8
Exhibit 8
J-Bird Music Group Ltd.
Form 10-SB, Amendment No. 1
File No. 0-24449
June 14, 1996
Xx. Xxxx X. Xxxxxxxxxxx, Xx.
Caltron, Inc.
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Dear Xxxx:
This letter sets forth the terms and conditions on and
subject to which Applied Advanced Technologies, Inc. ("AAT"),
Xxxx Xxxxxx ("Xxxxxx") and Caltron, Inc. ("Caltron") agree that
(i) Caltron shall acquire an interest in AAT, and (ii) AAT and
Xxxxxx shall acquire equity in Caltron and cash.
I. Governance of AAT
Xxxxxx shall be the sole president of AAT so long as he remains
the holder of a majority of the outstanding shares of the common
stock of AAT (the "Common Stock"). During the term of this
agreement, Xxxxxx shall vote his shares to elect to the board of
directors of AAT one nominee of Caltron and two nominees of
Xxxxxx.
Xxxxxx has assigned to AAT all of Avnery's right, title and
interest in and to an electron beam technology (the "Technology"
as more completely described in Schedule A) to AAT prior to
Caltron's initial investment in AAT.
II. Purchase and Sale of Shares
A. The initial closing of the transactions contemplated by this
Agreement (the "Initial Closing") shall be accomplished by mail
and/or fax or other electronic transfer on or before June 14,
1996 (the "Initial Closing Date"), or in such other manner and at
such other date, place and time as the parties shall agree. The
Initial Closing shall be accomplished as follows:
(1) Caltron shall transfer to Xxxxxx a total of 130,000
shares of Caltron common stock, of which said shares shall be
unregistered, rule 144 stock.
(2) Caltron shall pay to AAT $100,000 by certified check or
wire transfer, such amount to be offset by the $4 1,000 already
advanced to AAT.
(3) Upon receipt by Xxxxxx of the Caltron shares referred
to in A.(1) and the receipt by AAT of the amount referred to in
A(2), Xxxxxx shall transfer 60,000 shares of AAT Common Stock to
Caltron, representing 30% of the issued and outstanding AAT
shares, and AAT shall issue an additional 15,385 shares of AAT
Common Stock to Caltron, representing an additional 5% of the
issued and outstanding shares of AAT.
B. The second closing of the transactions contemplated by this
Agreement (the "Second Closing") shall be accomplished by mail
and/or fax or other electronic transfer on or before the sixtieth
day following the Initial Closing Date (or if such date is not a
business day in Boston, Massachusetts, on the next following
business day), or in such other manner and at such other date,
place and time as the parties shall agree. The Second Closing
shall be accomplished as follows:
(1) Caltron shall pay to AAT $100,000 by certified check or
wire transfer.
(2) Upon receipt by AAT of the amount referred to in B(l),
AAT shall transfer to Caltron an additional 17,948 shares of AAT
Common Stock, representing an additional 5% of the issued and
outstanding shares of AAT.
C. The third closing of the transactions contemplated by this
Agreement (the "Third Closing") shall be accomplished by mail
and/or fax or other electronic transfer on or before the one
hundred twentieth day following the Initial Closing Date (or if
such date is not a business day in Boston, Massachusetts, on the
next following business day), or in such other manner and at such
other date, place and time as the parties shall agree. The Third
Closing shall be accomplished as follows:
(1) Caltron shall pay to AAT $100,000 by certified check or
wire transfer.
(2) Upon receipt by AAT of the amount referred to in C(l),
AAT shall transfer to Caltron an additional 21,213 shares of AAT
Common Stock, representing an additional 5% of the issued and
outstanding shares of AAT.
X. Xxxxxx and AAT (and their respective agents) shall have
complete access to the books and records of Caltron and shall
have the right to audit and copy such books and records.
E. Caltron (and their respective agents) shall have complete
access to the books and records of AAT and shall have the right
to audit and copy the financial books and records.
