EXHIBIT 10.46
OPTION SHARES ESCROW AGREEMENT
THIS OPTION SHARES ESCROW AGREEMENT ("Agreement") is entered into as of
September 29, 1995, by and between Xxxxxx Xxxxxxxx, Xxxxxxxxx Xxxxxx III, Xxxxxx
Xxxxxxxx (collectively, the "Shareholders") and Core Technologies
(Pennsylvania), Inc., a Delaware corporation (the "Company").
Recitals:
Whereas, each of the Shareholders have entered into a Stock Purchase
Agreement of even date herewith (the "SPA") for the purchase of common stock of
the Company from Safeguard Scientifics (Delaware), Inc. ("Safeguard");
Whereas, Safeguard required, as a condition to entering into the SPA,
that the Shareholders and the Company enter into this Agreement and the
Shareholders deposit an aggregate of 700,000 shares of the Company's Common
Stock (the "Option Shares") into the escrow with the Company created by this
Agreement, subject to the Company's right to redeem said shares upon exercise of
vested Covered Options (as defined below);
NOW, THEREFORE, for adequate consideration the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Escrow.
1.1 The Company hereby acknowledges receipt from the Shareholders of
the certificate or certificates evidencing the following number of Option Shares
Xxxxxx Xxxxxxxx 233,334 shares
Xxxxxxxxx Xxxxxx III 233,333 shares
Xxxxxx Xxxxxxxx 233,333 shares;
together with Assignments Separate From Certificate in the form attached hereto
as Attachment A, duly executed by the Shareholders in blank. Unless redeemed by
the Company in accordance herewith, the Option Shares shall be held by the
Company in escrow in accordance with the terms and conditions of this Agreement.
1.2 During the term of this escrow, the Secretary of the Company, or
such substitute officer of the Company as may be designated by the Company's
board of directors, shall maintain custody of and hold the Option Shares on
behalf of the Company, in its capacity as escrow agent under this Agreement.
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Each Shareholder irrevocably appoints the Company as attorney-in-fact for the
term of this escrow to execute all documents necessary or appropriate to make
negotiable any Option Shares redeemed pursuant to Section 3 and to complete any
such redemption transaction.
1.3 The Company shall act as escrow agent under this Agreement on the
following terms and conditions:
1.3.1 The escrow agent shall, and shall be obligated to,
perform only those duties specifically set forth herein. The escrow agent's
duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.
1.3.2 The escrow agent may rely and shall be protected in
relying on any instrument reasonably believed to be genuine and to have been
signed or presented by the proper party or parties. The escrow agent (as well as
any officer of the Company appointed pursuant to Section 1.2) shall not be
liable for any act done or omitted reasonably and in good faith (and any
reliance on or act done or omitted pursuant to the written advice of legal
counsel to the Company shall be conclusively presumed to be reasonable and in
good faith).
1.3.3 It is understood and agreed that should any dispute
arise with respect to the redemption of or the delivery and/or ownership or
right of possession of the Option Shares held by the escrow agent hereunder, the
escrow agent is authorized and directed to retain in the escrow agent's
possession, without liability to anyone, all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected. However, the escrow agent shall be under no duty whatsoever to
institute any such proceedings.
1.4 Unless and until redeemed by the Company pursuant to and in
accordance with Section 3, each Shareholder shall retain beneficial and legal
ownership of all the Option Shares deposited by him, and shall be entitled to,
and to exercise, all the privileges, rights and benefits of such ownership,
including without limitation the right to vote the same and to receive dividends
and other distributions thereon.
2. Grant of Covered Options. The Company has granted, or shall
reasonably promptly after the date of this Agreement grant, to employees of the
Company other than the Shareholders a total of at least 700,000 options under
its existing option plan to purchase common stock of the Company (the "Covered
Options"). The Covered Options shall have an exercise price equal to the fair
market value of the common stock of the Company at the time of grant (the
"Option Price").
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3. Redemption.
