SHARE REPURCHASE AGREEMENT
THIS
SHARE REPURCHASE AGREEMENT
(this
"Agreement"),
dated
as of October 9,
2007, is
made 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
Grand Orient Fortune Investment, Ltd., a limited liability company organized
and
existing under the laws of the British Virgin Islands, with an address at Unit
1B-1806, 00 Xxxxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxxxx 000000, Xxxxx (the
"Stockholder").
WITNESSETH:
WHEREAS,
the
Stockholder desires to sell to the Company, and the Company desires to
repurchase from the Stockholder, 1,944,444 shares of the Company’s common stock
(the "Shares"),
par
value $0.001 per share (“Common
Stock”);
WHEREAS,
the
Company’s Board of Directors has approved the Company’s repurchase of the Shares
at a price per share equal the offering price per share of the Company’s Common
Stock to be offered and sold in an offering (the “Offering”)
of a
minimum of $3,000,000 and a maximum of $8,000,000 of the Company’s securities
exempt from securities registration afforded by the provisions of Section 4(2)
of the Securities Act of 1933, as amended (the “Securities
Act”),
or
Regulation D promulgated thereunder.
NOW,
THEREFORE,
in
consideration of the mutual covenants contained herein, intending to be legally
bound hereby, the parties agree as follows:
1. Repurchase
of the Shares.
The
Company shall repurchase from the Stockholder, and the Stockholder shall sell
to
the Company, all right, title and interest to the Shares. The Company shall
deliver to the Stockholder, in exchange for the Shares, a cash amount equal
to
an aggregate of $3,169,444 (the “Purchase
Price”),
being
the Offering price per share multiplied by the aggregate number of the
Shares.
2. Stockholder’s
Representations and Warranties.
The
Stockholder represents
and warrants to the Company as of the date hereof:
(a) Stockholder
beneficially owns and has the unrestricted right (other than as such right
may
be restricted by laws of general application, including the Securities Act)
to
transfer the Shares, free and clear of all liens, claims, charges and other
encumbrances.
(b) Stockholder
has full right, power and authority to enter into this Agreement and to transfer
the Shares in accordance with the terms of this Agreement, and this Agreement
constitutes a legal, valid and binding obligation of Stockholder.
(c) Stockholder
has not assigned or transferred any interest in any of the Shares, or entered
into any agreement the effect of which is to modify the rights of the holder
of
the Shares.
(d) Stockholder
acknowledges and represents that the Company is not a fiduciary of Stockholder
and that Stockholder and the Company have entered into the transactions that
are
the subject of this Agreement at arms' length.
(e) Stockholder
is not currently acting as an agent of the Company, or as an underwriter or
a
dealer with respect to (or participating in a distribution of) any securities
of
the Company and has not offered the Shares for sale to investors or otherwise
participated in the Offering.
(f) Stockholder
has not offered or sold any shares of capital stock of the Company by any form
of general solicitation or general advertising.
(g) Stockholder
is relying on his business or financial experience or the business or financial
experience of Stockholder’s professional advisors who are unaffiliated with the
Company, in determining whether to enter into this Agreement and to transfer
the
Shares to the Company pursuant to the Company.
(h) Stockholder
is an “accredited investor” as defined in Rule 501(a) under the Securities
Act.
(i) The
Company has made it’s officers and directors available to Stockholder to answer
questions about the Company and its business. Stockholder has conducted his
own
investigation, to the extent that the Stockholder has determined necessary
or
desirable, regarding the Company and Stockholder has not relied upon any
statements or representations made by the Company or any director, officer,
employee, representative or other advisor of the Company in making its decision
to sell the Shares. Stockholder acknowledges that the Company or its officers,
directors, employees or affiliates may be in possession of material, nonpublic
information regarding the Company. Stockholder agrees to sell the Shares to
the
Company pursuant to the terms hereof without access to such information.
Stockholder acknowledges and agrees that no representations or warranties,
whether express or implied, were, or are being, given to Stockholder by the
Company, other than the representations and warranties as are set forth in
Section 3 hereof.
(j) Stockholder
has reviewed with its own tax and legal advisors the tax and legal consequences
of the transactions contemplated by this Agreement. Stockholder relies solely
on
such advisors and not on any statements or representations of or of any of
the
Company’s agents with respect to such tax and legal consequences. Stockholder
understands that Stockholder, and not the Company, shall be responsible for
Stockholder’s own tax and legal liability that may arise as a result of the
transactions contemplated by this Agreement.
