Document:

exv10w43

 

Exhibit 10.43

PURCHASE, SALE AND LICENSE AGREEMENT

               THIS PURCHASE, SALE AND LICENSE AGREEMENT (“Agreement”) is entered into as
of May 1, 2003 by and among PLANET POLYMER TECHNOLOGIES, INC., a California
corporation (“Planet”), and RYER ENTERPRISES LLC, a Nevada limited liability
company (“Ryer”), with reference to the following facts:

     A.     Planet is engaged in the business of developing and licensing unique
hydrosoluble polymer and biodegradable materials with broad applications in the
fields of agriculture and industrial manufacturing and other related business
activities; and

     B.     Planet desires to sell to Ryer, and Ryer desires to purchase from
Planet, all of Planet’s Equipment (as hereinafter defined) and the AQUAMIM
Relationships (as hereinafter defined) relating to Planet’s metal injection
molding feedstock business (the “Business”), which are described in more detail
in Section 1 below; and

     C.     Planet desires to license to Ryer and Ryer desires to acquire an
exclusive worldwide license from Planet to use and commercially exploit all
rights to the Intellectual Property (as hereinafter defined), which is
described in more detail in Section 3 below. It is anticipated that, as
provided in Section 3.5 below, the Intellectual Property will automatically
become the property of Ryer, without additional payment therefor, upon the
expiration of the Term (as hereinafter defined), provided that Ryer makes all
of the payments due to Planet under this Agreement.

               NOW, THEREFORE, IN CONSIDERATION OF the foregoing facts and the mutual
promises set forth below, the parties agree as follows:

     1.     Purchase and Sale of Assets. Subject to the terms and conditions set
forth in this Agreement, Planet hereby agrees to sell to Ryer, and Ryer hereby
agrees to purchase from Planet: (a) all of Planet’s Equipment ( the
“Equipment”) relating to the Business, which Equipment is set forth in more
detail 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 and
contracts relating to the AQUAMIM Technology, if any (collectively, the
“AQUAMIM Relationships”). The Equipment and the AQUAMIM Relationships are
collectively referred to as the “Assets”.

     2.     Purchase Price for the Assets. The purchase price (the “Purchase
Price”) 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 “Principal
Payment”): (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 before
the first day of each and every month for the period
beginning 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 Secured
Promissory Note attached hereto as Exhibit

1

 

“C” and incorporated by reference.
Ryer reserves the right to pre-pay the balance remaining on the Purchase Price
and receive the benefit of the Balance Pre-Payment Incentive as defined in
Section 2.2 below.

               2.2     Balance Pre-Payment Incentive. At any time during the Period and so
long 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 in
full (the “Balance Pre-Payment”) by paying to Planet the discounted net present
value of the remaining unpaid monthly payments determined using a discount rate
equal to the then current yield on Two Year U.S. Treasury Bills (“T-Bill
Rate”). The T-Bill rate shall be that rate published in the Wall Street
Journal on the third business day preceding the date the Balance Pre-Payment is
delivered to Planet.

               2.3     Principal Payment Due Date. If any Monthly Principal Payment hereunder
is not paid on or before the fifth calendar day of the month in which it
becomes due, Ryer shall pay, at Planet’s option, a late or collection charge
equal to ten percent (10%) of the amount of such unpaid Monthly Principal
Payment. In the event that any default under this Section 2.3 continues for
more 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 principal
amount 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 “Retained
Obligations”), including without limitation the following:

                         (a)     Accounts payable, product warranty obligations and
customer
deposits.

                         (b)     Any amount due and payable prior to or on account of the
period
preceding the Closing Date, or any liabilities, claims or obligations arising
out of, or attributable to events, circumstances, acts or omissions occurring
prior to the Closing Date (even if asserted after the Closing Date).

                         (c)     Any liabilities arising out of or in connection with any employment
agreement, executive compensation agreement, or any bonus, pension, benefit,
welfare, vacation, sick pay, severance, retirement, disability, insurance,
collective bargaining, deferred compensation or other employee benefit plan or
labor agreement relating to Planet employees, whether oral or written, or any
liabilities arising out of or in connection with the termination of employment
of any Planet employee.

                         (d)     Any Federal, state or local income,
sales, property, real estate or
other taxes or imposts payable by Planet.

               2.5     The Purchase Price shall be allocated to the Equipment as set forth on
Exhibit “A” attached hereto and incorporated by this reference, and to the
other assets being
transferred to Ryer as provided elsewhere in this Agreement. Seventy-Five
Thousand Dollars ($75,000) of the Purchase Price shall be allocated to the
AQUAMIM Relationships and general

2

 

intangibles. Each of the parties shall
report 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 of
royalties to Planet as provided in this Agreement, Planet hereby grants to Ryer
an exclusive, worldwide license (the “License”) to use any and all of the
patents and trademarks described on Exhibit “B” attached hereto and
incorporated by reference (the “Patents and Trademarks”) and any and all other
existing intellectual property relating to Planet’s AQUAMIM Metal Injection
Molding (“MIM”) technology (collectively, the “AQUAMIM Technology”) and any
other formulas, processes and other information and trade secrets related to
the Business (collectively the “Intellectual Property”) and to develop, have
developed, make, have made, use, offer to sell and sell products using any or
all of the Intellectual Property. The License includes the right to grant
sublicenses to third parties to use some or all of the Intellectual Property to
make, use or sell products, subject to the payment of royalties to Planet as if
any such use or sale were by Ryer directly (however, Planet shall never be
entitled to receive more than one royalty for any product sold). Ryer shall
notify any sub-licensees under this section of all rights and obligations of
Ryer under this Agreement that are sublicensed to such sub-licensee, and Ryer
shall notify Planet within 30 days after the grant of any sublicense under this
section, including the name and address of any such sublicensee. Except as
expressly provided in this Agreement, the License is perpetual and irrevocable.
The License may be terminated by Planet, by written notice to Ryer, in the
event that Ryer fails to make any payment due to Planet under this Agreement
and such failure is not cured within thirty (30) days after written notice
thereof is given by Planet to Ryer; provided, however, that if there is a bona
fide 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 has
not been made within thirty (30) days after the final resolution of such
dispute.

               3.1     Royalties. During the eight-year period beginning on May 1, 2003 and
ending on April 30, 2011 (the “Term”), Ryer shall pay to Planet royalties based
upon sales by Ryer to third parties during the Term of Feedstock (as
hereinafter defined) and MIM products manufactured by Ryer using any Feedstock
(“Feedstock Products”). The amount of the royalties will be determined by the
formulas set forth in this Section 3.1. The applicable formula will be
determined by: (a) whether the Feedstock is based upon Planet’s water-soluble
binder system (“Water-Soluble Feedstock”) or is a tungsten-carbide Feedstock
made using the AQUAMIM Technology (“Carbide Feedstock”); and (b) whether the
Feedstock is sold to a third party or used by Ryer to make a Feedstock Product
that is sold to a third party. As used herein, the term “Feedstock” shall mean
a mixture of one or more metal powders and one or more binders that is used in
MIM to make a sintered metal product and that is either a Water-Soluble
Feedstock or a Carbide Feedstock.