3.1 If and for so long as they are held in escrow hereunder, the Option
Shares shall be subject to redemption by the Company from time-to-time on a
one-for-one basis as the Covered Options are exercised as set forth herein. In
this regard:
3.1.1 If and as those Covered Options which are or become
vested are exercised from time-to-time, the Company shall have the right to, and
the parties intend that the Company shall, redeem from the Shareholders, pro
rata in accordance with the respective number of Option Shares deposited by the
Shareholders, an aggregate number of Option Shares equal to the number of shares
of Common Stock being purchased by such Covered Option exercise. The Redemption
Price of a given Option Share (i.e., the amount payable upon its redemption
hereunder), which will be payable by the Company upon exercise of a Covered
Option and redemption of a corresponding number of Option Shares, shall be equal
to the exercise price per share under the Covered Option whose exercise gives
rise to the redemption in question.
3.1.2 The Company shall give to the Shareholders a written
notice (a "Redemption Notice") in connection with each redemption of Option
Shares pursuant hereto. Each Redemption Notice shall, as to each Covered Option
then being exercised, (i) certify that said Covered Option was fully vested, had
not lapsed or expired, and was validly and properly exercised, except for any
such requirements which are waived with respect to such option by the Company's
board of directors or its option committee; (ii) identify the person exercising
the same, the number of shares of stock being purchased pursuant thereto and the
option exercise price per share thereunder; and (iii) state the number of Option
Shares being redeemed and the applicable Redemption Price (in total and per
share).
3.1.3 Each redemption shall occur as described in its
respective Redemption Notice, unless the Shareholders object in good faith in
writing stating the basis for such objection, at the principal office of the
Company on the tenth (10th) business day after the date the Shareholders are
given the Redemption Notice. If the Shareholders so object to a redemption, then
the Company shall neither effect the closing of the redemption in question nor
release the affected Option Shares to the Shareholders until the dispute is
resolved by the mutual written agreement of the parties concerned or by a final
order, decree or judgment of a court of competent jurisdiction after the time
for appeal has expired and no appeal has been perfected.
3.1.4 At each redemption closing hereunder, the Company shall
(i) transfer to the Company's order (including, if applicable, appropriately
filling in and dating the necessary Assignments Separate From Certificate)
and/or cancel the correct number of shares and (ii) pay to the Shareholders the
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aggregate Redemption Price for the shares so transferred and/or canceled either
by personal delivery of a check to Shareholders or by wire transfer in
accordance with the Shareholders' instructions, the payment method to be at the
election of the Shareholders.
3.1.5 The parties intend that the Company shall exercise the
corresponding redemption right set forth in this Section 3 reasonably promptly
after each valid exercise of a vested Covered Option. However, the failure of
the Company to timely exercise a redemption right hereunder following the valid
exercise of a vested Covered Option shall not result in a waiver by the Company
of such redemption right or bar a later exercise of such redemption right except
as provided in Section 7.1.
3.1.6 The Company shall redeem all Option Shares which it has
the right to redeem under this Section 3 unless otherwise expressly approved by
the Company's board of directors.
4. Stock Splits, etc. If, from time to time during the term of this
Agreement, there is any stock dividend, stock split or other change in the
character or amount of any of the outstanding securities of the Company or if
there is any consolidation, merger or sale of all, or substantially all, of the
assets of the Company, then in such event any and all adjustments or new,
substituted or additional securities to which the Shareholder is entitled by
reason of its ownership of Option Shares shall be immediately subject to this
escrow and the redemption right set forth in Section 3 and shall be "Option
Shares" for all purposes of this Agreement with the same force and effect as the
shares of stock presently subject to this Agreement, if and provided that the
shares of stock under the Covered Options are similarly adjusted or entitled to
such new, substituted or additional securities and such adjustments or new,
substituted or additional securities are subject to the terms and conditions of
the Covered Options agreements between the Company and the optionees thereunder.
After each such event, the Option Price per Option Share payable upon exercise
of the Covered Option in question shall be appropriately adjusted as well. The
Shareholders authorize the Company to deposit into escrow under this Agreement
any certificates evidencing any such new, substituted or additional securities
subject to this Agreement.
5. Restriction on Transfer.
5.1 The Shareholders agree not to sell, transfer, pledge, hypothecate
or otherwise dispose of any Option Shares which remain subject to the right of
redemption set forth in Section 3, except as set forth in Section 5.2 below.