(k) Stockholder
acknowledges that no representation by the Company is made that the Purchase
Price it is to receive for sale of the Shares under this Agreement is fair
to
the Stockholder or equal to any purchase price that may be offered to other
parties, now or in the future, and that such Purchase Price may be greater
or
less than the actual fair market value of the Shares. Stockholder acknowledges
that shares of the Company’s common stock may trade at prices higher than the
Purchase Price and that the Company may offer its shares, or other stockholders
of the Company may in the future sell their shares to the Company or to third
parties, at prices higher or lower than the Purchase Price. Stockholder
acknowledges that it will have no future participation in any Company gains,
profits or dividends with respect to the Shares. Stockholder acknowledges that
the Company and its Board of Directors have expressed no opinion to Stockholder
and made no recommendation to Stockholder as to whether Stockholder should
sell
the Shares to the Company pursuant to the terms of this Agreement and that
the
Company’s Board of Directors has told Stockholder that it did not request, and
did not receive, a fairness opinion from any financial advisor with respect
to
the purchase price for the Shares.
2
3. Company’s
Representations and Warranties.
The
Company represents
and warrants to Stockholder as of the date hereof:
(a) Organization.
Each of
the Company and its subsidiaries (i) is a duly organized or formed and validly
existing corporation, partnership or limited liability company, as the case
may
be, in good standing under the laws of the jurisdiction of its formation and
has
the corporate, partnership or limited liability company power and authority,
as
applicable, to own its property and assets and to transact the business in
which
it is engaged and presently proposes to engage, and (ii) has duly qualified
and
is authorized to do business and is in good standing as a foreign corporation,
partnership or limited liability company, as applicable, in all jurisdictions
in
which the nature of its activities and of its properties (both owned and leased)
makes such qualification required, except for those jurisdictions in which
failure to be so qualified would not, individually or in the aggregate, be
reasonably expected to have a material adverse effect on (A) the business
affairs, financial condition, assets, results of operations or prospects of
the
Company and its subsidiaries, taken as a whole, whether or not arising in the
ordinary course of business, or (B) the transactions contemplated by, or the
Company's ability to perform under, this Agreement (“Material
Adverse Effect").
(b) Corporate
Power and Authority.
The
Company has full corporate power and authority necessary to (i) execute and
deliver this Agreement, (ii) perform its obligations hereunder, (iii) own and
operate its properties and assets and (iv) carry on its business as presently
conducted and as proposed to be conducted.
(c) Authorization.
The
execution, delivery and performance of this Agreement (including the purchase
of
the Shares) have been duly authorized by all requisite corporate action and
no
further consent or authorization of the Company, its Board of Directors or
its
stockholders is required.
(d) Execution;
Binding Agreement.
This
Agreement has been duly executed and delivered by the Company and, when this
Agreement is duly authorized, executed and delivered by Stockholder, will be
a
valid and binding agreement enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity.
3
(e) Non-contravention.
Neither
the execution and delivery by the Company of this Agreement, nor the performance
by the Company of any of its obligations hereunder, nor compliance with the
terms and provisions hereof, nor the consummation of the transactions
contemplated herein
violates, conflicts with, results in a breach of, or constitutes a default
(or
an event which with the giving of notice or the lapse of time or both would
be
reasonably likely to constitute a default) or creates any rights in respect
of
any Person under (i) the certificates of incorporation or bylaws (or similar
organizational documents) of the Company or any of its subsidiaries, (ii) any
decree, judgment, order, law, treaty, rule, regulation or determination of
any
court, governmental agency or body, or arbitrator having jurisdiction over
the
Company or any of its subsidiaries or any of their respective properties or
assets, (iii) the terms of any bond, debenture, indenture, credit agreement,
note or any other evidence of indebtedness, or any agreement, stock option
or
other similar plan, lease, mortgage, deed of trust or other instrument to which
the Company or any of its subsidiaries is a party, by which the Company or
any
of its subsidiaries is bound, or to which any of the properties or assets of
the
Company or any of its subsidiaries is subject, or (iv) any rule or regulation
of
the NASD or its OTC Bulletin Board or any rule or regulation of the markets
where the Company's securities are publicly traded or quoted applicable to
the
Company or the transactions contemplated hereby.
(f) Required
Consents; Permits.
No
consent, approval, license, authorization, validation or order of, or filing,
recording or registration with, or exemption by, any court, governmental agency
or other body or authority, or any subdivision thereof, is required to authorize
or as a condition to (i) execution and delivery by the Company of this Agreement
or the performance by the Company of any of its obligations hereunder or (ii)
the legality, validity, binding effect or enforceability of this
Agreement.
(g) Legal
Proceedings.