                         3.1.1     Royalty on Feedstock Sold to a Third Party. The royalty on any
Water-Soluble Feedstock or Carbide Feedstock sold to a third party shall be
computed by multiplying the total price of such Feedstock (excluding taxes,
shipping and handling, and similar charges) by six percent (6%). Such total
price and the Shipped Weight (as that term is
hereinafter defined) of the Feedstock sold to a third party shall be
evidenced by Ryer’s invoice to such third party.

3

 

                         3.1.2     Royalty on Feedstock Used by Ryer. The royalty on any Water-Soluble
Feedstock or Carbide Feedstock used by Ryer to make a Feedstock Product shall
be computed by dividing the Shipped Weight (as that term is hereinafter
defined) of such Feedstock Product by ninety-four percent (94%), and then
multiplying such quotient by the Royalty Per Pound (as hereinafter defined) of
the Feedstock used to make such Feedstock Product. The parties acknowledge
that approximately six percent (6%) of the weight of a Feedstock is comprised
of the weight of the binders, which are removed during the debinding and
sintering processes of MIM. Accordingly, the parties agree that dividing the
Shipped Weight of a Feedstock Product by 94% (i.e. by 0.94) will yield the
approximate weight of the Feedstock incorporated into such Feedstock Product.
For example, if the Shipped Weight of a Feedstock Product is 94 grams, then the
weight of the Feedstock incorporated into such Product is approximately 100
grams [94 ÷ 0.94 = 100], comprised of 94 grams of metal powders and 6 grams of
binders.

                         3.1.3     Royalty Per Pound. Since Feedstock used by Ryer to make Feedstock
Products will not be sold to a third party, the parties have agreed to
determine a Royalty Per Pound for each Feedstock, which will be used in
computing the royalty due to Planet on Feedstock incorporated by Ryer into
Feedstock Products. The parties acknowledge that: (a) the cost to produce a
Feedstock is affected by the cost of the metal powders, the cost of the binders
and 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 of
Feedstock for each time the Feedstock must be mixed (e.g. the cost of mixing
for a single-mixed Feedstock is $1.00 per pound of Feedstock and such cost for
a triple-mixed Feedstock is $3.00 per pound of Feedstock); (c) the cost of
metal powders and, to a lesser extent, binders will vary (sometimes
substantially) from time to time as market conditions change; and (d) in
setting the selling price for any Feedstock, Planet would customarily mark up
the total cost of such powders, binders and mixing by fifty percent (50%) for
its gross profit. Accordingly, the parties have agreed that the Royalty Per
Pound for each Feedstock will be adjusted periodically to reflect changes in
such costs, as more particularly hereinafter provided. The Royalty Per Pound
for any Feedstock at any given time shall be computed by multiplying the then
cost per pound of such Feedstock by one and one-half (1.5) and then multiplying
such product (the “Internal Price”) by either six percent (6%) for
Water-Soluble Feedstocks or ten percent (10%) for Carbide Feedstocks. The
current Royalty Per Pound for each of certain Feedstocks that Ryer anticipates
it may use to make Feedstock Products, based on the current Internal Price of
such Feedstock, is set forth on Exhibit “G” attached hereto and incorporated by
reference. The Royalty Per Pound for each Feedstock shall be adjusted
annually, on the last business day of each April, based on the then total costs
of producing such Feedstock. The costs of metal powders shall be based upon
the average cost of the metal powders purchased by Ryer over the 30-day period
directly preceding the last business day of each April, as evidenced by
invoices for such purchases. Should Ryer not purchase any metal powders in the
preceding 30-day period, the price will be determined upon the metal powder
prices reported on the last business day of April by a mutually agreeable third
party supplier of the metal powder. For simplicity, the cost of the binders
and the mixing shall be assumed to be $1.00 per pound of Feedstock for the
binders and $1.00 per pound of Feedstock
for each time that a Feedstock must be mixed (e.g. $3.00 per pound of
Feedstock for a triple-mixed Feedstock). Said assumed costs shall be adjusted
equitably if Ryer can demonstrate

4

 

materially lower total costs for those two
items. For example, if, on April 30, 2004, the cost of the metal powders used
to make Tungsten Carbide (15%) Carbide Feedstock has increased by $2.00 per
pound (to $10.00 per pound) of Feedstock then the Royalty Per Pound for such
Carbide 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 make
Tungsten 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 the
Feedstock (instead of triple-mixing it), then the Royalty Per Pound for such
Carbide 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 at
such other times as there is a Material Change in the cost of the metal
powders. 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 shall
be determined in the following manner. If fewer than four of any identical
item are shipped, the Ryer employee responsible for shipping such items (the
“Shipping Clerk”) shall weigh each item and shall determine the average weight
of 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 such
item) shall be noted on the shipping manifest. If more than three of any
identical item are shipped, the Shipping Clerk shall weigh three representative
samples of such item and determine the average weight of such items, which
average weight and the total weight of all such items (determined by
multiplying the average weight by the number of pieces) shall be noted on the
shipping manifest. Alternatively, if a container contains only identical
Feedstock Products or Feedstock, the Shipping Clerk may determine the total
weight of the contents (exclusive of the weight of any packaging material),
which total weight shall be noted on the shipping manifest. The total Shipped
Weight of the various Feedstocks and Feedstock Products shipped, and the
Feedstock used to make each such Feedstock Product, shall be indicated on the
invoices to the purchasers of such items.

                         3.1.5     Computation and Payment of Royalties. Royalties due from Ryer to
Planet under this Section 3.1 shall be computed on the total Shipped Weight of
the various Feedstocks and Feedstock Products shipped during each calendar
month of the Term. The royalties due to Planet for each calendar month (the
“Royalty Payments”), computed in accordance with the provisions of this Section
3.1, 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 Royalty
Payments shall survive the expiration of the Term and the termination of this
Agreement. Ryer shall submit to Planet, with each remittance, Ryer’s
computation of the Royalty Payment then due, together with copies of shipping
manifests and invoices to support such computation.

               3.2     Royalty Payment Due Date. If any Royalty Payment, as defined in
Section 3.1 above, is not paid on or before the fifth calendar day after it is
due, Ryer shall pay, at Planet’s option, a late or collection charge equal to
ten percent (10%) of the amount of such unpaid Monthly Principal Payment. In
the event that any default under this Section 3.2
continues for more than thirty (30) days, interest shall accrue at the rate of
ten percent (10%) per year (based upon a 360-day year) on the unpaid amount
until such default is cured.

5

 

               3.3     Enforcement of Patents and Trademarks During the Term.

                         3.3.1     Notice of Potential Infringement. Each party (the “Notifying
Party”) shall promptly notify the other party of any infringement or potential
infringement of any of the Patents or Trademarks or any use or disclosure of
any trade secret comprising part of the Intellectual Property (the “Affected
Intellectual Property”) of which the Notifying Party becomes aware.

                         3.3.2     Planet Option to Prosecute. Planet shall have the first option and
right to commence and prosecute litigation or other proceedings to enforce any
and all rights under the Intellectual Property. If Planet commences any such
litigation or proceedings, Planet shall, unless Planet provides adequate
notice, within any applicable statute of limitations, to Ryer of Planet’s
intent 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 written
approval of Ryer, which may be granted, withheld or conditioned in Ryer’s sole
and 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 infringement
or potential infringement of any Affected Intellectual Property; or (b) Ryer
notifies Planet of such an infringement or potential infringement; Planet
determines not to commence litigation or other proceedings to enforce and/or
protect the Affected Intellectual Property Planet shall notify Ryer in writing
of any such determination prior to the expiration of such 90-day period and, if
Planet fails to so notify Ryer, Planet shall be deemed to have determined not
to commence such litigation or other proceedings, then upon expiration of such
period or upon any such refusal, Ryer may commence and prosecute litigation or
other proceedings to enforce and/or protect the Affected Intellectual Property.
Planet shall cooperate with Ryer, as necessary, to enable Ryer to prosecute
such litigation or other proceedings. If acting to prevent the running of any
applicable statute of limitations, and after having provided written notice to
Planet of Ryer’s intent to commence litigation and or other proceedings, Ryer
may commence said action prior to the running of the 90-day period.

