Exhibit 10.43
**PURCHASE, SALE AND LICENSE AGREEMENT**
               THIS PURCHASE, SALE AND LICENSE AGREEMENT (“Agreement”) is entered into asof May 1, 2003 by and among PLANET POLYMER TECHNOLOGIES, INC., a Californiacorporation (“Planet”), and RYER ENTERPRISES LLC, a Nevada limited liabilitycompany (“Ryer”), with reference to the following facts:
     A.     Planet is engaged in the business of developing and licensing uniquehydrosoluble polymer and biodegradable materials with broad applications in thefields of agriculture and industrial manufacturing and other related businessactivities; and
     B.     Planet desires to sell to Ryer, and Ryer desires to purchase fromPlanet, all of Planet’s Equipment (as hereinafter defined) and the AQUAMIMRelationships (as hereinafter defined) relating to Planet’s metal injectionmolding feedstock business (the “Business”), which are described in more detailin Section 1 below; and
     C.     Planet desires to license to Ryer and Ryer desires to acquire anexclusive worldwide license from Planet to use and commercially exploit allrights to the Intellectual Property (as hereinafter defined), which isdescribed in more detail in Section 3 below. It is anticipated that, asprovided in Section 3.5 below, the Intellectual Property will automaticallybecome the property of Ryer, without additional payment therefor, upon theexpiration of the Term (as hereinafter defined), provided that Ryer makes allof the payments due to Planet under this Agreement.
               NOW, THEREFORE, IN CONSIDERATION OF the foregoing facts and the mutualpromises set forth below, the parties agree as follows:
     1.     Purchase and Sale of Assets. Subject to the terms and conditions setforth in this Agreement, Planet hereby agrees to sell to Ryer, and Ryer herebyagrees to purchase from Planet: (a) all of Planet’s Equipment ( the“Equipment”) relating to the Business, which Equipment is set forth in moredetail in Exhibit “A,” attached hereto and incorporated by reference; and (b)all right, title and interest of Planet in all existing business relationships,development projects, business development programs, existing orders andcontracts relating to the AQUAMIM Technology, if any (collectively, the“AQUAMIM Relationships”). The Equipment and the AQUAMIM Relationships arecollectively referred to as the “Assets”.
     2.     Purchase Price for the Assets. The purchase price (the “PurchasePrice”) for the Assets shall consist of the following consideration:
               2.1     Cash. Ryer shall pay Planet Three Hundred One Thousand Dollars($301,000.00), payable in the following installments (each a “PrincipalPayment”): (a) Twenty Five Thousand Dollars ($25,000.00) on or before May 1,2003, and (b) Eleven Thousand Five Hundred Dollars ($11,500.00) on or beforethe first day of each and every month for the periodbeginning June 1, 2003 through May, 31, 2005, for a period of twenty-four(24) months (the “Period”), as set forth in more detail in the SecuredPromissory Note attached hereto as Exhibit
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“C” and incorporated by reference.Ryer reserves the right to pre-pay the balance remaining on the Purchase Priceand receive the benefit of the Balance Pre-Payment Incentive as defined inSection 2.2 below.
               2.2     Balance Pre-Payment Incentive. At any time during the Period and solong as Ryer is not in default on any payment due Planet under this Agreement,Ryer has the option to pre-pay the remaining balance on the Purchase Price infull (the “Balance Pre-Payment”) by paying to Planet the discounted net presentvalue of the remaining unpaid monthly payments determined using a discount rateequal to the then current yield on Two Year U.S. Treasury Bills (“T-BillRate”). The T-Bill rate shall be that rate published in the Wall StreetJournal on the third business day preceding the date the Balance Pre-Payment isdelivered to Planet.
               2.3     Principal Payment Due Date. If any Monthly Principal Payment hereunderis not paid on or before the fifth calendar day of the month in which itbecomes due, Ryer shall pay, at Planet’s option, a late or collection chargeequal to ten percent (10%) of the amount of such unpaid Monthly PrincipalPayment. In the event that any default under this Section 2.3 continues formore than thirty (30) days, interest shall accrue at the rate of ten percent(10%) per year (based upon a 360-day year) on the entire outstanding principalamount until such default is cured.
               2.4     No Assumption of Planet Obligations. Buyer shall assume no liability,claim or obligation (contingent or otherwise) of Planet (the “RetainedObligations”), including without limitation the following:
                         (a)     Accounts payable, product warranty obligations andcustomerdeposits.
                         (b)     Any amount due and payable prior to or on account of theperiodpreceding the Closing Date, or any liabilities, claims or obligations arisingout of, or attributable to events, circumstances, acts or omissions occurringprior to the Closing Date (even if asserted after the Closing Date).
                         (c)     Any liabilities arising out of or in connection with any employmentagreement, executive compensation agreement, or any bonus, pension, benefit,welfare, vacation, sick pay, severance, retirement, disability, insurance,collective bargaining, deferred compensation or other employee benefit plan orlabor agreement relating to Planet employees, whether oral or written, or anyliabilities arising out of or in connection with the termination of employmentof any Planet employee.
                         (d)     Any Federal, state or local income,sales, property, real estate orother taxes or imposts payable by Planet.
               2.5     The Purchase Price shall be allocated to the Equipment as set forth onExhibit “A” attached hereto and incorporated by this reference, and to theother assets beingtransferred to Ryer as provided elsewhere in this Agreement. Seventy-FiveThousand Dollars ($75,000) of the Purchase Price shall be allocated to theAQUAMIM Relationships and general
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intangibles. Each of the parties shallreport this transaction for tax purposes in accordance with such allocations.
