan of Merger entered into
between Planet Technologies Inc. ("PLANET") and Allergy Control Products, Inc.
("ACP"), and is entered into by and between the undersigned shareholder, officer
or director of ACP (the "UNDERSIGNED"), and Planet. The Undersigned and Planet
are sometimes individually referred to as a "PARTY" and collectively as the
"PARTIES." This Agreement is made, in part, with reference to the following
relevant facts:
RECITALS
A. Planet and ACP have entered into a certain Agreement and Plan of Merger,
dated as of March 7, 2005 (the "MERGER AGREEMENT"), which is incorporated
herein by this reference
B. As part of the Merger Agreement, the Parties have agreed to certain
nondisclosure and noncompete provisions (as defined herein).
NOW, THEREFORE, in consideration of the signing of the Merger Agreement by
ACP and as a material inducement therefore, the mutual covenants exchanged
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledge, Undersigned and Planet hereby agree as follows:
1. Noncompete and Nondisclosure.
(a) During the period commencing on ______, 2005 and ending on December
31, 2007, the Undersigned shall not, directly or indirectly, for himself or on
behalf of any other Person, (A) disclose to any Person other than Planet or ACP,
any information relating to the business of Planet or ACP (including without
limitation information relating to accounts, financial dealings, transactions,
trade secrets, Intellectual Property, customer lists and pricing lists), whether
or not marked or otherwise identified as confidential or secret, except for
information generally known in the allergy control products industry, (B)
solicit, divert, take away or attempt to take away any business, with respect to
the products of either Business as presently conducted, or any of ACP's or
Planet's customers or suppliers, or (C) hire any employee or induce or attempt
to induce any employee to leave his or her employment with Planet without the
prior written consent of Planet.
(b) The Undersigned acknowledges that the restrictions contained in
Section 1(a) are reasonably necessary to protect the good will and the
legitimate business interests of Planet and ACP and agree that any violation of
such restrictions will result in irreparable injury to ACP and the Business
acquired by Planet hereunder for which damages will not be an adequate remedy.
EXHIBIT A - Page 1
Planet shall therefore be entitled to preliminary and injunctive relief as well
as to any other remedies at law or in equity available to Planet. The parties
hereto agree that the duration and area for which the covenants set forth in
Section 1(a) are to be effective are reasonable. In the event that any court
determines that the time period or the area, or both of them, are unreasonable,
the parties hereto agree that the covenants shall remain in full force and
effect for the greatest time period and in the greatest area that would not
render them unenforceable.
2. Miscellaneous.
(a) If either Party resorts to litigation to enforce its rights under this
Agreement, the prevailing Party will be entitled to recover its costs and
expenses actually incurred in connection with the action including, but not
limited to, court costs and reasonable attorneys' fees.
(b) If the provisions of this Agreement shall be deemed to create a
restriction which is unreasonable as to scope, duration or geographical area,
the parties agree that the provisions of this Agreement shall be enforceable in
such scope, for such duration and in such geographical area as any court of
competent jurisdiction may determine to be reasonable.
(c) Failure to exercise any right under this Agreement will not constitute
a waiver of such right in the event of a subsequent default.
(d) This Agreement will be governed by the laws of the State of
California.
(e) All notices under this Agreement will be in writing and sent to the
address set forth in the Merger Agreement for Planet and to the last known
address of the Undersigned provided in writing to Planet and will be effective
upon receipt thereof.
(f) This Agreement may not be modified or amended, or any term or
provision hereof waived or discharged, except by a writing signed by the party
against whom such amendment, modification, waiver or discharge is sought to be
enforced.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first above written.
