Exhibit 10.5
ASSIGNMENT OF INTELLECTUAL PROPERTY, TRANSFER OF RIGHTS,
AND ASSET PURCHASE AGREEMENT
This Assignment of Intellectual Property, Transfer of Rights, and Asset Purchase
Agreement (this "Agreement") is made and entered into effective as of February
1, 1999 (the "Effective Date") by and between Sierra Monitor Corporation, a
California corporation with principal offices located at 0000 Xxxxx Xxxxx,
Xxxxxxxx, XX 00000 (the "Company") and Montech Holdings Inc. (d.b.a. Montech
International) a Florida corporation with principal offices located at 00000
Xxxxx Xxxxxxx, Xxxx Xxxxx, XX 00000 ("Seller") and Xxxxxx X. Xxxxxxx as an
individual and shareholder of the Seller who hereby signs this Agreement for
purposes of Section 5 and Section 6(b) only.
RECITALS:
WHEREAS, Seller has previously created and developed a proprietary line of
products known as the "MC-25 Environmental Controller", as more fully described
on the List of Assets attached hereto as Exhibit A (the "Assets");
WHEREAS, the Company now desires to purchase, and Seller desires to sell, all
the specified Assets in exchange for cash consideration, including payments made
directly to the Seller and in payments made in settlement of certain of Seller's
debts; and
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
promises contained herein and for other good and valuable consideration, the
Company and Seller agree, as follows:
AGREEMENT:
1) Sale, Assignment and Transfer of the Assets.
a) Intellectual Property, Rights and Assets Transferred. Seller hereby
grants and irrevocably assigns all right, title and interest
whatsoever, throughout the world, in and to the Assets and works
specifically listed on Exhibit A hereto as well as all intellectual
property rights, including but not limited to, copyrights, patents,
trademarks and trade secrets associated with such Assets, to the
Company, its successors and assigns, for the full duration of all such
rights, and any renewals and extensions thereof. Seller agrees that
the Assets to be transferred shall include all related support
materials, work-in-progress and documentation developed by Seller in
connection with the Assets including notes, records, sketches,
drawings, specifications, and any other material related to the
Assets. Such transferred Assets, including all such support materials
and documentation, will remain the sole property of the Company.
Seller covenants and agrees that it will not keep in its possession,
recreate, reverse engineer or deliver to anyone else any reproductions
of any software or documentation relating to any of the aforementioned
Assets.
b) Computer Programs and Software Transferred. Seller agrees that such
computer programs and software transferred as part of the Assets
assigned to the Company shall include the underlying source code as
written in the programming language used by Seller in its original
development. In addition, the Company and the Seller agree that,
except for the representations, warranties, agreements and covenants
contained in this Agreement, Seller is providing such computer
programs and software to the Company on an "as is" basis with no
warranty that such programs are error-free and without any express or
implied warranty of merchantability or
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Exhibit 10.5
fitness for a particular purpose and with no ongoing maintenance or
support obligations. Seller further agrees that the Company shall have
the right to alter, modify or combine the transferred computer
programs, software and other portions of the Assets with other works,
and hereby waives any claim that any new versions, developments or
derivative works involving the Assets constitutes a violation of any
"moral rights" or a distortion, mutilation or disparagement or
contains unauthorized variations of the same. As of the Effective
Date, the Company shall assume all costs of the further development
and support of the Assets, including those related, but not limited
to, salaries, consulting services and equipment; however, nothing
herein shall require or otherwise obligate the Company to assume any
obligations or liabilities of Seller, its employees and shareholders
or to continue the production, sales and/or development of the Assets.
c) Cooperation in Securing Rights. Seller hereby covenants and agrees
that it will assist and cooperate with the Company, or its designees,
in every proper way to further secure the Company's rights in the
Assets hereby assigned to the Company together with any copyrights,
patents, trademarks, trade secrets or other intellectual property
rights relating thereto in any and all countries. Such cooperation and
assistance of Seller shall include, but not be limited to, the giving
of testimony and the prompt execution of all applications,
specifications, oaths, assignments and all other instruments which the
Company deems necessary in order to apply for, perfect, obtain and
sustain such intellectual property rights and in order to assign and
convey to the Company, its successors, assigns, and nominees the sole
and exclusive right, title and interest in and to such transferred
Assets and any copyrights, patents, trademarks, trade secrets or other
intellectual property rights relating thereto, including the filing
and prosecution of substitute, divisional, continuing or additional
applications covering said intellectual property rights, including
without limitation, reissues and reexaminations, opposition
proceedings, cancellation proceedings, priority contests, public use
proceedings, infringement actions and court actions; provided,
however, that if requested on a timely basis, the Company shall
reimburse Seller for its reasonable costs and expenses, including for
the time of its employees on the basis of Seller's then current
standard consulting rates as determined by reference to the rates
actually charged by Seller to its then current clients, in connection
with providing such cooperation.
