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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 30, 1999
PLANET POLYMER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
0-26804 33-0502606
(Commission File No.) (IRS Employer Identification No.)
9985 BUSINESSPARK AVENUE, SUITE A
SAN DIEGO, CALIFORNIA 92131
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (858) 549-5130
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On December 30, 1999, Planet Polymer Technologies, Inc. (the "Company")
and its wholly-owned subsidiary Deltco of Wisconsin, Inc. ("Deltco") entered
into a Stock Purchase Agreement (the "Purchase Agreement") with Daniel B.
Mettler and Randy J. Larson (together, the "Buyers") whereby the Company sold
and the Buyers purchased all of the outstanding shares of stock of Deltco for an
aggregate purchase price of $1,000,000. The Buyers are management employees of
Deltco and the purchase price was determined during arms-length negotiations
between the parties.
In January 1996, the Company acquired Deltco, a manufacturer and
reprocessor of thermoplastic scrap resins that can be used in a variety of
applications, either blended with other polymer materials or alone. Since
January 1996, the Company has maintained Deltco as a wholly-owned subsidiary,
and has used Deltco's plant, which is located in Ashland, Wisconsin, equipment
and other physical property to manufacture recycled polypropylene.
The Company hereby incorporates by reference the Purchase Agreement and
the contents of the news release announcing the signing of the Purchase
Agreement filed as Exhibits 2.1 and 99.1, respectively, to this report.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(b) PRO FORMA FINANCIAL INFORMATION
(i) The pro forma financial statements required by this report
will be filed by amendment within 60 days of the filing of this report.
(c) EXHIBITS
2.1 Stock Purchase Agreement dated as of December 30, 1999
between Planet Polymer Technologies, Inc., Deltco of Wisconsin, Inc. and
Daniel B. Mettler and Randy J. Larson.
99.1 Press release, dated January 10, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PLANET POLYMER TECHNOLOGIES, INC.
Dated: January 14, 2000 By: /s/ Robert J. Petcavich
------------------------------------
Robert J. Petcavich, Ph.D.
Chairman, Chief Executive Officer
and President
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INDEX TO EXHIBITS
2.1 Stock Purchase Agreement dated as of December 30, 1999
between Planet Polymer Technologies, Inc., Deltco of Wisconsin, Inc. and Daniel
B. Mettler and Randy J. Larson.
99.1 Press release, dated January 10, 2000.
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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is made and entered into by and between
Planet Polymer Technologies, Inc., a California corporation (Seller), Deltco of
Wisconsin, Inc., a Wisconsin corporation (Deltco), and Daniel B. Mettler and
Randy J. Larson (Buyers).
WHEREAS, Daniel B. Mettler has been an employee of Deltco for approximately
9 (nine) years and is currently President and General Manager of Deltco; and
WHEREAS, Randy J. Larson has been an employee of Deltco for approximately 2
(two) years and is currently Sales Manager of Deltco; and
WHEREAS, Seller is a public corporation with its principal place of
business in California; and
WHEREAS, Seller acquired Deltco in January 1996 and maintains Deltco as a
wholly-owned subsidiary; and
WHEREAS, as management employees of Deltco, Buyers are familiar with
Deltco's business, assets, liabilities, operations, products, facilities,
contracts, financial performance, and prospects; and
WHEREAS, the Seller owns 900 shares of the common stock of Deltco, which
constitutes all of the outstanding shares of stock of Deltco; and
WHEREAS, the Seller wishes to sell such shares to the Buyers and the Buyers
wish to purchase such shares from the Seller; and
WHEREAS, the parties have determined that it is in their respective best
interests that Buyers collectively purchase all of the issued and outstanding
capital stock of Deltco from Seller,
NOW, THEREFORE, in exchange for the valuable consideration provided for
herein, the undersigned, intending to be legally bound hereby, agree as follows:
SECTION l. SALE AND PURCHASE.
1.1 SALE AND PURCHASE OF SHARES. At closing, the Seller will sell, assign,
transfer and deliver to the Buyers and the Buyers will purchase, accept and
receive from the Seller, on the terms and subject to the conditions set forth
herein, the 900 shares of common stock of Deltco referred to above.
1.2 PURCHASE PRICE.
a. The aggregate purchase price payable by the Buyer for the Deltco shares
is $1,000,000.00, with such amount to be paid as hereinafter provided.
The purchase price in this transaction is based on Deltco's net worth on
11-27-99, which is the agreed valuation date, with the understanding that the
$738,371.00 on Deltco's 11-27-99 balance sheet as being due to Deltco from
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Planet will be removed from Deltco's balance sheet prior to closing. Deltco's
11-27-99 balance sheet is an integral part of this agreement and is incorporated
herein by reference. Seller will not withdraw any funds or other amounts from
Deltco and will not cause or allow any transaction to occur which will
negatively affect Deltco's financial condition between the 11-27-99 valuation
date and the closing of this transaction, except for the removal of the
aforesaid amount due to Deltco from Planet.
b. Earnest money in the amount of $50,000.00 has been paid by the Buyers.
Such earnest money shall be applied towards the purchase price at closing.
1.3 CLOSING.
a. The closing of this transaction will occur effective December 30, 1999
through Northern State Bank, 32l West Main Street, Ashland, Wisconsin. Seller
and Buyers will agree to an exact closing time and date at a mutually convenient
time, as soon as Buyers financing allows closing to occur. Such closing will
occur via the mail through Northern State Bank or as otherwise agreed to between
the parties.
b. At closing, Daniel B. Mettler and Randy J. Larson will pay $100,000.00
in cash, or the equivalent, to Deltco and in exchange Deltco will immediately
issue:
i. Fifty (50) shares of its common stock to Daniel B. Mettler and;
ii. Fifty (50) shares of its common stock to Randy J. Larson.
After such 100 new shares of Deltco stock are issued, Deltco will have a
total of 1,000 shares of its common stock outstanding.
c. Thereafter, at closing, Deltco will borrow up to $800,000.00 from
Northern State Bank (or in combination with such other entities as are
designated by Daniel B. Mettler and Randy J. Larson) and in connection with such
loan, Deltco will execute and deliver such notes, mortgages, security
agreements, financing statements and other documents as the lenders may
reasonably require. Seller will not be liable or responsible for payment of any
such $800,000.00 loan to Deltco.
d. Thereafter, at closing, $1,000,000.00, in the form set forth below, will
be paid by Deltco to the Seller to redeem the 900 shares of Deltco common stock
held by the Seller. Deltco will pay such $1,000,000.00 to Seller in exchange for
Seller endorsing and surrendering all of it's 900 shares of Deltco stock to
Deltco so such stock can be held by Deltco as treasury stock. That will result
in Daniel B. Mettler and Randy J. Larson being the sole remaining shareholders
of Deltco with Deltco being liable and responsible for repayment of the
$800,000.00 loan.