     3.     License of Patents and Trademarks and Other Intellectual Property.Subject to the terms and conditions of this Agreement, including the payment ofroyalties to Planet as provided in this Agreement, Planet hereby grants to Ryeran exclusive, worldwide license (the “License”) to use any and all of thepatents and trademarks described on Exhibit “B” attached hereto andincorporated by reference (the “Patents and Trademarks”) and any and all otherexisting intellectual property relating to Planet’s AQUAMIM Metal InjectionMolding (“MIM”) technology (collectively, the “AQUAMIM Technology”) and anyother formulas, processes and other information and trade secrets related tothe Business (collectively the “Intellectual Property”) and to develop, havedeveloped, make, have made, use, offer to sell and sell products using any orall of the Intellectual Property. The License includes the right to grantsublicenses to third parties to use some or all of the Intellectual Property tomake, use or sell products, subject to the payment of royalties to Planet as ifany such use or sale were by Ryer directly (however, Planet shall never beentitled to receive more than one royalty for any product sold). Ryer shallnotify any sub-licensees under this section of all rights and obligations ofRyer under this Agreement that are sublicensed to such sub-licensee, and Ryershall notify Planet within 30 days after the grant of any sublicense under thissection, including the name and address of any such sublicensee. Except asexpressly provided in this Agreement, the License is perpetual and irrevocable.The License may be terminated by Planet, by written notice to Ryer, in theevent that Ryer fails to make any payment due to Planet under this Agreementand such failure is not cured within thirty (30) days after written noticethereof is given by Planet to Ryer; provided, however, that if there is a bonafide dispute between the parties as to the amount of any payment due to Planet,the License may not be terminated by Planet until and unless such payment hasnot been made within thirty (30) days after the final resolution of suchdispute.
               3.1     Royalties. During the eight-year period beginning on May 1, 2003 andending on April 30, 2011 (the “Term”), Ryer shall pay to Planet royalties basedupon sales by Ryer to third parties during the Term of Feedstock (ashereinafter defined) and MIM products manufactured by Ryer using any Feedstock(“Feedstock Products”). The amount of the royalties will be determined by theformulas set forth in this Section 3.1. The applicable formula will bedetermined by: (a) whether the Feedstock is based upon Planet’s water-solublebinder system (“Water-Soluble Feedstock”) or is a tungsten-carbide Feedstockmade using the AQUAMIM Technology (“Carbide Feedstock”); and (b) whether theFeedstock is sold to a third party or used by Ryer to make a Feedstock Productthat is sold to a third party. As used herein, the term “Feedstock” shall meana mixture of one or more metal powders and one or more binders that is used inMIM to make a sintered metal product and that is either a Water-SolubleFeedstock or a Carbide Feedstock.
                         3.1.1     Royalty on Feedstock Sold to a Third Party. The royalty on anyWater-Soluble Feedstock or Carbide Feedstock sold to a third party shall becomputed by multiplying the total price of such Feedstock (excluding taxes,shipping and handling, and similar charges) by six percent (6%). Such totalprice and the Shipped Weight (as that term ishereinafter defined) of the Feedstock sold to a third party shall beevidenced by Ryer’s invoice to such third party.
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                         3.1.2     Royalty on Feedstock Used by Ryer. The royalty on any Water-SolubleFeedstock or Carbide Feedstock used by Ryer to make a Feedstock Product shallbe computed by dividing the Shipped Weight (as that term is hereinafterdefined) of such Feedstock Product by ninety-four percent (94%), and thenmultiplying such quotient by the Royalty Per Pound (as hereinafter defined) ofthe Feedstock used to make such Feedstock Product. The parties acknowledgethat approximately six percent (6%) of the weight of a Feedstock is comprisedof the weight of the binders, which are removed during the debinding andsintering processes of MIM. Accordingly, the parties agree that dividing theShipped Weight of a Feedstock Product by 94% (i.e. by 0.94) will yield theapproximate weight of the Feedstock incorporated into such Feedstock Product.For example, if the Shipped Weight of a Feedstock Product is 94 grams, then theweight of the Feedstock incorporated into such Product is approximately 100grams [94 ÷ 0.94 = 100], comprised of 94 grams of metal powders and 6 grams ofbinders.
