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Exhibit 7
J-Bird Music Group Ltd.
Form 10-SB, Amendment No. 1
File No. 0-24449
ASSIGNMENT AGREEMENT
This Assignment Agreement, made this 3rd day of May, 1996
among Rhode Island Renal Institute, a Rhode Island non profit
corporation with its principle place of business at 0000 Xxxx
Xxxx, Xxxxxxx, Xxxxx Xxxxxx 00000 ("RIRI"), Xxxxxx Xxxxxx, an
individual, residing at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx
00000 ("XXXXXX"), CALTRON, Inc. a Pennsylvania corporation, with
offices at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000
("CALTRON").
WHEREAS, XXXXXX and RIRI have entered into a Development and
Investment Agreement dated November 21, 1995 ("D&I Agreement");
WHEREAS, pursuant to the D&I Agreement RIRI agrees to
provide financial support, clinical testing facilities and
supplies to XXXXXX to assist his development of the Renal Ozone
Sterilization System ("XXXX");
WHEREAS, XXXXXX and RIRI desire to assign their interest in
the XXXX and any interest created by the D&I Agreement to CALTRON
and in exchange Caltron desires to transfer certain restricted
common shares of CALTRON stock ("Stock') to RIRI;
WHEREAS, CALTRON, INC. desires to accept assignment of the
XXXX and any interest created by the D&I Agreement under the
terms and conditions set forth below.
NOW THEREFORE, in consideration of the mutual premises and
promises contained herein, the signatory parties agree hereto as
follows:
1. Assignment.
XXXXXX and RIRI herewith and hereby assign to CALTRON which
herewith and hereby accepts said assignment from XXXXXX and RIRI
the right to manufacture and distribute the XXXX and any
interests created by the D&I Agreement among XXXXXX and RIRI
("Assigned Rights"). XXXXXX and RIRI agree to execute all
documents necessary to effectuate the above contemplated
assignments. XXXXXX and RIRI further agree that any future
developments, whether patentable or otherwise, whether
copyrighted or otherwise, developed from the pending Patents
shall be assigned to CALTRON.
2. CALTRON Use of the Xxxx and the Interests Created Pursuant
to the D&I Agreement.
CALTRON shall use the Assigned Rights solely to manufacture
and distribute the XXXX and for no other use.
3. CALTRON Reimbursement to XXXXXX and RIRI for Assigned
Rights.
CALTRON shall pay to RIRI a total of 125,00 shares of the
Stock in exchange for the Assigned Rights at the time this
Agreement is executed. The foregoing transfer of the Stock shall
be subject to the representations and warranties of CALTRON and
RIRI as indicated on Addendum A attached hereto and which is a
part of this Agreement.
4. RIRI's Unconditional Put Option.
Notwithstanding the foregoing, RIRI shall have the
unconditional right, within three (3) months of the date of this
Agreement, to put the Stock which Caltron transferred to RIRI
pursuant to this Agreement back to Caltron in exchange for either
$500,000.00 or the Assigned Rights. RIRI shall exercise the put
by sending written notice to Xxxx X. Xxxxxxxxxxx, Xx., President
of Caltron, stating that it is exercising the put. The written
notice shall specify whether RIRI will receive, in exchange for
the put, either $500,000.00 or the Assigned Rights that RIRI has
transferred to Caltron pursuant to this Agreement.
5. CALTRON Royalty Payments to XXXXXX and RIRI..
CALTRON agrees to pay to RIRI as additional consideration
for the Assigned Rights, a perpetual royalty of three (3%)
percent of all commercial sales made by CALTRON related to the
Assigned Rights. CALTRON agrees to make available, to XXXXXX and
RIRI, CALTRON's sales records with regard to sales related to the
Assigned Rights. CALTRON agrees to pay the 3% royalty on an
annual basis which payment shall be made within 30 days of the
close of CALTRON's fiscal year.
