Exhibit 10.4
ASSIGNMENT OF INTELLECTUAL PROPERTY AND TRANSFER OF RIGHTS AGREEMENT
This Assignment of Intellectual Property and Transfer of Rights Agreement (this
"Agreement") is made and entered into as of September 23, 1998 (the
"Effective Date") by and between Sierra Monitor Corporation, a California
corporation with principal offices at 0000 Xxxxx Xxxxx, Xxxxxxxx, XX 00000
(the "Company") and Xxxxxx Xxxxx, an individual ("Seller") who is a
California resident. Each of the Company and Seller is sometimes
hereinafter referred to as a "Party" and, collectively, they are sometimes
hereinafter referred to as "the Parties".
RECITALS:
WHEREAS, Seller now owns a line of products known as the
"Communications Bridge", as more fully described on the List of Assets attached
hereto as Exhibit A (the "Communications Bridge.")
WHEREAS, for purposes of this Agreement, the product and the term
"Communications Bridge" shall include all right, title and interest in and to
the Communications Bridge, including, but not limited to, all related computer
programs (including the underlying source code and object code), software,
customer lists, intellectual property and all other rights developed by, owned
by, or otherwise granted to, Seller;
WHEREAS, the Company now desires to acquire all rights from Seller to
the Communications Bridge, so that the Company can manufacture, distribute and
sell the Communications Bridge as well as to further develop such products and
related products;
WHEREAS, the Company now desires to purchase, and Seller desires to
sell, the Communications Bridge in exchange for a cash payment and unregistered
shares of the Company's common stock; 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:
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Exhibit 10.4
AGREEMENT:
1. Sale, Assignment and Transfer of the Communications Bridge.
(a) Intellectual Property and Rights Transferred. Seller
hereby grants and irrevocably assigns all right, title and interest whatsoever,
throughout the world, in and to the computer programs, software, source and
object code, documentation, and all other rights owned by, or otherwise granted
to, Seller known as the Communications Bridge, including, without limitation,
the rights 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 the Communications Bridge, to the
Company, its successors and assigns, for the full duration of all such rights,
and any renewals and extensions thereof. The Parties agree that the
Communications Bridge to be transferred shall include all related support
materials, work-in-progress and documentation owned by Seller including notes,
records, sketches, drawings, specifications, and any other material related to
the Communications Bridge. Such transferred Communications Bridge, including all
such support materials and documentation, will remain the sole property of the
Company.
(b) Computer Programs and Software Transferred. The Parties
agree that such computer programs and software transferred as part of the
Communications Bridge 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 Parties 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 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
Communications Bridge with other works, and hereby waives any claim that any new
versions, developments or derivative works involving the Communications Bridge
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 Communications Bridge, 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, or to continue the production, sales and/or development
of the Communications Bridge.
(c) Cooperation in Securing Rights. Seller hereby covenants
and agrees that he will assist and cooperate with the Company, or its designee,
in every proper way to further secure the Company's rights in the Communications
Bridge 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 Communications
Bridge 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 Seller is not then employed by the Company,
the Company shall reimburse Seller for his reasonable time, on the basis of
Seller's then current standard consulting rates as determined by reference to
the rates actually charged by Seller to his other then current clients, and
expenses in connection with providing such cooperation.
(d) Validity of the Transfer of Communications Bridge. Seller
represents and warrants (i) that Seller has not previously granted any rights in
the Communications Bridge to any third party (which have not otherwise been
reacquired in full by Seller prior to the Effective Date); and (ii) that Seller
currently has the full power and authority to make and enter into this Agreement
and to make the present assignment of the
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Exhibit 10.4
Communications Bridge to the Company as contemplated by this Agreement. The
Company represents and warrants to Seller (i) that the Company has the right,
power and authority to enter into and fully perform its obligations hereunder;
and (ii) the making of this Agreement by the Company does not violate any other
agreement between the Company and any third party.
2. Consideration. Upon the execution of this Agreement and
contemporaneous with the transfer of the Communications Bridge to the Company,
the Company will simultaneously, or as soon as practical thereafter, deliver to
Seller (i) a certificate registered in Seller's name representing Two Hundred
Eleven Thousand Three Hundred and Twenty-Five (211,325) unregistered shares of
the Company's common stock (the "Shares") and (ii) a check (or checks) payable
to Seller for a total of One Hundred and Thirty Thousand and Three Hundred
Dollars (U.S. $130,300, the "Payment"). 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
Communications Bridge to the Company.
3. Representations. The Seller agrees that he will execute any proper
oath or verify any proper document required to carry out the terms of this
Agreement. The Seller agrees that his performance of all the terms of this
Agreement will not breach any other agreement to keep in confidence proprietary
information acquired by him in confidence or in trust prior to his employment by
the Company. The Seller hereby agrees, represents and warrants that he has not
entered into, and will not enter into, any oral or written agreement in conflict
with this Agreement.
4. Acquisition of Shares of Common Stock. In connection with his
acquisition of the Shares of common stock of the Company, Seller hereby
represents to the Company the following:
(a) Seller is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the securities. Seller
is acquiring the Shares for investment purposes only for his own account only
and not with a view to, or for resale in connection with, any "distribution"
thereof within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").
(b) Seller understands that the Shares have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of his investment intent as expressed herein. In this connection, Seller
understands that, in the view of the Securities and Exchange Commission (the
"SEC"), the statutory basis for such exemption may be unavailable if his
representation was predicated solely upon a present intention to hold these
Shares for the minimum capital gains period specified under tax statutes, for a
deferred sale, for or until an increase or decrease in the market price of the
securities, or for a period of one year or any other fixed period in the future.
