EXHIBIT 10.26
PATENT RIGHTS PURCHASE & SALE
-----------------------------
AGREEMENT
---------
A. PARTIES
This agreement is entered into this 11th day of July, 2005 by and
between Ingen Technologies, Inc., a Georgia corporation doing business in
California ("Ingen") and Xxxxxxx XxXxxxxxx, a resident of California
("grantor").
B. RECITALS AND SUMMARY
Ingen is in the business of providing oxygen sensing and warning
technology to medical, private and governmental markets. Grantor is the inventor
of certain technology utilized by Ingen in the design and manufacture of its
BAFI and OxyAlert product lines. The technology is patented. United States
Patents No. 6,326,896 B1 (December 4, 2001) and No. 6,137,417 (October 24, 2000)
("the patents") are attached as exhibits "A" and "B," respectively, hereto (and
incorporated herein as a part hereof by this reference). The parties entered
into an exclusive licensing agreement for use of the patents on or about June
24th, 1999 ("licensing agreement" - see Exhibit "C" hereto, incorporated herein
as a part hereof by this reference). Grantor is selling all of his right, title
and interest in the patents to Ingen as provided in this Agreement.
C. PURCHASE & SALE; PRICE AND TERMS
Grantor hereby sells and Ingen hereby purchases all right and title of
grantor to the patents, including, but not limited to, the patents themselves
and foreign rights of priority for both patents. Grantor represents and warrants
that except for the licensing agreement attached hereto as Exhibit "C," there
are no encumbrances of any nature or kind on the patents and all rights of any
nature thereto, and further, that grantor is conveying full right and title to
the patents and all rights of any nature thereto to Ingen (devoid of any
infringement problems and all claims by other parties, private and
governmental).
Ingen, in acquiring full right and title to the patents and all rights
of any nature thereto, is free to utilize all such rights and title to the
fullest extent permitted by law. However, any use of the technology as embodied
in the patents is subject to this Agreement, including, but not limited to (as
required) the payment of the royalty in C. 3. below.
There are 3 components to the purchase price for the patents and all
rights as aforesaid:
1
1. Ten thousand dollars ($10,000) (U.S.), payable in full upon
the signing of this agreement.
2. The issuance of two million (2,000,000) shares of restricted
common shares of Ingen; the stock certificate to be issued as
soon as is practical (after the signing of this Agreement) by
Ingen's transfer agent.
3. Payment of four percent (4%) of the gross profits of all
products of Ingen utilizing the technology embodied within the
patents (if and when any such royalties become due). Payment
shall be within thirty (30) days of the close of each calendar
quarter for the life of the patents. Grantor, with 10 business
days advance written notice, may, with a qualified
representative, inspect the relevant books of Ingen to audit
compliance with this subsection. Any such inspections shall be
at grantor's expense and are limited to one inspection per
calendar year (and must be at least 90 days apart).
D. COMPLIANCE WITH SECURITIES LAWS
The parties understand that this Agreement is in the nature of a
"security" as defined under applicable state and federal law. This is because a
portion of the purchase price for the patents is payable in restricted
securities of Ingen.
It is understood that this Agreement will not be registered with any
state or federal securities regulatory authority and that the parties are
relying upon exemptions from registration under state and federal law, or, the
parties are relying on a federal law "private placement" exemption that
pre-empts state law. No state or federal securities regulator has read or passed
upon the merits or adequacy of this Agreement. The certificate evidencing
ownership of common stock in Ingen will contain a restrictive endorsement
prohibiting transfer (without permission obtainable under very limited
circumstances).
E. ASSIGNMENT OF PATENTS
Immediately after this Agreement is signed, the parties shall execute
an Assignment of Patent as prepared by Ingen within a form substantially similar
to the form as contained within Exhibit "D" hereto. Exhibit "D" is incorporated
herein as a part hereof by this reference. Ingen shall prepare, and the parties
shall also immediately execute, a United States Patent and Trademark Office Form
PTO-1595. Ingen shall, as soon as is practical thereafter, record the Form
PTO-1595 and Assignment of Patent (at Ingen's expense) with the United States
Patent and Trademark Office. The parties agree to expeditiously prepare and sign
any other document needed to effectuate this transaction to its fullest degree.