e. At closing, the $1,000,000.00 purchase price will be paid to Seller as
follows:
i. By payment of $900,000.00 in cash or the equivalent, with part
of such amount being the $50,000.00 earnest money already paid to Seller;
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and
ii. By delivery of a promissory note to Seller from Deltco in the
principal amount of $100,000.00. Such promissory note will provide that
Deltco promises to pay Seller the principal amount of $100,000.00 with
interest at eight (8) percent per annum as follows:
$1,213.28 on the date one month from the date of such note and the
like sum of $1,213.28 on the same date of each successive month
thereafter for a period of three (3) years. On the date three (3)
years from the date of such note, the entire remaining balance of
principal and interest shall be immediately due and payable to the
order of Seller in a single lump sum balloon payment. Such note will
be secured by a General Business Security Agreement and UCC Financing
Statement, which are subordinate, in terms of priority, to the other
notes, mortgages, security agreements, financing statements and
security agreements which are used in connection with this sale. Such
note will also be personally guaranteed by Daniel B. Mettler and Randy
J. Larson.
For illustrative purposes, a loan amortization schedule is annexed hereto
and is incorporated herein by reference.
1.4 DELIVERIES AT CLOSING.
At Closing:
a. The Seller will deliver to the Buyer the stock certificate representing
the Seller's 900 shares of Deltco stock properly endorsed by the Seller to
Deltco.
b. The Buyer will pay to the Seller the purchase price in the form of
the cash and promissory note referred to above.
c. The Seller will execute and deliver to the Buyer and Deltco a
certificate (the "Closing Certificate"), setting forth the Seller's
representations and warranties that each of the representations and warranties
made by Deltco and Seller in this agreement was accurate in all respects as of
the date of this agreement and as of the date of closing and that each of the
covenants and obligations that Deltco and the Seller are required to have
complied with or performed pursuant to this agreement at or prior to closing
have been duly completed.
d. The Buyer will execute and deliver to the Seller a certificate (the
"Buyers' Certificate"), setting forth the Buyers' representations and warranties
that each of the representations and warranties made by the Buyers in this
agreement was accurate in all respects as of the date of this agreement and as
of the date of closing and that each of the covenants and obligations that the
Buyers are required to have complied with or performed pursuant to this
agreement at or before closing have duly been completed.
e. The Seller will deliver to Buyers written resignations from each
existing officer and director of Deltco which are then effective.
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1.5 1999 FEDERAL AND STATE INCOME TAX RETURNS.
The Seller will file, when due, Deltco's 1999 federal and state income tax
returns and all federal income taxes, if any, which Deltco owes for calendar
year 1999, will be paid by Seller. All state income taxes, if any, which Deltco
owes for calendar year 1999, will be paid by Deltco.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF DELTCO AND THE SELLER.
Except as described in the Disclosure Schedule, attached hereto, Deltco and
the Seller jointly and severally represent and warrant, as follows:
2.1 DUE ORGANIZATION.
a. Deltco is a corporation duly organized, validly existing and in good
standing under the laws of Wisconsin and has all necessary power and authority:
i) to conduct its business in the manner in which its business is
currently being conducted and in which its business is proposed to be
conducted;
ii) to own and use its assets in the manner in which its assets are
currently owned and used; and
iii) to perform its obligations under all Deltco Contracts to which it
is a party, or to which it or any of its assets is or may become bound, or
under which it has, or may become subject to, any obligations.
b. Deltco has no subsidiaries, and Deltco has never owned, beneficiary or
otherwise, any shares or other securities of, or any direct or indirect interest
of any nature in, any Entity.
2.2 CERTIFICATE OF INCORPORATION AND BYLAWS; RECORDS.
a. At closing, Deltco will deliver to the Buyers accurate and complete
copies of its certificate of incorporation and bylaws, including all amendments
thereto;
b. At closing, Deltco will deliver to the Buyers the original of all it's
stock records and the minutes and other records of the meetings and other
proceedings (including any actions taken by written consent or otherwise without
a meeting) of its shareholders, board of directors and all committees of its
board of directors.
c. The Seller represents that since January l, 1996:
i) There have been no meetings or other proceedings of the
shareholders of Deltco, the board of directors of Deltco or any committee
of the board of directors of Deltco that are not fully reflected in such
minutes or other records.
ii) There has not been any violation of any of the provisions of
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the articles of incorporation or bylaws of Deltco or of any resolution
adopted by the shareholders of Deltco, the board of directors of Deltco or
any committee of the board of directors of Deltco; and no event has
occurred, and no condition or circumstance exists, that might (with or
without notice or lapse of time) constitute or result directly or
indirectly in such a violation.
iii) The books of account, stock record, minute books and other
records of Deltco are accurate, up-to-date and complete, and have been
maintained in accordance with sound and prudent business practices. All of
the records of Deltco are in the actual possession and direct control of
Deltco.
2.3 CAPITALIZATION.
a. Deltco has issued and outstanding a total of 900 shares of it's stock,
all of which are owned solely by the Seller. No additional shares will be issued
except as specifically set forth herein.
b. The Seller and the Buyers will acquire at the closing, good and valid
title to the Deltco shares, free and clear of any encumbrances.
c. All of the Deltco shares (i) have been duly authorized and validly
issued, (ii) are fully paid and non-assessable, and (iii) have been issued in
full compliance with all applicable securities laws and other applicable legal
requirements.
d. At closing, the Seller will deliver to the Buyers, the originals of the
stock certificates evidencing the Deltco shares.
e. There is no:
i) outstanding subscription, option, call, warrant or right (whether
or not currently exercisable) to acquire any shares of the capital stock or
other securities of Deltco;
ii) outstanding security, instrument or obligation that is or may
become convertible into or exchangeable for any shares of the capital stock
or other securities of Deltco;
iii) contract under which Deltco is or may become obligated to sell or
otherwise issue any shares of its capital stock or any other securities; or
iv) condition or circumstance that may directly or indirectly give
rise to or provide a basis for the assertion of a claim by an person to the
effect that such person is entitled to acquire or receive any shares of
capital stock or other securities of Deltco.
f. Deltco has never repurchased, redeemed or otherwise reacquired any
shares of capital stock or other securities.
2.4 FINANCIAL STATEMENTS.
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a. Deltco has delivered to the Buyers the following financial statements
and notes (collectively, the "Deltco Financial Statements"):
i) the unaudited balance sheet of Deltco as of December 31, 1998, and
the related unaudited statements of operations, changes in stockholders'
equity and cash flows of Deltco for the year then ended, together with the
notes thereto;
ii) the unaudited balance sheet of Deltco as of October 30, 1999 and
the related unaudited statements of operations, changes in shareholders
equity and cash flows of Deltco for the ten months then ended.
b. All of the Deltco Financial Statements are accurate and complete in all
material respects, and the dollar amount of each line item included in the
Deltco Financial Statements is accurate in all material respects. The Deltco
Financial Statements present fairly the financial position of Deltco as of the
respective dates thereof and, the results of operations, changes in
stockholder's equity and cash flows of Deltco for the periods covered thereby
and have been prepared in accordance with generally accepted accounting
principals, applied on a consistent basis throughout the periods covered.