There
is no pending, or to the best knowledge of the Company, threatened action,
suit,
proceeding or investigation before any court, governmental agency or body,
or
arbitrator having jurisdiction over the Company or any of its subsidiaries
or
any of its affiliates that could reasonably affect this Agreement.
(h) Compliance
with Securities Laws.
The
offer and sale of the Shares to the Company are made in compliance with all
Federal and State securities laws. Neither the Company nor any agent on its
behalf has solicited or will solicit any offers to buy or has offered to sell
or
will offer to sell all or any part of the Shares or any other securities to
any
Person or Persons so as to bring the sale of Shares to the Company but the
Stockholder within the registration provisions of the Securities
Act.
(i) Non-Public
Information; General Sollicitation.
The
Company has not furnished to Stockholder any material non-public information
concerning the Company.
(j) Fairness
of Stock Price.
The
Company has considered and agrees that the Purchase Price is fair to the Company
and its stockholders.
4
4. Closing.
(a) The
closing of the sale and repurchase of the Shares shall take place at the offices
of Xxxxxxx Xxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, at 10:00
a.m. on September __, 2007, or at such other time and place as the Parties
shall
agree (which time and place are designated as the “Closing,”
and
such date, the “Closing
Date”);
provided,
however,
that
the Closing of the sale and repurchase of the Shares shall occur not later
than
October ___, 2007.
(b) At
the
Closing, the Stockholder shall deliver to the Company:
(i) a
certificate or certificates representing the Shares, duly endorsed in blank
or
accompanied by duly executed stock power or other instrument of transfer, in
proper form for transfer, free and clear of all liens, charges, claims or other
encumbrances of any nature; and
(ii) an
executed copy of the Put/Call Agreement between the Company and the Stockholder,
in the form attached hereto as “Exhibit
A”
(the
“Put/Call
Agreement”),
pursuant to
which
(A) the Company shall
have the option to repurchase 972,222 additional shares (the “Additional
Shares”)
of its
Common Stock from the Stockholder at a per share exercise price equal to the
Offering price, and (B) the Stockholder shall have the right to require the
Company to redeem the Additional Shares at per share redemption price equal
to
the Offering price.
(b) At
the
Closing the Company shall deliver to the Stockholder:
(i) the
Purchase Price, by wire transfer of immediately available funds to an account
designated at least three (3) days prior to the Closing (or such lesser time
period as is reasonably practicable); and
(ii) an
executed copy of the Put/Call Agreement.
5. Conditions
to the Stockholder’s Obligation To Sell.
The
obligation of the Stockholder hereunder to issue and sell the Shares at the
Closing is subject to the satisfaction, at or before the Closing Date, of each
of the following conditions; provided,
however
that
these conditions are for the Stockholder’s sole benefit and may be waived by the
Stockholder at any time in its sole discretion:
(a) The
representations and warranties of the Company shall be true and correct in
all
material respects as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as
of a
specific date), and the Company shall have performed, satisfied and complied
in
all material respects with the covenants, agreements and conditions required
by
this Agreement to be performed, satisfied or complied with by the Company at
or
prior to the Closing Date;
5
(b) The
Company shall have consummated a reverse merger or share exchange with American
International Dairy Holding Co., Inc., a Nevada corporation (“AIDH”),
pursuant to which the business and operations of AIDH shall have become the
primary business and operations of the Company (the “Merger”);
(c) The
Company, or AIDH, shall have consummated the Offering;
(d) The
Company shall have delivered an executed copy of the Put/Call Agreement to
the
Stockholder; and
(e) The
Company shall have entered into a Put/Call Agreement with Fortune Land Holding
Ltd., a limited liability company organized and existing under the laws of
the
British Virgin Islands (“Fortune”),
in
substantially the same form attached hereto as “Exhibit
A”
(the
“Fortune
Put/Call Agreement”),
pursuant to
which
(A) the Company shall
have the option to repurchase 972,222 shares (the “Fortune
Shares”)
of its
Common Stock from Fortune at a per share exercise price equal to the Offering
price, and (B) the Fortune shall have the right to require the Company to redeem
the Fortune Shares at per share redemption price equal to the Offering
price.
6. Conditions
To The Company's Obligation To Purchase.
The
obligation of the Company hereunder to purchase the Shares is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions; provided,
however,
that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion:
(a) The
representations and warranties of the Stockholder shall be true and correct
in
all material respects as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date), and the Stockholder shall have performed, satisfied
and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Stockholder at or prior to the Closing Date;
(b) The
Company shall have consummated the Merger;
(c) The
Company, or AIDH, shall have consummated the Offering;
(d) The
Stockholder shall have delivered an executed copy of the Put/Call Agreement
to
the Company; and
(e) The
Company and Fortune shall have entered into the Fortune Put/Call
Agreement.