                         3.1.3     Royalty Per Pound. Since Feedstock used by Ryer to make FeedstockProducts will not be sold to a third party, the parties have agreed todetermine a Royalty Per Pound for each Feedstock, which will be used incomputing the royalty due to Planet on Feedstock incorporated by Ryer intoFeedstock Products. The parties acknowledge that: (a) the cost to produce aFeedstock is affected by the cost of the metal powders, the cost of the bindersand the cost of mixing the metal powders and binders to form the Feedstock; (b)the current cost of mixing is approximately One Dollar ($1.00) per pound ofFeedstock for each time the Feedstock must be mixed (e.g. the cost of mixingfor a single-mixed Feedstock is $1.00 per pound of Feedstock and such cost fora triple-mixed Feedstock is $3.00 per pound of Feedstock); (c) the cost ofmetal powders and, to a lesser extent, binders will vary (sometimessubstantially) from time to time as market conditions change; and (d) insetting the selling price for any Feedstock, Planet would customarily mark upthe total cost of such powders, binders and mixing by fifty percent (50%) forits gross profit. Accordingly, the parties have agreed that the Royalty PerPound for each Feedstock will be adjusted periodically to reflect changes insuch costs, as more particularly hereinafter provided. The Royalty Per Poundfor any Feedstock at any given time shall be computed by multiplying the thencost per pound of such Feedstock by one and one-half (1.5) and then multiplyingsuch product (the “Internal Price”) by either six percent (6%) forWater-Soluble Feedstocks or ten percent (10%) for Carbide Feedstocks. Thecurrent Royalty Per Pound for each of certain Feedstocks that Ryer anticipatesit may use to make Feedstock Products, based on the current Internal Price ofsuch Feedstock, is set forth on Exhibit “G” attached hereto and incorporated byreference. The Royalty Per Pound for each Feedstock shall be adjustedannually, on the last business day of each April, based on the then total costsof producing such Feedstock. The costs of metal powders shall be based uponthe average cost of the metal powders purchased by Ryer over the 30-day perioddirectly preceding the last business day of each April, as evidenced byinvoices for such purchases. Should Ryer not purchase any metal powders in thepreceding 30-day period, the price will be determined upon the metal powderprices reported on the last business day of April by a mutually agreeable thirdparty supplier of the metal powder. For simplicity, the cost of the bindersand the mixing shall be assumed to be $1.00 per pound of Feedstock for thebinders and $1.00 per pound of Feedstockfor each time that a Feedstock must be mixed (e.g. $3.00 per pound ofFeedstock for a triple-mixed Feedstock). Said assumed costs shall be adjustedequitably if Ryer can demonstrate
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materially lower total costs for those twoitems. For example, if, on April 30, 2004, the cost of the metal powders usedto make Tungsten Carbide (15%) Carbide Feedstock has increased by $2.00 perpound (to $10.00 per pound) of Feedstock then the Royalty Per Pound for suchCarbide Feedstock will become $2.10 per pound [($10.00+$1.00+$3.00) x 1.5 x 10%= $2.10]. If, on April 30, 2004, the cost of the metal powders used to makeTungsten Carbide (15%) Carbide Feedstock has decreased by $2.00 per pound (to$6.00 per pound) of Feedstock, and if Ryer has determined to double-mix theFeedstock (instead of triple-mixing it), then the Royalty Per Pound for suchCarbide Feedstock will become $1.35 per pound [($6.00+$1.00+$2.00) x 1.5 x 10%= $1.35]. The Royalty Per Pound for any Feedstock shall also be adjusted atsuch other times as there is a Material Change in the cost of the metalpowders. A Material Change is one that results in a Twenty Five Percent (25%)or greater increase or decrease in the cost of the metal powders.
                         3.1.4     Shipped Weight. The Shipped Weight of any Feedstock Product shallbe determined in the following manner. If fewer than four of any identicalitem are shipped, the Ryer employee responsible for shipping such items (the“Shipping Clerk”) shall weigh each item and shall determine the average weightof such items, which average weight and the total weight of all such items(determined by multiplying the average weight by the number of pieces of suchitem) shall be noted on the shipping manifest. If more than three of anyidentical item are shipped, the Shipping Clerk shall weigh three representativesamples of such item and determine the average weight of such items, whichaverage weight and the total weight of all such items (determined bymultiplying the average weight by the number of pieces) shall be noted on theshipping manifest. Alternatively, if a container contains only identicalFeedstock Products or Feedstock, the Shipping Clerk may determine the totalweight of the contents (exclusive of the weight of any packaging material),which total weight shall be noted on the shipping manifest. The total ShippedWeight of the various Feedstocks and Feedstock Products shipped, and theFeedstock used to make each such Feedstock Product, shall be indicated on theinvoices to the purchasers of such items.
                         3.1.5     Computation and Payment of Royalties. Royalties due from Ryer toPlanet under this Section 3.1 shall be computed on the total Shipped Weight ofthe various Feedstocks and Feedstock Products shipped during each calendarmonth of the Term. The royalties due to Planet for each calendar month (the“Royalty Payments”), computed in accordance with the provisions of this Section3.1, shall be paid by Ryer to Planet prior to the expiration of forty-five (45)days after the end of such calendar month. The obligation to make the RoyaltyPayments shall survive the expiration of the Term and the termination of thisAgreement. Ryer shall submit to Planet, with each remittance, Ryer’scomputation of the Royalty Payment then due, together with copies of shippingmanifests and invoices to support such computation.
               3.2     Royalty Payment Due Date. If any Royalty Payment, as defined inSection 3.1 above, is not paid on or before the fifth calendar day after it isdue, Ryer shall pay, at Planet’s option, a late or collection charge equal toten percent (10%) of the amount of such unpaid Monthly Principal Payment. Inthe event that any default under this Section 3.2continues for more than thirty (30) days, interest shall accrue at the rate often percent (10%) per year (based upon a 360-day year) on the unpaid amountuntil such default is cured.
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               3.3     Enforcement of Patents and Trademarks During the Term.
                         3.3.1     Notice of Potential Infringement. Each party (the “NotifyingParty”) shall promptly notify the other party of any infringement or potentialinfringement of any of the Patents or Trademarks or any use or disclosure ofany trade secret comprising part of the Intellectual Property (the “AffectedIntellectual Property”) of which the Notifying Party becomes aware.
                         3.3.2     Planet Option to Prosecute. Planet shall have the first option andright to commence and prosecute litigation or other proceedings to enforce anyand all rights under the Intellectual Property. If Planet commences any suchlitigation or proceedings, Planet shall, unless Planet provides adequatenotice, within any applicable statute of limitations, to Ryer of Planet’sintent to discontinue to prosecute such litigation or other proceedings,diligently prosecute the same to final judgment or settlement; provided,however, that Planet shall not settle any such matter without the prior writtenapproval of Ryer, which may be granted, withheld or conditioned in Ryer’s soleand absolute discretion.