2.5 NO CHANGES.
Except as may be set forth in 2.5 on the Disclosure Statement, since
October 30, 1999:
a. There has not been any material adverse change in the business,
condition, assets, liabilities, operations, financial performance, net income or
prospects (or in any aspect or portion thereof) of Deltco, and no event has
occurred that might have a material adverse effect on Deltco's business,
condition, assets, liabilities, operations, financial performance, net income or
prospects (or on any aspect or portion thereof);
b. There has not been any material loss, damage or destruction to, or any
interruption in the use of, any of the assets of Deltco (whether or not covered
by insurance);
c. Deltco has not (i) declared, accrued, set aside or paid any dividend or
made any other distribution in respect of any shares of capital stock, or (ii)
repurchased, redeemed or otherwise reacquired any shares of capital stock or
other securities;
d. There has not been any material change in the relationship of Deltco
with any of its clients or customers.
e. Deltco has not sold or otherwise issued any shares of capital stock or
any other securities;
f. Deltco has not amended its articles of incorporation or bylaws or
effected or been a party to any Acquisition Transaction, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
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g. Deltco has not purchased or otherwise acquired any asset from any other
person, except for supplies acquired by Deltco in the ordinary course of
business;
h. Deltco has not leased or licensed any asset from any other person;
i. Deltco has not made any capital expenditure, other than capital
expenditures in the ordinary course of business which are not material;
j. Deltco has not sold or otherwise transferred, and has not leased or
licensed, any asset to any other person except for services sold by Deltco from
its inventory in the ordinary course of business.
k. Deltco has not written off as uncollectible, or established any
extraordinary reserve with respect to, any account receivable or other
indebtedness (except for Natural Fiber Composites $13,073.40 and M & K Plastics
$899.72);
l. Deltco has not pledged or hypothecated any of its assets or otherwise
permitted any of its assets to become subject to any encumbrance;
m. Deltco has not made any loan, advance or guaranty to any other person,
other than an advance of $2,022.81 to Paul Cameron in November, 1999;
n. Deltco has not (i) established or adopted any Employee Benefit Plan, or
(ii) paid any bonus or made any profit sharing or similar payment to, or
increased the amount of the wages, salary, commissions, fringe benefits or other
compensation or remuneration payable to, any of its directors, officers or
employees, or (iii) made any payments to independent contractors or other
service providers that are not consistent with the past practices of Deltco,
(except for year end bonuses and wage increases in November for Eric Maclin,
David Chovan, Brian Greene, Dan Schick and Tom Guski);
o. Deltco has not entered into, and neither Deltco nor any of the assets
owned or used by Deltco has become bound by, any contract that is not an
excluded contract.
p. No contract by which Deltco or any of the assets owned or used by Deltco
is or was bound, or under which Deltco has or had any rights or interest, has
been amended or terminated;
q. Deltco has not incurred, assumed or otherwise become subject to any
liability, other than accounts payable (of the type required to be reflected as
current liabilities in the "liabilities" entries on a balance sheet prepared in
accordance with GAAP) incurred by Deltco in the ordinary course of business;
r. Deltco has not discharged any encumbrances or discharged or paid any
indebtedness or other liability, except for accounts payable that (i) are
reflected as current liabilities in the "liabilities" entries on the Unaudited
Interim Balance Sheet or have been incurred by Deltco since September 30, 1999
in the ordinary course of business, and (ii) have been discharged or paid in the
ordinary course of business.
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s. Deltco has not forgiven any debt or otherwise released or waived any
right or claim;
t. Deltco has not changed any of its methods of accounting or accounting
principles or practices in any respect;
u. Deltco has not entered into any transaction or taken any other action
outside the ordinary course of business;
v. Deltco has not settled or agreed to settle, or instituted or planned to
institute, any proceeding involving Deltco;
w. Deltco has not agreed, committed or offered (in writing or otherwise),
or has attempted, to take any of the actions referred to in clauses "(d)"
through "(v)" above.
2.6 TITLE TO ASSETS.
a. Deltco owns, and has good, valid and marketable title to, all assets
purported to be owned by it.
Except as set forth in Part 2.6 of the Disclosure Schedule, all
of said assets are owned by Deltco free and clear of any
encumbrances.
b. Part 2.6 of the Disclosure Schedule identifies all assets that are
being leased or licensed by Deltco.
2.7 BANK ACCOUNTS.
Part 2.7 of the Disclosure Schedule accurately sets forth, with
respect to each account maintained by or for the benefit of Deltco
at any bank or other financial institution:
a. the name and location of the institution at which such account is
maintained;
b. the name in which such account is maintained and the account number of
such account;
c. a description of such account and the purpose for which such account is
used;
d. the current balance in such account;
e. the rate of interest being earned on the funds in such account; and
f. the names of all individuals authorized to draw on or make withdrawals
from such account.
There are no safe deposit boxes or similar arrangements maintained by or
for the benefit of Deltco.
2.8 RECEIVABLES.
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a. The attached three page balance sheet provides an accurate statement of
all accounts receivable, notes receivable and other receivables of Deltco as of
October 30, 1999 except as is set forth in part 2.8 of the Disclosure Schedule.
b. Except as set forth in Part 2.8 of the Disclosure Schedule, all existing
accounts receivable of Deltco (including those accounts receivable reflected on
the Unaudited Interim Balance Sheet that have not yet been collected and those
accounts receivable that have arisen since October 30, 1999, and have not yet
been collected);
i) represent valid obligations of customers of Deltco arising from
bona fide transactions entered into in the ordinary course of business; and
ii) are current. The parties recognize the DLM American Plastics
account receivable may not be collectible at all and this agreement
reflects a compromise regarding that account.
2.9 INVENTORY; EQUIPMENT.
a. The attached three page balance sheet provides an accurate statement of
all inventory (including work in process and finished goods) of Deltco as of
October 30, 1999 except as is set forth in part 2.9 of the Disclosure Schedule.
All of Deltco's existing inventory (including all inventory that is reflected on
the Unaudited Interim Balance Sheet and that has not been disposed of by Deltco
since October 30, 1999):
i) is of such quality and quantity as to be usable and saleable by
Deltco in the ordinary course of business;
ii) has been priced using the weighted average method of pricing
inventory; and
iii) is free of any defect or deficiency that would prevent the sale
thereof by Deltco in the ordinary course of business.
b. The attached three page balance sheet accurately reflects all equipment,
furniture, fixtures, improvements and other tangible assets owned by Deltco as
of October 30, 1999.
c. Each asset of Deltco:
i) is structurally sound, free of defects and deficiencies and in good
condition and repair (ordinary wear and tear excepted);
ii) to the best of the knowledge of Deltco and the Seller, complies in
all respects with, and is being operated and otherwise used in material
compliance with, all applicable legal requirements; and
iii) is adequate for the uses to which it is being put.