                         3.3.4     Recoveries. All recoveries resulting from any such litigation or
other proceedings shall be for the benefit of the party that bore the expense
of prosecuting the litigation or other proceeding until all such expenses have
been recovered and thereafter shall be allocated to Planet to provide for
recovery of its lost royalty interest and to Ryer to provide for recovery of
its lost profits.

               3.4     Infringement Actions.

                         3.4.1     Notice. If at any time before termination of this Agreement a claim
is made or an action is brought against Ryer by a third party alleging
intellectual property or trade secret infringement attributable to Ryer’s use
of the Intellectual Property, Ryer shall
promptly inform Planet, and Planet and Ryer shall confer together to find the
best means of avoiding infringement of such third party’s intellectual property
or of defending such claims or

6

 

action. Notwithstanding the foregoing, Ryer
shall have no obligation to take or refrain from taking any action to avoid any
such infringement that would involve any material change to any part of Ryer’s
production process or the cost to Ryer of such process unless arrangements
reasonably satisfactory to Ryer are made for the payment by Planet of all costs
of such change and all additional costs of such process.

                         3.4.2     Indemnification. Planet shall, at its own expense, defend and
indemnify Ryer from and against any claim, demand, liability, loss, cost,
damage or expense (including attorney’s fees and disbursements but excluding
those attorney’s fees incurred by Ryer should Ryer choose to retain separate
outside counsel) incurred in connection with or resulting from the alleged
infringement of a third party’s patent or other propriety rights by reason of
the use of the Intellectual Property in accordance with this Agreement. Planet
shall obtain written approval from Ryer as to counsel selected to defend
against any infringement claim or action. Approval of said counsel will not be
unreasonably withheld by Ryer.

                         3.4.3     Right of Setoff. If in the reasonable judgment of Ryer (which
judgment shall be exercised in good faith), Planet shall be indebted to Ryer
under this Agreement, including under Section 3.4, Ryer shall have the right to
setoff such indebtedness against any amount Ryer then or in the future may owe
to Planet, including without limitation amounts under the promissory note
delivered 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 this
Agreement, Planet shall transfer the Intellectual Property to Ryer upon the
expiration of the Term, without additional consideration. Prior to such
transfer: (a) Planet may not encumber, sell or otherwise transfer any of the
Intellectual 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 of
the Intellectual Property that is not in the public domain as of the date of
this Agreement; (c) Planet shall, at its own expense, keep the Intellectual
Property in full force and effect, and shall timely file all necessary
extensions and other documents; and (d) if, at any time, Planet desires to
abandon 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 execution
of this Agreement.

     5.     Conditions Precedent to the Closing by Ryer. The obligations of Ryer
to consummate this Agreement are subject to the fulfillment, at or prior to the
Closing Date of the conditions set forth below, unless waived by Ryer in a
writing delivered to Planet:

               5.1     Representations and Warranties. The representations and warranties of
Planet shall be true and correct in all material respects as of the Closing
Date as though made on
that date and Planet shall have performed or complied with all of its
covenants, terms and conditions to be performed prior to Closing Date.

7

 

               5.2     Absence of Litigation. Prior to or at the Closing Date, no
litigation, investigation, inquiry or proceeding shall be pending or threatened
(i) to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or to obtain damages or other relief by reason of such
consummation; (ii) involving any of the Assets of Planet; (iii) involving any
contractual relationship pertaining to the acquisition by Ryer of the Assets,
(iv) involving the Intellectual Property, or (v) involving any contractual
relationship pertaining to the acquisition by Ryer of the Intellectual
Property, the results of which could prevent, materially delay or make illegal
the 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 no
other event or condition materially and adversely affecting the Assets shall
have occurred.

               5.4     Authorization by Planet. The execution and delivery of this Agreement
by Planet and the performance of the transactions contemplated herein shall
have been duly authorized by Planet’s Board of Directors and Ryer shall have
received copies of all resolutions of the Board of Directors pertaining to such
authorization, certified by Planet’s secretary.

               5.5     Covenants and Agreements. Planet shall have performed and complied
with each and all of the covenants, agreements, terms and conditions to be
performed and complied with by Planet on or before the Closing Date, pursuant
to the provisions of this Agreement, and Planet shall so certify in writing
delivered to Ryer at the Closing Date.

               5.6     Physical Inventory. On or before the Closing Date, Ryer shall have
conducted a physical inventory of all Equipment as held by Planet as of the
Closing 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 fully
complies with the representations and warranties set forth herein with respect
to such Equipment. Ryer acknowledges that it has received all of the Equipment
and Raw Materials from Planet.

     6.     Conditions Precedent to the Closing by Planet. The obligations of
Planet to consummate this Agreement are subject to the fulfillment, before or
on the Closing Date, of the conditions set forth below, unless waived by Planet
in a writing delivered to Ryer:

               6.1     Representations and Warranties. The representations and warranties of
Ryer shall be true and correct in all material respects as of the Closing Date
as though made on that date and Ryer shall have performed or complied with all
of its covenants, terms and conditions to be performed prior to the Closing
Date.

               6.2     Absence of Litigation. Prior to or at the Closing Date, no
litigation, investigation, inquiry or proceeding shall be pending or threatened
(i) to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or to obtain damages or other relief by reason of such
consummation; (ii) involving any contractual relationship pertaining to
the acquisition by Ryer of the Assets, or (iii) involving any contractual
relationship pertaining to the acquisition by Ryer of the Intellectual
Property, the results of which could prevent, materially delay or make illegal
the consummation of such purchase.

8

 

               6.3     Authorization by Ryer. The execution and delivery of this Agreement
by Ryer and the performance of the transactions contemplated herein shall have
been duly authorized by Ryer’s Manager shall have received copies of all
resolutions of the Manager pertaining to such authorization, certified by
Ryer’s Manager.

               6.4     Covenants and Agreements. Ryer shall have performed and complied with
each and all of the covenants, agreements, terms and conditions to be performed
and complied with by Ryer on or before the Closing Date, pursuant to the
provisions of this Agreement, and Ryer shall so certify in writing delivered to
Planet at the Closing Date.

               6.5     Consulting Agreement. On or before the Closing Date, Ryer shall have
duly executed and delivered the Consulting Agreement to Planet in the form
attached hereto as Exhibit “D,” and incorporated by reference.

     7.     Planet’s Representations and Warranties. Planet represents and
warrants to Ryer the accuracy and completeness of the matters set forth in this
Section 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 of
California, and has full and complete power and authority together with all
licenses, permits and certificates from agencies and public authorities as are
necessary to own its properties and to conduct its business where such
properties are now owned and such business is now conducted, and has full power
and authority to enter into and accomplish the transactions herein
contemplated, to enter into this Agreement and to carry out the provisions
hereof.