2
F. CANCELLATION OF LICENSING AGREEMENT; MUTUAL RELEASE
Immediately upon the signing of this Agreement, the Exclusive Licensing
Agreement, as contained in Exhibit "C" hereto, is cancelled and is of no further
force and effect except as provided for herein. Grantor represents and warrants
that he received 200,000 shares of Ingen common stock as contained in 1. of the
licensing agreement. Any employment contract between Ingen and Grantor as
referenced in 1. of the licensing agreement is also cancelled and is of no
further force and effect.
1. GENERAL, MUTUAL RELEASE; NON-ADMISSION OF LIABILITY
This Mutual General Release shall not in any way be construed as an
admission that either party has acted wrongfully with respect to the other party
or any other person, and both parties specifically disclaim any liability to or
wrongful acts against the other party or any other person, on the part of
himself, herself and their respective employees or agents, if any. In fact, the
parties are not aware of having done anything to harm the interests of the other
party.
2. COMPLETE RELEASE BY BOTH PARTIES.
(a) Except as herein otherwise agreed, each party hereby
irrevocably and unconditionally releases, acquits and forever discharges the
other and each of their present and former agents, directors, officers,
employees, representatives, attorneys, spouses, other family members and anyone
associated with the other having anything to do with the relationship of the
parties, and all persons acting by, through, under or in concert with any of
them from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses (including attorneys' fees
and costs actually incurred) of any nature whatsoever, known or unknown,
suspected or unsuspected, including, but not limited to, rights arising out of
alleged violations of any contracts, express or implied, any covenant of good
faith and fair dealing, express or implied, or any tort, or any federal, state
or other governmental statute, regulation, or ordinance. This paragraph shall
have no applicability to Claims, if any, based totally on events occurring after
the date of this Agreement and/or on the provisions of this Agreement.
(b) Except as herein otherwise agreed, each party hereby
irrevocably and unconditionally releases, acquits and forever discharges the
other from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, controversies, damages, actions, causes of action, suits,
rights, demands, costs, losses, debts and expenses (including attorneys' fees
and costs actually incurred) of any nature whatsoever, known or unknown,
suspected or unsuspected as of the date of the execution of this Agreement, by
reason of any act or omission concerning any matter, cause, or thing.
3
3. KNOWING AND VOLUNTARY WAIVER BY THE PARTIES
The parties expressly waive and relinquish all rights and benefits
afforded by Section 1542 of the Civil Code of the State of California, and do so
understanding and acknowledging the significance of such specific waiver of
Section 1542. Section 1542 of the Civil Code of the State of California states
as follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his settlement
with the debtor."
Thus, notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release, the parties expressly
acknowledge that this Mutual General Release is intended to include in its
effect, without limitation, all claims which the parties do not know or suspect
to exist at the time of execution hereof, and that this Mutual General Release
contemplates the extinguishment of any such claim or claims and any right to xxx
regarding any such claim or claims (except for uncured breaches of this
Agreement occurring after the date first written above).
G. REPRESENTATIONS AND WARRANTIES OF INGEN
Ingen represents and warrants that it is properly formed and in good
standing in the state of Georgia and that it has and will continue to operate
its business in a commercially reasonable manner, in accordance with industry
standards.
Ingen represents and warrants that it will continue to use its best
efforts to manufacture and sell its products using the technologies embodied in
the patents for the length of time of this Agreement, or for as long as
commercially viable (in the reasonable judgment of Ingen); whichever comes
first. If and when sales are made, Ingen will dutifully collect and timely pay
grantor's royalty as contained herein regardless of whether the royalty is due
from sales of its products or as a result of a licensing agreement with another
party.
Ingen represents and warrants that it will take no conscious actions
(or omissions) that will intentionally devalue the patents. Ingen agrees,
subject to reasonable economic constraints and within Ingen's product sales
territories or the United States (whichever area is greater), to defend the
patents against infringement and other forms of illegal exploitation by others.
Ingen represents and warrants that it knows of no reason (economic,
legal or otherwise) why it should not enter into this Agreement. Ingen does not
represent or warrant that the terms of this Agreement are any more or less
favorable to grantor than any other terms might have been and further, that
Ingen accepts no responsibility for any potential legal, economic and/or tax
ramifications of this Agreement to the grantor.