Officer/Director: Planet Technologies, Inc., a California
corporation
____________________________________ By: _____________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Print Name: _________________________
EXHIBIT A - Page 2
EXHIBIT B
FORM OF EMPLOYMENT AGREEMENT
▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: EMPLOYMENT AGREEMENT
Dear Ed,
Planet Technologies, Inc. (the "Company") is pleased to offer you the
position of President/CEO of the Allergy Control Products ("ACP") subsidiary,
pursuant to the terms of this letter agreement ("Agreement"). This Agreement is
made and contingent upon the acquisition of ACP by Planet Technologies, Inc. and
effective on the closing date of such Agreement (the "Effective Date") and will
last for a period of four years from the Effective Date and will automatically
renew on an annual basis unless terminated by either party in writing. You and
the Company hereby agree as follows:
1. DUTIES
You will be expected to do and perform all services, acts or things
necessary or advisable to manage and conduct the business of the ACP and the
Company, including those duties normally associated with the position of
President. You will report to the Company's Chairman and Chief Executive
Officer, unless otherwise assigned by the Company. You will work at the facility
located in Ridgefield, Connecticut. In addition, the company will take all
appropriate steps to insure that upon closing you will be elected to the Board
of Directors of the Company.
2. BASE SALARY AND BENEFITS
Your base salary will be $200,000 per annum, less payroll deductions and
all required withholdings payable weekly on the ACP payroll. You will be
eligible for annual salary increases in line with performance and the company's
guidelines for each year.
You will continue to be reimbursed for your premiums on your healthcare
plan, use of car, cell phone, and other pertinent business expenses and be
eligible for ACP's standard benefits. The Company may modify its benefits from
time to time, as it deems necessary Discretionary Bonus
In addition to your base salary, you will be eligible to earn a
discretionary annual performance bonus ("Bonus") at the discretion of the
Company's Board. The performance Bonus will be for superior performance for
exceeding sales, gross profits and net profit plans for the year. You must be
employed by the Company throughout the year to be eligible for the Bonus. The
Bonus will be pro-rated in the event you are terminated without Cause, but you
will
EXHIBIT B - Page 1
not be eligible if you resign or your employment is terminated with Cause (as
defined below) prior to the date on which the Bonus is awarded.
3. STOCK OPTIONS
Subject to approval of the Board, you will be granted a stock option under
the terms of the Company's 2000 Stock Incentive Plan (the "Plan") to purchase an
amount of Common Stock equal to 3% of then outstanding shares of Common Stock of
the Company, but not less than 100,000 shares (the "Option"). To the maximum
extent possible, the Option shall be an Incentive Stock Option as such term is
defined in Section 422 of the Internal Revenue Code of 1986, as amended. The
Option will be governed by and granted pursuant to a separate Stock Option
Agreement and the Plan. The exercise price per share of the Option will be equal
to the fair market value of the Common Stock established on the date of grant.
The Option will be subject to vesting over four (4) years so long as you provide
continuous service to the Company in accordance with the Plan, according to the
following schedule: 1/4 of the shares subject to the Option will vest upon your
12 month anniversary and 1/48th of the shares subject to the Option will vest at
the end of each monthly period thereafter for a period of three (3) years. If
your employment is terminated without Cause during the first four year period of
this Agreement, then this Option grant will become fully vested.
If you have questions regarding the tax implications of the Stock Option
or any part of your compensation package, please consult with your own tax
advisor.
4. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
During your employment by the Company, you shall devote your full business
energies, interest, abilities and productive time to the proper and efficient
performance of your duties under this Agreement; provided that, you shall not be
precluded from engaging in civic, charitable or religious activities which do
not present any conflict of interest with the Company or affect your performance
of duties for the Company.
Except with the prior written consent of the Board, you will not, during
the term of this Agreement, and any period during which you are receiving
compensation or any other consideration from the Company, including, but not
limited to, severance pay pursuant to Section 6 herein, engage in competition
with the Company, either directly or indirectly, in any manner or capacity, as
adviser, principal, agent, affiliate, promoter, partner, officer, director,
employee, stockholder, owner, co-owner, consultant, or member of any association
or otherwise, in any phase of the business of developing, manufacturing and
marketing of products or services which are in the same field of use or which
otherwise compete with the products or services or proposed products or services
of the Company.
During the term of this Agreement, you agree not to acquire, assume or
participate in, directly or indirectly, any position, investment or interest
known by you to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise or in any company, person or entity that is,
directly or indirectly, in competition with the business of the Company.
