PUT/CALL AGREEMENT
THIS
PUT/CALL AGREEMENT
(this
“Agreement”)
is
made and entered into this 9th day of October, 2007, by and between Micro-Tech
Identification Systems, Inc., a corporation organized and existing under
the
laws of the State of Nevada, with an address at 0000 X. 0000 X., Xxxxx Xxxxx,
XX
00000 (the “Company”),
and
Fortune Land Holding Ltd., a limited liability company organized and existing
under the laws of the British Virgin Islands, with an address at P.O. Box
957,
Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
(the
“Shareholder”).
RECITALS:
WHEREAS,
Shareholder
is the beneficial owner of 972,222 shares (the “Shares”)
of
common stock of the Company, $0.001 par value per share (“Common
Stock”);
WHEREAS,
the
parties hereto desire to set forth the circumstances under which (a) the
Company
shall
have the option to repurchase the Shares, and (b) the Shareholder shall have
the
right to require the Company to redeem the Shares.
NOW,
THEREFORE,
in
consideration of the foregoing recitals, the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Call
Option.
(a) Grant
of Call Option.
Subject
to the terms and conditions hereof, the Shareholder does hereby give and
grant
to the Company the exclusive right, privilege and option (but not the duty)
to
repurchase the Shares from the Shareholder (the “Call
Option”).
The
Call Option may be exercised for all, but not less than all, of the Shares.
Such
purchase shall be consummated within ninety (90) days following the date
of the
Call Option Exercise Notice (as herein defined).
(b) Call
Option Price.
In the
event the Company exercises its Call Option, the exercise price shall be
$1.63
per share (the “Call
Option Price”).
(c) Exercise
of Call Option.
(i) The
Company shall exercise the Call Option by giving written notice of its exercise
of the Call Option to the Shareholder (“Call
Option Exercise Notice”),
in
accordance with the provisions of Section 7 hereof (as defined below), and
making payment of the aggregate Call Option Price.
(ii)
Upon
exercise of the Call Option, and delivery to the Shareholder of the Call
Option
Price in full for the Shares, the Shareholder shall no longer be deemed to
be
the owner of such Shares.
(d) Conditions
to Exercise of Call Option.
The
Company may only exercise its Call Option provided all of the following
conditions have been met (the “Call
Option Conditions”):
(i) either
(1) a registration statement (“Registration
Statement”)
covering the resale of the Shares has been declared effective by the Securities
and Exchange Commission (the “Commission”),
and
has been kept continuously effective by the Company, or (2) all of the Shares
are available for sale without registration pursuant to Rule 144(k);
and
(ii) the
closing price of a share of Common Stock of the Company as traded on the
Over-the-Counter Bulletin Board (or such other exchange or stock market on
which
the Common Stock may then be listed or quoted) equals or exceeds $4.075
(appropriately adjusted for any stock split, reverse stock split, stock dividend
or other reclassification or combination of the Common Stock occurring after
the
date hereof) for at least ten (10) consecutive trading days immediately
preceding the date that the call notice is given by the Company.
(e) Call
Option Term.
The
Company may only exercise its Call Option by delivering a Call Option Exercise
Notice to the Company within thirty (30) days of such time as all of the
Call
Option Conditions have been met.
2.
Put
Right.
(a) Grant
of Put Right.
Subject
to the terms and conditions hereof, the Shareholder shall have the right
to
cause the Company to repurchase the Shares from the Shareholder (the
“Put
Right”).
The
Shareholder may only exercise its Put Right as to all, but not less than
all, of
the Shares. Upon exercise of the Put Right by the Shareholder, the redemption
of
the Shares by the Company shall be consummated within ninety (90) days following
the date of the Put Exercise Notice (as defined below).
(b) Put
Purchase Price.
In the
event the Shareholder exercises its Put Right, the redemption price shall
be
$1.63 per share (the “Redemption
Price”).
(c) Exercise
of Put Right.
(i) The
Shareholder shall exercise its Put Right by giving written notice of its
exercise of the Put Right to the Shareholder (“Put
Exercise Notice”),
in
accordance with the provisions of Section 7 hereof.
(ii)
Upon
exercise of the Put Right, and delivery by the Company to the Shareholder
of the
Redemption Price in full for the Shares, the Shareholder shall no longer
be
deemed to be the owner of such Shares.
(d) Conditions
to Exercise of Put Right.