               7.2     No Breach. The execution, delivery, performance and compliance by
Planet with this Agreement will not (with or without the giving of notice or
passage of time) result in any material breach of, constitute a default under,
or result in the imposition of any lien or encumbrance upon the Assets or
Intellectual Property pursuant to any material agreement or other instrument to
which Planet is a party or by which Planet or the Assets or Intellectual
Property are bound or affected.

               7.3     Authorization and Binding Effect. The execution, delivery and
performance of this Agreement by Planet and the consummation of the
transactions contemplated by this Agreement have all been duly authorized by
the directors of Planet and all the corporate acts, proceedings and approvals
required of Planet, its officers and directors for all of the foregoing have
been duly taken and remain in effect. This Agreement constitutes the legal,
valid and binding obligation of Planet, enforceable against Planet in
accordance with its terms.

               7.4     Compliance with Laws and Other Instruments. Planet has, complied in
all material respects with all laws, regulations and orders applicable to the
Assets and has all material permits and licenses required thereby. There is no
term or provision of any mortgage, indenture, contract, agreement or instrument
to which Planet is a party or by which it is bound, or

9

 

of any provision of any
state or federal judgment, decree, order, statute, rule or regulation
applicable to or binding upon Planet or the Assets and/or Intellectual Property
which materially adversely affects or, so far as Planet may now foresee, in the
future is reasonably likely to materially adversely affect, the Assets and/or
Intellectual Property.

               7.5     Proprietary Rights. Planet is not using any trademark, trademark
registration or application, service mark or trade name, patent, patent
registration or application, copyright or copyright registration or
application, the use of which is necessary or contemplated in connection with
the operation of Planet’s business or in connection with the performance of any
contract to which Planet is a party, in violation of the rights of the owner
thereof.

               7.6     Title to and Condition of Equipment. Except as set forth in
Exhibit “E,” attached hereto and incorporated by reference, Planet will have on
the Closing Date good and marketable title to all of the Equipment, subject to
no liens or encumbrances, whether by mortgage, security interest, pledge, lien,
conditional sale agreement, encumbrance, charge or otherwise, and at the
Closing Date will deliver to Ryer full legal title thereto free and clear of
all liens and encumbrances. Except as specifically represented or warranted in
this Agreement, the Equipment is being sold to Ryer “as is” without any further
representation or warranty being made by Planet, express or implied.

               7.7     Brokers or Finders. Planet has retained no broker or finder in
connection 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 of
Patents is currently in compliance with formal legal requirements (including
payment of filing, examination, and maintenance fees and proofs of working or
use), are valid and enforceable, and are not subject to any maintenance fees or
taxes or actions falling due within 120 days after the Closing Date.

                         7.8.2     None of the Intangible Property is involved in, any interference,
cancellation, reissue, reexamination, challenge, infringement or opposition
proceeding. Planet has not received any written notice of any interference,
cancellation, reissue, reexamination, challenge, infringement or opposition
proceeding regarding the Intangible Property. To Planet’s knowledge, there is
no potentially interfering patent or patent application of any third party and
no such action is threatened with the respect to any of the Intangible
Property.

                         7.8.3     To Planet’s knowledge, no patent is infringed or has been challenged
or 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 or
other proprietary right of any other
person. Planet has not received any written notice that any 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 or other proprietary
right of any other person.

10

 

                         7.8.4     To the extent applicable, all products made, use, or sold relating
to the Business under any patents have been marked with the proper patent
notice.

                         7.8.5     To Planet’s knowledge, the AQUAMIM trademark has not been infringed
or challenged or threatened in any way. To Planet’s knowledge, none of the
marks used by Planet in the Business infringes or is alleged to infringe any
trade name, trademark, or service mark of any third party. The AQUAMIM mark
has been registered with the United States Patent and Trademark Office is
currently in compliance with all formal legal requirements (including the
timely post-registration filing of affidavits of use and incontestability and
renewal application), are valid and enforceable, and are not subject to any
maintenance fee or taxes or actions falling due within 120 days after the
Closing Date.

                         7.8.6     If applicable, all products and materials containing a mark bear the
proper federal registration notice where permitted by law.

                         7.8.7     With respect to each trade secret, the documentation relating to
such trade secret is current, accurate, and sufficient in detail and content to
identify and explain it and to allow its full and proper use without reliance
on the knowledge or memory of any individual.

                         7.8.8     Planet has taken all reasonable precautions to protect the secrecy,
confidentiality, and value of its trade secrets related to the AQUAMIM
Technology.

                         7.8.9     To Planet’s knowledge, the trade secrets and proprietary information
related to the AQUAMIM Technology and other Intellectual Property, including
without limitation the formulations used in connection therewith, are not part
of the public knowledge or literature, and, to Planet’s knowledge, have not
been used, divulged, or appropriated either for the benefit of any person
(other than Planet) or to the detriment of Planet. Planet has used its best
efforts to protect the confidentiality and non-disclosure of trade secrets and
proprietary information related to the Business. No trade secret is subject to
any adverse claim or has been challenged or threatened in any way.

                         7.8.10     All former and current employees of Planet have executed written
contracts 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 restricts
or limits in any way the scope of work in which the employee may be engaged or
requires the employee to transfer, assign, or disclose information concerning
his work to anyone other than the Planet.

     8.     Ryer’s Representations and Warranties. Ryer represents and warrants
to Planet the accuracy and completeness of the matters set forth in this
Section 9, as of the date hereof and as of the Closing Date:

               8.1     Organization and Standing. Ryer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Nevada, and has full and complete power and authority together with all
licenses, permits and certificates from

11

 

agencies and public authorities as are
necessary to own its properties and to conduct its business where such
properties are now owned and such business is now conducted, and has full power
and authority to enter into and accomplish the transactions herein
contemplated, to enter into this Agreement and to carry out the provisions
hereof.

               8.2     Authorization and Binding Effect. The execution, delivery and
performance of this Agreement by Ryer and the consummation of the transactions
contemplated by this Agreement have been all duly authorized by the Manager of
Ryer and all the company acts, proceedings and approvals required of Ryer, its
Manager and/or Members for all of the foregoing have been duly taken and remain
in effect. This Agreement constitutes the legal, valid and binding obligation
of Ryer, enforceable against Ryer in accordance with its terms.

               8.3     Brokers or Finders. Ryer has retained no broker or finder in
connection with the transactions contemplated by this Agreement.

               8.4     Financial Condition of Ryer. On the Closing Date, Ryer has
unencumbered cash on hand in the approximate amount of Two Hundred Thousand
Dollars ($200,000), and approximately Two Hundred Thousand Dollars ($200,000)
in equipment other than the Equipment which secures a loan in the approximate
amount of Two Hundred Thousand Dollars ($200,000). Ryer believes its financial
condition is reasonably adequate to execute its business plan.

               8.5     Survival of Representations. The covenants, representations and
warranties made by Ryer herein, except as they may be fully performed prior to
or contemporaneously with the Closing and except that the last sentence of
Section 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 the
condition it received the Equipment and shall not, without the prior written
consent of Ryer, incur expenses in the maintenance or repair of any Assets
which could result in a lien upon or other liability against any of the
Equipment;

                         (b)     until delivery to Ryer, shall duly observe and conform to all
legal requirements applicable to such Equipment and the business conducted in
connection therewith;

                         (c)     use its best efforts to cause all of the conditions
set forth in Section
9 of this Agreement to be satisfied, and has not and shall not undertake any
course of action which would be inconsistent with either a prompt consummation
of the Closing Date or satisfaction of the conditions of the Closing Date set
forth in this Agreement; and

                         (d)     use its best efforts to preserve the
goodwill of the customers,
suppliers and others having relationships with the Business or the Assets.