Ownership by you, as a passive investment, of less than two percent (2%) of the
outstanding shares of capital stock of any corporation with one or more classes
of its capital stock listed on a
EXHIBIT B - Page 2
national securities exchange or publicly traded on the Nasdaq Stock Market or in
the over-the-counter market shall not constitute a breach of this paragraph.
5. TERMINATION
The Company may terminate your employment at any time and for any or no
reason, with or without Cause (as defined herein) or advance notice by giving
written notice of such termination, subject to the provisions stated herein.
Similarly, you may terminate your employment with the Company at any time at
your election, in your sole discretion, for any or no reason. The "at will"
nature of your employment relationship may not be modified except by a written
agreement signed by the Chairman of the Board.
If the Company terminates your employment without Cause (as defined
herein) at any time during the term of your employment, then upon your
furnishing to the Company and effective release and waiver of claims and
continued compliance with Section 4 herein and your Proprietary Information and
Inventions Agreement with the Company, you shall be entitled to receive
severance payments in the form of continuation of your base salary in effect at
the time of your termination, subject to standard deductions and withholdings,
for the period of 36 months minus the number of months you were employed after
the Effective Date, but not less than a period of twelve (12) months.
6. DEFINITIONS.
For purposes of this Agreement, "Cause" for the Company to terminate your
employment hereunder shall mean the occurrence of any of the following events:
(a) your repeated failure to satisfactorily perform your reasonably
assigned job duties on behalf of the Company;
(b) your commission of an act that materially injures the business of the
Company;
(c) your refusal or failure to follow lawful and reasonable directions of
the Board or the appropriate individual to whom you report;
(d) your conviction of a felony involving moral turpitude that is likely
to inflict or has inflicted material injury on the business of the Company;
(e) your engagement or in any manner participating in any activity which
is directly competitive with or intentionally injurious to the Company or which
violates any material provisions of Section 5 hereof or your Proprietary
Information and Inventions Agreement with the Company; or
(f) your commission of any fraud against the Company, employees, agents or
customers or use or intentional appropriation for his personal use or benefit of
any funds or properties of the Company not authorized by the Board to be so used
or appropriated.
EXHIBIT B - Page 3
7. COMPANY POLICY
As a Company employee, you will be expected to abide by Company rules and
policies. The Company's policies may be modified from time to time at the sole
discretion of the Company, with the exception of the Company's "at will"
employment policy, which may only be modified by a signed agreement with
Company's Chief Executive Officer.
Normal working hours are 40 hours a week, Monday through Friday. As an
exempt salaried employee, you will be expected to work additional hours as
required by the nature of your work assignments.
8. PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
As a condition of employment, you will be required to sign and comply with
the Proprietary Information and Inventions Agreement, attached hereto as Exhibit
A, which prohibits unauthorized use or disclosure of the Company's proprietary
information, among other things.
In your work for the Company, you will be expected not to use or disclose
any confidential information, including trade secrets, of any former employer or
other person to whom you have an obligation of confidentiality. Rather, you will
be expected to use only that information which is generally known and used by
persons with training and experience comparable to your own, which is common
knowledge in the industry or otherwise legally in the public domain, or which is
otherwise provided or developed by the Company. During our discussions about
your proposed job duties, you assured us that you would be able to perform those
duties within the guidelines just described.
You agree that you will not bring onto Company premises any unpublished
documents or property belonging to any former employer or other person to whom
you have an obligation of confidentiality.
9. ENTIRE AGREEMENT
This Agreement, together with your Proprietary Information and Inventions
Agreement and the stock documents referred to herein, forms the complete and
exclusive statement of the terms of your employment with the Company. The
employment terms in this Agreement supersede any other agreements or promises
made to you by anyone, whether oral or written.
10. GOVERNING LAW
This Agreement will be governed by and construed according to the laws of
the State of California. You hereby expressly consent to the personal
jurisdiction of the state and federal courts located in San Diego, California
for any lawsuit filed there against you by the Company arising from or related
to this Agreement.
11. SUCCESSORS AND ASSIGNS.
This Agreement will be binding upon your heirs, executors, administrators
and other legal representatives and will be binding upon and shall inure to the
benefit of the Company, its
EXHIBIT B - Page 4
successors, and its assigns. The term "Company" as used herein shall include
such successors and assigns to the extent applicable.