4
H. FURTHER REPRESENTATIONS AND WARRANTIES OF GRANTOR
1. The grantor has received and carefully reviewed, and is familiar
with this Agreement and all material incorporated by reference herein, as well
as all amendments and attachments delivered herewith. In evaluating the
suitability of entering into this Agreement, the grantor has relied upon his own
judgments, opinions and observations of Ingen based on his experience with Ingen
over the last few years.
2. The grantor has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
prospective entrance into this Agreement. Grantor represents and warrants that
he is not aware of any reason (legal, financial or otherwise) why he should not
enter into this Agreement.
3. The grantor has obtained, to the extent he deems necessary, his own
personal professional advice with respect to the risks inherent in this
Agreement, and the suitability of entering into this Agreement in light of his
personal needs and requirements.
4. Especially with respect to the Ingen stock involved as a part of the
purchase price, the grantor believes that entering into this Agreement is
suitable for him based upon his investment objectives and financial needs, and
the grantor has adequate means of providing for his current financial needs and
personal contingencies and has no need for liquidity of investment with respect
to the stock being transferred to him per this Agreement.
5. The grantor has been given access to full and complete information
regarding the company and its founding principals, and has utilized such access
to his satisfaction, or waived the opportunity to do so, for the purpose of
asking questions and receiving answers concerning the terms and conditions of
this Agreement, obtaining information in addition to, or verifying information
included in, this Agreement, and obtaining any of the documents described
herein. The grantor has either attended or been give reasonable opportunity to
attend a meeting with representatives of the company for the purpose of asking
questions of, and receiving answers from, such representatives concerning the
terms and conditions of this Agreement and to obtain any additional information,
to the extent reasonably available, necessary to verify the accuracy of
information provided in this Agreement and to ascertain the current state of
company operations and prospects.
6. The grantor recognizes that Ingen has a limited operating history,
and that entry into this Agreement involves risk including, but not limited to,
the risk of economic losses from operations of the company (and resulting
inability of Ingen to manufacture and sell its products or pay the obligations
contained herein).
7. With respect to the Ingen shares transferred hereby, the grantor
realizes that (i) entry into this Agreement should be considered by him to be a
long-term investment, (ii) He must bear the economic risk of investment for an
indefinite period of time because this Agreement has not been registered under
applicable securities laws, but rather is pursuant to exemptions therefrom and,
therefore, his interest in the Ingen shares per this Agreement may not be sold
5
unless subsequently registered under such securities laws or exempted from such
registration, (iii) there is presently no public market for the Ingen shares
(and none is expected), the grantor understands that he may not be able to
liquidate his Ingen stock in the event of an emergency or pledge any of his
interest in the Ingen stock as collateral or security for loans.
8. The grantor acknowledges that Ingen and its affiliates have not
retained counsel to provide him with representation in connection with this
Agreement. The grantor also acknowledges that he understands that (i) no counsel
has undertaken any independent due diligence investigation of the facts and
circumstances relating to this Agreement, and (ii) he must assume responsibility
for his own due diligence investigation, and (iii) the protection afforded by a
complete due diligence investigation of counsel is not present in this
Agreement.
9. The grantor acknowledges that he understands the risk that
insufficient operating funds and/or proceeds from product sales will be
available to Ingen over time and there is no guarantee that Ingen will be able
to maintain or increase its current level of operation and sales output; or
remain in business during the life of this Agreement.
10. The grantor has been advised that this Agreement has not being
registered under the Securities Act of 1933 or the relevant state securities
law, and that the Ingen stock portion of this Agreement is being offered and
sold pursuant to exemptions from such registrations, and that the company's
reliance upon such exemptions is predicated partly on the grantor's
representations to the company as contained herein. The grantor represents and
warrants that this Agreement is being entered into for his own account and for
investment (with regard to the Ingen stock) and without the intention of
reselling or redistributing the Ingen shares, that he has made no agreement with
others regarding this Agreement, and that his financial condition is such that
it is not likely that it will be necessary to dispose his interest in the Ingen
stock herein in the foreseeable future. The grantor further represents that he
understands that he may not dispose of or transfer any of his interest in the
Ingen shares, or otherwise, in this Agreement in any manner without first
obtaining (i) an opinion of counsel satisfactory to the company that such
proposed disposition or transfer lawfully may be made without the registration
of this Agreement for such purpose pursuant to the Act, as then amended, and
applicable state securities laws, as well as any internal documents or policies
of the company, or (ii) such registrations (it being expressly understood that
the company shall not have any obligations to register this Agreement for any
purpose.)