2.10 REAL PROPERTY. Deltco does not own any real property or any interest in
real property, except for the leaseholds created under the real property
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leases identified in Part 2.10 of the Disclosure Schedule. Part 2.10 of the
Disclosure Schedule provides an identification of each of said leases and the
type of Deltco facilities located on such premises. Deltco enjoys peaceful and
undisturbed possession of such premises. The Buyers have heretofore been
provided with a copy of each such lease, and the copy is a true and complete
copy of the original thereof.
2.11 PROPRIETARY ASSETS.
a. Except as may be set forth in a Part 2.11 of the Disclosure Schedule,
there is no Proprietary Asset that is owned by or licensed to Deltco or that is
otherwise used or useful in connection with Deltco's business.
b. Deltco has taken all reasonable measures and precautions necessary to
protect the confidentiality and value of each Proprietary Asset identified or
required to be identified in Part 2.11 of the Disclosure Schedule.
c. To the best of the knowledge of Deltco and the Seller, Deltco is not
infringing, and Deltco has not at any time infringed or received any notice or
other communication (in writing or otherwise) of any actual, alleged, possible
or potential infringement of, any Proprietary Asset owned or used by any other
person. To the best of the knowledge of Deltco and the Seller, no other person
is infringing, and no Proprietary Asset owned or used by any other person
infringes or conflicts with, any Proprietary Asset owned or used by Deltco.
2.12 CONTRACTS.
To the best of Deltco's knowledge and information, Deltco is in compliance
with each of its contracts and is not in default of any such contracts.
2.13 LIABILITIES.
The attached three page balance sheet accurately reflects all of Deltco's
liabilities as of October 30, 1999. Except as identified in such attached
balance sheet, Deltco has no liabilities.
2.14 COMPLIANCE WITH LEGAL REQUIREMENTS.
a. Except as may be set forth in a Part 2.14 of the Disclosure Schedule:
i) to the best of the knowledge of Deltco and the Seller, Deltco is in
substantial compliance with each legal requirement that is applicable to it
or to the conduct of its business or the ownership or use of any of its
assets;
ii) to the best of the knowledge of Deltco and the Seller, Deltco has
at all times been in substantial compliance with each legal requirement
that is or was applicable to it or to the conduct of its business or the
ownership or use of any of its assets;
iii) to the best of the knowledge of Deltco and the Seller, no event
has occurred, and no condition or circumstances exists, that might
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(with or without notice or lapse of time) constitute or result directly or
indirectly in a violation by Deltco of, or a failure on the part of Deltco
to comply with, any legal requirement; and
iv) Deltco has not received, at any time, any notice or other
communication (in writing or otherwise) from any Governmental Body or any
other person regarding (i) any actual, alleged, possible or potential
violation of, or failure to comply with, any legal requirement, or (ii) any
actual, alleged, possible or potential obligation on the part of Deltco to
undertake, or to bear all or any portion of the cost of, any cleanup or any
remedial, corrective or response action of any nature.
b. Deltco has delivered to the Buyers an accurate and complete copy of each
report, study, survey or other document to which Deltco has access that
addresses or otherwise relates to the compliance of Deltco with, or the
applicability to Deltco of, any legal requirement.
c. To the best of the knowledge of Deltco and the Seller, no Governmental
Body has proposed any legal requirement that, if adopted or otherwise put into
effect, (i) will have an adverse effect on Deltco's business, condition, assets,
liabilities, operations, financial performance, net income or prospects or on
the ability of Deltco or the Seller to comply with or perform any covenant or
obligation under any of the Transactional Agreements, or (ii) will have the
effect of preventing, delaying, making illegal or otherwise interfering with any
of the transactions.
2.15 TAX MATTERS.
a. Each tax required to have been paid, or claimed by any Governmental Body
to be payable, by Deltco (whether pursuant to any Tax Return or otherwise) has
been duly paid in full or on a timely basis. Any tax required to have been
withheld or collected by Deltco has been duly withheld and collected; and (to
the extent required) each such tax has been paid to the appropriate Governmental
Body.
b. Except as may be set forth in a Part 2.15 of the Disclosure Schedule,
(i) the Deltco Financial Statements fully accrue all actual and contingent
liabilities for taxes with respect to all periods through the dates thereof in
accordance with GAAP and (ii) Deltco has established on its books reserves that
are adequate for the payment of all taxes not yet due and payable.
c. Part 2.15 of the Disclosure Schedule accurately identifies each
examination or audit of any Deltco return that has been conducted since January
l, 1996. Deltco has delivered to the Buyers accurate and complete copies of all
audit reports and similar documents (to which Deltco has access) relating to
Deltco returns. Except as set forth in Part 2.16 of the Disclosure Schedule, no
extension or waiver of the limitation period applicable to any of the Deltco
returns has been granted (by Deltco or any other person), and no such extension
or waiver has been requested from Deltco.
d. Except as may be set forth in a Part 2.15 of the Disclosure Schedule, no
claim or other proceeding is pending or has been threaten against or with
respect to Deltco in respect of any tax. There are no unsatisfied liabilities
for taxes (including liabilities for interest, additions to tax and penalties
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thereon and related expenses) with respect to any notice of deficiency or
similar document received by Deltco. Deltco has not entered into or has become
bound by any agreement or consent pursuant to Section 34l(f) of the Code. Deltco
has not been, and Deltco will not be, required to include any adjustment in
taxable income for any tax period (or portion thereof) pursuant to Section 48l
or 263A of the Code or any comparable provision under state or foreign tax
laws as a result of transactions or events occurring, or accounting methods
employed, prior to the closing.
e. There is no agreement, plan, arrangement or other contract covering any
employee or independent contractor or former employee or independent contractor
of Deltco that, individually or collectively, could give rise directly or
indirectly to the payment of any amount that would not be deductible pursuant to
Section 280G or Section 162 of the Code. Deltco is not, and Deltco has never
been, a party to or bound by any tax indemnity agreement, tax sharing agreement,
tax allocation agreement or similar contract.
2.16 BENEFIT PLANS; ERISA.
Part 2.16 of the Disclosure Schedule identifies each Current Benefit Plan
and each Past Benefit Plan. Deltco has never established, adopted, maintained,
sponsored, contributed to, participated in or incurred any liability with
respect to any Employee Benefit Plan, except for the Company Plans identified in
Part 2.16 of the Disclosure Schedule; and Deltco has never provided or made
available any fringe benefit or other benefit of any nature to any of its
employees, except as set forth in Part 2.16 of the Disclosure Schedule. Deltco
has delivered to the Buyers accurate and complete copies of each Company Plan.