As required by law, this offer is subject to satisfactory proof of your
right to work in the United States.
Please sign and date this Agreement, and return it to me as soon as
possible, if you wish to accept employment with the Company under the terms
described above.
We look forward to your favorable reply and to a productive and enjoyable
work relationship.
Sincerely,
PLANET TECHNOLOGIES, INC.
By: ________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Accepted:
___________________________________________
___________________________________________
Date
Attachment: Exhibit A: Proprietary Information and Inventions Agreement
EXHIBIT B - Page 5
EXHIBIT A TO
FORM OF EMPLOYMENT AGREEMENT
EMPLOYEE'S PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by PLANET
TECHNOLOGIES, INC. (the "COMPANY"), and the compensation received by me from the
Company from time to time, I hereby agree as follows:
12. PROPRIETARY INFORMATION.
(a) RECOGNITION OF COMPANY'S RIGHTS. All Proprietary Information shall be
the sole property of the Company and its assignees. I hereby assign to the
Company any rights I may have or acquire in all Proprietary Information. At all
times during my employment by the Company and at all times after termination of
such employment, I will keep in confidence and trust all Proprietary
Information, and I will not disclose, sell, use, lecture upon or publish any
Proprietary Information or anything relating to it without the written consent
of the Company, except as may be necessary in the ordinary course of performing
my duties as an employee of the Company, or unless an officer of the Company
expressly authorizes such in writing.
(b) PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" shall mean
any and all confidential and/or proprietary knowledge, data or information of
the Company, whether in oral, written, graphic or electronic form. By way of
illustration, but not limitation, "PROPRIETARY INFORMATION" includes (a) trade
secrets, know-how, inventions, ideas, tangible and intangible information
relating to antibodies and other biological materials, cell lines, samples of
assay components, media and/or cell lines and procedures and formulations for
producing any such assay components, media and/or cell lines, formulations,
compounds, products, processes, designs, formulas, methods, techniques,
programs, software models, algorithms, developmental or experimental work,
clinical or other data, compilations of data, other works of authorship,
improvements and discoveries (hereinafter collectively referred to as
"INVENTIONS"); (b) information regarding plans for research and development, new
products, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, suppliers, customers,
licensees and strategic partners, and the existence and terms of any business
discussions, negotiations or agreements to which the Company is a party; and (c)
information regarding the skills and compensation of other employees or
consultants of the Company.
(c) NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS. I
represent that I have not brought and will not bring with me to the Company or
use in the performance of my responsibilities at the Company any equipment,
supplies, facility or trade secret information of any former employer or any
other person to whom I have an obligation of confidentiality which is not
generally available to the public, unless I have obtained written authorization
for its possession and use.
EXHIBIT B - Page 1
13. ASSIGNMENT OF INVENTIONS.
(a) The term "PROPRIETARY RIGHTS" shall mean all trade secrets, patents,
copyrights, trademarks, mask works, moral rights and other intellectual property
rights throughout the world.
(b) ASSIGNMENT OF INVENTIONS. Subject to Sections 2(f) and 2(g), I agree
that all Inventions (and all Proprietary Rights with respect thereto) shall be
the sole property of the Company and its assigns. I hereby assign to the Company
any right, title and interest I may have or acquire in and to all Inventions
(and all Proprietary Rights with respect thereto). If I have any rights to the
Inventions (or Proprietary Rights with respect thereto) that cannot be assigned
to the Company, I unconditionally and irrevocably waive the enforcement of such
rights and all claims and causes of action of any kind against the Company with
respect to such rights. I agree, at the Company's request and expense, to
consent to and join in any action to enforce such rights. If I have any right to
the Inventions (or Proprietary Rights with respect thereto) that cannot be
assigned to the Company or waived by me, I unconditionally and irrevocably grant
to the Company during the term of such rights, an exclusive, irrevocable,
perpetual, worldwide, fully paid and royalty-free license, with rights to
sublicense through multiple levels of sublicensees, to make, have made, use,
offer for sale, sell, import, reproduce, create derivative works of, distribute,
publicly perform and publicly display by all means now known or later developed,
such rights.
