99.1 Settlement and Forbearance Agreement dated July 31, 2009
SETTLEMENT AND FORBEARANCE AGREEMENT
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This Settlement and Forbearance Agreement ("Agreement") is made as of
July 31, 2009 entered into between INGEN TECHNOLOGIES, INC. ("Ingen" or
"Defendant"), on the one hand, and NEW MILLENNIUM CAPITAL PARTNERS II, LLC
("NMCP"), AJW OFFSHORE, LTD. ("AJWO"), AJW QUALIFIED PARTNERS, LLC ("AJWQP") and
AJW Partners, LLC ("AJW"), AJW MASTER FUND, LTD. ("AJWMF"); AJW PARTNERS II, LLC
("AJW2"); AJW OFFSHORE II, LTD. ("AJWO2"); AJW QUALIFIED PARTNERS II, LLC
("AJWQ2"); NEW MILLENNIUM CAPITAL PARTNERS III, LLC ("NMCP3"); and AJW MASTER
FUND II, LTD. ("AJWMF2") (collectively "Plaintiffs"), on the other hand
(collectively referred to herein as the "Parties").
WHEREAS AJWP, AJWQP, AJWO and NMCP entered into a Securities Purchase
Agreement with Ingen, dated July 25, 2006, pursuant to which they acquired
Callable Secured Convertible Notes ("the Note(s)") from Ingen; and
WHEREAS, AJWP, AJWQP, AJWO and NMCP also entered into a Securities
Purchase Agreement with Ingen dated March 15, 2007, pursuant to which they
acquired additional Notes from Ingen; and
WHEREAS, NMCP, AJWP and AJMF, also entered into a Securities Purchase
Agreements with Ingen on or about June 16, 2008 pursuant to which they acquired
additional Notes; and
WHEREAS, AJWP, AJWQP, AJWO, NMCP, AJWMF have assigned certain of their
rights under the Notes and Securities Purchase Agreements to AJWP2, AJWO2,
AJWQ2, NMCP3, and AJMF2; and
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WHEREAS, Plaintiffs commenced an action in the Supreme Court of New
York, New York County, against Ingen and Ingen, Index No. 601918/09 (the
"Action"); and
WHEREAS, the Parties arc now desirous of resolving their differences
without further litigation; and with Ingen continuing to issues shares to
Plaintiff in exchange for reductions in the sums due to plaintiffs.
NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the Parties agree as follows:
1. EFFECTIVE DATE. This Agreement will be effective on the above date
once it has been executed by all Parties.
2. THE JUDGMENT.
A. Defendant hereby consents to the entry of judgment in favor
of Plaintiffs in the aggregate amount of four million five hundred thousand
dollars ($4,500,000) (the "Judgment Amount"). The parties shall execute the
Stipulation for Entry of Judgment annexed as Exhibit A hereto and the judgment
arising there from is referred to in this Agreement as the Judgment.
3. CANCELLATION OF ALL WARRANTS. Upon execution of this Agreement, all
warrants to acquire securities of Ingen owned by Plaintiffs shall be cancelled,
surrendered, and deemed null and void.
4. PAYMENT AND FORBEARANCE.
A. No later than 11:00 a.m. on each Tuesday, commencing August
4, 2009, until the judgment is satisfied, Ingen shall deliver to Plaintiffs the
Weekly Payment Amount, as defined below, in the form of shares of Ingen common
stock, provided such shares are free of restrictive legends. The Weekly Payment
Amount shall be the greater of: (a) forty million (40,000,000) shares or (b)
twenty percent (20%) of the prior week's total trading volume as reported on
Bloomberg. However, in no event shall any shares be delivered that would cause
Plaintiffs to be the beneficial owner of more than 4.99% of Ingen's common
stock, in accordance with SEC Rule 13d-3.
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B. Plaintiffs consent to Ingen's offering up to four million
dollars ($4,000,000) of securities and shall forbear any collection efforts so
long as one half of the net offering proceeds from the offering is paid to
Plaintiffs (the "Offering Payment"), pro rata , as such funds are received by
Ingen or its affiliates, provided, further, that neither Ingen nor any of its
affiliates shall issue or sell securities to any person other than Plaintiffs in
any week in excess of the Weekly Payment. Plaintiffs shall receive copies of
offering materials before any closing. The Offering Payment shall be made by
wire to such account as Plaintiffs direct.