F. If Caltron fails to pay in full the amounts provided above
after thirty (30) days following AAT's written notice, AAT shall,
at Avnery's sole election, issue up to 2.5 million new shares of
AAT Common Stock to be registered in the name of Xxxxxx or his
nominees. The purchase price for such shares shall equal the par
value thereof, payable in cash, debt, services or property of
equivalent value, as determined by the AAT board of directors.
III. Issuance of Subsequent Shares
Unless AAT is authorized to issue shares pursuant to II.F, AAT
shall sell to Caltron, at a time (determined by AAT) after the
third anniversary and prior to the sixth anniversary of the
Initial Closing Date and upon at least 30 days written notice to
Caltron, and Caltron shall purchase, a number of shares of Common
Stock (the "Additional Shares") required so that upon giving
effect to such issuance Caltron would own eighty percent (80%) of
the outstanding shares of Common Stock. In consideration of the
issuance and delivery of the Additional Shares, Caltron shall
issue and deliver to AAT, either a number of shares of fully
registered and immediately publicly tradable Caltron stock valued
as of the date of AAT's notice, or immediately available funds,
in amount equal to thirty-five percent (35%) of (five times AAT's
gross pre-tax profit for the then preceding four quarters). In
addition, at Avnery's option, Caltron shall take all actions
necessary or appropriate to cause Xxxxxx to be elected to
Caltron's Board of Directors, and to continue to hold such
position (absent Avnery's resignation), such actions to include
without limitation the execution and delivery of any agreements,
and the solicitation of proxies, as may be necessary to ensure
such election. At Avnery's election, shares to be issued to
Caltron shall be purchased from Xxxxxx, instead of being issued
directly by AAT, so as to achieve the same shift in ownership.
The percentage ownership by Xxxxxx of Caltron shall not be
diluted by the issuance of additional Caltron shares. If Caltron
should spin off AAT, Xxxxxx shall have the option (exercisable
beginning with the effectiveness of the spin-off and continuing
for five years thereafter) to purchase an additional ten percent
(10%) of AAT common stock at a price of $.01 per share.
IV. Future Development and Reversion of Shares
A. AAT anticipates that it will require approximately
$2,000,000 in funding in order to continue development of the
technology to the point of commercializing the product. Caltron
will use its best efforts to procure the needed funding by
sublicensing the Technology in fields to be determined by mutual
agreement of Caltron and AAT.
B. Beginning with the sixth month following the date of this
Agreement and ending on the twenty-sixth month following the date
of this Agreement (the "Minimum Payment Period"), Caltron shall
pay AAT $75,000 per month (the "Minimum Payment") payable on the
last day of the month; provided that the minimum payment due each
month shall be offset (but not below zero) by the amount by which
(i) aggregate revenues from the license of the Technology
received by AAT prior to such month, plus the dollar amount of
Minimum Payment actually paid for all prior months, exceeds (ii)
the product of $75,000 multiplied by the number of months of the
Minimum Payment Period for all prior months.
C. If AAT and Caltron do not generate a total of $1,500,000 in
license fees actually received
on commercial licenses of the Technology within two (2) years of
the date of this Agreement, then AAT and Xxxxxx, respectively,
shall have the right to terminate this Agreement with thirty (30)
days written notice to Caltron. Should the Agreement be
terminated then all rights granted to Caltron pursuant to this
Agreement shall terminate and all rights granted to AAT and
Xxxxxx collectively and individually pursuant to this Agreement
Shall terminate. In addition, all AAT stock transferred to
Caltron in connection with this Agreement shall revert back to
AAT and Xxxxxx, respectively, in each case without any payment by
AAT or Xxxxxx to Caltron, and Caltron shall promptly deliver to
AAT and Xxxxxx all certificates representing such AAT shares,
duly endorsed for transfer. All Caltron stock transferred to AAT
and Xxxxxx pursuant to section II.A.(I) collectively and
individually in connection with this Agreement shall revert back
to Caltron without any payment by Caltron to AAT or Xxxxxx, and
AAT and Xxxxxx shall deliver to Caltron all certificates
representing such Caltron shares, duly endorsed for transfer.