12

 

               9.2     Transfer of Raw Materials. At the Closing, Planet shall transfer to
Ryer, at Ryer’s option, the raw materials as set forth in more detail on
Exhibit “F,” attached hereto and incorporated by reference, “as is” without
representation or warranty of any kind, express or implied, including without
limitation any warranty as to condition or title. Forty Thousand Four Hundred
Dollars ($40,400) of the Purchase Price shall be allocated to such raw
materials.

               9.3     Survival of Representations. The covenants, representations and
warranties made by Planet herein, except as they may be fully performed prior
to 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 of
180 consecutive calendar days, for any reason other than as a result of force
majeur, the business of supplying products or services to the custom MIM
feedstock marketplace, and the manufacture of Feedstock Products, the License
with respect to the Patents shall terminate.

               10.2     Maintenance of Records. During the Term, Ryer shall maintain
current, accurate and complete books and records relating to the sales of
Feedstocks and Feedstock Products and the payment of the above-referenced
royalties to Planet, and the performance of its obligations under this
Agreement. Planet or its designee may, annually during the Term and for a
period 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 pertaining
thereto for the purposes of verifying the accuracy and completeness of records,
reports and payments provided hereunder. Notwithstanding the foregoing, if
Planet discovers during the course of any such audit that royalty payments to
Planet for any six-month period are ninety-seven percent (97%) or less of the
royalty payments that should have been paid (“Material Discrepancy”), Planet
may thereafter conduct audits on a quarterly basis until there shall have been
two (2) consecutive years without a Material Discrepancy and Ryer shall pay all
reasonable costs of the audits. Planet or its designee may, during the course
of such examination, review or audit, make copies and/or extracts of books and
records relating to sales of Feedstock and Feedstock Products and royalty
payments with respect thereto and Ryer’s compliance with the provisions of this
Agreement. Planet shall treat all such information reviewed during an audit as
confidential and will not disclose the same to any third party without the
written consent of Ryer.

     11.     Sales and Use Taxes. Planet and Ryer shall each pay one-half (1/2) of
all taxes arising out of the transfer of the Assets to Ryer pursuant to this
Agreement. Planet shall file all necessary reports and other documents with
the appropriate governing bodies in California in
connection with the transfer of Assets and Planet shall pay all amounts of
such taxes due in connection with the sale and transfer of the Assets. Within
15 days after Planet has provided copies of the transfer or sales tax returns
and evidence of payment, Ryer shall reimburse Planet for one-half (1/2) of all
such taxes. Ryer shall not be responsible for any sales, use, business,
occupation, withholding or similar tax or any taxes of any kind related to the
Assets or the Business for any period prior to the Closing Date.

13

 

     12.     Confidential Information. Planet and Ryer shall maintain in
confidence all proprietary information of the other party to this Agreement
disclosed to Planet or Ryer, respectively, under this Agreement. Planet and
Ryer shall not disclose any proprietary information to any other person or use
such proprietary information for its own or any other persons’ benefit other
than as permitted by this Agreement without the prior written consent of the
owner of the proprietary information. Planet and Ryer shall abide by the
reasonable confidentiality restrictions imposed by the other party from time to
time for such proprietary information.

     13.     Non-Competition and Non-Solicitation. During the Term, Planet shall
not:

               13.1     Directly or indirectly own, manage, operate, control, provide
financing 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 company
not in excess of one percent of any class of such securities shall not in and
of itself be considered to be in competition with the business.

               13.2     Accept or fill any order from or contract for any Feedstock or
related services or otherwise directly or indirectly solicit, persuade, induce,
attempt to solicit, persuade or induce any Customer not to do business with
Ryer or to reduce the amount of business done with Ryer. The term “Customer”
refers to any person or entity constituting part of the AQUAMIM Relationships
and any person or entity with whom Planet has done business at any time during
the 36 months preceding the Closing Date which was related to any product or
service created or developed that uses any aspect of the AQUAMIM Technology or
other Intellectual Property. A Customer shall also include a known customer of
a Customer when the Customer is a distributor or reseller.

               13.3     Directly or indirectly hire, employ, retain, engage, contract or
otherwise interfere with any person who was an employee of Planet prior to the
Closing Date who has entered into Ryer’s employ, or induce any such person to
leave Ryer’s employ.

               13.4     Planet will be in violation of this Agreement if it engages in any or
all of the activities set forth in this Section 13 directly or indirectly for
itself 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 or
entity in which Planet owns, directly or indirectly, any of the outstanding
equity interests (including convertible debt).

14

 

     14.     General Provisions.

               14.1     Jurisdiction. Each party hereto hereby consents to the exclusive
jurisdiction of the state and federal courts sitting in San Diego County,
California in any action on a claim arising out of, under or in connection with
this Agreement or the transactions contemplated by this Agreement. Each party
hereto further agrees that personal jurisdiction over it may be effected by
service of process by registered or certified mail addressed as provided in
Section 14.2 of this Agreement, and that when so made shall be as if served
upon it personally within the State of California.

               14.2     Notices. All notices, requests, consents, and other communications
required or permitted hereunder shall be in writing and shall be personally
delivered or mailed by using first-class, registered, or certified mail,
postage prepaid, to the following addresses or to such other address as the
parties hereto may designate in writing:

	 	 	 	 	 
	 	 	
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 deemed
to 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 and
postage prepaid as set forth above.

               14.3     Counterparts. This Agreement may be executed in any number of
counterparts, in person or by facsimile, each of which when executed by the
parties hereto and delivered shall be deemed to be an original, and all such
counterparts taken together shall be deemed to be but one and the same
instrument.

               14.4     Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the State of California.

15

 

               14.5     Integration and Construction. This Agreement together with all
Exhibits and Schedules referred to herein shall comprise the complete and
integrated agreement of the parties hereto and shall supersede all prior
agreements, written or oral, on the subject matter hereof. This Agreement has
been drafted with the joint participation of the parties hereto and shall be
construed to be neither against nor in favor of Planet or Ryer in accordance
with the fair meaning thereof. The parties further agree that this Agreement
will be construed to effectuate the normal and reasonable expectations of a
sophisticated 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 any
departure therefrom, may in any event be effective unless in writing and signed
by the party or parties affected thereby, and then only in the specific
instance and for the specific purpose given.

               14.7     Attorneys’ Fees. Each party to this Agreement shall bear its own
legal fees and any and all other expenses relating to the transactions
contemplated in this Agreement. If any party institutes any arbitration,
action or proceeding to enforce this Agreement or any provision hereof or for
damages by reason of any alleged breach of this Agreement or of any provision
hereof or for a declaration of rights hereunder, then the prevailing party in
any such arbitration, action or proceeding shall be entitled to receive from
the other party all costs and expenses, including reasonable attorneys’ fees,
incurred by the prevailing party in connection with such action or proceeding.

               14.8     Headings. The headings of this Agreement are for convenience of
reference only and shall not affect the construction of any provision of this
Agreement.