C. So long as Ingen shall (i) deliver the Weekly Payment
Amount, as defined below, when due; (ii) shall not breach subpart 4(B) above;
and (iii) shall timely deliver shares to the Escrow Agent. Plaintiffs agree to
forbear from enforcing the Judgment or any security interests held by Plaintiffs
through and until May 31, 2010.
5. REDUCTION OF THE JUDGMENT. The Judgment and related Judgment Amount
shall be reduced (i) by the net proceeds from any sales, transfers or other
dispositions of the Weekly Payment Amount, (ii) by the amount of any Offering
Payment, and (iii) by such other cash payments as Ingen may decide to make from
time to time.
6. MONITORING. Plaintiffs shall provide Ingen with monthly reports
setting forth the proceeds of any sales, transfers or other dispositions of the
Weekly Payment Amount, and upon request, shall provide defendant with records to
confirm such proceeds.
7. PAYMENT & DISCHARGE. Upon payment in full of the Judgment by May 31,
2010, the following shall occur:
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a. Plaintiffs will provide Ingen with a satisfaction-piece
with respect to the Judgment and shall execute appropriate UCC
forms, to be provided by Ingen, to terminate any and all
security interests.
b. Ingen shall irrevocably, fully, and finally, without
further word, deed, action, execution, or further
documentation, releases and discharges Plaintiffs, their past
and present officers, directors, employees, managers, and
representatives ("Plaintiff Releasees"), from any and all
actions, causes of action, suits, debts, accounts, covenants,
contracts, agreements, promises, damages, judgments, claims,
and demands whatsoever, in law or equity, known or unknown
which it, its successors and assigns now have or hereinafter
may have against Plaintiff Releasees, from the beginning of
time up to and including the date of this Agreement.
c. Plaintiffs shall irrevocably, fully, and finally, without
further word, deed, action, execution, or further
documentation, releases and discharges Ingen its officers,
directors, employees, managers, and representatives ("Ingen
Releasees"), from any and all actions, causes of action,
suits, debts, accounts, covenants, contracts, agreements,
promises, damages, judgments, claims, and demands whatsoever,
in law or equity, known or unknown which it, its successors
and assigns now have or hereinafter may have against Ingen
Releasees, from the beginning of time up to and including the
date of this Agreement.
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8. THE ESCROW. Simultaneous herewith, the parties shall sign the Escrow
Agreement annexed hereto as Exhibit B. No later than five business days
thereafter, Ingen shall deliver to the Escrow Agent certificates for 400 million
shares of Ingen Common Stock, free and clear of all restrictive legends, to be
held in escrow in accordance with the terms of the Escrow Agreement.
9. ACKNOWLEDGEMENT OF JUDGMENT AND FIRST PRIORITY SECURITY INTERESTS.
Ingen represents, warrants, covenants and acknowledges that (a) the Judgment is
valid, binding and enforceable and Ingen waives any and all defenses, off-sets,
challenges or counterclaims of any kind, nature or description thereto and (b)
Plaintiffs have and shall retain a first priority security interests in the
amount of any sums owed by Ingen, until the Judgment is paid in full.
10. ASSIGNMENT. The Parties represent, covenant, and warrant that
it/they are the sole and lawful owner of all right, title and interest in and to
every claim and other matter which each purports to release herein, and that it
has not heretofore assigned or transferred, or purported to assign or transfer,
to any person, firm, association, corporation or other entity, any right, title
or interest in any such claim or other matter. In the event that such
representation is false, and any such claim or matter is asserted against any
party hereto (and/or the successor of such party) by any party or entity who is
the assignee or transferee of such claim or matter, the Party shall fully
indemnify, defend and hold harmless the party against who such claim or matter
is asserted (and its successors) from and against such claim or matter and from
all actual costs, demands, fees, expenses, liabilities, and damages which that
party (and/or its successors) incurs as a result of the assertion of such claim
or matter. It is the intention of the Parties that this indemnity does not
require payment as a condition precedent to recovery by a party under this
indemnity.
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11. AUTHORITY TO BIND PARTIES. Each Party executing this Agreement
represents, covenants, and warrants to the other Parties that the individual
executing this Agreement on behalf of each party has the power and authority to
execute this Agreement and to bind the party to the terms and conditions of this
Agreement by executing this Agreement.