                         3.3.3     Ryer Option to Prosecute. In the event that, within ninety (90)days after the first to occur of: (a) Planet becomes aware of an infringementor potential infringement of any Affected Intellectual Property; or (b) Ryernotifies Planet of such an infringement or potential infringement; Planetdetermines not to commence litigation or other proceedings to enforce and/orprotect the Affected Intellectual Property Planet shall notify Ryer in writingof any such determination prior to the expiration of such 90-day period and, ifPlanet fails to so notify Ryer, Planet shall be deemed to have determined notto commence such litigation or other proceedings, then upon expiration of suchperiod or upon any such refusal, Ryer may commence and prosecute litigation orother proceedings to enforce and/or protect the Affected Intellectual Property.Planet shall cooperate with Ryer, as necessary, to enable Ryer to prosecutesuch litigation or other proceedings. If acting to prevent the running of anyapplicable statute of limitations, and after having provided written notice toPlanet of Ryer’s intent to commence litigation and or other proceedings, Ryermay commence said action prior to the running of the 90-day period.
                         3.3.4     Recoveries. All recoveries resulting from any such litigation orother proceedings shall be for the benefit of the party that bore the expenseof prosecuting the litigation or other proceeding until all such expenses havebeen recovered and thereafter shall be allocated to Planet to provide forrecovery of its lost royalty interest and to Ryer to provide for recovery ofits lost profits.
               3.4     Infringement Actions.
                         3.4.1     Notice. If at any time before termination of this Agreement a claimis made or an action is brought against Ryer by a third party allegingintellectual property or trade secret infringement attributable to Ryer’s useof the Intellectual Property, Ryer shallpromptly inform Planet, and Planet and Ryer shall confer together to find thebest means of avoiding infringement of such third party’s intellectual propertyor of defending such claims or
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action. Notwithstanding the foregoing, Ryershall have no obligation to take or refrain from taking any action to avoid anysuch infringement that would involve any material change to any part of Ryer’sproduction process or the cost to Ryer of such process unless arrangementsreasonably satisfactory to Ryer are made for the payment by Planet of all costsof such change and all additional costs of such process.
                         3.4.2     Indemnification. Planet shall, at its own expense, defend andindemnify Ryer from and against any claim, demand, liability, loss, cost,damage or expense (including attorney’s fees and disbursements but excludingthose attorney’s fees incurred by Ryer should Ryer choose to retain separateoutside counsel) incurred in connection with or resulting from the allegedinfringement of a third party’s patent or other propriety rights by reason ofthe use of the Intellectual Property in accordance with this Agreement. Planetshall obtain written approval from Ryer as to counsel selected to defendagainst any infringement claim or action. Approval of said counsel will not beunreasonably withheld by Ryer.
                         3.4.3     Right of Setoff. If in the reasonable judgment of Ryer (whichjudgment shall be exercised in good faith), Planet shall be indebted to Ryerunder this Agreement, including under Section 3.4, Ryer shall have the right tosetoff such indebtedness against any amount Ryer then or in the future may oweto Planet, including without limitation amounts under the promissory notedelivered to Planet at Closing and any royalties owed under Section 3.1, above.
               3.5     Transfer of Intellectual Property Upon Expiration of the Term.Provided that Ryer has paid to Planet all amounts due to Planet under thisAgreement, Planet shall transfer the Intellectual Property to Ryer upon theexpiration of the Term, without additional consideration. Prior to suchtransfer: (a) Planet may not encumber, sell or otherwise transfer any of theIntellectual Property to any party other than Ryer, and any such encumbrance,sale or transfer shall be null and void; (b) Planet shall not disclose any ofthe Intellectual Property that is not in the public domain as of the date ofthis Agreement; (c) Planet shall, at its own expense, keep the IntellectualProperty in full force and effect, and shall timely file all necessaryextensions and other documents; and (d) if, at any time, Planet desires toabandon any Intellectual Property, Planet shall notify Ryer thereof and shall,at Ryer’s request, transfer such Intellectual Property to Ryer.
     4.     Closing Date. The closing shall take place concurrently with executionof this Agreement.
     5.     Conditions Precedent to the Closing by Ryer. The obligations of Ryerto consummate this Agreement are subject to the fulfillment, at or prior to theClosing Date of the conditions set forth below, unless waived by Ryer in awriting delivered to Planet:
               5.1     Representations and Warranties. The representations and warranties ofPlanet shall be true and correct in all material respects as of the ClosingDate as though made onthat date and Planet shall have performed or complied with all of itscovenants, terms and conditions to be performed prior to Closing Date.
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               5.2     Absence of Litigation. Prior to or at the Closing Date, nolitigation, investigation, inquiry or proceeding shall be pending or threatened(i) to enjoin or prevent the consummation of the transactions contemplated bythis Agreement or to obtain damages or other relief by reason of suchconsummation; (ii) involving any of the Assets of Planet; (iii) involving anycontractual relationship pertaining to the acquisition by Ryer of the Assets,(iv) involving the Intellectual Property, or (v) involving any contractualrelationship pertaining to the acquisition by Ryer of the IntellectualProperty, the results of which could prevent, materially delay or make illegalthe consummation of such purchase.
               5.3     Material Damage. Prior to the Closing Date, no material damage,destruction, casualty or loss (whether or not covered by insurance) and noother event or condition materially and adversely affecting the Assets shallhave occurred.
               5.4     Authorization by Planet. The execution and delivery of this Agreementby Planet and the performance of the transactions contemplated herein shallhave been duly authorized by Planet’s Board of Directors and Ryer shall havereceived copies of all resolutions of the Board of Directors pertaining to suchauthorization, certified by Planet’s secretary.
               5.5     Covenants and Agreements. Planet shall have performed and compliedwith each and all of the covenants, agreements, terms and conditions to beperformed and complied with by Planet on or before the Closing Date, pursuantto the provisions of this Agreement, and Planet shall so certify in writingdelivered to Ryer at the Closing Date.