2.17 ENVIRONMENTAL MATTERS.
a. To the best of the knowledge of Deltco and Seller, Deltco is not liable
or, potentially liable for any response cost or natural resource damages under
Section 107(a) of CERCLA, or under any other so-called "superfund" or
"superlien" law or similar legal requirement, at or with respect to any site.
b. Deltco has never received any notice or other communication (in writing
or otherwise) from any Governmental Body or other person regarding any actual,
alleged, possible or potential liability arising from or relating to the
presence, generation, manufacture, production, transportation, importation, use,
treatment, refinement, processing, handling, storage, discharge, release,
emission or disposal of any hazardous material. No person has ever commenced or
threatened to commence any contribution action or other proceeding against
Deltco in connection with any such action, alleged, possible or potential
liability; and no event has occurred, and no condition or circumstance exits,
that may directly or indirectly give rise to, or result in Deltco becoming
subject to, any such liability.
c. Except as may be set forth in a Part 2.17 of the Disclosure Schedule,
Deltco has never generated, manufactured, produced, transported, imported,
used, treated, refined, processed, handled, stored, discharged, released or
disposed of any hazardous material (whether lawfully or unlawfully). Except
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as set forth in Part 2.17 of the Disclosure Schedule, Deltco has never permitted
(knowingly or otherwise) any hazardous material to be generated, manufactured,
produced, used, treated, refined, processed, handled, stored, discharged,
released or disposed of (whether lawfully or unlawfully):
i) on or beneath the surface of any real property that is, or that has
at any time been, owned by, leased to, controlled by or used by Deltco;
ii) to the best knowledge of Deltco and the Seller, in or into any
surface water, groundwater, soil or air associated with or adjacent to any
such real property; or
iii) in or into any well, pit, pond, lagoon, impoundment, ditch,
landfill, building, structure, facility, improvement, installation,
equipment, pipe, pipeline, vehicle or storage container that is or was
located on or beneath the surface of any such real property or that is or
has at any time been owned by, leased to, controlled by or used by Deltco.
d. To the best of the knowledge of Deltco and Seller, all property that is
owned by, leased to, controlled by or used by Deltco, and all surface water,
groundwater, soil and air associated with or adjacent to such property:
i) is free of any hazardous material and any harmful chemical or
physical conditions; and
ii) is free of any environmental contamination of any nature.
e. Each storage tank or other storage container that is or has been owned
by, leased to, controlled by or used by Deltco, or that is located on or beneath
the surface of any real property owned by, leased to, controlled by or used by
Deltco:
i) is in sound condition; and
ii) has been demonstrated by accepted testing methodologies to be free
of any corrosion or leaks.
2.18 SALE OF PRODUCTS; PERFORMANCE OF SERVICES.
a. Each product that has been sold by Deltco to any person conformed and
complied in all respects with the terms and requirements of any applicable
warranty or other contract and with all applicable legal requirements. All
repair services and other services that have been performed by Deltco were
performed properly and in full conformity with the terms and requirements of all
applicable warranties and other contracts and with all applicable legal
requirements.
b. Deltco will not incur or otherwise become subject to any liability
arising directly or indirectly from any product manufactured or sold (including
as a result of any defects or deficiencies at the time of sale), or any repair
services or other services performed by, Deltco on or at any time prior to the
closing date.
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c. Other than with respect to returns in the ordinary course of business
consistent with past practices no product manufactured or sold by Deltco has
been subject of any recall or other similar action; and no event has occurred,
and no condition or circumstance exits, that might (with or without notice or
lapse of time) directly or indirectly give rise to or serve as a basis for any
such recall or other similar action relating to any such product.
d. Except as may be set forth in a Part 2.18 of the Disclosure Schedule, no
customer or other person has ever asserted or threatened to assert any claim
against Deltco (i) under or based upon any warranty provided by or on behalf of
Deltco, or (ii) under or based upon any other warranty relating to any product
sold by Deltco or any services performed by Deltco. To the best of the knowledge
of Deltco and the Seller, no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time)
directly or indirectly give rise to or serve as a basis for the assertion of any
such claim.
e. Deltco has in place, and has at all times had in place, an adequate and
appropriate quality control system that is at least as comprehensive and
effective as the quality control systems customarily maintained by comparable
entities.
2.19 CERTAIN PAYMENTS, ETC. Deltco, and to the best of the knowledge of Deltco
and the Seller, no officer, employee, agent or other person associated with or
acting for or on behalf of Deltco, has at any time, directly or indirectly:
a. used any corporate funds (i) to make any unlawful political contribution
or gift or for any other unlawful purpose relating to any political activity,
(ii) to make any unlawful payment to any governmental official or employee, or
(iii) to establish or maintain any unlawful or unrecorded fund or account of any
nature;
b. made any false or fictitious entry, or failed to make any entry that
should have been made, in any of the books of account or other records of
Deltco;
c. made any payoff, influence payment, bribe, rebate, kickback or unlawful
payment to any person;
d. performed any favor or given any gift which was not deductible for
federal income tax purposes;
e. made any payment (whether or not lawful) to any person, or provided
(whether lawfully or unlawfully) any favor or anything of value (whether in the
form of property or services, or in any other form) to any person, for the
purpose of obtaining or paying for (i) favorable treatment in securing business,
or (ii) any other special concession; or
f. agreed, committed, offered or attempted to take any of the actions
described in clauses "(a)" through "(e)" above.
2.20 PROCEEDINGS; ORDERS.
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a. There is no pending proceeding, and, to the best knowledge of Deltco and
the Seller, no person has threatened to commence any proceeding:
i) that involves Deltco or that otherwise relates to or might affect
the business or any of the assets owned or used by Deltco (whether or not
Deltco is named as a party thereto); or
ii) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the
transactions.
To the best of the knowledge of Deltco and the Seller, no event has
occurred, and no claim, dispute or other condition or circumstance exists, that
might directly or indirectly give rise to or serve as a basis for the
commencement of any such proceeding.
b. There is no order to which Deltco, or any of the assets owned or used by
Deltco, is subject; and the Seller is not subject to any order that relates to
the business or to any of the assets owned or used by Deltco.
c. To the best of the knowledge of Deltco and the Seller, no officer or
employee of Deltco is subject to any order that prohibits such officer or
employee from engaging in or continuing any conduct, activity or practice
relating to the business of Deltco.
d. There is no proposed order that, if issued or otherwise put into effect,
(i) may have a material adverse effect on the business, condition, assets,
liabilities, operations, financial performance, net income or prospects (or on
any aspect or portion thereof) of Deltco or on the ability of Deltco or the
Seller to comply with or perform any covenant or obligation under any of the
Transactional Agreements, or (ii) may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of the transactions.