d) Validity of the Transfer of Assets. Seller represents and warrants (i)
that the Assets being assigned and transferred to the Company along
with all related materials being assigned and transferred to the
Company will not infringe any copyright, patent, trademark, trade
secret or other proprietary or intellectual property rights of any
third party; (ii) that Seller is the sole owner, without restriction
or encumbrance, of all rights (including, but not limited to, all
copyrights, patents, trademarks, trade secrets and other intellectual
property rights,) title and interest in and to the Assets; (iii) that
Seller has not previously granted any rights in the Assets to any
third party (which have not otherwise been reacquired in full by
Seller prior to the Effective Date); and (iv) that Seller currently
has the full power and authority to make and enter into this Agreement
and to make the present assignment of the Assets to the Company as
contemplated by this Agreement. Upon the Effective Date of this
Agreement and the transfer of the Assets to the Company, Seller
covenants and agrees not to use in the future and to discontinue any
current use of such Assets and associated materials and further not to
recreate such rights and materials in any manner whatsoever once such
rights are actually transferred to the Company.
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Exhibit 10.5
2) Consideration. In consideration for entering into this agreement and the
transfer of Assets contemplated hereby, the Company has delivered to Seller
the aggregate consideration of One Hundred Fifty Thousand Dollars (U.S.
$150,000.00, the "Payment"), pursuant to the terms and conditions specified
by Seller. Such Payment shall be inclusive of all applicable taxes, fees or
other assessments, if any, involved with this transfer. In addition, such
Payment shall be inclusive of any expenses or fees of any nature
whatsoever, claimed or to be claimed by Seller in connection with the
preparation of this Agreement or involved with the transfer of such Assets
to the Company.
3) Tax Consequences. The Company makes no representations or warranties with
respect to the tax consequences of the payment or transfer of any
consideration to Seller under the terms of this Agreement. Seller agrees
and understands that it is solely responsible for the payment of federal,
state, and/or local taxes, if any, on the consideration received from the
Company under this Agreement and any penalties or assessments thereon.
Seller further agrees to indemnify and hold the Company harmless from any
and all claims, demands, deficiencies, penalties, assessments, executions,
judgments, or recoveries by any taxing authority against the Company for
any amounts claimed due on account of Seller's failure to pay any of such
taxes and from damages sustained by the Company by reason of any such
claims, including reasonable attorneys' fees and expenses.
4) Indemnification. Seller agrees to indemnify, defend and hold the Company
harmless from any loss, cost, liability or expense arising out of or
resulting from any breach or claimed breach of Seller's representations and
warranties contained herein, including, but not limited to, those arising
out of any third party claims that the Assets infringe any intellectual
property rights including, without limitation, copyrights, patents,
trademarks and trade secrets. In addition, so long as the Company is not in
material default under this Agreement, the Seller will defend the Company
against such claims at Seller's expense and pay all damages that a court
finally awards or settlements entered into, provided that the Company
promptly notifies Seller in writing of such claim, reasonably cooperates
with Seller in the defense or any related settlement negotiations;
provided, however, that Seller shall not fail to diligently protect the
Company from liability or consent to any entry of judgment or enter into
any settlement in the defense of such claim that does not include as an
unconditional term thereof the complete release of the Company from all
liability with respect to such claim without the Company's prior express
written consent.
a) Right to Cure. If such a claim of infringement is made or appears
possible, Seller may, at its option and expense, secure for the
Company the appropriate rights for the Company to be able to continue
to use the Assets, in the manner contemplated by this Agreement.
b) No Obligation. Seller shall have no obligation for any claim based
upon a modified version of the Assets or the combination, operation,
or use of the Assets with any product, data, or apparatus other than
as necessary to use such Assets as designed by Seller.