All cash payments made by Caltron to AAT and Xxxxxx under this
Agreement are non refundable.
D. If Caltron (or any of its successors in interest) is
required to transfer any shares of AAT to
either AAT or Xxxxxx, or their respective successors in
interest, and is unable to, or for any reason does not,
deliver the certificate or certificates evidencing such shares in
accordance with this Agreement, Caltron (or its successors in
interest) shall be deemed to have sold, assigned, transferred and
conveyed to AAT and/or Xxxxxx (as applicable) all right, title
and interest in and to such shares, and Caltron (and its
successors in interest) shall have no further rights thereto and
AAT shall record the transfer in its stock transfer book.
E. If AAT and/or Xxxxxx (or their respective successors in
interest) is required to transfer any shares of Caltron to
Caltron (or its successors in interest) and is unable to, or for
any reason does not, deliver the certificate or certificates
evidencing such shares in accordance with this Agreement, AAT
and/or Xxxxxx (or their successors in interest) shall be deemed
to have sold, assigned, transferred and conveyed to Caltron all
right, title and interest in and to such shares, and AAT and/or
Xxxxxx (and their respective successors in interest) shall have
no further rights thereto and Caltron shall record the transfer
in its transfer agent.
F. Except as specifically provided above, Caltron shall not
transfer any shares of AAT without the prior written consent of
AAT until two (2) year after the date of this Agreement. The
certificates representing shares to be issued by AAT shall bear a
legend prohibiting the transfer of such shares. Upon expiration
of the two (2) year period (assuming the shares have not reverted
to AAT and Xxxxxx), Caltron may surrender the certificates
representing the shares to AAT and AAT shall issue new
certificates which do not bear such legend.
G. Except as specifically provided above, AAT and/or Xxxxxx
shall not transfer any of the 130,000 shares described in section
II.A.(1) of Caltron without the prior written consent of Caltron
until two (2) year after the date of this Agreement. The
certificates representing shares to be issued by Caltron shall
bear a restrictive legend under Rule 144, prohibiting the
transfer of such shares. Upon expiration of the two (2) year
period (assuming the shares have not reverted back to Caltron),
AAT and/or Xxxxxx may surrender the certificates representing the
shares to Caltron and Caltron shall issue new certificates which
do not bear such legend.
V. Confidential Information.
Caltron will not at any time divulge or make accessible to
any person or entity, or appropriate to the use of Caltron or any
third party, for any reason or purpose whatsoever, any knowledge
or information disclosed to Caltron of a confidential or
proprietary nature relating to the products, technology, business
or customers of AAT, including without limitation non-public
technical information related to the Technology (collectively,
the "Confidential Information"). AAT shall, in addition to any
other available rights and remedies, have the right to obtain
injunctive relief for any breach or threatened breach of the
terms of this Section.
VI. Miscellaneous.
A. This Agreement shall not be assigned by either party without
the advance written consent of the other, provided AAT may assign
to a successor to all or substantially all of its business. This
Agreement shall be binding upon and inure to the benefit of the
parties, their successors and permitted assigns.
B. This Agreement constitutes the entire agreement between the
parties with respect to its subject matter; except as provided
herein, all other prior agreements, representations, statements,
negotiations and undertakings are terminated and superseded
hereby.
C. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of
Massachusetts.
X. Xxxxxx shall use his best effort to cause AAT to carry on
its business in accordance with the by-laws of AAT and applicable
Massachusetts law.
E. Except for the right of either party to apply to a court of
competent jurisdiction for a temporary restraining order,
preliminary injunction, or other equitable relief to preserve the
status quo or prevent irreparable harm pending the selection and
confirmation of an arbitrator, any dispute under this agreement
shall be determined by binding arbitration in accordance with the
commercial arbitration rules of the American Arbitration
Association, in Boston, Massachusetts, before a single
arbitrator.
EXECUTED AS AN INSTRUMENT UNDER SEAL.