12. SURVIVAL OF REPRESENTATIONS, COVENANTS, AND WARRANTIES. The
representations, covenants, and warranties contained in this Agreement are
deemed to and do survive the execution hereof.
13. MODIFICATIONS. This Agreement may not be amended, canceled, revoked
or otherwise modified except by written agreement subscribed by all of the
Parties to be charged with such modification.
14. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be binding
upon and shall inure to the benefit of the Parties hereto and their respective
partners, employees, agents, servants, heirs, administrators, executors,
successors, representatives and assigns. The Parties agree to execute all
documents necessary to effectuate this transaction.
15. NOTICES. All notices shall he sent by overnight courier and by
e-mail to the addresses designated below and shall be deemed received on the
date of transmission.
If to Plaintiffs to: Corey Ribotsky
N.I.R. Group
1044 Northern Boulevard, Suite 302
Roselyn, NY 11576
cribotsky@irgroup.com
and
Yoel Goldfeder
N.I.R. Group
1044 Northern Boulevard, Suite 302
Roselyn, NY 11576
ygoldfeder@nirgroup.com
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with a copy to: Thomas J. Fleming
Olshan Grundman Frome Rosenzweig &
Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, NY 10022
tfleming@olshanlaw.com
If to Ingen to: Scott Sand, CEO
35193 Avenue A
Yucaipa, CA 92399
Telephone: 909.790.7180
Facsimile: 909.790.7185
with a copy to: Rick Weed
Weed & Co. LLP
4695 MacArthur Court, Suite 1430
Newport Beach, CA 92660
Telephone 949.475.9086 ext. 22
Facsimile 949.475.9087
16. FORUM AND GOVERNING LAW. This Agreement shall be governed by the
laws of the State of New York, without regard to the provisions governing
conflicts of law. Each party agrees to submit to the exclusive jurisdiction of
the Courts located in New York County, New York, in any dispute arising out of
or concerning this Agreement. In the event that plaintiffs prevail in any
action, suit or other proceeding to remedy, prevent or obtain relief from a
breach of this Agreement, arising out of a breach of this Agreement or to
enforce the Judgment upon a default, plaintiffs shall recover their attorneys'
fees and costs incurred in each and every such action, suit or enforcement
effort, including any and all appeals or petitions therefrom.
17. COUNTERPARTS. This Agreement may be executed in counterparts, and
by signatures transmitted by facsimile or by emailed PDF copy, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
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IN WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby,
execute this Agreement upon the date first set forth above.
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By:_________________________________________
Name:
Title:
AJW PARTNERS, LLC
By:_________________________________________
Name:
Title:
AJW OFFSHORE, LTD.
By:_________________________________________
Name:
Title:
AJW QUALIFIED PARTNERS, LLC.
By:_________________________________________
Name:
Title:
AJW MASTER FUND, LTD.
By:_________________________________________
Name:
Title:
AJW PARTNERS II, LLC
By:_________________________________________
Name:
Title:
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AJW OFFSHORE II, LTD.
By:_________________________________________
Name:
Title:
AJW QUALIFIED PARTNERS II, LLC
By:_________________________________________
Name:
Title:
NEW MILLENNIUM CAPITAL PARTNERS III, LLC
By:_________________________________________
Name:
Title:
AJW MASTER FUND II, LTD.
By:_________________________________________
Name:
Title:
INGEN TECHNOLOGIES, INC.