5) Confidential Information. The Seller and Xxxxxx X. Xxxxxxx hereby severally
agree that each will hold in strictest confidence and not use, except for
the benefit of the Company, or disclose to any person, firm or corporation
without written authorization of the Company any Confidential Information,
as defined herein below. For purposes of this Agreement, "Confidential
Information" shall mean any of the Company's proprietary information,
technical data, trade secrets or know-how, including, but not limited to,
research, product plans, products, services, customer lists and customers
(including, but not limited to, customers of the Company on whom the Seller
called or with whom the Seller became acquainted), markets, software,
developments, inventions, processes, formulas, technology, designs,
drawings, engineering, hardware configuration information,
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Exhibit 10.5
marketing, finances or other business information directly or indirectly
disclosed to the Seller by the Company or by others under confidentiality
agreements executed by the Seller, in writing, orally, or by drawings or
observation of parts or equipment. Confidential Information does not
include any of the foregoing items which have become publicly known and
made generally available through no wrongful act of the Seller or of others
who were under confidentiality obligations as to the items involved.
6) Representations and Warranties.
a) The Seller hereby represents to the Company that:
i) the Seller is a corporation duly, organized, validly existing and
in good standing under the laws of the state of Florida;
ii) the Seller has the right, power and authority to enter into and
fully perform its obligations hereunder this Agreement;
iii) all corporate action on the part of the Seller, its officers,
directors and shareholders necessary for the authorization of
this Agreement and the performance of the Seller's obligations
hereunder have been taken prior to the Effective Date of this
Agreement;
iv) the undersigned officer has the authority to act on behalf of the
Seller and to bind the Seller and all who may claim through it to
the terms and conditions of this Agreement;
v) Xxxxxx X. Xxxxxxx is the duly elected and acting officer of the
Seller who has the full corporate authority and power to execute
this Agreement on behalf of the Seller;
vi) the making of this Agreement by the Seller does not breach or
otherwise violate and other agreement between the Seller and any
third party;
vii) the Seller has not entered into, and will not enter into, any
oral or written agreement in conflict with this Agreement;
viii)the Seller holds good and marketable right title and interest in
the Assets and such Assets are not subject to any mortgage,
pledge, lien, lease, charge or other encumbrance and are fit and
usable for the purposes for which they are intended to be used;
ix) there are no liens or claims of lien or assignments in law or
equity or otherwise against any of the Assets nor are there any
actions, suits, legal proceedings or investigations pending or
threatened lawsuits against the Seller which would impact the
Seller's ability to enter into and perform under this Agreement
and that the Seller is not aware of any basis for any of the
foregoing; and
x) the Seller has previously provided the Company with all due
diligence and documentation requested by Company in connection
with this Agreement, that exist and such documents do not contain
any untrue statement of a material fact.
b) Xxxxxx X. Xxxxxxx hereby represents to the Company that:
i) to his knowledge, he is the sole authorized director of Seller;
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Exhibit 10.5
ii) to his knowledge, that he is the sole authorized, duly elected
and acting officer of Seller who has the full corporate authority
and power to execute this Agreement on behalf of the Seller;
iii) shareholders representing more than 50% of the outstanding stock
of the Seller which represents a controlling interest of the
Seller, have approved the Assignment of Intellectual Property,
Transfer of Rights and Asset Purchase transaction;
iv) to his knowledge, the making of this Agreement and the sale of
the Assets by the Seller does not breach or otherwise violate and
other agreement between the Seller and any third party;
v) he has not entered into, and will not enter into, any oral or
written agreement in conflict with this Agreement and that he has
not taken, and will not take in the future, any such actions on
behalf of the Seller which will result in the conflict with this
Agreement;
vi) to his knowledge, that there are no liens or claims of lien or
assignments in law or equity or otherwise against any of the
Assets nor are there any actions, suits, legal proceedings or
investigations pending or threatened lawsuits against the Seller
which would impact the Seller's ability to enter into and perform
under this Agreement and that there is no basis for the any of
the foregoing.
c) The Company hereby represents to Seller that:
i) the Company is a corporation duly, organized, validly existing
and in good standing under the laws of the state of California;
ii) the Company has the right, power and authority to enter into and
fully perform its obligations hereunder this Agreement;
iii) all corporate action on the part of the Company, its officers,
directors and shareholders necessary for the authorization of
this Agreement and the performance of the Company's obligations
hereunder have been taken prior to the Effective Date of this
Agreement;
iv) the undersigned officer has the authority to act on behalf of the
Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement; and
v) the making of this Agreement by the Company does not breach or
otherwise violate and other agreement between the Company and any
third party.