               5.6     Physical Inventory. On or before the Closing Date, Ryer shall haveconducted a physical inventory of all Equipment as held by Planet as of theClosing Date and shall be satisfied that such Equipment is one hundred percent(100%) owned by Planet and is in working order, and that such Equipment fullycomplies with the representations and warranties set forth herein with respectto such Equipment. Ryer acknowledges that it has received all of the Equipmentand Raw Materials from Planet.
     6.     Conditions Precedent to the Closing by Planet. The obligations ofPlanet to consummate this Agreement are subject to the fulfillment, before oron the Closing Date, of the conditions set forth below, unless waived by Planetin a writing delivered to Ryer:
               6.1     Representations and Warranties. The representations and warranties ofRyer shall be true and correct in all material respects as of the Closing Dateas though made on that date and Ryer shall have performed or complied with allof its covenants, terms and conditions to be performed prior to the ClosingDate.
               6.2     Absence of Litigation. Prior to or at the Closing Date, nolitigation, investigation, inquiry or proceeding shall be pending or threatened(i) to enjoin or prevent the consummation of the transactions contemplated bythis Agreement or to obtain damages or other relief by reason of suchconsummation; (ii) involving any contractual relationship pertaining tothe acquisition by Ryer of the Assets, or (iii) involving any contractualrelationship pertaining to the acquisition by Ryer of the IntellectualProperty, the results of which could prevent, materially delay or make illegalthe consummation of such purchase.
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               6.3     Authorization by Ryer. The execution and delivery of this Agreementby Ryer and the performance of the transactions contemplated herein shall havebeen duly authorized by Ryer’s Manager shall have received copies of allresolutions of the Manager pertaining to such authorization, certified byRyer’s Manager.
               6.4     Covenants and Agreements. Ryer shall have performed and complied witheach and all of the covenants, agreements, terms and conditions to be performedand complied with by Ryer on or before the Closing Date, pursuant to theprovisions of this Agreement, and Ryer shall so certify in writing delivered toPlanet at the Closing Date.
               6.5     Consulting Agreement. On or before the Closing Date, Ryer shall haveduly executed and delivered the Consulting Agreement to Planet in the formattached hereto as Exhibit “D,” and incorporated by reference.
     7.     Planet’s Representations and Warranties. Planet represents andwarrants to Ryer the accuracy and completeness of the matters set forth in thisSection 8 as of the date hereof and as of the Closing Date:
               7.1     Organization and Standing. Planet is a corporation duly organized,validly existing and in good standing under the laws of the State ofCalifornia, and has full and complete power and authority together with alllicenses, permits and certificates from agencies and public authorities as arenecessary to own its properties and to conduct its business where suchproperties are now owned and such business is now conducted, and has full powerand authority to enter into and accomplish the transactions hereincontemplated, to enter into this Agreement and to carry out the provisionshereof.
               7.2     No Breach. The execution, delivery, performance and compliance byPlanet with this Agreement will not (with or without the giving of notice orpassage of time) result in any material breach of, constitute a default under,or result in the imposition of any lien or encumbrance upon the Assets orIntellectual Property pursuant to any material agreement or other instrument towhich Planet is a party or by which Planet or the Assets or IntellectualProperty are bound or affected.
               7.3     Authorization and Binding Effect. The execution, delivery andperformance of this Agreement by Planet and the consummation of thetransactions contemplated by this Agreement have all been duly authorized bythe directors of Planet and all the corporate acts, proceedings and approvalsrequired of Planet, its officers and directors for all of the foregoing havebeen duly taken and remain in effect. This Agreement constitutes the legal,valid and binding obligation of Planet, enforceable against Planet inaccordance with its terms.
               7.4     Compliance with Laws and Other Instruments. Planet has, complied inall material respects with all laws, regulations and orders applicable to theAssets and has all material permits and licenses required thereby. There is noterm or provision of any mortgage, indenture, contract, agreement or instrumentto which Planet is a party or by which it is bound, or
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of any provision of anystate or federal judgment, decree, order, statute, rule or regulationapplicable to or binding upon Planet or the Assets and/or Intellectual Propertywhich materially adversely affects or, so far as Planet may now foresee, in thefuture is reasonably likely to materially adversely affect, the Assets and/orIntellectual Property.
               7.5     Proprietary Rights. Planet is not using any trademark, trademarkregistration or application, service mark or trade name, patent, patentregistration or application, copyright or copyright registration orapplication, the use of which is necessary or contemplated in connection withthe operation of Planet’s business or in connection with the performance of anycontract to which Planet is a party, in violation of the rights of the ownerthereof.
               7.6     Title to and Condition of Equipment. Except as set forth inExhibit “E,” attached hereto and incorporated by reference, Planet will have onthe Closing Date good and marketable title to all of the Equipment, subject tono liens or encumbrances, whether by mortgage, security interest, pledge, lien,conditional sale agreement, encumbrance, charge or otherwise, and at theClosing Date will deliver to Ryer full legal title thereto free and clear ofall liens and encumbrances. Except as specifically represented or warranted inthis Agreement, the Equipment is being sold to Ryer “as is” without any furtherrepresentation or warranty being made by Planet, express or implied.
               7.7     Brokers or Finders. Planet has retained no broker or finder inconnection with the transactions contemplated by this Agreement.
               7.8     Intangible Property. With regard to the Intangible Property:
                         7.8.1     To Planet’s knowledge, all of the Intangible Property consisting ofPatents is currently in compliance with formal legal requirements (includingpayment of filing, examination, and maintenance fees and proofs of working oruse), are valid and enforceable, and are not subject to any maintenance fees ortaxes or actions falling due within 120 days after the Closing Date.