The
Shareholder may exercise its Put Right in the event that:
(i) the
Company fails to exercise its Call Option within ten (10) days of a date
on
which all of the Call Option Conditions have been met; or
(ii) the
Company consummates a private offering of not less than $5,000,000 of its
securities (a “Qualified
Offering”);
or
(iii)
the
Company fails to (A) file the Registration Statement within
thirty (30) business days of the date hereof (the “Filing
Date”),
(B)
have the Registration Statement declared effective within ninety (90) calendar
days from the Filing Date, or, if reviewed by the Commission, within one
hundred
eighty (180) calendar days after the Filing Date, or (C) keep the Registration
Statement continuously effective until all
of
the Shares are available for sale without registration pursuant to Rule
144(k);
or
(iv) the
Company fails to consummate a Qualified Offering within two (2) years of
the
date hereof (each
of
2(d)(i), (ii), (iii) and (iv), a “Put
Right Trigger”).
(e) Put
Right Term.
The
Shareholder may only exercise its Put Right by delivering a Put Exercise
Notice
to the Company within thirty (30) days of a Put Right Trigger.
3.
Title.
Upon
exercise of the Call Option or Put Right, the Shareholder shall deliver to
the
Company good and marketable title to the Shares, free and clear of any liens
or
other restrictions, except for applicable restrictions on transfer under
federal
and state securities laws.
4.
Binding
Effect.
This
Agreement and the rights and obligations hereunder shall be binding upon
and
inure to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
5.
Amendments.
This
Agreement may not be altered, modified, or amended except by a writing signed
by
each of the parties hereto.
6.
Further
Assurances.
Each of
the parties hereto agrees to execute, acknowledge, deliver, file, record
and
publish certificates, instruments, agreements and documents, and to take
all
action which may be required by law or may be deemed by the Shareholder or
the
Company, in the exercise of their reasonable good faith discretion, to be
reasonably necessary in furtherance of the purposes and the objectives and
intentions underlying this Agreement and not inconsistent with the terms
hereof.
7.
Notices.
All
notices required or permitted hereunder shall be in writing and shall be
deemed
effectively given: (a) upon personal delivery to the party to be notified;
(b)
when sent by confirmed telex or facsimile if sent during normal business
hours
of the recipient, if not, then on the next business day; (c) five days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (d) two days after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification
of
receipt. All communications shall be sent to the parties hereto at the
respective addresses set forth below, or as notified by such party from time
to
time at least 10 days prior to the effectiveness of such notice:
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if
to the Company:
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Micro-Tech
Identification Systems, Inc.
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0000
X. 0000 X.
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Xxxxx
Xxxxx, XX 00000
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Attention:
_____________
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Facsimile:
_____________
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with
a copy to:
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Xxxxxxx
Xxxx LLP
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0000
Xxxxxxxx, 00xx Xxxxx
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Xxx
Xxxx, XX 00000
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Attention:
Xxxxxxx X. Xxxxx, Esq.
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Facsimile:
(000) 000-0000
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if
to Shareholder:
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Fortune
Land Holding Ltd.
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P.O.
Box 957
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Offshore
Incorporations Centre
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Road
Town, Tortola
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British
Virgin Islands
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Attention:
_____________
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Facsimile:
_____________
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with
a copy to:
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___________________ | |
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___________________ | |
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___________________ | |
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Attention:
_____________
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Facsimile:
_____________
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8.
Governing
Law; Jurisdiction.
This
Agreement shall be governed by, interpreted under, and construed in accordance
with the laws of the State of New York, applicable to contracts made and
to be
performed therein, without giving effect to the principles of conflicts of
law.
Except in respect of an action commenced by a third party in another
jurisdiction, Shareholder and the Company agree that any legal suit, action,
or
proceeding arising out of or relating to this Agreement must be instituted
in a
state or federal court in the State of New York, County of New York, if there
is
any such court which has and will exercise its jurisdiction in any such matter,
and they hereby irrevocably subject to the jurisdiction of any such court
and
agree not to assert therein any objection based on venue or the inconvenience
of
such forum.
9.
Captions.
Captions
used herein are inserted for reference purposes only and shall not affect
the
interpretation or construction of this Agreement.
10.
Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
agreement. This Agreement may be executed and delivered by facsimile
transmission.
11.
No
Third Party Beneficiaries.
This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their successors and assigns and nothing herein, express or implied,
is intended to or shall confer upon any other person any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
12.
Expenses.
All
costs and expenses, including, without limitation, fees and disbursements
of
counsel, financial advisors and accountants, incurred in connection with
this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
[The
Remainder Of This Page Is Left Blank Intentionally.]
IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date and year first written
above.
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MICRO-TECH
IDENTIFICATION
SYSTEMS,
INC.
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| By: | /s/ Yang, Xxxx Xxxx | |
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Name: Yang, Xxxx Xxxx |
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| Title: Chief Executive Officer | ||
| FORTUNE LAND HOLDING LTD. | ||
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| By: | [Illegible] | |
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Name: |
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| Title: | ||