(c) ASSISTANCE. I further agree to assist the Company in every proper way
(but at the Company's expense) to obtain, and from time to time enforce, the
Proprietary Rights in any and all Inventions, including, but not limited to
applying for and obtaining such patents thereon and enforcing same, as the
Company may desire, together with any assignments thereof to the Company or
persons designated by it. My obligation to assist the Company in obtaining and
enforcing Proprietary Rights in the Inventions in any and all countries shall
continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after such termination for time actually
spent by me at the Company's request on such assistance. In the event that the
Company is unable for any reason whatsoever to secure my signature to any lawful
and necessary document required to obtain or enforce any Proprietary Rights with
respect to any Invention (including renewals, extension, continuations,
divisions or continuations in part thereof), I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents, as my agents
and attorneys-in-fact to act for and in my behalf and instead of me, to execute
and file any such documents and to do all other lawfully permitted acts to
further execution or enforcement of Proprietary Rights with the same legal force
and effect as if executed by me.
(d) PRIOR INVENTIONS. As a matter of record I have attached hereto as
EXHIBIT A a complete list of all inventions or improvements which have been made
or conceived or first reduced to practice by me, alone or jointly with others,
prior to the commencement of my employment by the Company which I desire to
remove from the operation of this Agreement (collectively referred to as "PRIOR
INVENTIONS"); and I covenant that such list is complete. If disclosure of any
such Prior Inventions would cause me to violate any prior confidentiality
agreement, I understand that I should not list such Prior Invention in EXHIBIT A
but will disclose a cursory name for each such invention, a listing of the
party(ies) to whom it belongs, and the fact that full disclosure as to such
Prior Invention has not been made for that reason. If no such disclosure is
attached to this Agreement, I represent that I have made no such inventions and
EXHIBIT B - Page 2
improvements at the time of signing this Agreement. If, in the course of my
employment with the Company, I incorporate a Prior Invention into an Invention
or a Company product or process, the Company is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with
rights to sublicense through multiple tiers of sublicensees) to make, have made,
use, offer for sale, sell, import, reproduce, create derivative works of,
distribute, publicly perform and publicly display by all means now known or
later developed such Prior Invention. Notwithstanding the foregoing, I agree
that I will not incorporate, or permit to be incorporated, Prior Inventions in
any Invention or Company product or process without the Company's prior written
consent.
(e) OBLIGATION TO KEEP COMPANY INFORMED. I will promptly and fully in
writing disclose to the Company all Inventions authored, conceived or reduced to
practice or learned by me, either alone or jointly with others, during the
period of my employment and for one (1) year after termination of this
Agreement, including any that may be covered by Section 2870 of the California
Labor Code.
(f) GOVERNMENT OR THIRD PARTY. I also agree to assign all my right, title
and interest in and to any particular Invention to a third party, including
without limitation the United States, as directed by the Company.
(g) NONASSIGNABLE INVENTIONS. This Agreement does not apply to inventions
which qualify fully for protection under Section 2870 of the California Labor
Code, which are ideas or inventions for which no equipment, supplies, facility
or trade secret information of the Company was used and which were developed
entirely on my own time, and (1) which do not relate (a) directly to the
business of the Company, or (b) to the Company's actual or demonstrably
anticipated research or development, or (2) which do not result from any work
performed by me for the Company. Notwithstanding the foregoing, I shall disclose
in confidence to the Company any invention in order to permit the Company to
make a determination as to compliance by me with the terms and conditions of
this Agreement.