APPLIED ADVANCED TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxx, President
ACCEPTED AND AGREED TO:
CALTRON, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx, Xx., President /s/ Xxxx Xxxxxx
ASSIGNMENT OF
RIGHTS TO TECHNOLOGY
The undersigned, for good and valuable consideration paid by
APPLIED ADVANCED TECHNOLOGIES, INC. ("Grantee") the receipt and
sufficiency whereof is acknowledged, does hereby grant, sell,
transfer, assign and deliver to the Grantee all of the
undersigned's right, title and interest in and to the following
intellectual property rights:
all general and specific knowledge, experience and
information, including without limitation on all inventions,
trade secrets, know-how and improvements thereof and all
patent and proprietary rights and patent applications now or
hereafter owned or possessed by the undersigned, relating to
the development, design, manufacture, assembly, operation,
or testing or methods, processes or equipment related to the
technology described in Schedule A or components thereof
(including without limitation all continuations,
continuations-in-part, divisions and reissues of patents),
engineering and manufacturing information and procedures and
components information, all apparatus, prototypes, equipment
and parts embodying any of the above and all documents and
copies thereof constituting, describing or relating to the
above, including memoranda, reports, manuals, descriptions,
specifications, drawings, schematics, software (including
without litigation source and object codes), notebooks,
printed circuit patterns, parts lists, patent applications
and patentable information, invention records and
disclosures, drawings (including lay-out and assembly
drawings), renderings, schedules, financial records, work
records, time records, flow charts, computer programs,
photographs, computer print-outs, listings, tapes, disks,
diskettes, chips, contracts, patterns, inspection procedures
and test procedures.
to have and to hold the same to the Grantee and its successors
and assigns to their own use and behoof forever.
The undersigned agrees to execute and deliver such
additional documents and instruments as the Grantee may
reasonably request in order to confirm-n the transfer of
technology contemplated hereby and the Grantees ownership
thereof.
Executed as an instrument under sea] this 17th day of November,
1995.
/s/ Xxxx Xxxxxx
Schedule A
Description of Technology
An Electron Beam Accelerator technology which uses thermionic
emission as Electron Source, and Titanium Foil for Exit Window,
with vacuum Sealed-off Chamber that requires no active vacuum
pumps for operation and uses Ceramic or Glass as High Voltage
Insulator and Vacuum Chamber combined.
ASSIGNMENT OF
RIGHTS TO TECHNOLOGY
The undersigned, for good and valuable consideration paid by
APPLIED ADVANCED TECHNOLOGIES, INC. ("Grantee") the receipt and
sufficiency whereof is acknowledged, does hereby grant, sell,
transfer, assign and deliver to the Grantee all of the
undersigned's right, title and interest in and to the following
intellectual property rights:
all general and specific knowledge, experience and
information, including without limitation on all inventions,
trade secrets, know-how and improvements thereof and all
patent and proprietary rights and patent applications now or
hereafter owned or possessed by the undersigned relating to
the development, design, manufacture, assembly, operation,
or testing or methods, processes or equipment related to the
technology described in Schedule A or components thereof
(including without limitation all continuations,
continuations-in-part, divisions and reissues of patents),
engineering and manufacturing information and procedures and
components information, all apparatus, prototypes, equipment
and parts embodying any of the above and all documents and
copies thereof constituting, describing or relating to the
above, including memoranda, reports, manuals, descriptions,
specifications, drawings, schematics, software (including
without limitation source and object codes), notebooks,
printed circuit patterns, parts lists, patent applications
and patentable information, invention records and
disclosures, drawings (including lay-out and assembly
drawings), renderings, schedules, financial records, work
records, time records, flow charts, computer programs,
photographs, computer print-outs, listings, tapes, disks,
diskettes, chips, contracts, patents, inspection procedures
and test procedures.
to have and to hold the same to the Grantee and its successors
and assigns to their own use and behoof forever.
The undersigned agrees to execute and deliver such additional
documents and instruments as the Grantee may reasonably request
in order to confirm the transfer of technology contemplated
hereby and the Grant s ownership thereof.
Executed as an instrument under seal this 17th day of November,
1995.
/s/ Xxxx Xxxxxx