(c) Seller further understands that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, Seller
understands that the Company is under no obligation to register the Shares. In
addition, Seller understands that the certificate evidencing the Shares will be
imprinted with a legend which prohibits the transfer of such Shares unless they
are registered or such registration is not required in the opinion of counsel
for the Company.
(d) Seller is familiar with the provisions of Rules144 and
701, each promulgated under the Securities Act, which, in substance, permit the
limited public resale of "restricted securities" acquired, directly or
indirectly, from the issuer thereof (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions. In the
event that the Company remains subject to the reporting requirements of
Section13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
any securities exempt under Rule 701 may be resold by the Seller ninety (90)
days thereafter, subject to the satisfaction of certain of the conditions
specified by Rule 144, including amount other things: (i) the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Exchange Act);
and (ii) in the case of an affiliate, the availability of certain public
information about the Company, and the
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Exhibit 10.4
amount of securities being sold during any three month period not exceeding the
limitations specified in Rule 144(e), if applicable.
If the Shares of the Company do not qualify under Rule 701 at the time of
acquisition, then such Shares may be resold by the Seller in certain
limited circumstances subject to the provisions of Rule 144, which
requires among other things: (i) the availability of certain public
information about the Company; (ii) the resale occurring not less than
one year after the Seller has acquired, and made full payment for (within
the meaning of Rule 144), the Shares to be sold; and, in the case of an
affiliate, or of a non-affiliate who has held the securities less than
two years, (iii) the sale being made through a broker in an unsolicited
"broker's transaction" or in transactions directly with a market maker
(as said term is defined under the Exchange Act) and the amount of
securities being sold during any three-month period not exceeding the
specified limitations stated therein, if applicable.
(e) Seller further understands that while a public market
currently exists for shares of the Company's common stock, the Shares that
Seller is acquiring pursuant to the terms of this Agreement have not been
registered under the Securities Act and, further, that at the time that Seller
wishes to sell the Shares, there may be no public market upon which to make such
a sale. Even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144 or 701, and
that, in such event, Seller would be precluded from selling the Shares under
Rule 144 or 701 even if the one-year minimum holding period had been satisfied.
(f) Seller further understands that in the event all of the
applicable requirements of Rule 144 or 701 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the SEC has expressed its opinion that
persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or 701 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales, and that such persons and their
respective brokers who participate in such transactions do so at their own risk.
(g) The address set forth below is the Seller's true and
correct address of residence, and the Seller has no present intention of
becoming a resident of any other state or jurisdiction.
10. Legends. Each certificate or instrument representing the Shares and
securities issuable upon conversion thereof will be endorsed with the following
legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
CONNECTION WITH THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATE RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THIS CERTIFICATE MUST BE
SURRENDERED TO THE CORPORATION OR ITS TRANSFER AGENT
AS A CONDITION PRECEDENT TO THE TRANSFER OF ANY
INTEREST IN THE SECURITIES REPRESENTED BY THIS
CERTIFICATE."
(b) Any other legends required by California law or other
applicable state blue sky laws.
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
represents that it 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 the Parties relating to the subject
matter of this Agreement that are not fully expressed in this Agreement and
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Exhibit 10.4
neither Party has relied upon any representation or statement made by the other
Party 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) Authority. Each of the Parties hereto represents and
warrants that the undersigned has the authority to act on behalf of such Party
and to bind such Party and all who may claim through it to the terms and
conditions of this Agreement. Each of the Parties further represents and
warrants that there are no liens or claims of lien or assignments in law or
equity or otherwise of or against any of the claims or causes of action released
in this Agreement.
(d) Execution and Validity of Agreement. Each of the Parties
hereto agrees to execute any proper oath or verify any proper document required
to carry out the terms of this Agreement. Each of the Parties hereto hereby
represents and warrants that its performance of all the terms of this Agreement
will not breach any other agreements to keep in confidence proprietary
information acquired by it in confidence or in trust from an outside third party
and each of the Parties further covenants and agrees that they will not enter
into, any oral or written agreements in conflict herewith.
(e) 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.
(f) 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 Parties original intent upon entering into this Agreement.
(g) Assignment. Neither of the Parties to this agreement may
assign its rights or delegate its duties hereunder without the prior written
consent of the other Party.
(h) 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.
(i) 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, unless upon appropriate investigation such courier's
records indicate a latter date. All such notices shall be addressed to the other
Party at the appropriate address set forth below or at other such address for
which such Party has previously provided the other under the terms of notice
hereunder.
(j) Costs. Except as otherwise specifically provided herein,
the Parties shall each bear their own costs, attorneys' fees and other fees
incurred in connection with the preparation and execution of this Agreement.
(k) 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.
(l) Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of California as such laws
are applied to agreements entered into and to be performed entirely in
California by California residents.
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Exhibit 10.4
(m) 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 hereby expressly consents to (i) 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 address first set forth at the
beginning 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.
(n) 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 and Transfer of Rights Agreement to be
executed and delivered as of the Effective Date first set forth above.
COMPANY: SELLER:
SIERRA MONITOR CORPORATION
By: /S/ Xxxxxx X. Xxxxxx By: /S/ Xxxxxx Xxxxx
----------------------------- ---------------------------
Xxxxxx X. Xxxxxx, President Xxxxxx Xxxxx
Address: 0000 Xxxxx Xxxxx Address: Resident of
Xxxxxxxx, XX 00000 California
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