14. NO CONFLICT OF INTEREST. I agree that during the period of my employment
by the Company and any period during which I am receiving compensation or any
other consideration from the Company, including, but not limited to, any
severance pay, I will not, without the Company's prior written consent, engage
in any employment or business activity which is competitive with the business of
the Company or any of its affiliates, either directly or indirectly, in any
manner or capacity, as adviser, principal, agent, affiliate, promoter, partner,
officer, director, employee, stockholder, owner, co-owner, consultant or
otherwise, in any phase of the business of developing, manufacturing and
marketing of products or services which are in the same field of use or which
otherwise compete with the products or services or proposed products or services
of the Company or any of its affiliates. My ownership, as a passive investment,
of less than two percent (2%) of the outstanding shares of capital stock of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or publicly traded on the Nasdaq Stock Market or in the
over-the-counter market shall not constitute a breach of this Section 3.
15. NON-SOLICITATION. I agree that for a period of one (1) year following
termination of my employment with the Company, I will not solicit or in any
manner encourage any employee,
EXHIBIT B - Page 3
independent contractor or consultant of the Company to leave employment or
service with the Company.
16. NO CONFLICTING OBLIGATIONS. I represent that my performance of all the
terms of this Agreement and that my employment by the Company do not and will
not breach any agreement to keep in confidence proprietary information acquired
by me in confidence or in trust prior to my employment by the Company. I have
not entered into, and I agree I will not enter into, any agreement either
written or oral in conflict herewith.
17. RETURN OF COMPANY MATERIALS. All drawings, notes, memoranda,
specifications, documents, data, devices, records, apparatus, equipment,
chemicals, molecules, organisms and other physical property, including any
copies thereof, whether or not pertaining to Proprietary Information, furnished
to me by the Company or produced by myself or others in connection with my
employment shall be and remain the sole property of the Company and shall be
returned promptly to the Company upon termination of this Agreement for any
reason, or earlier if requested by the Company, and I will not retain or take
with me any such property or any reproduction of such property.
18. GENERAL PROVISIONS.
(a) Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the
party shall specify in writing. Such notice shall be in writing and shall be
deemed given (i) upon personal delivery to the appropriate address, (ii) upon
delivery by facsimile transmission with receipt confirmed, (iii) if sent by
certified or registered mail, postage prepaid, three (3) days after the date of
mailing, or (iv) if sent by overnight courier, the next business day such
courier regularly makes deliveries.
(b) This Agreement will be governed by and construed according to the laws
of the State of California, as such laws are applied to agreements entered into
and to be performed entirely within the State of California between California
residents. I hereby expressly consent to the personal jurisdiction of the state
and federal courts located in San Diego County, California for any lawsuit filed
there against me by Company arising from or related to this Agreement.
(c) Because my services are personal and unique and because I may have
access to and become acquainted with the Proprietary Information of the Company,
I acknowledge and agree that, if I were to breach this Agreement, the Company
would suffer an irreparable injury such that no remedy at law would adequately
protect or appropriately compensate the Company for such injury. Accordingly, I
agree that the Company shall have the right to enforce this Agreement and any of
its provisions by injunction, specific performance or other equitable relief,
without bond and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.
(d) This Agreement (including any exhibits hereto) contains the final,
complete and exclusive agreement of the parties relative to the subject matter
hereof and supersedes all prior and contemporaneous understandings and
agreements relating to said subject matter. This
EXHIBIT B - Page 4
Agreement may not be changed, modified, amended or supplemented except by a
written instrument signed by both parties.
(e) If any provision of this Agreement shall be declared invalid, illegal
or unenforceable, such provision shall be severed and all remaining provisions
shall continue in full force and effect.
(f) This Agreement shall be binding upon my heirs, executors,
administrators and other legal representatives and me and shall inure to the
benefit of the Company, its successors and assigns.
(g) The waiver from time to time by the Company of any of its rights or
the Company's failure to exercise any remedy shall not operate or be construed
as a continuing waiver of same or of any other of the Company's rights or
remedies provided in this Agreement.
(h) I agree and understand that nothing in this Agreement shall confer any
right with respect to continuation of employment by the Company, nor shall it
interfere in any way with my right or the Company's right to terminate my
employment at any time, with or without cause, nor shall it obligate the Company
to make any payment to me based upon termination of my employment.
This Agreement shall be effective as of the first day of my employment by
the Company.
Dated: ____________, 2004 By: _____________________________
Printed Name: ___________________
Title: __________________________
ACCEPTED AND AGREED TO:
PLANET TECHNOLOGIES, INC.