By:_________________________________________
Name:
Title:
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EXHIBIT A
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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AJW PARTNERS, LLC; AJW OFFSHORE, LTD.; AJW | Index No. 601918/09
QUALIFIED PARTNERS, LLC; NEW MILLENNIUM |
CAPITAL PARTNERS II, LLC; AJW MASTER FUND, |
LTD.; AJW PARTNERS II, LLC; AJW OFFSHORE II, |
LTD.; AJW QUALIFIED PARTNERS II, LLC; NEW | STIPULATION
MILLENNIUM CAPITAL PARTNERS III, LLC; and | -----------
AJW MASTER FUND II, LTD., |
|
Plaintiffs, |
|
-against- |
|
INGEN TECHNOLOGIES, INC., |
|
Defendant. |
- ---------------------------------------------|
WHEREAS, the parties have entered into a Settlement and Forbearance
Agreement dated July 31, 2009 and now wish to effectuate certain provisions of
that agreement;
IT IS HEREBY STIPULATED AND AGREED by and between the undersigned,
that:
1. Defendant consents to jurisdiction of the Court's of New York,
waives any claims or defense regarding service of process or venue, and consents
to the entry of judgment in favor of Plaintiffs in the following amounts:
Name Judgment Amount
---- ---------------
AJW OFFSHORE, LTD. $610,127
AJW QUALIFIED PARTNERS, LLC $87,507
AJW PARTNERS, LLC $15,740
AJW MASTER FUND, LTD. $134,609
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AJW PARTNERS II, LLC $415,673
AJW OFFSHORE II, LTD. $1,608,518
AJW QUALIFIED PARTNERS II, LLC $801,750
NEW MILLENNIUM CAPITAL PARTNERS III, LLC $350,489
AJW MASTER FUND II, LTD. $475,587
2. Plaintiffs are hereby authorized to enter judgment in the above
amounts without further notice to defendant. Said judgment shall not include any
costs, expenses or attorneys fees.
Dated: New, York, New York
July __, 2009
OLSHAN GRUNDMAN FROME
ROSENZWEIG & WOLOSKY LLP
By: ____________________________
Thomas J. Fleming
ATTORNEYS FOR PLAINTIFFS
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
HODGSON RUSS LLP
By: ____________________________
Mark Harmon
ATTORNEYS FOR DEFENDANT
1540 Broadway
24th Floor
New York, New York 10036
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EXHIBIT B
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ESCROW AGREEMENT
----------------
This Escrow Agreement is made and entered into between INGEN
TECHNOLOGIES, INC. ("Ingen" or "Defendant"), on the one hand, and NEW MILLENNIUM
CAPITAL PARTNERS II, LLC ("NMCP"), AJW OFFSHORE, LTD. ("AJWO"), AJW QUALIFIED
PARTNERS, LLC ("AJWQP") and AJW Partners, LLC ("AJW"), AJW MASTER FUND, LTD.
("AJWMF"); AJW PARTNERS II, LLC ("AJW2"); AJW OFFSHORE II, LTD. ("AJWO2"); AJW
QUALIFIED PARTNERS II, LLC ("AJWQ2"); NEW MILLENNIUM CAPITAL PARTNERS III, LLC
("NMCP3"); and AJW MASTER FUND II, LTD. ("AJWMF2") (collectively "Plaintiffs"),
on the other hand, and Olshan Grundman Frome Rosenzweig & Wolosky, LLP, a New
York limited liability partnership having an office at 65 East 55th Street, New
York, New York 10022 ("OGFR&W" or "Escrow Agent").
WHEREAS, Ingen and Plaintiffs have executed a Settlement Agreement and
Forbearance dated as of July 31, 2009 (the "Agreement") which provides for
OGFR&W to receive shares of Ingen to be held in escrow (the "Escrow Materials");
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree that the Escrow Materials shall be held by Escrow Agent in escrow and
disposed of in accordance with the following provisions:
1. The definitions in the Agreement and its exhibits shall apply
herein. The Escrow Materials are 400 million shares of Ingen Common Stock, free
and clear of all restrictive legends, in the name of AJWP consisting of ten
certificates of 40 million shares each.
2. Escrow Agent shall hold the Escrow Materials in escrow and shall not
deliver them to Plaintiffs, except as permitted by the Agreement, or to Ingen,
except upon its payment in full of the Judgment. In the event that Plaintiffs
are entitled to enforce the Judgment under the Agreement, the Escrow Agent shall
be permitted to deliver to Plaintiffs, the Escrow Materials for liquidation to
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satisfy the Judgment, provided that in no event shall plaintiffs ever be
entitled to receive more than 4.9% of Ingen's issued and outstanding shares.
Once the judgment is satisfied, any remaining shares shall be delivered to
Ingen.
