UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
Planet Technologies, Inc.
(Name of Issuer)
Common Shares, no par value
(Title of Class of Securities)
727044 20 8
(Cusip Number)
Jonathan T. Dawson
354 Pequot Avenue
Southport, CT 06890
(203) 254-0091
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 11, 2005
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Sect. 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Sect. 240.13d-7 for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
Persons who respond to the collection of information contained in this
form are not required to respond unless the form displays a currently
valid OMB control number.
SEC 1746 (11-03)
CUSIP No. 727044 20 8
1.
Name of Reporting Person:
Jonathan T. Dawson
I.R.S. Identification Nos. of above persons (entities only):
2.
Check the Appropriate Box if a Member of a Group (See Instructions):
(a) [ ]
(b) [ ]
3.
SEC Use Only:
4.
Source of Funds (See Instructions):
PF
5.
Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e): [ ]
6.
Citizenship or Place of Organization:
United States
Number of
Shares
Beneficially
Owned by
Each Reporting
Person With
7.
Sole Voting Power:
600,000
8.
Shared Voting Power:
0
9.
Sole Dispositive Power:
600,000
10.
Shared Dispositive Power:
0
11.
Aggregate Amount Beneficially Owned by Each Reporting Person:
600,000
12.
Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): []
13.
Percent of Class Represented by Amount in Row (11):
15.1%
14.
Type of Reporting Person (See Instructions):
IN
Item 1. Security and Issuer
This statement on Schedule 13D (this "Statement") relates
to the common stock, no par value (the "Common Shares"), of Planet
Technologies, Inc., a California corporation ("Planet" or the
"Company"). The principal executive offices of Planet are
located at 6835 Flanders Drive, Suite 100, San Diego, California 92121.
Item 2. Identity and Background
(a) Jonathan T. Dawson ("Reporting Person")
(b) 354 Pequot Avenue, Southport, CT 06890
(c) Portfolio Manager
(d) During the last five years, the Reporting Person has not
been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).
(e) During the last five years, the Reporting Person has not been
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction which resulted in a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities law or finding any
violations with respect to such laws.
(f) United States.
Item 3. Source and Amount of Funds or Other Consideration
The common stock shares of Planet were issued to the Reporting
Person as consideration for his shares of Allergy Control Products,
Inc. ("ACP"), and pursuant to that Agreement and Plan of Merger entered
into by Planet and ACP dated March 7, 2005 wherein ACP merged into a
wholly owned subsidiary of Planet.
Item 4. Purpose of Transaction
The Reporting Person has not formulated any plans, proposals or
otherwise that relate to or would otherwise result in any matter required
to be disclosed pursuant to paragraphs (a) through (j) of Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) The Reporting Person beneficially owns 600,000 shares of common
stock of Planet, or 15.1% of the total outstanding common stock of Planet.
(b) The Reporting Person has the sole power to vote and dispose or
direct the disposition of all 600,000 shares of common stock of Planet.
(c) Other than the transaction reported on this Schedule 13D, the
Reporting Person has not effected any transaction in shares of the common
stock of Planet during the preceding 60 days.
(d) No other person is known to have the right to receive the power
to direct the receipt of dividends from, or proceeds from the sale of,
such securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Shares were issued pursuant to the terms of the Agreement and Plan
of Merger.
Item 7. Material to be Filed as Exhibits
Exhibit 1. Agreement and Plan of Merger, and amendments thereto,
between Planet and ACP dated March 7, 2005.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete, and correct.
REPORTING PERSON:
Date: January 31, 2006
By:
/s/ Jonathan T. Dawson
Jonathan T. Dawson
Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001)
EXHIBIT 1
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
Jonathan T. Dawson
AGREEMENT AND PLAN OF MERGER, dated as of March 7, 2005 (this
"Agreement"), by and between Allergy Control Products, Inc.,
a Delaware corporation ("ACP"),\ JonathanT. Dawson
("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).
"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).
"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 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 Jon Dawson.
"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 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 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.
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 transferson 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. 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.
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 indirectly adjust, split,
combine, redeem, reclassify, purchase or otherwise acquire, any share
s 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.
(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.
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.
(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. 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 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).(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. 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 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 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. (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 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 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. 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 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. 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
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.
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 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.
6.03. Registration Statement. 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 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. 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 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 Edward J. Steube. Planet and ACP shall use their
best efforts to cause Planet and Edward J. Steube to enter into an
employment agreement for the employment of Mr.Steube 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 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. 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 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. 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.
(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.
(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 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 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.
(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
Blanchard, Krasner & French or other reasonably acceptable counsel,
as counsel to Planet and the opinion of Brody, Wilkinson and Ober,
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.
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. 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, 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.
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 Jonathan T. Dawson
Dawson Herman Capital Management, Inc.
354 Pequot Avenue
P.O. Box 760
Southport, CT 06890
Telephone: (203) 254-0091
Facsimile: (203) 254-0657
With copies to:
Brody, Wilkinson and Ober, P.C.
Attention: Seth L. Brody, Esq.
2507 Post Road
Southport, CT 06890
Telephone: (203) 319-7100
Facsimile: (203) 254-1772
Allergy Control Products
c/o Ed Stuebe
96 Danbury Road
Ridgefield, CT 06877
Telephone: (203) 438-9580
Facsimile: (203) 431-8963
If to Planet to:
Planet Technologies, Inc.
6835 Flanders Drive, Ste. 500
San Diego, CA 92121
Telephone: (858) 824-0888
Facsimile: (858) 824-0891
With a copy to:
Blanchard, Krasner & French
Attention: Robert W. Blanchard, Esq.
800 Silverado Street, Second Floor
La Jolla, CA 92037
Telephone: (858) 551-2440
Facsimile: (858) 551-2434
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 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".
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: Scott L. Glenn
Title: President and
Chief Executive Officer
ALLERGY CONTROL PRODUCTS
By:_________________________________
Name:
Title:
SHAREHOLDER
____________________________________
Jonathan T. Dawson
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. 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:
______________________________________
Print Name: ___________________________
Planet Technologies, Inc., a California
corporation
By: _____________________________
Scott L. Glenn, President
EXHIBIT B
FORM OF EMPLOYMENT AGREEMENT
Ed Steube
96 Danbury Road
Ridgefield, CT 06877
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 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 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.
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 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:
Scott L. Glenn
Chairman and Chief Executive Officer
Accepted:
Date
Attachment: Exhibit A: Proprietary Information and
Inventions Agreement
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.
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
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, 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 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: ______________________________
Scott L. Glenn
Chairman and Chief Executive Officer
Address: 6402 Cardeno Drive
La Jolla, Ca 92037
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 s
ubject 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:
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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
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
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 Edward J. Steube 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
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