PUT AND CALL AGREEMENT
This Put and Call Agreement (the "Agreement"), dated as of
January 2, 2002, is entered into by and between Xxxxxx X. Xxxxxxxxxx,
Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxxxxx, jointly and severally,
(the "Guarantors") and La Jolla Cove Investors, Inc. a California
corporation ("LJCI"), with reference to the following:
WHEREAS, concurrently herewith, LJCI is purchasing from Meltronix,
Inc.(the "Company") the 9 3/4% Convertible Debenture of the Company
in the aggregate principal amount of $200,000 (the "Debenture"); and
WHEREAS, the parties hereto desire to provide for certain put and call
provisions relating to the Debenture.
NOW, THEREFORE, in consideration of the mutual promises and convenants
contained herein, and in consideration of LJCI purchasing the Debenture,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Put Right. During the period and from time to time between
July 2, 2002 and October 2, 2002 (the "Put Period"), LJCI shall have
the right to sell in its sole and absolute discretion, and Guarantors,
jointly and severally, shall thereafter have the obligation to purchase,
the portion of the Debenture then remaining unpaid for a cash purchase
price of 200% of the principal balance remaining unpaid plus any accrued
interest. The election of LJCI to sell the Debenture shall be pursuant to
written notice to Guarantors, which notice shall be sent at least three
business days prior to the effective date of the transfer and shall specify
the principal balance, plus any accrued interest, of the Debenture. On the
effective date of the transfer, the Guarantors shall pay to LJCI (or its
designee) the purchase price therefor in good funds, and within three days
thereafter LJCI shall deliver to the Guarantors the Debenture together with
an assignment thereof. Any transfer hereunder shall be without warranty or
representation except as to good title. The obligations of Guarantors
hereunder shall not be subject to any defense, setoff, recoupment,
impairment or termination for any reason including, without limitation,
whether the Debenture or the stock issuable upon conversion thereof is
publicly traded, whether any bankruptcy proceedings have been instituted
by or against the Company or any order has been entered adjudging the
Company a bankrupt or insolvent, whether the Company or its transfer agent
consents to or authorizes the transfer, whether the terms of the Debenture
have been modified, or whether the stock issuable upon conversion of the
Debenture has been registered.
2. Call Right. During the period and from time to time between
July 2, 2002 and October 2, 2002 (the "Call Period"), the Guarantors,
jointly and severally, shall have the option to purchase, and LJCI shall
thereafter have the obligation to sell, the portion of the Debenture then
remaining unpaid for a cash purchase price of 212.5% of the principal
balance remaining unpaid plus any accrued interest. The election of
Guarantors to purchase the Debenture shall be pursuant to written notice
to LJCI, which notice shall be sent at least three business days prior to
the effective date of the transfer. On the effective date of the transfer,
Guarantors shall pay to LJCI (or its designee) the purchase price therefor
in good funds, and within three days thereafter LJCI shall deliver to
Guarantors the Debenture together with an assignment thereof. Any transfer
hereunder shall be without warranty or representation except as to good
title. To the extent that LJCI has previously exercised its right pursuant
to Paragraph 1, the Guarantors shall not have a right to exercise their
rights under this paragraph for the portion of the Debenture for which the
Put notice has been received.
3. Interest. At such time that money is due to any party, and if such
amount is not paid within five (5) business days, then that amount shall
accrue interest at the rate of nine percent (9%) per year.
4. Governing Law. This Agreement shall in all respects be construed,
interpreted and enforced in accordance with and governed by the laws of
the State of California, United States of America.
5. Consent to Jurisdiction. Each of the Company and the Guarantors (i)
hereby irrevocably submits to the jurisdiction of the United States
District Court sitting in the District of San Diego and the courts of the
State of California located in San Diego county for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereunder and (ii) hereby waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue
of the suit, action or proceeding is improper. Each of the Company and the
Guarantors consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.
Nothing in this section shall affect or limit any right to serve process
in any other manner permitted by law.
6. Attorneys' Fees. In the event of any legal action between the parties
with respect to this Agreement or the subject matter hereof, the prevailing
party shall be entitled to recover reasonable attorneys' fees in addition
to court costs and litigation expenses incurred in said legal action,
regardless of whether such legal action is prosecuted to judgment.
7. Notices. Any notice, demand or other communication required or
permitted under this Agreement shall be deemed given and delivered
when in writing and (a) personally served upon the receiving party, or
(b) upon hand delivery by telex (with correct answer back received),
telecopy or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such
notice is to be received), or (c) upon the third (3rd) calendar day
after mailing to the receiving party by either (i) United States
registered or certified mail, postage prepaid, or (ii) FedEx or other
comparable overnight delivery service, delivery charges prepaid, and
addressed as follows:
To the Guarantors: Xxxxxx X. Xxxxxxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone: 000- 000-0000
Facsimile:
Xxxxxxx X. Xxxxx
00000 X. 00xx Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Telephone: 000- 000-0000
Facsimile:
Xxxxxxx X. Xxxxxxxx
000 Xxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Telephone:
Facsimile:
To LJCI: La Jolla Cove Investors, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxx, XX 00000
Telephone: 000 000-0000
Facsimile: 000-000-0000
8. Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or invalid, then this Agreement shall continue
in full force and effect without said provision. If this Agreement
continues in full force and effect as provided above, the parties shall
replace the invalid provision with a valid provision which corresponds
as far as possible to the spirit and purpose of the invalid provision.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the
parties hereto, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall
constitute one document. Facsimile execution shall be deemed originals.
10. Entire Agreement. This Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof, and
supersede all prior oral or written agreements, representations or
warranties between the parties other than those set forth herein or
herein provided for.
11. Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the permitted successors and assigns,
heirs, executors, and administrators of the parties hereto.
12. Amendment and Waiver. No modification or waiver of any provision of
this Agreement shall be binding upon the party against whom it is sought
to be enforced, unless specifically set forth in writing signed by an
authorized representative of that party. A waiver by any party of any
of the terms or conditions of this Agreement in any one instance shall
not be deemed or construed to be a waiver of such terms or conditions
for the future, or of any subsequent breach thereof. The failure by any
party hereto at any time to enforce any of the provisions of this
Agreement, or to require at any time performance of any of the provisions
hereof, shall in no way to be construed to be a waiver of such provisions
or to affect either the validity of this Agreement or the right of any
party to thereafter enforce each and every provision of this Agreement.
13. Status of Shares. The Guarantors acknowledge that the Debenture
being purchased by LJCI constitutes restricted securities and the resale
thereof by the Guarantors may be limited and subject to applicable
securities laws. In the event that the Guarantors acquire the Debenture
pursuant to the exercise of the Put Right or Call Right, they shall
acquire the Debenture for investment purposes and not with a view to
distribution.
IN WITNESS WHEREOF, LJCI, Xxxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxxx, and
Xxxxxxx X. Xxxxxxxx have duly executed this Agreement as of the date
first above written.
La Jolla Cove Investors, Inc. _____________________________
Xxxxxx X. Xxxxxxxxxx
By :_________________________________ _____________________________
Xxxxxxx X. Xxxxx
Title :_______________________________ _____________________________
Xxxxxxx X. Xxxxxxxx