7) Additional Cooperation. Seller agrees that it will execute any proper oath
or verify any proper document required to carry out the terms of this
Agreement. Seller hereby represents and warrants that its performance of
all the terms of this Agreement will not breach any other agreement to keep
in confidence proprietary information acquired by it in confidence or in
trust from an outside third party prior to the Effective Date of this
Agreement and agrees to notify the Company immediately in writing if Seller
is subsequently notified of such purported breach or otherwise becomes
aware of such a claim of such breach.
8) Noncompetition. The Seller agrees that it will not engage in any business
activity directly related to the business in which the Company is now
involved or becomes involved during the thirty six (36)
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Exhibit 10.5
months following the effective date of this Agreement, or any other
activities that conflict with the Seller's obligations to the Company
hereunder.
9) Solicitation of Employees. The Seller agrees it will not, during the thirty
six (36) months immediately following the effective date of this Agreement,
either directly or indirectly solicit, induce, recruit or encourage any of
the Company's employees or consultants to leave their employment with the
Company, or take away any such employees or consultants, or otherwise
attempt to solicit, induce, recruit, encourage or take away employees or
consultants of the Company, either directly oh behalf of the Seller or for
any other person or entity.
10) Arbitration and Equitable Relief.
a) Arbitration. Except as otherwise provided in subsection 10(b) below,
any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement,
will be settled by binding arbitration held in Santa Xxxxx County,
California, or at any other location mutually agreeable to the Company
and the Seller, in accordance with the rules of the American
Arbitration Association then in effect, as follows: In the event that
Company and Seller mutually agree on one arbitrator, the arbitration
shall be conducted by such single arbitrator. Otherwise, in the event
that the Company and Seller do not so agree on the same arbitrator,
the Company and the Seller will each select one arbitrator and these
two arbitrators shall select a third arbitrator. In addition, unless
the Company and the Seller mutually agree, none of such arbitrators
shall be employed by or affiliated with either party or an
organization which is a direct competitor of the Company. At the
request of either party, the arbitration proceedings will be conducted
in secrecy. In such case, all the documents, testimony, and records
shall be received, heard, and maintained by the arbitrators in secrecy
under seal, available for inspection only by the Company and the
Seller and their respective attorneys and their respective experts who
shall agree in advance and in writing to receive all such information
confidentially and to maintain such information in secrecy until such
information shall become generally known to the public. The Company
and the Seller will each state their respective positions in writing,
and verbally. Each of the parties shall then have an opportunity to
amend their written positions once after such verbal presentations.
The three arbitrators, acting by majority vote, will then make a
determination and such decision of the arbitrators will be binding on
all parties. Such arbitrators shall be able to decree any and all
relief of an equitable nature, including but not limited to such
relief as a temporary restraining order, a temporary or a permanent
injunction, or both, and shall also be able to award damages, with or
without an accounting, costs, and reasonable attorneys' fees. Such
arbitrators shall also allocate all other costs associated with such
proceeding in an equitable fashion. The decision of the arbitrators
will be final, conclusive and binding on the parties to the
arbitration. The decree or judgment of an award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
b) Equitable Remedies. If the Seller breaches subsections 1(a) or 1(b) or
Sections 5, 8 or 9 of this Agreement, the Company will have available,
in addition to any other right or remedy available, the right to
obtain an injunction from a court of competent jurisdiction
restraining such breach or threatened breach and to specific
performance of any such provision of this Agreement. No bond or other
security will be required in obtaining such equitable relief and the
Seller consents to the issuance of any such injunction and ordering of
specific performance.