2.21 AUTHORITY; BINDING NATURE OF AGREEMENTS.
a. Deltco has the absolute and unrestricted right, power and authority to
enter into and to perform its obligations under this Agreement; and the
execution, delivery and performance of Deltco of this Agreement have been duly
authorized by all necessary action on the part of Deltco and its shareholders,
board of directors and officers. This Agreement constitutes the legal, valid and
binding obligation of Deltco, enforceable against Deltco in accordance with its
terms.
b. The Seller has the absolute and unrestricted right, power and capacity
to enter into and to perform the Seller's obligations under each of the
Transactional Agreements to which the Seller is or may become a party. This
Agreement constitutes the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms. Upon the execution
of each of the other Transactional Agreements at the closing, each of such other
Transactional Agreements will constitute the legal, valid and binding obligation
of the Seller if a party thereto, and will be enforceable against the Seller in
accordance with its terms.
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2.22 NON-CONTRAVENTION; CONSENTS. Neither the execution and delivery of any of
the transactional agreements, nor the consummation or performance of any of the
transactions, will directly or indirectly (with or without notice or lapse of
time):
a. contravene, conflict with or result in a violation of (i) any of the
provisions of the articles of incorporation or bylaws of Deltco, or (ii) any
resolution adopted by the shareholders, board of directors or any committee of
the board of directors of Deltco;
b. contravene, conflict with or result in a violation of, or give any
governmental body or other person the right to challenge any of the transactions
or to exercise any remedy or obtain any relief under, any legal requirement or
any order to which Deltco or the Seller, or any of the assets owned or used by
Deltco, is subject;
c. cause Deltco, the Buyers or any affiliate of the Buyers to become
subject to, or to become liable for the payment of, any tax;
d. cause any of the assets owned or used by Deltco to be reassessed or
revalued by any taxing authority or other governmental body;
e. contravene, conflict with or result in a violation of any of the terms
or requirements of, or give any governmental body the right to revoke, withdraw,
suspend, cancel, terminate or modify, any governmental authorization that is
held by Deltco or any of it's employees or that otherwise relates to the
business or to any of the assets owned or used by Deltco;
f. contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any Deltco contract;
g. give any person the right to (i) default or exercise any remedy under
any Deltco contract, (ii) accelerate the maturity or performance of any Deltco
contract, or (iii) cancel, terminate or modify any contract;
h. contravene, conflict with or result in a violation or breach of or a
default under any provision of, or give any person the right to declare a
default under, any contract to which the Seller is a party or by which the
Seller is bound; or
i. result in the imposition or creation of any encumbrance upon or with
respect to any asset owned or used by Deltco.
2.23 BROKERS. Neither Deltco nor the Seller has agreed or become obligated to
pay, or has taken any action that might result in any person claiming to be
entitled to receive, any brokerage commission, finder's fee or similar
commission or fee in connection with any of the transactions.
2.24 SELLER.
a. The Seller has the capacity and financial capability to comply with
and perform all of the Seller's covenants and obligations under each of the
Transactional Agreements to which the Seller is or may become a party. When
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used herein, transactional agreements shall mean and refer to the Stock Purchase
Agreement and the Closing Certificates.
b. The Seller has not:
i) at any time, (A) made a general assignment for the benefit of
creditors, (B) filed, or had filed against the Seller, any bankruptcy
petition or similar filing, (C) suffered the attachment or other judicial
seizure of all or a substantial portion of the Seller's assets, (D)
admitted in writing the Seller's inability to pay the Seller's debts as
they become due, (E) been convicted of, or pleaded guilty to, any felony,
or (F) taken or been the subject of any action that may have an adverse
effect on the Seller's ability to comply with or perform any of the
Seller's covenants or obligations under any of the Transactional
Agreements; or
ii) been subject to any order that may have an adverse effect on the
Seller's ability to comply with or perform any of the Seller's covenants or
obligations under any of the Transactional Agreements.
c. There is no proceeding pending, and, to the best knowledge of Deltco and
the Seller, no person has threatened to commence any proceeding, that may have
an adverse effect on the ability of the Seller to comply with or perform any of
the Seller's covenants or obligations under any of the Transactional Agreements.
No event has occurred, and no claim, dispute or other condition or circumstance
exists, that might directly or indirectly give rise to or serve as a basis for
the commencement of any such proceeding.
d. There is no claim that the Seller may have had in the past, may now have
or may have in the future against any of the relevant parties, that has arisen
or arises directly or indirectly out of, or relates directly or indirectly to,
any circumstance, agreement, activity, action, omission, event or matter
occurring or existing on or prior to the date of this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF BUYERS: COVENANTS.
Buyers, jointly and severally, represent and warrant to and for the benefit
of the Seller, as follows:
3.1 ACQUISITION OF SHARES. The Buyers are not acquiring the Deltco Shares with
the current intention of making a public distribution thereof.
3.2 BROKERS. The Buyers have not agreed or become obligated to pay, and has not
taken any action that might result in any person claiming to be entitled to
receive, any brokerage commission, finder's fee or similar commission or fee in
connection with any of the transactions.
3.3 Buyers, Daniel B. Mettler and Randy J. Larson, are President and Sales
Manager, respectively of Deltco.
3.4 Buyers have no debts or obligations to Deltco or Seller except as disclosed
in this Agreement. Buyers have exercised due and proper care in the performance
of their employments with Deltco. Buyers are not aware of any facts which would
make any of the representations or warranties in this
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Agreement about or concerning Deltco to be untrue.
SECTION 4. CONDITIONS PRECEDENT TO BUYERS' OBLIGATION TO CLOSE
The Buyers' obligation to purchase the Deltco shares and to take the other
actions required to be taken by the Buyers at the closing is subject to the
satisfaction, at or prior to the closing, of each of the following conditions.
4.1 SATISFACTORY COMPLETION OF PRE-ACQUISITION REVIEW. The Buyers shall have
satisfactorily completed their pre-acquisition investigation and review of the
business, condition, assets, liabilities, operations, financial performance, net
income and prospects of Deltco and shall be satisfied with the results of that
investigation and review.
4.2 ACCURACY OF REPRESENTATIONS.
a. Each of the specified representations shall have been accurate in all
respects as of the date of this Agreement, and shall be accurate in all respects
as of the closing date.
b. All of the other representations and warranties made by Deltco and the
Seller in this agreement (considered collectively), and each of said
representations and warranties (considered individually), shall have been
accurate in all material respects as of the date of this Agreement, and shall be
accurate in all material respects as of the closing date.
4.3 PERFORMANCE OF OBLIGATIONS; CONSENTS.
Deltco shall have performed it's obligation under this Agreement.