               14.9     Exhibits and Schedules. Each Exhibit and Schedule referred to herein
and attached hereto is an integral part of this Agreement and is incorporated
herein by this reference.

16

 

               14.10     Successors and Assigns. This Agreement and the provisions hereof
shall be binding upon and inure to the benefit of each of the parties and their
successors and assigns.

               14.11     Opportunity to Consult Counsel. Each party hereto acknowledges that
it has had a sufficient opportunity to consult independent legal counsel and
independent accountants concerning the provisions of this Agreement and entered
into this Agreement intending to be legally bound. The parties hereto are
relying solely upon the advice of their own independent counsel and accountants
and are not relying in any manner or way on the advice or counsel of the other
party’s counsel, accountants, or other advisors.

               14.12     Time is of the Essence. All dates and times in this Agreement are
of the essence.

               14.13     Severability. If any
provision of this Agreement or the application
of such provision to any person or circumstance shall be held invalid, the
remainder of this Agreement or the application of such provision to persons or
circumstances other than those to which it is held invalid shall not be
affected thereby.

               14.14     Non-Binding Mediation. Except as otherwise provided by law, Planet
and Ryer agree any controversy or claim arising out of or relating to the
calculation and determination of Royalty Payments shall be brought to
non-binding mediation before a mutually agreeable mediator in San Diego,
California. Should any dispute arising out of the calculation and
determination of Royalty Payments fail to be resolved through non-binding
mediation, then the terms of Section 14.15 shall take effect.

               14.15     Binding Arbitration. Except as otherwise provided by law, should
non-binding mediation as provided for in section 14.14 above fail to resolve
any controversy or claim arising out of or relating to the calculation and
determination of Royalty Payments shall be settled by arbitration in San Diego,
California, in accordance with the Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. By agreeing to arbitration
under this paragraph, both Ryer and Planet understand that they are agreeing to
have any dispute relating to the calculation and determination of Royalty
Payments decided by a neutral arbitrator, and as to those disputes decided by
the neutral arbitrator, the parties are giving up their right to a jury or
court trial and, in addition, the parties waive any right to seek punitive
damages. Any other action, other than one for calculation of the Royalty
Payments, on a claim arising out of, under or in connection with this Agreement
or the transactions contemplated by this Agreement shall be determined in State
or Federal Court within the County of San Diego, State of California.

[Signature Page Follows]

17

 

               IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.

	 	 	 	 	 
	 	
PLANET:	 	 
	 	 	 	 	 
	 	PLANET
POLYMER TECHNOLOGIES, INC., a 

California corporation
	 	 	 	 	 
	 	
By:	

	 	 	 	 	 
	 	
Its:
	

	 	 	 	 	 
	 	
RYER:	 	 
	 	 	 	 	 
	 	RYER
ENTERPRISES LLC, a Nevada limited liability 

company
	 	 	 	 	 
	 	
By:
	

Jay Gilbert, Manager

18<PAGE>

                                                                    EXHIBIT 10.1

--------------------------------------------------------------------------------
SILICON VALLEY BANK

                          AMENDMENT TO LOAN DOCUMENTS

BORROWER:         NOVATEL WIRELESS, INC.

DATE:             APRIL 21, 2003

         THIS AMENDMENT TO LOAN DOCUMENTS is entered into between Silicon Valley
Bank ("Silicon") and the borrower named above ("Borrower").

         The Parties agree to amend the Loan and Security Agreement between
them, dated November 29, 2001 (as otherwise amended, the "Loan Agreement"), as
follows, effective as of the date hereof. (Capitalized terms used but not
defined in this Amendment shall have the meanings set forth in the Loan
Agreement.)

         1. MODIFIED DISCLOSURE RE MATERIAL ADVERSE LITIGATION. That portion of
Section 8 of the Schedule to Loan and Security Agreement that currently reads as
follows:

   MATERIAL ADVERSE
   LITIGATION (Section 3.10):       Sanmina Corporation v. Novatel Wireless,
                                    Inc., Case No. CV 802384.

is hereby amended to read as follows:

   MATERIAL ADVERSE
   LITIGATION (Section 3.10):       On February 28, 2003, a class action law
                                    suit was filed in the United States District
                                    Court for the Southern District of Florida
                                    against Credit Suisse First Boston (CSFB)
                                    and approximately 50 companies, including
                                    Novatel Wireless, for whose respective
                                    initial public offering CSFB purportedly
                                    served as the lead underwriter. The suit
                                    purports to be on behalf of all the
                                    purchasers of the common stock of the named
                                    issuing companies and alleges violations of
                                    federal and state securities law.
                                    Specifically, the suit alleges that CSFB and
                                    each named issuer conspired to file false
                                    and misleading registration statements and
                                    other reports containing knowingly inflated
                                    financial and performance projections in
                                    order to support an aggressive IPO issue
                                    price. Although the

                                      -1-
<PAGE>

        SILICON VALLEY BANK                          AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------

                                    Company has not yet been served in this
                                    action, the Company has reviewed the
                                    complaint, believes to have meritorious
                                    defenses, and the Company intends to
                                    vigorously defend against it.

                                    In January of 2003, our wholly-owned
                                    subsidiary, Novatel Wireless Technologies,
                                    Ltd. (NWT) terminated one of its Canadian
                                    employees for cause. On February 26, 2003,
                                    the employee filed suit on the judicial
                                    district of Calgary, in the Court of Queen's
                                    Bench of Alberta, claiming that NWT had
                                    wrongfully terminated him and seeking
                                    approximately $365,000 in damages. NWT has
                                    been informed by its counsel that NWT has
                                    meritorious defenses, and NWT intends to
                                    vigorously defend against the claim.

                                    On April 30, 2002, the Company entered into
                                    an employment agreement pursuant to which
                                    the employee purportedly commenced working
                                    for us on May 8, 2002. The individual has
                                    alleged that on or about May 10, 2002, we
                                    breached our agreement with him by
                                    materially diminishing his responsibilities
                                    and, as a consequence of which, he has
                                    alleged, he terminated his employment with
                                    the Company for "Good Reason" as defined in
                                    the employment agreement. The employee has
                                    filed a claim with the California Department
                                    of Labor (DOL) seeking approximately
                                    $450,000. The Company is currently waiting
                                    for the DOL to schedule a hearing on the
                                    matter. The Company believes this claim is
                                    without merit and intends to vigorously
                                    defend against the claim.