                         7.8.2     None of the Intangible Property is involved in, any interference,cancellation, reissue, reexamination, challenge, infringement or oppositionproceeding. Planet has not received any written notice of any interference,cancellation, reissue, reexamination, challenge, infringement or oppositionproceeding regarding the Intangible Property. To Planet’s knowledge, there isno potentially interfering patent or patent application of any third party andno such action is threatened with the respect to any of the IntangibleProperty.
                         7.8.3     To Planet’s knowledge, no patent is infringed or has been challengedor threatened in any way by the Intangible Property. To Planet’s knowledge,none of the products manufactured and sold, nor any process or know-how used,by Planet in the Business infringe or is alleged to infringe any patent orother proprietary right of any otherperson. Planet has not received any written notice that any of the productsmanufactured and sold, nor any process or know-how used, by Planet in theBusiness infringe or is alleged to infringe any patent or other proprietaryright of any other person.
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                         7.8.4     To the extent applicable, all products made, use, or sold relatingto the Business under any patents have been marked with the proper patentnotice.
                         7.8.5     To Planet’s knowledge, the AQUAMIM trademark has not been infringedor challenged or threatened in any way. To Planet’s knowledge, none of themarks used by Planet in the Business infringes or is alleged to infringe anytrade name, trademark, or service mark of any third party. The AQUAMIM markhas been registered with the United States Patent and Trademark Office iscurrently in compliance with all formal legal requirements (including thetimely post-registration filing of affidavits of use and incontestability andrenewal application), are valid and enforceable, and are not subject to anymaintenance fee or taxes or actions falling due within 120 days after theClosing Date.
                         7.8.6     If applicable, all products and materials containing a mark bear theproper federal registration notice where permitted by law.
                         7.8.7     With respect to each trade secret, the documentation relating tosuch trade secret is current, accurate, and sufficient in detail and content toidentify and explain it and to allow its full and proper use without relianceon the knowledge or memory of any individual.
                         7.8.8     Planet has taken all reasonable precautions to protect the secrecy,confidentiality, and value of its trade secrets related to the AQUAMIMTechnology.
                         7.8.9     To Planet’s knowledge, the trade secrets and proprietary informationrelated to the AQUAMIM Technology and other Intellectual Property, includingwithout limitation the formulations used in connection therewith, are not partof the public knowledge or literature, and, to Planet’s knowledge, have notbeen used, divulged, or appropriated either for the benefit of any person(other than Planet) or to the detriment of Planet. Planet has used its bestefforts to protect the confidentiality and non-disclosure of trade secrets andproprietary information related to the Business. No trade secret is subject toany adverse claim or has been challenged or threatened in any way.
                         7.8.10     All former and current employees of Planet have executed writtencontracts with Planet that assign to Planet all rights to any inventions,improvements, discoveries, or information relating to the business of Planet.No employee of Planet has entered into any contract or agreement that restrictsor limits in any way the scope of work in which the employee may be engaged orrequires the employee to transfer, assign, or disclose information concerninghis work to anyone other than the Planet.
     8.     Ryer’s Representations and Warranties. Ryer represents and warrantsto Planet the accuracy and completeness of the matters set forth in thisSection 9, as of the date hereof and as of the Closing Date:
               8.1     Organization and Standing. Ryer is a limited liability company dulyorganized, validly existing and in good standing under the laws of the State ofNevada, and has full and complete power and authority together with alllicenses, permits and certificates from
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agencies and public authorities as arenecessary to own its properties and to conduct its business where suchproperties are now owned and such business is now conducted, and has full powerand authority to enter into and accomplish the transactions hereincontemplated, to enter into this Agreement and to carry out the provisionshereof.
               8.2     Authorization and Binding Effect. The execution, delivery andperformance of this Agreement by Ryer and the consummation of the transactionscontemplated by this Agreement have been all duly authorized by the Manager ofRyer and all the company acts, proceedings and approvals required of Ryer, itsManager and/or Members for all of the foregoing have been duly taken and remainin effect. This Agreement constitutes the legal, valid and binding obligationof Ryer, enforceable against Ryer in accordance with its terms.
               8.3     Brokers or Finders. Ryer has retained no broker or finder inconnection with the transactions contemplated by this Agreement.
               8.4     Financial Condition of Ryer. On the Closing Date, Ryer hasunencumbered cash on hand in the approximate amount of Two Hundred ThousandDollars ($200,000), and approximately Two Hundred Thousand Dollars ($200,000)in equipment other than the Equipment which secures a loan in the approximateamount of Two Hundred Thousand Dollars ($200,000). Ryer believes its financialcondition is reasonably adequate to execute its business plan.
               8.5     Survival of Representations. The covenants, representations andwarranties made by Ryer herein, except as they may be fully performed prior toor contemporaneously with the Closing and except that the last sentence ofSection 8.4 shall apply only as of the Closing Date, shall remain for the Term.
     9.     Covenants of Planet. Planet covenants to Ryer as set forth below.
               9.1     Conduct of Business. Planet shall:
                         (a)     until delivery to Ryer, shall maintain the Equipment in thecondition it received the Equipment and shall not, without the prior writtenconsent of Ryer, incur expenses in the maintenance or repair of any Assetswhich could result in a lien upon or other liability against any of theEquipment;
                         (b)     until delivery to Ryer, shall duly observe and conform to alllegal requirements applicable to such Equipment and the business conducted inconnection therewith;
                         (c)     use its best efforts to cause all of the conditionsset forth in Section9 of this Agreement to be satisfied, and has not and shall not undertake anycourse of action which would be inconsistent with either a prompt consummationof the Closing Date or satisfaction of the conditions of the Closing Date setforth in this Agreement; and
                         (d)     use its best efforts to preserve thegoodwill of the customers,suppliers and others having relationships with the Business or the Assets.