4.4 NO MATERIAL ADVERSE CHANGE. There shall have been no material adverse
change in the business, condition, assets, liabilities, operations, financial
performance, net income or prospects (or in any aspect or portion thereof) of
Deltco since October 30, 1999.
4.5 ADDITIONAL DOCUMENTS. Buyers shall have received such other documents as
may be reasonably necessary which the Buyers requested in good faith for the
purpose of carrying out the provisions of this agreement.
4.6 NO PROCEEDINGS. There shall not have been commenced or threatened against
the Buyers, or against any person affiliated with the Buyers, any proceeding (a)
involving any challenge to, or seeking damages or other relief in connection
with, any of the transactions, or (b) that may have the effect of preventing,
delaying, making illegal or otherwise interfering with any of the transactions.
4.7 NO CLAIM REGARDING STOCK OWNERSHIP OR SALE PROCEEDS. No person shall have
made or threatened any claim asserting that such person or any other person (a)
may be the holder or the beneficial owner of, or may have the right to acquire
or to obtain beneficial ownership of, any capital stock or other securities of
Deltco, or (b) may be entitled to all or any portion of the purchase price.
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4.8 NO PROHIBITION. Neither the consummation nor the performance of any of the
transactions will, directly or indirectly (with or without notice or lapse of
time), contravene or conflict with or result in a violation of, or cause the
Buyers or any person affiliated with the Buyers to suffer any adverse
consequence under, (a) any applicable legal requirement or order, or (b) any
legal requirement or order that has been proposed by or before any governmental
body.
SECTION 5. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
The Seller's obligation to sell the Deltco shares and to take the other
actions required to be taken by the Seller at the closing is subject to the
satisfaction, at or prior to the closing, of each of the following conditions.
5.1 ACCURACY OF REPRESENTATIONS. All of the representations and warranties made
by the Buyers in this Agreement (considered collectively), and each of said
representations and warranties (considered individually), shall have been
accurate in all material respects as of the date of this Agreement and shall be
accurate in all material respects as of the closing date.
5.2 BUYERS' PERFORMANCE.
All of the covenants and obligations that the Buyers are required to comply
with or to perform pursuant to this Agreement at or prior to the closing
(considered collectively), and each of said covenants and obligations
(considered individually), shall have been complied with and performed in all
material respects.
5.3 NO INJUNCTION. There shall not be in effect any injunction that shall have
been entered by a court of competent jurisdiction since the date of this
Agreement and that prohibits the sale of Deltco shares by the Seller to the
Buyers.
SECTION 6. INDEMNIFICATION
6.1 SURVIVAL OF REPRESENTATIONS AND COVENANTS.
a. The representations, warranties, covenants and obligations of each party
shall remain in full force and effect and shall survive closing.
b. For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
Deltco and the Seller in this Agreement.
6.2 MUTUAL INDEMNIFICATION.
a. The Parties shall hold harmless and indemnify each other from and
against, and shall compensate and reimburse each other for, any damages which
are directly or indirectly suffered or incurred by either party or to which
either of the parties may otherwise become subject at any time (regardless of
whether or not such damages relate to any third-party claim) and which arise
directly or indirectly from or as a direct or indirect result of, or are
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directly or indirectly connected with:
i) any breach of any representation, warranty, covenant or
obligation made by them in this Agreement or in the closing certificate,
or
ii) any proceeding relating directly or indirectly to any breach,
alleged breach, liability or matter of the type referred to in clause "(i)"
above.
b. The Seller acknowledges and agrees that, if there is any breach of any
representation, warranty or other provision relating to Deltco or its business,
condition, assets, liabilities, operations, financial performance, net income or
prospects (or any aspect or portion thereof), then the Buyers themselves shall
be deemed, by virtue of their ownership of common stock of Deltco, to have
incurred damages as a result of such breach or liability.
6.3 DEFENSE OF THIRD PARTY CLAIMS. In the event of the assertion or commencement
by any person of any claim or proceeding with respect to which one party may
become obligated to indemnify, hold harmless, compensate or reimburse any
indemnitee pursuant to this Section 6, the Indemnitee shall have the right, at
their election, to designate the Party to assume the defense of such claim or
proceeding at its sole expense. In such case:
a. the indemnifying party shall proceed to defend such claim or
proceeding in a diligent manner with counsel satisfactory to the indemnitee;
b. the indemnitee shall make available to the indemnifying party any
non-privileged documents and materials in it's possession that may be
necessary to the defense of such claim or proceeding;
c. the indemnifying party shall keep the indemnitee informed of all
material developments and events relating to such claim or proceeding;
d. the indemnitee shall have the right to participate in the defense of
such claim or proceeding at its sole cost and expense;
e. the indemnifying party shall not settle, adjust or compromise such
claim or proceeding without the prior written consent of the indemnitee, which
shall not be unreasonably withheld; and
f. the indemnitee may at any time assume the defense of such claim or
proceeding.
If the indemnitee does not elect to designate the indemnifying party to assume
the defense of any such claim or proceeding, the indemnitee may proceed with the
defense of such claim or proceeding on its own. If it does so proceed with the
defense of any such claim or proceeding on it's own:
i) all reasonable expenses relating to the defense of such claim or
proceeding shall be borne and paid exclusively by the indemnifying party;
ii) the indemnifying party shall make available to the indemnitee any
documents and materials that may be necessary to the defense of such
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claim or proceeding;
iii) the indemnitee shall keep the indemnifying party informed of all
material developments and events relating to such claim or proceeding; and
iv) the indemnitee shall have the right to settle, adjust or
compromise such claim or proceeding with the consent of the indemnifying
party; provided, however, that the indemnifying party shall not
unreasonably withhold such consent.
6.4 EXERCISE OF REMEDIES BY INDEMNITEES OTHER THAN BUYERS. No indemnitee (other
than a party to this agreement) shall be permitted to assert any indemnification
claim or exercise any other remedy under this Agreement unless the indemnitee
(or any successor thereto or assign thereof) shall have consented to the
assertion of such indemnification claim or the exercise of such other remedy.
SECTION 7. MISCELLANEOUS PROVISIONS.
7.1 FURTHER ASSURANCES. Each party hereto shall execute and/or cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the closing) for the purpose of carrying out or evidencing any
of the transactions.