11. The grantor represents and warrants that he is a bona fide resident
of, and is domiciled in, the State of California and that his entry into this
Agreement by him is in his name solely for his own beneficial interest and not
as nominee for, or on behalf of, or for the beneficial interest of, or with the
intention to transfer to, any other person, trust, or organization, except
specifically set forth elsewhere in this Agreement.
6
12. The grantor is informed of the significance to Ingen of the
foregoing representations, and such representations are made with the intention
that Ingen will rely on the same. The grantor shall indemnify and hold harmless
Ingen, its officers, directors, managers and agents against any losses, claims,
damages, or liabilities to which they, or any of them, may become subject
insofar as such losses, claim, damages, or liabilities (or actions in respect
thereof) arise from any misrepresentation or misstatement of facts or omission
to represent or state facts made by the grantor to Ingen herein.
13. The grantor represents that he has obtained any necessary financial
and/or tax planning assistance in evaluating his entrance into this Agreement.
14. Confidentiality. Grantor represents and warrants that he will hold
this Agreement in confidence and in accordance with the following:
a. The provisions of this Agreement are confidential and private
and are not to be disclosed to outside parties (except on a reasonable need to
know basis only) without the written and express, advance consent of all parties
hereto.
b. Grantor agrees and acknowledges that in his association with
Ingen under this Agreement (and prior to), he may come into, or has such,
possession or knowledge of confidential and/or proprietary information. Such
confidential and/or proprietary information includes, but is not limited to:
information regarding agents, contractors, employees and all affiliates of which
Ingen possesses an ownership interest of ten percent (10%) or greater; corporate
and/or financial information and records of or any client, customer or associate
of Ingen; customer information; client information; shareholder information;
business contacts; investor leads and contacts; employee information; documents
regarding Ingen's website and any product, business plan or presentation
materials of Ingen.
Grantor represents and warrants to Ingen that he will not divulge
confidential, proprietary information of Ingen or any of its subsidiaries to
anyone or anything without the written and express, advance consent of Ingen,
and further represents and warrants that he will not use any proprietary
information of Ingen for his or anyone else's gain or advantage at any time
during or after the term of this Agreement.
I. FORCE MAJEURE
Ingen is not responsible for any delay or financial loss regarding this
Agreement caused by any unforeseen event(s), act(s) or omission(s) of others not
within its control, including, but not limited to, labor stoppages or strikes,
lack of access to locations, equipment or facilities, interruption or cessation
of any public services or utilities, inclement weather, natural disasters, riots
or civil disturbances, terrorism or harassment, acts of war or aggression,
sickness, injury, death, incapacity, contractual disputes and adverse economic
conditions.
7
J. LITIGATION, LEGAL MATTERS
Management has no information leading it to believe that litigation is
imminent or planned by anyone with respect to Ingen, its securities or this
Agreement.
K. ACCESS TO INFORMATION
Grantor has the right to request additional information relative to
this private placement of securities and Agreement and Ingen, to the extent it
can reasonably and affordably supply it, has the duty to supply the same in a
timely manner.
L. TABLE OF EXHIBITS
EXHIBIT "A" United State Patent (December 4, 2001)
EXHIBIT "B" United States Patent (October 24, 2000)
EXHIBIT "C" Exclusive Licensing Agreement (June 24, 1999)
EXHIBIT "D" Assignment of Patent form
M. MISCELLANEOUS LEGAL CONSIDERATIONS
1. Modifications and Amendments. The terms and conditions of this
Agreement may be amended at any time and from time to time, in whole and in
part, upon written agreement signed by a duly authorized officer of Ingen and
grantor.
2. Expenses. Each party shall bear its own respective costs, fees and
expenses associated with entering into and executing its duties under this
Agreement.