3. If Escrow Agent shall have received a written notice signed by any
party advising Escrow Agent that a dispute has arisen over entitlement to the
Escrow Materials (or any portion thereof), Escrow Agent will not make any
delivery of the Escrow Materials (or any portion thereof) until receipt by
Escrow Agent of an authorization in writing signed by all the persons believed
by Escrow Agent to have an interest in such dispute, directing the disposition
of the Escrow Materials (or any portion thereof), or, in the absence of such
authorization, Escrow Agent may hold the Escrow Materials (or any portion
thereof) until the final determination of the right of the parties in an
appropriate proceeding. If such written authorization is not given, or
proceedings for such determination are not begun and diligently continued,
Escrow Agent is not required to bring an appropriate action or proceeding for
leave to place the Escrow Materials (or any portion thereof) in court, pending
such determination, but may at the Escrow Agent's sole discretion, on notice to
the parties, either deposit all or portion the Escrow Materials (not theretofore
released by Escrow Agent pursuant to the provisions hereof) with the Clerk of
any Court located in New York County, and upon such deposit, Escrow Agent shall
be relieved and discharged of all further obligations and liability hereunder.
4. Escrow Agent is acting as a stakeholder only, its duties being
purely ministerial, at the request of the parties and for their convenience.
Escrow Agent shall not be deemed to be the agent or trustee for any of the
parties and shall not be liable to any of the parties for any act or omission
unless it involves willful misconduct or gross negligence on the part of Escrow
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Agent. Without limiting the generality of the foregoing, Escrow Agent shall not
be responsible or liable in any manner whatsoever for (1) the sufficiency,
correctness, genuineness, or validity of any check or other instrument delivered
to it, (2) the form of execution of any such instruments, (3) the identity,
authority, or rights of any person executing or delivering any such instrument,
or (4) the terms and conditions of any instrument pursuant to which the parties
may act, or (5) any loss of profits, income, interest or dividends or diminution
in value resulting from a delay in delivering the Escrow Materials, from their
being held in escrow, or from any other source. Ingen hereby agrees to jointly
and severally indemnify and hold harmless Escrow Agent from and against all
claims and costs incurred in an action brought by Ingen against Escrow Agent,
including, but not limited to, reasonable attorneys' fees (either paid to retain
attorneys or amounts representing the fair value of legal services rendered to
or for itself), incurred in connection with the performance of Escrow Agent's
duties hereunder, except with respect to acts or omissions involving willful
misconduct or gross negligence on the part of Escrow Agent.
5. Notwithstanding anything to the contrary contained herein, Ingen
agrees that Olshan Grundman Frome Rosenzweig & Wolosky, LLP may represent
Plaintiffs in any action, suit or other proceeding between the parties, or in
which the parties may be involved.
6. No change or termination of this Agreement affecting the rights,
duties, or liability of Escrow Agent shall be binding upon Escrow Agent unless
agreed to in writing by Escrow Agent.
7. Any disagreement, claim or controversy among the parties or any of
them arising out of or in connection with this Escrow Agreement shall be
determined exclusively in a court located in New York County, New York. Ingen
and Plaintiffs consent to service of process in the same manner permitted in the
Settlement Agreement.
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8. Notices, demands and requests to or from the Escrow Agent shall be
delivered in the same manner as in the Settlement Agreement.
9. Escrow Agent has signed below for the sole purpose of agreeing to
act as such in accordance with the terms and conditions of this Settlement
Agreement.
10. The parties hereby acknowledge and agree that the fact that Escrow
Agent's representation of Plaintiffs does not constitute a conflict of interest
and hereby consent to Escrow Agent acting in such capacity.
11. This agreement may be signed in counterparts. A telecopied
signature shall be acceptable to all parties in lieu of an original signed page.
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By: ____________________________________
Name:
Title:
AJW PARTNERS, LLC
By: ____________________________________
Name:
Title:
AJW OFFSHORE, LTD.
By: ____________________________________
Name:
Title:
AJW QUALIFIED PARTNERS, LLC.
By: ____________________________________
Name:
Title:
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AJW MASTER FUND, LTD.
By: ____________________________________
Name:
Title:
AJW PARTNERS II, LLC
By: ____________________________________
Name:
Title:
AJW OFFSHORE II, LTD.
By: ____________________________________
Name:
Title:
AJW QUALIFIED PARTNERS II, LLC
By: ____________________________________
Name:
Title:
NEW MILLENNIUM CAPITAL PARTNERS III, LLC
By: ____________________________________
Name:
Title:
AJW MASTER FUND II, LTD.
By: ____________________________________
Name:
Title:
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INGEN TECHNOLOGIES, INC.
By: ____________________________________
Name:
Title:
OLSHAN GRUNDMAN FROME ROSENZWEIG
& WOLOSKY LLP
As Escrow Agent
By: _________________________________
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