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               9.2     Transfer of Raw Materials. At the Closing, Planet shall transfer toRyer, at Ryer’s option, the raw materials as set forth in more detail onExhibit “F,” attached hereto and incorporated by reference, “as is” withoutrepresentation or warranty of any kind, express or implied, including withoutlimitation any warranty as to condition or title. Forty Thousand Four HundredDollars ($40,400) of the Purchase Price shall be allocated to such rawmaterials.
               9.3     Survival of Representations. The covenants, representations andwarranties made by Planet herein, except as they may be fully performed priorto or contemporaneously with the Closing Date, shall survive indefinitely.
     10.     Covenants of Ryer. Ryer covenants to Planet as set forth below:
               10.1     License. In the event that, during the Term, Ryer or its assigns,for a period of 180 consecutive calendar days discontinues, for any period of180 consecutive calendar days, for any reason other than as a result of forcemajeur, the business of supplying products or services to the custom MIMfeedstock marketplace, and the manufacture of Feedstock Products, the Licensewith respect to the Patents shall terminate.
               10.2     Maintenance of Records. During the Term, Ryer shall maintaincurrent, accurate and complete books and records relating to the sales ofFeedstocks and Feedstock Products and the payment of the above-referencedroyalties to Planet, and the performance of its obligations under thisAgreement. Planet or its designee may, annually during the Term and for aperiod of twenty-four (24) months thereafter, upon at least ten (10) days’advance written notice to Ryer and during reasonable business hours, examine,inspect and audit such books and records and any source documents pertainingthereto for the purposes of verifying the accuracy and completeness of records,reports and payments provided hereunder. Notwithstanding the foregoing, ifPlanet discovers during the course of any such audit that royalty payments toPlanet for any six-month period are ninety-seven percent (97%) or less of theroyalty payments that should have been paid (“Material Discrepancy”), Planetmay thereafter conduct audits on a quarterly basis until there shall have beentwo (2) consecutive years without a Material Discrepancy and Ryer shall pay allreasonable costs of the audits. Planet or its designee may, during the courseof such examination, review or audit, make copies and/or extracts of books andrecords relating to sales of Feedstock and Feedstock Products and royaltypayments with respect thereto and Ryer’s compliance with the provisions of thisAgreement. Planet shall treat all such information reviewed during an audit asconfidential and will not disclose the same to any third party without thewritten consent of Ryer.
     11.     Sales and Use Taxes. Planet and Ryer shall each pay one-half (1/2) ofall taxes arising out of the transfer of the Assets to Ryer pursuant to thisAgreement. Planet shall file all necessary reports and other documents withthe appropriate governing bodies in California inconnection with the transfer of Assets and Planet shall pay all amounts ofsuch taxes due in connection with the sale and transfer of the Assets. Within15 days after Planet has provided copies of the transfer or sales tax returnsand evidence of payment, Ryer shall reimburse Planet for one-half (1/2) of allsuch taxes. Ryer shall not be responsible for any sales, use, business,occupation, withholding or similar tax or any taxes of any kind related to theAssets or the Business for any period prior to the Closing Date.
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     12.     Confidential Information. Planet and Ryer shall maintain inconfidence all proprietary information of the other party to this Agreementdisclosed to Planet or Ryer, respectively, under this Agreement. Planet andRyer shall not disclose any proprietary information to any other person or usesuch proprietary information for its own or any other persons’ benefit otherthan as permitted by this Agreement without the prior written consent of theowner of the proprietary information. Planet and Ryer shall abide by thereasonable confidentiality restrictions imposed by the other party from time totime for such proprietary information.
     13.     Non-Competition and Non-Solicitation. During the Term, Planet shallnot:
               13.1     Directly or indirectly own, manage, operate, control, providefinancing to or, engage or otherwise participate in any business, corporation,partnership, limited liability company, association, firm, joint venture,organization or other person or entity that is competitive with the Business.Notwithstanding the foregoing, the ownership of securities of a public companynot in excess of one percent of any class of such securities shall not in andof itself be considered to be in competition with the business.
               13.2     Accept or fill any order from or contract for any Feedstock orrelated services or otherwise directly or indirectly solicit, persuade, induce,attempt to solicit, persuade or induce any Customer not to do business withRyer or to reduce the amount of business done with Ryer. The term “Customer”refers to any person or entity constituting part of the AQUAMIM Relationshipsand any person or entity with whom Planet has done business at any time duringthe 36 months preceding the Closing Date which was related to any product orservice created or developed that uses any aspect of the AQUAMIM Technology orother Intellectual Property. A Customer shall also include a known customer ofa Customer when the Customer is a distributor or reseller.
               13.3     Directly or indirectly hire, employ, retain, engage, contract orotherwise interfere with any person who was an employee of Planet prior to theClosing Date who has entered into Ryer’s employ, or induce any such person toleave Ryer’s employ.
               13.4     Planet will be in violation of this Agreement if it engages in any orall of the activities set forth in this Section 13 directly or indirectly foritself or any other person or entity and whether as partner, joint venturer,agent and/or director of any person or as an equity holder of any person orentity in which Planet owns, directly or indirectly, any of the outstandingequity interests (including convertible debt).
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     14.     General Provisions.
               14.1     Jurisdiction. Each party hereto hereby consents to the exclusivejurisdiction of the state and federal courts sitting in San Diego County,California in any action on a claim arising out of, under or in connection withthis Agreement or the transactions contemplated by this Agreement. Each partyhereto further agrees that personal jurisdiction over it may be effected byservice of process by registered or certified mail addressed as provided inSection 14.2 of this Agreement, and that when so made shall be as if servedupon it personally within the State of California.