3. Indemnification. Each party, if an offending party, agrees to
indemnify and hold harmless the other party from any claim of damage of any
party or non-party arising out of any act or omission of the offending party
arising from this Agreement.
4. Notices. Any notice, request, proposal, statement or other
communication required or permitted to be given hereunder shall be in writing
and shall be deemed given when personally delivered or confirmed by facsimile or
ten (10) days after mailed by certified mail, postage prepaid, to the parties at
their respective addresses first set forth above or to such other address of
which a party shall have theretofore notified the other by a notice given in
accordance with this Paragraph 4., together with a courtesy copy to the
receiving party's counsel, as follows:
If to Ingen:
------------
Ingen Technologies, Inc.
000 X. Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
8
If to Grantor:
--------------
Xx. Xxxxx XxXxxxxxx
00000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
5. Breach. In the event of a breach of this Agreement, the breaching
party shall be notified by the other party by written notice within ten (10)
days of reasonable discovery of the breach. Upon notice so given, the breach
shall be corrected within fifteen (15) days. If the breach is not corrected
within this period, the non-breaching party may take appropriate legal action
consistent with the terms of this Agreement.
6. Assignment. The provisions of this Agreement shall be binding upon
and inure to the benefit of Ingen and grantor and their respective successors,
assigns and personal representatives. If Ingen shall at any time be merged or
consolidated into or with any other corporation or the company's capital
ownership units or substantially all of its assets are transferred to another
entity, the provisions of this Agreement shall be binding upon and inure to the
benefit of grantor and the entity resulting from such merger or consolidation or
to which such capital ownership units or assets shall be transferred, and this
provision shall apply in the event of any subsequent merger, consolidation or
transfer.
7. Entire Agreement. This Agreement is the full and complete,
integrated agreement of the parties, merging and superceding all previous
written and/or oral agreements and representations between the parties, and is
amendable as provided for above. This Agreement shall be interpreted as if the
parties participated equally in its drafting.
8. Governing Law. This Agreement shall be governed by the laws of the
State of California applicable to contracts made to be performed entirely
therein, and each party agrees to submit to the personal jurisdiction of any
Court of competent jurisdiction in San Bernardino County and to all the rules
and orders of such Court, and the laws of the State of California.
9. Waiver. Any waiver by either party of any provision of this
Agreement or any right hereunder shall not be deemed a continuing waiver and
shall not prevent or stop such party from thereafter enforcing such provision,
and the failure of either party to insist in any one or more instances upon the
strict performance of any of the provisions of this Agreement by the other party
shall not be construed as a waiver or relinquishment for the future performance
of any such term or provision, but the same shall continue in full force and
effect.
10. Enforcement. If the parties cannot settle any dispute arising out
of or relating to this Agreement, or the breach thereof, in a reasonable and
timely fashion, and a mediation session has failed, either party may file for
binding arbitration within San Bernardino County, California. Arbitration shall
be governed by the rules of the American Arbitration Association and judgment
9
upon the award may be entered in any Court within San Bernardino County having
jurisdiction thereof. However, the parties agree to reserve the right to obtain
a preliminary injunction from a court of competent jurisdiction if necessary in
the event of a material breach arising from this Agreement.
11. Headings. The headings in this Agreement are solely for convenience
of reference and shall not affect its interpretation.
12. Possible Invalidity. In case any provision of this Agreement should
be held to be contrary to, or invalid under, the law of any country, state or
other jurisdiction, such illegality or invalidity shall not affect in any way
any of the other provisions hereof, this Agreement in such event to be construed
as though the offending provision had been deleted or modified in such a manner
as to make it enforceable to the maximum extent possible to reflect the parties'
intent hereunder, and all of the provisions hereof nevertheless shall continue
unmodified and in full force and effect in any country, state or jurisdiction in
which such provisions are legal and valid.
13. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same agreement. Facsimile signatures shall be considered as valid
and binding as original signatures.
14. Independent Covenants: Each of the respective rights and
obligations of the parties hereunder shall be deemed independent and may be
enforced independently irrespective of any of the other rights and obligations
set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed (before a Notary Public)
this Agreement, consisting of ten (10) pages, on the date first written above.
-------------------------------------- --------------------------------------
Ingen Technologies, Inc. GRANTOR
By: Xxxxx X. Sand, CEO
10