6. Development by RIRI and XXXXXX.
XXXXXX and RIRI shall devote its best efforts to develop the
XXXX project by January 1, 1997, including, but not limited to,
completing the testing of the effectiveness of the XXXX and to
further develop the efficiencies of the sterilization technology.
7. Patent Application.
XXXXXX and RIRI will file a patent application for the XXXX
by May 9, 1996. They will also provide a letter from patent
counsel, who shall be acceptable to all parties, stating that the
application complies with all legal requirements.
8. Patent Infringement.
XXXXXX and RIRI agree to defend any patent infringements by
third parties.
9. Testing.
XXXXXX and RIRI shall conduct clinical testing of the XXXX
system, testing shall include but not be limited to, standard
sterility testing of the Dialyzer and comparison to standard
chemical reuse sterilization techniques.
10. Reversion of Assignment to RIRI and XXXXXX Upon Certain
Conditions.
If CALTRON does not generate a total of $500,000 in
commercial sales of sales directly related to the Assigned Rights
within 5 years of the date of this Agreement, all rights granted
to CALTRON pursuant to this Agreement shall terminate and shall
revert back to RIRI and XXXXXX.
11. Miscellaneous.
a. Governing Law. This Agreement shall be governed by the
laws of the State of Rhode Island.
b. Counterparts. This Agreement may be executed in
multiple counterparts, each of which may be deemed an
original instrument.
c. Assignment. This Agreement shall not be transferred or
assigned by either party without the express written
consent of the other party and such consent shall not
be unreasonably withheld.
d. Modification. This Agreement may only be modified in
writing signed by the parties.
IN WITNESS WHEREOF, the parties have set their hands and
seal this day, month, and year above written.
CALTRON, INC. XXXXXX XXXXXX
/s/ Xxxx X. Xxxxxxxxxxx, Xx. /s/Xxxxxx
Xxxxxx
President
RHODE ISLAND RENAL INSTITUTE, INC.
/s/ Xxxxx Xxxx
Executive Director
ADDENDUM A
Caltron's Representations.
Caltron represent and warrant to the RIRI as follows:
1. Ownership of the Stock. Caltron is duly
authorized to issue and by this Agreement transfers to the RIRI
the Stock, free and clear of hens, encumbrances, restrictions and
claims of every kind. Caltron has full legal right, power and
authority to enter this Agreement and to issue the Stock. There
is no legal action pending or (to the knowledge of Caltron)
threatened affecting the stock ownership, nor is there any
reasonable basis for such an action.
2. Liabilities. Caltron does not have any
obligations or liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise and whether due or to
become due) resulting from or arising out of any transaction
entered into, any action taken or omitted, or any state of facts
existing on or before the Closing Date. All others are released
or otherwise eliminated by Caltron on or before Closing. To the
best of Caltron's knowledge there is no basis for any claim
against Caltron for any material liabilities or obligations not
disclosed, including liabilities pertaining to hazardous waste
materials or toxic or waste-like substances. Caltron is not
indebted to any director, officer, employee or agent of Caltron,
and Caltron is indebted to a stockholder which has been disclosed
to RIRI.
3. Financial Statements. Caltron agrees to deliver
to the RIRI audited financial statements of Caltron. These will
accurately present Caltron's financial position at the time
issued and will be prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout
preceding periods. There has been no material adverse change in
Caltron's business, assets, properties, liabilities or financial
condition since the date of the Financial Statements and no
future changes are expected. Caltron has operated solely in the
ordinary course of business to date.
4. Assets, Property. Caltron has good and marketable
title to all of the properties and assets which the Financial
Statements state that it owns, and they are not subject to any
mortgages, pledges, hens, encumbrances or other charges of any
kind or nature whatsoever. Other than the properties owned by
Caltron on the date of this Agreement, there are no properties
tangible or intangible owned by Caltron or other third parties
which are used in the day-to-day operation of Caltron.