                                    Sanmina Settlement. On January 12, 2002, the
                                    Company entered into a settlement agreement
                                    (the "Settlement Agreement") with Sanmina
                                    related to claims filed in October 2001. In
                                    October 2001 Sanmina Corporation (now known
                                    as Sanmina-SCI Corporation) ("Sanmina")
                                    filed suit against the Company in Santa
                                    Clara County Superior Court seeking
                                    approximately $27

                                      -2-
<PAGE>

        SILICON VALLEY BANK                          AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------

                                    million of claims for breach of contract
                                    under a contract manufacturing arrangement.
                                    The Company reached a settlement with
                                    Sanmina to end any and all disputes and
                                    litigation arising from the claims and
                                    signed a settlement agreement and mutual
                                    general release (the "Settlement"). Under
                                    the Settlement, which became effective on
                                    January 28, 2002, the Company made a cash
                                    payment to Sanmina of $1,300,000 and issued
                                    to Sanmina 333,333 shares of common stock.
                                    As part of this issuance, we also granted to
                                    Sanmina the right to obligate us to
                                    repurchase up to 133,333 of the shares of
                                    common stock at a price of $12.00 per share.
                                    In addition, the Company agreed to take
                                    delivery of inventory held by Sanmina and
                                    make payments totaling $5 million in 2002
                                    and $4 million in 2003 and up to an
                                    additional $2 million in the event the
                                    Company fails to make any of the agreed upon
                                    payments. On February 7, 2003, the Company
                                    and Sanmina amended the Settlement Agreement
                                    to extend the time period during which the
                                    Company would be permitted to satisfy its
                                    remaining payment obligations (the
                                    "Amendment"). Pursuant to the terms of the
                                    Amendment, the Company agreed that for so
                                    long as the Company owed monies to Sanmina
                                    pursuant to the Settlement Agreement (the
                                    "Sanmina Debt") the Company would make
                                    specified pre-payments on the Sanmina Debt
                                    in the event that the Company failed to meet
                                    agreed upon performance targets, met or
                                    exceeded other performance targets, or
                                    raised additional working capital. As of
                                    February 10, 2003, the Sanmina Debt totaled
                                    approximately $3.505 million. See Note 2 for
                                    further discussion of the Company's
                                    obligation to Sanmina in connection with the
                                    Purchase Agreement.

         2. ADDITIONAL DISCLOSURES. Borrower hereby discloses the following
additional information all of which has been disclosed in Borrower's Form 10-K
dated March 28, 2003 for the Borrower's fiscal year ending December 31, 2002
(all references in "Company" in these disclosures shall be to Borrower):

                                      -3-
<PAGE>

        SILICON VALLEY BANK                          AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------

                  a. Effective January 13, 2003, the Company's former Chief
Executive Officer was replaced. The former CEO's employment agreement with the
Company provides that in the event that the Company terminates him without
cause, or in the event he terminates his employment with the Company because the
Company has materially breached the terms of his employment agreement or because
a change of control occurs, he is entitled to receive in a lump sum payment an
amount equal to his annual base salary then in effect and all unvested options
will immediately vest and become exercisable. He would then also be entitled to
a bonus equal to the amount of the bonus he had earned as of the date of his
termination as well as to the continuation of certain employee benefits pursuant
to the terms of existing company plans. If the Company terminates his employment
for cause, or he terminates his employment without good reason, he will be
entitled to receive severance and other benefits only as may then be established
under the Company's existing severance and benefit plans and policies at the
time of such termination. The Company is currently evaluating the amounts that
might be owed to him under the terms of his employment agreement. Management
believes the maximum amount owned, if any, could be his base salary, which was
$325,000 upon his termination. Management does not believe any amounts are due
to him under the management retention agreement. No payments have been made to
date to him under any of these agreements. The amounts owed, if any, will be
recorded in 2003.

                  b. The Company has sustained substantial losses from
operations in each period since its inception and has used substantially all of
its available cash resources to fund the operating losses, including the $2.4
million financing completed in September 2002 (see Note 7) and the $1.1 million
net proceeds received in March 2003 (see below).

                     During the fourth quarter of 2002, management determined
that the Company had insufficient working capital to continue operations through
the second quarter of 2003. As part of management's plan to improve the
Company's financial condition, on March 12, 2003, the Company entered into a
series of agreements, including the Securities Purchase Agreement (the "Purchase
Agreement") with a group of investors (the "Investors") in connection with the
private placement of $3.25 million of convertible debt and equity securities,
and the issuance of up to $3.505 of equity securities in satisfaction of
outstanding third-party obligations. As a result of these agreements, the
Company completed, or agreed to complete subject to stockholder approval, for
which the Company has scheduled a Special Meeting of Stockholders on April 30,
2003, the following transactions which are collectively referred to as the
"Private Placement Transactions":

                     -        On March 13, 2003, the Company received cash of
                              $1.1 million, net of $100,000 fees, in exchange
                              for issuing $1.2 million of secured subordinated
                              convertible promissory notes (the "Initial
                              Convertible Notes"), convertible subject to
                              stockholder approval into newly authorized Series
                              B Stock, and Common Stock, and warrants to
                              purchase an aggregate of 857,143 shares of Common
                              Stock;

                     -        Upon receiving Stockholder approval, the Company
                              agreed to sell 2,050 additional shares of Series B
                              Stock and warrants to purchase an aggregate of
                              1,983,929 shares of Common Stock in exchange for
                              $2.05 million in cash; and

                                      -4-
<PAGE>

        SILICON VALLEY BANK                          AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------

                     -        Upon receiving Stockholder approval, the Company
                              agreed to issue $3.505 million of secured
                              subordinated convertible promissory notes (the
                              "Additional Convertible Notes,") to the Investors
                              in satisfaction of presently outstanding
                              third-party obligations to be acquired by the
                              Investors from Sanmina-SCI Corporation (the
                              "Sanmina Obligations"). The Investors agreed
                              subsequently to convert the Additional Convertible
                              Notes into 3,505 shares of Series B Stock. The
                              purchase of the Sanmina Obligations by the
                              Investors is conditioned upon the Company
                              receiving stockholder approval for the Private
                              Placement. The Convertible Notes convert into a
                              number of shares of Series B Stock equal to the
                              total amount outstanding divided by $1,000. The
                              Series B shares are convertible into shares of
                              Common Stock equal to the total amount outstanding
                              divided by $0.70.

                     On March 12, 2003, concurrent with the Purchase Agreement,
the Investors and Sanmina entered into an agreement pursuant to which, subject
to certain terms and conditions, Sanmina agreed to sell to the Investors, and
the Investors agreed to purchase from Sanmina, (herein, the "Sanmina Purchase")
the Sanmina Obligation at a substantial discount. In order to facilitate the
Sanmina Purchase, Sanmina granted the Company a forbearance from its obligation
to make payments to Sanmina upon the earlier of the Sanmina Purchase or August
1, 2003. In return for obtaining this payment forbearance, the Company agreed to
continue to observe the operating covenants contained in the Amendment, such as
achieving certain revenue milestones, through the earlier of the Sanmina
Purchase or August 1, 2003. The Holders of the Initial Convertible Notes have
the right to extend the forbearance period beyond August 1, 2003 by making
payments to Sanmina at the rate of $150,000 per month of extension. These
extension payments will reduce the Company's aggregate obligation to Sanmina
under the Settlement Agreement, as amended, and will increase the principal
balance of the Initial Convertible Notes.

                     The Sanmina Purchase is subject to, among other things, the
approval by the stockholders. The Sanmina Purchase is also subject to the
Company and Sanmina each providing the other with a general release from any and
all claims and liabilities arising out of the Settlement Agreement, as amended,
and the related security agreement. Upon consummation of the Sanmina Purchase,
Sanmina will no longer be a creditor of the Company.