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Exhibit 10.5
11) General Provisions.
a) Entire Agreement. This Agreement represents the entire agreement and
understanding between the Company and Seller and supersedes, merges
and replaces any and all prior oral and written agreements and
understandings relating to the subject matter of this Agreement. Each
party to the Agreement represents such party has had the opportunity
to consult with an attorney and has carefully read and understands the
scope and effect of the provisions of this Agreement. There are no
representations, agreements, arrangements or understandings, oral or
written, among any of the parties to this Agreement relating to the
subject matter of this Agreement that are not fully expressed in this
Agreement and none of the parties has relied upon any representation
or statement made by one of the other parties in entering into this
Agreement that is not specifically set forth in this Agreement.
b) Modification. No modification of or amendment to this Agreement, nor
any waiver of any rights under this Agreement, shall be effective
unless in writing and signed by both the Company and Seller.
c) Waiver. No failure or delay by either of the parties in exercising any
right, power or privilege under this Agreement will operate as a
waiver thereof. The waiver by either of the parties of a breach of any
provision of this Agreement will not operate or be construed as a
waiver of any other or subsequent breach.
d) Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, the remaining provisions of this
Agreement shall continue in full force and effect without said
provision and the parties agree to amend this Agreement and to
substitute and replace such void or unenforceable provision with a new
enforceable provision negotiated in good faith which most nearly
effects the original intent of the parties upon entering into this
Agreement.
e) Assignment. Neither of the Seller nor the Company may assign its
rights or delegate its duties under this Agreement without the prior
written consent of the other party.
f) Successors and Assigns. This Agreement shall be binding upon, and
inure to the benefit of, the respective legal representatives,
successors and permitted assigns of the parties.
g) No Third Party Beneficiaries. Except as otherwise set forth in this
Agreement, the provisions of this Agreement are not intended to be for
the benefit of or enforceable by a third party.
h) Notices. Any notice required or permitted by this Agreement shall be
in writing and shall be deemed given upon actual receipt or (i) upon
delivery, if personally delivered, (ii) after three days upon deposit
in the mail if sent by prepaid registered or certified mail, return
receipt requested, or (iii) the next business day after delivery to a
commercial overnight courier service. All such notices shall be
addressed at to the appropriate using the address set forth below at
the end of this Agreement or at other such address for which such a
party has previously provided the other with notice under the terms of
notice hereunder.
i) Costs. Except as otherwise specifically provided herein, each of the
parties hereto shall each bear its own costs, attorneys' fees and
other fees incurred in connection with the preparation and execution
of this Agreement.
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Exhibit 10.5
j) Disputes. In the event of a dispute between the parties arising from
or related to this Agreement, the parties agree that the prevailing
party in such dispute shall be entitled to reimbursement of reasonable
attorneys' fees and expenses, in addition to any other rights and
remedies that it may have.
k) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of California, without regard to
the laws of conflicts.
l) Consent to Jurisdiction. Each of the parties hereto hereby expressly
agrees and consents that the California state courts located within
the County of Santa Clara, California shall be the exclusive
jurisdiction and venue in which to adjudicate any dispute arising from
or relating to this Agreement (unless, if there is exclusive federal
jurisdiction, then the United States District Court for the Northern
District of California shall be the exclusive jurisdiction and venue
for such matters.) Furthermore, each of the parties hereto hereby
expressly consents to (i) the personal jurisdiction of the federal and
state courts within California, (ii) service of process being effected
upon it by registered mail sent to the appropriate officer at the
address as set forth below at the end of this Agreement or at other
such address for which such party has previously provided under the
terms of notice hereunder, and (iii) the uncontested enforcement of a
final judgment from such court in any other jurisdiction wherein such
party or any of its assets are present.
m) Counterparts. This Agreement may be executed in counterparts, each of
which when so executed and delivered shall be deemed to be an
original, and all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, each of the parties hereto have caused this Assignment of
Intellectual Property, Transfer of Rights, and Asset Purchase Agreement to be
executed and delivered as of the Effective Date first set forth above.
COMPANY: SELLER:
SIERRA MONITOR CORPORATION MONTECH HOLDINGS INC.
d.b.a. Montech International
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------------- ------------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxx
Title: President Title: President, Sole Director
Address: 0000 Xxxxx Xxxxx Address: 00000 Xxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000 Xxxx Xxxxx, Xxxxxxx 00000
XXXXXX X. XXXXXXX:
(For purposes of Sections 5 and 6(b) only.)
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
Address: ____________________
____________________
____________________
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