6
5. Indemnification.
(a) Indemnification
of Stockholder.
The
Company hereby agrees to indemnify Stockholder and each of its consultants,
agents, attorneys, accountants and affiliates (each a "Stockholder
Indemnified Party")
against any claim, demand, action, liability, damages, loss, cost or expense
(including, without limitation, reasonable legal fees and expenses incurred
by
such Stockholder Indemnified Party in investigating or defending any such
proceeding) (all of the foregoing, including associated costs and expenses
being
referred to herein as a Proceeding"),
that
may be incurred that are related, directly or indirectly, to (i) breach of
this
Agreement by the Company; (ii) the fairness of this transaction and this
Agreement to the Company; and (iii) any claims related to the sale or resale
of
the Shares in violation of state or federal securities laws.
(b) Indemnification
of Company.
The
Stockholder hereby agrees to indemnify the Company and each of its officers,
directors, consultants, agents, attorneys, accountants and affiliates (each
a
"Company
Indemnified Party")
against any claim, demand, action, liability, damages, loss, cost or expense
(including, without limitation, reasonable legal fees and expenses incurred
by
such Company Indemnified Party in investigating or defending any such
proceeding) (all of the foregoing, including associated costs and expenses
being
referred to herein as a Proceeding"),
that
may be incurred that are related, directly or indirectly, to breach of this
Agreement, or any of the representations or warranties contained herein, by
the
Stockholder.
(c) Conduct
of Claims.
Whenever
a claim for indemnification shall arise under this Section 5 arising out of
a
third party claim, the party making such a claim (the "Indemnified
Party")
shall
notify the party from whom such indemnification is sought (the "Indemnifying
Party")
in
writing of the Proceeding and the facts constituting the basis for such claim
in
reasonable detail. The Indemnifying Party shall have the right, exercisable
by
giving written notice to an Indemnified Party after receipt of written notice
from such Indemnified Party of such Proceeding, to assume, at the Indemnifying
Party's expense, the defense of any such Proceeding, with counsel reasonably
satisfactory to such Indemnified Party. The Indemnified Party shall have the
right to retain the counsel of its choice in connection with such Proceeding
and
to participate at its own expense in the defense of any such Proceeding;
provided,
however,
that
counsel to the Indemnifying Party shall not (except with the consent of the
relevant Indemnified Party) also be counsel to such Indemnified Party. In no
event shall the Indemnifying Party be liable for fees and expenses of counsel
(in addition to any local counsel) other than its own counsel for all
Indemnified Parties in connection with any one action or separate but similar
or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No Indemnifying Party shall, without the prior
written consent of the Indemnified Parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification could be sought under this
Section 5 unless such settlement, compromise or consent (A) includes an
unconditional release of each Indemnified Party from all liability arising
out
of such litigation, investigation, proceeding or claim and (B) does not include
a statement as to or an admission of fault, culpability or a failure to act
by
or on behalf of any Indemnified Party.
7
6. Miscellaneous.
(a) Counterparts.
This
Agreement may be executed in two or more counterparts and by the parties in
separate counterparts, each of which when so executed shall be deemed to be
an
original, and all of which taken together shall constitute one and the same
instrument.
(b) Governing
Law.
The
validity, performance, construction and effect of this Agreement shall be
governed by and construed in accordance with the internal laws of the State
of
New York, without giving effect to principles of conflicts of law. Both parties
hereto agree to submit to the jurisdiction of all New York courts, including
federal courts, and to waive any and all rights under the law of any
jurisdiction to object on any basis to jurisdiction or venue within New
York.
(c) Further
Assurances.
Each
party shall cooperate with, and take such action as may be reasonably requested
by, the other party in order to carry out the provisions and purposes of this
Agreement, generally, and the transactions contemplated hereunder.
(d) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
constitute a part of the Agreement, nor shall they affect its meaning,
construction or effect.
(f) Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding among the parties
as
to the subject matter hereof and merges with and supersedes all prior
discussions and understandings of any and every nature among them.
[The
remainder of this page is intentionally left blank.]
8
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first set forth
above.
| MICRO-TECH IDENTIFICATION SYSTEMS, INC.. | ||
| |
|
|
| By: | /s/ Yang, Xxxx Xxxx | |
|
Name: Yang, Xxxx Xxxx |
||
| Title: Chief Executive Officer | ||
| GRAND ORIENT FORTUNE INVESTMENT LTD. | ||
| |
|
|
| By: | [Illegible] | |
|
Name: |
||
| Title: | ||
9
Exhibit
A
Form
of Put/Call Agreement
10