               14.2     Notices. All notices, requests, consents, and other communicationsrequired or permitted hereunder shall be in writing and shall be personallydelivered or mailed by using first-class, registered, or certified mail,postage prepaid, to the following addresses or to such other address as theparties hereto may designate in writing:       Planet: Planet Polymer Technologies, Inc.    9985 Business Park Ave    San Diego, California 92131       with a copy to: Blanchard, Krasner & French, P.C.    800 Silverado St.,2nd Floor    La Jolla, California 92037    Attn: Robert W. Blanchard       Ryer: Ryer Enterprises LLC    42625 Rio Nedo, Unit B    Temecula, California 92590    Attn: Robert A. Sanford       with a copy to: Jay Gilbert    479 N. Main St., Suite 200    Glen Ellyn, IL 60137
All such notices, requests, consents and other communications shall be deemedto be properly given if delivered personally, via e-mail, or, if sent by mail,three business days after the same has been deposited in mail, addressed andpostage prepaid as set forth above.
               14.3     Counterparts. This Agreement may be executed in any number ofcounterparts, in person or by facsimile, each of which when executed by theparties hereto and delivered shall be deemed to be an original, and all suchcounterparts taken together shall be deemed to be but one and the sameinstrument.
               14.4     Governing Law. This Agreement shall be governed by, and construedand enforced in accordance with, the internal laws of the State of California.
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               14.5     Integration and Construction. This Agreement together with allExhibits and Schedules referred to herein shall comprise the complete andintegrated agreement of the parties hereto and shall supersede all prioragreements, written or oral, on the subject matter hereof. This Agreement hasbeen drafted with the joint participation of the parties hereto and shall beconstrued to be neither against nor in favor of Planet or Ryer in accordancewith the fair meaning thereof. The parties further agree that this Agreementwill be construed to effectuate the normal and reasonable expectations of asophisticated buyer and Planet.
               14.6     Waivers and Amendments. No amendment, modification, supplement,termination or waiver of any provision of this Agreement, and no consent to anydeparture therefrom, may in any event be effective unless in writing and signedby the party or parties affected thereby, and then only in the specificinstance and for the specific purpose given.
               14.7     Attorneys’ Fees. Each party to this Agreement shall bear its ownlegal fees and any and all other expenses relating to the transactionscontemplated in this Agreement. If any party institutes any arbitration,action or proceeding to enforce this Agreement or any provision hereof or fordamages by reason of any alleged breach of this Agreement or of any provisionhereof or for a declaration of rights hereunder, then the prevailing party inany such arbitration, action or proceeding shall be entitled to receive fromthe other party all costs and expenses, including reasonable attorneys’ fees,incurred by the prevailing party in connection with such action or proceeding.
               14.8     Headings. The headings of this Agreement are for convenience ofreference only and shall not affect the construction of any provision of thisAgreement.
               14.9     Exhibits and Schedules. Each Exhibit and Schedule referred to hereinand attached hereto is an integral part of this Agreement and is incorporatedherein by this reference.
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               14.10     Successors and Assigns. This Agreement and the provisions hereofshall be binding upon and inure to the benefit of each of the parties and theirsuccessors and assigns.
               14.11     Opportunity to Consult Counsel. Each party hereto acknowledges thatit has had a sufficient opportunity to consult independent legal counsel andindependent accountants concerning the provisions of this Agreement and enteredinto this Agreement intending to be legally bound. The parties hereto arerelying solely upon the advice of their own independent counsel and accountantsand are not relying in any manner or way on the advice or counsel of the otherparty’s counsel, accountants, or other advisors.
               14.12     Time is of the Essence. All dates and times in this Agreement areof the essence.
               14.13     Severability. If anyprovision of this Agreement or the applicationof such provision to any person or circumstance shall be held invalid, theremainder of this Agreement or the application of such provision to persons orcircumstances other than those to which it is held invalid shall not beaffected thereby.
               14.14     Non-Binding Mediation. Except as otherwise provided by law, Planetand Ryer agree any controversy or claim arising out of or relating to thecalculation and determination of Royalty Payments shall be brought tonon-binding mediation before a mutually agreeable mediator in San Diego,California. Should any dispute arising out of the calculation anddetermination of Royalty Payments fail to be resolved through non-bindingmediation, then the terms of Section 14.15 shall take effect.
               14.15     Binding Arbitration. Except as otherwise provided by law, shouldnon-binding mediation as provided for in section 14.14 above fail to resolveany controversy or claim arising out of or relating to the calculation anddetermination of Royalty Payments shall be settled by arbitration in San Diego,California, in accordance with the Rules of the American ArbitrationAssociation, and judgment upon the award rendered by the arbitrator(s) may beentered in any court having jurisdiction thereof. **By agreeing to arbitrationunder this paragraph, both Ryer and Planet understand that they are agreeing tohave any dispute relating to the calculation and determination of RoyaltyPayments decided by a neutral arbitrator, and as to those disputes decided bythe neutral arbitrator, the parties are giving up their right to a jury orcourt trial and, in addition, the parties waive any right to seek punitivedamages. Any other action, other than one for calculation of the RoyaltyPayments, on a claim arising out of, under or in connection with this Agreementor the transactions contemplated by this Agreement shall be determined in Stateor Federal Court within the County of San Diego, State of California.**
*[Signature Page Follows]*
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               IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beexecuted as of the date first set forth above.      PLANET:        PLANETPOLYMER TECHNOLOGIES, INC., a