7.2 FEES AND EXPENSES.
a. The Seller shall bear and pay all fees, costs and expenses that have
been incurred or that are in the future incurred by, on behalf of or for the
benefit of Deltco or the Seller in connection with:
i) the negotiation, preparation and review of any letter of intent,
confidentiality agreement or similar document relating to any of the
transactions;
ii) the investigation and review conducted by the Buyers and their
representatives with respect to the business of Deltco (and the furnishing
of information to the Buyers and their representatives in connection with
such investigation and review);
iii) the investigation and review conducted by the Seller and Deltco
with respect to the business of the Buyers;
iv) the negotiation, preparation and review of this Agreement
(including the Disclosure Schedule), the other Transactional Agreements and
all certificates, opinions and other instruments and documents delivered or
to be delivered in connection with the transactions;
v) the preparation and submission of any filing or notice required to
be made or given in connection with any of the transactions, and the
obtaining of any consent required to be obtained in connection with any of
the transactions; and
vi) the consummation and performance of the transactions. Such
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fees, costs and expenses are referred to herein as "expenses." Deltco shall
not bear or pay, and the Seller shall not permit Deltco to bear or pay, any
such expenses.
b. Subject to the provisions of Section 6, the Buyers shall bear and pay
all fees that have been incurred or that are in the future incurred by or on
behalf of the Buyers in connection with:
i) the negotiation, preparation and review of any term sheet or
similar document relating to any of the transactions;
ii) the investigation and review conducted by the Buyers and their
representatives with respect to the business of Deltco;
iii) the negotiation, preparation and review of this Agreement, the
other Transactional Agreements and all certificates, opinions and other
instruments and documents delivered or to be delivered in connection with
the transactions; and
iv) the consummation and performance of the transactions.
7.3 ATTORNEYS' FEES. If any legal action or other legal proceeding relating to
this agreement is brought by a party hereto against any party hereto, the
prevailing party shall be entitled to recover reasonable attorneys' fees, costs
and disbursements (in addition to any other relief to which the prevailing party
may be entitled).
7.4 NOTICES. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by telecopier) to the
address or telecopier number set forth beneath the name of such party below (or
to such other address or telecopier number as such party shall have specified in
a written notice given to the other parties hereto):
If to Deltco:
Deltco of Wisconsin, Inc.
60l Industrial Park Road
Ashland, WI 54806
Telecopier: (715) 682-0358
If to the Seller:
Planet Polymer Technologies, Inc.
Attention: Robert J. Petcavich
9985 Business Park Avenue
Suite A
San Diego, CA 92131
Telecopier: 858-549-5133
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If to the Buyers:
Daniel B. Mettler
Randy J. Larson
c/o Deltco
60l Industrial Park Road
Ashland, WI 54806
Telecopier: 715-682-0358
7.5 TIME OF THE ESSENCE. Time is of the essence of this Agreement except as to
the date of closing.
7.6 HEADINGS. The bold headings contained in this Agreement are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this
Agreement.
7.7 COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when taken together,
shall constitute one agreement.
7.8 GOVERNING LAW. This Agreement shall be construed in accordance with, and
governed in all respects by, the internal laws of the State of California
(without giving effect to principles of conflicts of laws). This Agreement is
entered into in San Diego, California, and the courts located in County of of
San Diego, California, shall have exclusive jurisdiction and venue over all
disputes arising out of or relating in any way to this Agreement.
7.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon: Deltco and
its successors and assigns (if any); the Seller and its successors and assigns
(if any); and the Buyers and their personal representatives, executors,
successors and assigns, (if any). This Agreement shall inure to the benefit of:
Deltco; the Seller; the Buyers and any of their respective personal
representatives, executors, successors and assigns (if any). The Buyers may
freely assign any or all of their rights under this Agreement (including its
indemnification rights) in whole or in part, to any other person with the
consent or approval of the Seller whose consent shall not be unreasonably
withheld.
7.10 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE. The rights and remedies of the
parties hereto shall be cumulative (and not alternative). The parties agree that
in the event of any breach or threatened breach of any covenant, obligation or
other provision set forth in this Agreement, the non-breaching party shall be
entitled (in addition to any other remedy that may be available to it) to (i) a
decree or order of specific performance or mandamus to enforce the observance
and performance of such covenant, obligation or other provision, and (ii) an
injunction restraining such breach or threatened breach.
7.11 WAIVER.
a. No failure on the part of any person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
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person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
b. No person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
person; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
7.12 AMENDMENTS. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of the Buyers and the Seller.
7.13 SEVERABILITY. In the event that any provision of this Agreement, or the
application of any such provision to any person or set of circumstances, shall
be determined to be invalid, unlawful, void or unenforceable to any extent, the
remainder of this Agreement, and the application of such provision to persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest extent permitted by
law.
7.14 PARTIES IN INTEREST. None of the provisions of this Agreement is intended
to provide any rights or remedies to any person other than the parties hereto
and their respective successors and assigns (if any).
7.15 ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of the
parties relating to the subject matter thereof and supersedes all prior
agreements and understandings among or between any of the parties relating to
the subject matter thereof.
7.16 CONSTRUCTION.
a. For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include the
masculine and feminine genders.
b. The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
c. As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
d. Except as otherwise indicated, all references in this Agreement to
"Sections" and "Exhibits" are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.
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7.17 FACSIMILE SIGNATURES. A facsimile of any signatures on this document shall
be as effective as original signatures.
Dated this 30th day of December, 1999.
PLANET POLYMER TECHNOLOGIES, INC.,
a California Corporation, Seller
DATED: 12/30/99 By: /s/ ROBERT J. PETCAVICH
-------------------- --------------------------------
Robert J. Petcavich
Chairman and CEO
DELTCO OF WISCONSIN, INC.,
a Wisconsin Corporation,
DATED: 12-30-99 By: /s/ DANIEL B. METTLER
-------------------- --------------------------------
Daniel B. Mettler
President
DATED: 12-30-99 /s/ DANIEL B. METTLER
-------------------- --------------------------------
Daniel B. Mettler, Buyer
DATED: 12-30-99 /s/ RANDY J. LARSON
-------------------- --------------------------------
Randy J. Larson, Buyer
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<PAGE> 1
EXHIBIT 99.1
For Immediate Release
PLANET POLYMER COMPLETES SALE OF DELTCO SUBSIDIARY
San Diego, CA - January 10, 2000 - Planet Polymer Technologies, Inc., (NASDAQ:
POLY), a specialty chemical company has finalized the sale of Deltco of
Wisconsin, Inc. to the management of the wholly owned subsidiary. Deltco is a
manufacturer and reprocessor of thermoplastic scrap resins.
The proceeds of approximately $1 million will be used to expand the agricultural
and industrial manufacturing business units of Planet Polymer.
Planet Polymer Technologies, Inc. is a specialty chemical company that develops
and licenses unique hydro-soluble polymer and biodegradable materials with broad
applications in the fields of agriculture and industrial manufacturing.
Except for the historical information contained herein, this news release
contains forward-looking statements which involve risks and uncertainties,
including the risk of acceptance and pricing of new products and general
economic conditions as they affect Planet's customers, as well as other risks
detailed from time to time in Planet Polymer's SEC reports, including the report
on Form 10-KSB for the year ended December, 1998.
Contact: David Mandy Joyce Fox
Otis / Mandy Planet Polymer Technologies, Inc.
(212) 348-1969 (858) 566-4206