                     If stockholder approval is not obtained, the Company would
not be able to complete the Private Placement Transactions, and would not have
sufficient working capital to continue operations. In addition, if stockholder
approval is not obtained, the holders of the Initial Convertible Notes would be
entitled to require that the Company repay the indebtedness evidenced by the
Initial Convertible Notes within 60 days following the termination of the
Purchase Agreement either in cash or in shares of Common Stock, subject to
Nasdaq's rules and regulations. Moreover, given the recent quoted market price
per share of the Common Stock, stockholder approval is all but required for
practically any issuance of equity securities that would generate net proceeds
sufficient to maintain operations through the remainder of the calendar year.
Because of the length of time required to negotiate an alternative transaction
with prospective investors and assuming such transaction were an equity issuance
or an issuance of securities convertible into or exercisable for equity
securities, the Company would have to present it to the Company's stockholders
for approval, and in light of the Company's current

                                      -5-
<PAGE>

        SILICON VALLEY BANK                          AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------

financial condition, it is unlikely that the Company would be able to continue
operations long enough to pursue an alternative source of financing.

                  c. The Company has incurred significant costs to develop its
technologies and products. These costs have exceeded total revenue. As a result,
the Company has incurred losses in each year since inception. As of December 31,
2002, the Company had an accumulated deficit of $230.4 million and negative
working capital of $2.1 million. During the year ended December 31, 2002, the
Company incurred a net loss of $28.3 million and a reduction in cash on hand
from $29 million to $1.6 million.

                     If the Company continues to experience negative cash flow,
it may be required to raise additional funds through the private or public sale
of additional debt or equity securities or through commercial bank borrowings to
fund working capital requirements and anticipated capital expenditures. The
Company's ability to obtain additional capital will depend on financial market
conditions, investor expectations for the wireless technology industry, the
national economy and other factors outside our control. There can be no
assurance that such additional financing will be available on acceptable terms,
or at all. If needed, the failure to secure additional financing would have a
material adverse effect on the business, financial condition and operating
results and may impair the Company's ability to continue or cause us to cease
our operations or cause it to cease operations.

          3. MODIFIED REPRESENTATION RE INSIDE DEBT. Subclause (2) of Section 9
of the Schedule to Loan and Security Agreement that currently reads as follows:

                  (2) SUBORDINATION OF INSIDE DEBT. All present and future
                  indebtedness of Borrower to its officers, directors and
                  shareholders ("Inside Debt") shall, at all times, be
                  subordinated to the Obligations pursuant to a subordination
                  agreement on Silicon's standard form. Borrower represents and
                  warrants that there is no Inside Debt presently outstanding,
                  except for the following: NONE. Prior to incurring any Inside
                  Debt in the future, Borrower shall cause the person to whom
                  such Inside Debt will be owed to execute and deliver to
                  Silicon a subordination agreement on Silicon's standard form.

is hereby amended to read as follows:

                  (2) SUBORDINATION OF INSIDE DEBT. All present and future
                  indebtedness of Borrower to its officers, directors and
                  shareholders ("Inside Debt") shall, at all times, be
                  subordinated to the Obligations pursuant to a subordination
                  agreement on Silicon's standard form. Borrower represents and
                  warrants that there is no Inside Debt presently outstanding,
                  except for the following: $1,200,000 in the aggregate in favor
                  of the holders of that Secured Convertible Subordinated Note
                  dated March 12, 2003 and, if shareholder approval is obtained,
                  an aggregate principal amount not to exceed $3,505,000
                  pursuant to that certain Secured Convertible Subordinated Note
                  (which amends and restates the Borrower's obligations to
                  Sanmina-SCI Corporation). Prior to incurring any Inside Debt
                  in the future, Borrower shall cause the person to whom such
                  Inside

                                      -6-
<PAGE>

        SILICON VALLEY BANK                          AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------

                  Debt will be owed to execute and deliver to Silicon a
                  subordination agreement on Silicon's standard form.

          4. ACCOUNTS PURCHASE AGREEMENT--CROSS-DEFAULT AND
CROSS-COLLATERALIZATION. The following new Section 10 is hereby added to the
Schedule to the Loan Agreement:

                  10. Accounts Receivable Purchase Agreement. Borrower and
         Silicon are entering into an Accounts Receivable Purchase Agreement
         dated April 21, 2003 (together with all amendments thereto and all
         extensions and renewals thereof and all replacements therefor, the
         'Purchase Agreement'). Borrower and Silicon agree that, without
         limiting the generality of any of the provisions of this Loan Agreement
         or the Purchase Agreement,

                           (a) the 'Obligations' as defined in this Loan
                  Agreement shall include without limitation all present and
                  future indebtedness, liabilities and obligations of Borrower
                  under or in connection with the Purchase Agreement, and the
                  'Obligations' for purposes of the Purchase Agreement shall
                  include without limitation all 'Obligations' as defined in
                  this Loan Agreement, and

                           (b) any default or event of default under or as
                  defined in the Purchase Agreement shall constitute an Event of
                  Default under this Loan Agreement, and any Default or Event of
                  Default under this Loan Agreement shall constitute an "Event
                  of Default" under the Purchase Agreement, and

                           (c) all security interests granted by Borrower to
                  Silicon under this Loan Agreement shall also secure all
                  'Obligations' as defined in the Purchase Agreement, and all
                  security interests granted by Borrower to Silicon under the
                  Purchase Agreement shall also secure all 'Obligations' as
                  defined in this Loan Agreement; and

                           (d) Eligible Receivables under this Loan Agreement
                  shall not in any event or circumstance include any Receivables
                  which are 'Purchased Receivables' under the Purchase
                  Agreement; and

                           (e) All of Silicon's rights and remedies under this
                  Loan Agreement and under the Purchase Agreement are
                  cumulative.

          5. CREDIT LIMIT. Section 1(a) of the Schedule to the Loan Agreement,
which presently reads:

                  (a) An amount not to exceed the lesser of: (i) $5,000,000 at
                  any one time outstanding (the "Maximum Credit Limit"); or
                  (ii) 65% of the amount of Borrower's Eligible Receivables
                  (as defined in Section 8 above);

is amended to read as follows:

                  (a) An amount not to exceed the lesser of (i) or (ii) below:

                                      -7-
<PAGE>

        SILICON VALLEY BANK                          AMENDMENT TO LOAN DOCUMENTS
--------------------------------------------------------------------------------

                  (i) An amount equal to the following: $5,000,000 (the
                  'Maximum Credit Limit') at any one time outstanding, minus
                  the total amount of all outstanding Advances under the
                  Purchase Agreement, and minus all outstanding 'Finance
                  Charges', 'Administrative Fees', interest, 'Repurchase
                  Amounts' (as the foregoing terms are defined in the Purchase
                  Agreement), and all other sums owing from Borrower to
                  Silicon under or in connection with the Purchase Agreement
                  (whether or not then due), or

                  (ii) 65% of the amount of Borrower's Eligible Receivables
                  (as defined in Section 8 above);

          6. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.

         7. GENERAL PROVISIONS. This Amendment, the Loan Agreement, the Purchase
Agreement, the prior written amendments to the Loan Agreement signed by Silicon
and Borrower, and the other written documents and agreements between Silicon and
Borrower set forth in full all of the representations and agreements of the
parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the parties
with respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between Silicon and Borrower shall continue in full force and effect
and the same are hereby ratified and confirmed.

   BORROWER:

   NOVATEL WIRELESS, INC.
                                                 SILICON:

   BY  /S/ PETER V. LEPARULO                     SILICON VALLEY BANK
         PRESIDENT OR VICE PRESIDENT

   BY /S/ MELVIN L. FLOWERS                      BY /S/ROBERT ANDERSEN
         SECRETARY OR ASS'T SECRETARY            TITLE VICE PRESIDENT

-1

                                      -8-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00052-of-00352.parquet"}]]