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5.2 Notwithstanding anything to the contrary in this Agreement, nothing
in this Agreement shall prevent the Shareholders from making a distribution or
transfer of beneficial and legal ownership of any or all the Option Shares,
provided that any such distribution or transfer is otherwise in compliance with
applicable securities laws and that the transferee(s) agree in writing to be
bound by the provisions of this Agreement and delivers to the Escrow Agent such
number of Assignments Separate From Certificate in the form of Attachment A,
duly executed in blank as the Company may reasonably require. The Shareholders
agree to give Company written notice of any distribution or transfer made
pursuant to this Section 5.2.
5.3 The Company shall not be required (i) to transfer on its books any
Option Shares which shall have been sold or transferred in violation of any of
the provisions set forth in this Agreement, or (ii) to treat as owner of such
shares or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares shall have been so transferred.
5.4 In no event may the Company assign its rights and delegate its
duties under this Agreement, including but not limited to the redemption right
set forth in Section 3, without the prior written consent of the Shareholders.
6. Stock Legends. The certificates representing the Option Shares, if
and while subject to the provisions of this Agreement, may be endorsed with the
following stock legend (in addition to any other stock legend endorsed thereon):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS OF REDEMPTION AND RESTRICTIONS UPON AND OBLIGATIONS WITH RESPECT TO
TRANSFER AS SET FORTH IN AN "OPTION SHARES ESCROW AGREEMENT" BETWEEN THE
CORPORATION AND THE ORIGINAL REGISTERED HOLDER OF SAID SHARES, A COPY OF WHICH
IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.
7. Termination Provisions.
7.1 If a Covered Option does not fully vest in the option holder, or if
a vested Covered Option lapses in whole or part without exercise, then a
corresponding number of Option Shares immediately shall cease to be subject to
such right of redemption and shall be free of any and all obligation to sell the
same to the Company and the certificate(s) for such share(s) promptly shall be
delivered to the Shareholders (or as the Shareholders then direct), pro rata in
proportion to the respective number of Option Shares deposited by each
Shareholder, with any legend endorsed thereon pursuant to Section 6 removed.
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7.2 This Agreement and the escrow created hereby will automatically
terminate upon the date all Option Shares have been either redeemed or released
from escrow pursuant to Section 3 or 7; provided, however, (i) if there is then
pending an unresolved objection to a redemption hereunder or any other
applicable dispute (see Sections 1.3.3 and 3.1.3), then this Agreement shall not
terminate until thirty (30) days after such objection or dispute is resolved and
(ii) the Company's obligation to pay in full the Option Price for all Option
Shares redeemed hereunder shall survive such termination. If, at the time of
such termination, the Company has possession of any documents, securities or
other property belonging to Shareholders, it shall promptly deliver all of same
to Shareholders.
8. Miscellaneous.
8.1 The parties agree to execute such further instruments and to take
such further action as may reasonably be necessary to carry out the intent of
this Agreement.
8.2 Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, deposit
with a guaranteed overnight courier, or upon deposit in the United States Post
Office, by registered or certified mail with postage and fees prepaid, addressed
to the Shareholders at their addresses set forth in the Company's records, or to
the Company as follows:
Core Technologies, Inc.
000 Xxxxxx Xxxxx
Xxxxx, XX 00000
Attn: Corporate Secretary
or, in each case, at such other address as such party may designate by written
notice to the other party hereto.
8.3 This Agreement shall inure to the benefit of the successors and
assigns of the Company and, subject to the restrictions on transfer herein set
forth, be binding upon Shareholders, their heirs, executors, administrators,
successors and assigns. Safeguard Scientifics (Delaware), Inc. shall be a third
party beneficiary of this Agreement, and the parties shall not amend or waive
compliance with this Agreement without the consent of Safeguard.
8.4 This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CORE TECHNOLOGIES (PENNSYLVANIA),
INC. SHAREHOLDERS:
By: Xxxxxx Xxxxxxxx Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, President XXXXXX XXXXXXXX
Xxxxxx Xxxxxxxx Xxxxxxxxx Xxxxxx
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XXXXXX XXXXXXXX XXXXXXXXX XXXXXX III
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