5. Corporate Matters. Caltron is a corporation duly
organized, validly existing and in good standing under the laws
of Pennsylvania. Caltron has all requisite corporate power and
authority to own and use its properties, to carry on its business
as now conducted and as proposed to be conducted. The copies of
Caltron's Articles of Incorporation and By-Laws, in each case as
amended through the date of this Agreement, and its stock
ledgers, stock transfer books, other stock records and records of
all of its corporate proceedings, including those of its
shareholder and directors, which have been furnished to the RIRI
are true, correct and complete.
6. Capitalization. Caltron's authorized capital
consists solely of 25,000,000 shares of common stock, of which
2,300,000 are currently outstanding. No shares of common stock
have been reserved for any purpose, or are held in its treasury,
and there are no outstanding securities that are convertible into
or exchangeable for shares of common stock. All of the issued
and outstanding shares of common stock have been duly authorized
and validly issued, are fully paid and non-assessable, and have
been offered, sold, issued and delivered in accordance with all
applicable federal and state securities laws.
7. Authorization. This Agreement has been duly
executed and delivered and constitutes Caltron's binding
obligation, enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby does not and
will not (i) conflict with or result in a breach of terms,
conditions or provisions of, (ii) constitute a default under,
(iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Stock or Caltron's assets pursuant
to, (iv) give any third parties the right to accelerate any
obligation under, (v) result in a violation of, or (vi) except
for those consents, authorizations or approvals which have been
obtained or those notices, registrations or declarations which
have been filed, require the authorization, consent or approval
of, or the filing of any notice, registration or declaration
with, any court or administrative or governmental body pursuant
to: (A) Caltron's Articles of Incorporation, or By-Laws, as
amended, (B) any law, statute, rule or regulation, or (C) any
deed of trust, mortgage, agreement, instrument, order, lease,
award, judgment or decree to which Caltron, the Stock or any of
Caltron's properties are subject.
8. Compliance with Laws, Litigation. Caltron has
conducted its business in full compliance with all laws, rules
and regulations applicable to it and its business, assets and
properties, (including environmental, health or safety laws,
rules and regulations) and has not received any claim or notice
to the contrary. There are no judgments, orders, decrees or
restrictions entered against Caltron. There are no actions,
suits, proceedings or claims pending or, to the best of Caltron's
knowledge, threatened against or affecting Caltron at law, in
equity or before or by any governmental department, commission,
board, bureau, agency or instrumentality, nor is there any
reasonable basis therefor. Caltron is not subject to any
arbitration proceedings or, to the best of Caltron's knowledge,
any governmental investigation or inquiry. To the best of
Caltron's knowledge, there is no basis for any of the foregoing.
Caltron has not received any opinion, memorandum or advice from
legal counsel to the effect that it is exposed to any liability
or disadvantage which may be material to its business.
9. Tax Matters. Caltron timely filed all tax returns
and reports required to be filed by it and paid all taxes and
assessments shown therein to be due or claimed to be due,
together with all interest, penalties, assessments and
deficiencies assessed in connection therewith. All tax
obligations and liabilities to which Caltron was subject on the
date of the Financial Statements are fully reserved for in the
Financial Statements. No tax or related liabilities are proposed
to be assessed or to the best of Caltron's knowledge threatened
against Caltron nor is there any reasonable basis therefor. No
waivers of statutes of limitations have been given or requested
by Caltron.
10. All Material Information. Caltron disclosed all
material facts concerning itself and none of Caltron's
representations or warranties or any information contained in any
document furnished by Caltron contain any untrue statement of a
material fact or omits any material facts necessary to make the
statement contained therein or otherwise made not misleading.
RIRI's Representations.
The RIRI represents and warrants to Caltron as follows:
1. Authorization. RIRI has duly authorized by all
necessary corporate action relating to the execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly
executed and delivered and constitutes the legal, valid and
binding obligation of the RIRI, enforceable according to its
terms.