By: ______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman and Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT B - Page 5
EXHIBIT A TO
EMPLOYEE'S PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
TO: PLANET TECHNOLOGIES, INC.
FROM:________________________
DATE:________________________
SUBJECT: PREVIOUS INVENTIONS
1. Except as listed in Section 2 below, the following is a complete list of all
inventions or improvements relevant to the subject matter of my employment by
Planet Technologies, Inc. (the "COMPANY") that have been made or conceived or
first reduced to practice by me alone or jointly with others prior to my
engagement by the Company:
[ ] No inventions or improvements.
[ ] See below:
____________________________________________________________________
____________________________________________________________________
[ ] Additional sheets attached.
2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):
INVENTION OR IMPROVEMENT PARTY(IES) RELATIONSHIP
1. ________________________ _______________ _______________________
2. ________________________ _______________ _______________________
[ ] Additional sheets attached.
By signing below, I acknowledge that I have read this Agreement document
carefully, understand it fully and agree to its terms and conditions. I
understand that signing this Agreement is a condition of employment
Print Name
Signature Date
EXHIBIT B - Page 6
TABLE OF CONTENTS
RECITALS
ARTICLE I
CERTAIN DEFINITIONS
1.01 Certain Definitions.................................................... 1
ARTICLE II
THE MERGER
2.01 The Merger............................................................. 4
2.02 Effective Date and Effective Time...................................... 5
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01 Effect on Capital Stock................................................ 6
3.02 Conversion of ACP Common Stock......................................... 6
3.03 Rights as Shareholder; Stock Transfers................................. 6
3.04 Intentionally left blank............................................... 6
3.05 Exchange Procedures.................................................... 6
3.06 Anti-Dilution Provisions............................................... 7
ARTICLE IV
ACTIONS PENDING ACQUISITION
4.01 Forebearances of ACP and Planet........................................ 7
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 Disclosure Schedules................................................... 10
5.02 Standard............................................................... 10
5.03 Representations and Warranties of ACP.................................. 10
5.04 Representations and Warranties of Planet............................... 17
i
ARTICLE VI
COVENANTS
6.01 Reasonable Best Efforts................................................ 20
6.02 Shareholder Approval................................................... 20
6.03 Registration Statement................................................. 21
6.04 Press Releases......................................................... 21
6.05 Access; Information.................................................... 22
6.06 Employment of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇......................................... 23
6.07 Acquisition Proposals.................................................. 23
6.08 Certain Policies....................................................... 24
6.09 Benefit Plans.......................................................... 24
6.10 Non-competition Agreements............................................. 24
6.11 Notification of Certain Matters........................................ 24
6.12 Human Resources Issues................................................. 24
6.13 Assistance with Third-Party Agreements................................. 25
6.14 Shareholder Covenants.................................................. 25
6.15 Additional Agreements.................................................. 27
6.16 Pre-Closing Adjustments................................................ 27
6.17 ACP Stock Options and Rights........................................... 27
6.18 Audited ACP Financial Statements....................................... 27
6.19 Tax Treatment of the Merger............................................ 27
6.20 Payment of Shareholder Debt............................................ 28
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 Conditions to Each Party's Obligation to Effect the Merger............. 28
7.02 Conditions to Obligation of ACP........................................ 28
7.03 Conditions to Obligation of Planet..................................... 29
ARTICLE VIII
TERMINATION
8.01 Termination............................................................ 31
8.01 Effect of Termination and Abandonment.................................. 31
ii
ARTICLE IX
MISCELLANEOUS
9.01 Survival............................................................... 32
9.02 Waiver; Amendment...................................................... 32
9.03 Counterparts........................................................... 33
9.04 Governing Law, Jurisdiction and Venue.................................. 33
9.05 Expenses............................................................... 33
9.06 Notices................................................................ 33
9.07 Entire Understanding; No Third Party Beneficiaries..................... 34
9.08 Effect................................................................. 34
9.09 Severability........................................................... 35
9.10 Enforcement of the Agreement........................................... 35
9.11 Interpretation......................................................... 35
iii
