EXHIBIT 4.3
MATERIAL TECHNOLOGIES, INC.
STOCK ESCROW/GRANT AGREEMENT
This Stock Escrow/Grant Agreement (this "Agreement") is made as of October 26,
2000, by and between Material Technologies, Inc. a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxxxx ("Xxxxxxxxx").
WHEREEAS, Xxxxxxxxx is an employee of the Company and is entitled to certain
payments in connection with various services rendered to the Company between
1990 and 1995;
WHEREAS, the Board of Directors of the Company (the "Board") has deemed it
advisable to issue shares of the Common Stock of the Company to Xxxxxxxxx in
partial satisfaction of the aforementioned obligations, provided that such
shares be returned to the Company in certain circumstances; and
WHEREAS, the Company desires to confirm the grant of the shares, and to set
forth the terms and conditions of such grant, and Xxxxxxxxx desires to accept
such grant and agree to the terms and conditions thereof, as set forth in this
Agreement.
1. Escrow of Shares. The company hereby confirms the transfer to Xxxxxxxxx
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on the date hereof of Four Million One Hundred Eighty-Three Thousand Six Hundred
and Seventy-Five (4,183,675) shares of the Company's Common Stock (the "Shares")
as partial compensation for services previously rendered to the Company, The
Shares shall be placed in an escrow by Xxxxxxxxx (as described below) and are
subject to all of the terms and conditions set forth in this Agreement,
including the restrictions set forth in Section4 below.
2. Xxxxxxxxx'x Rights. Subject to the terms hereof, Xxxxxxxxx shall have
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all of the rights of a shareholder with respect to the Shares while they are
held in escrow (except the right to vote the Shares), including without
limitation, the right to receive, any cash dividends declared thereon, if, from
time to time during the term of the escrow, there is (i) any stock dividend,
stock split or other change in the shares, or (ii) and merger or sale of all or
substantially all of the assets or other acquisition of the Company, any and all
new, substituted or additional securities to which Xxxxxxxxx is entitled by
reason of Xxxxxxxxx'x ownership of the Shares shall be immediately subject to
the escrow, deposited with the Escrow Agent and included thereafter as "Shares"
for purposes of this Agreement and the escrow.
3. Restrictions on Transfer. Except for the escrow described in Section5 or
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the transfer of the Shares to the Company or its assignees contemplated by this
Agreement, none of the Shares or any beneficial interest therein shall be
transferred, encumbered or otherwise disposed of in any way until such shares
subject to this Agreement are released from all forfeiture provisions in
accordance with the provisions of this Agreement.
4. Release of Shares from Escrow. Upon the exercise of the options or
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warrants described on Schedule 1 attached to this Agreement or upon the need of
the Company, in the sole discretion of the Board, to issue Common Stock to the
individuals or entities described on Schedule I (such obligations of the Company
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to issue its Common Stock are collectively referred to herein as the "Stock
Issuance Obligations"), Xxxxxxxxx agrees to release to the Company any and all
Shares required to satisfy the Stock Issuance Obligations, provided that
Xxxxxxxxx'x obligations hereunder shall be limited to the Shares. Shares subject
to a Stock Issuance Obligation shall be granted to Xxxxxxxxx upon (i) the
expiration or termination of the Stock Issuance Obligation, (ii) the direction
of the Board, in its sole discretion or (iii) the termination of this Agreement
by written consent of both parties hereto. Any Shares otherwise subject to,
and not yet released from, the forfeiture restrictions hereunder as of the date
of the termination of the employment of Xxxxxxxxx by the Company shall be
returned by Xxxxxxxxx to the Company.
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5. Escrow of Shares. As security for the faithful performance of the terms
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of this Agreement and to ensure the availability of the Company's Common Stock
to satisfy the Stock Issuance Obligations, Xxxxxxxxx agrees to hold the Shares
in escrow. Subject to the provisions of this Agreement, Xxxxxxxxx shall exercise
all rights and privileges of a shareholder of the Company with respect to the
Shares deposited in said escrow. Notwithstanding the foregoing, all Shares
released from the restrictions described in Section4 herein shall be released
from this escrow and granted to Xxxxxxxxx.
6. Legends. The share certificate evidencing the Shares, if any, issued
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hereunder shall be endorsed with the following legend (in addition to any legend
required under applicable state securities laws):
The shares represented by this certificate have not been registered under the
Securities Act of 1933. Such shares have been acquired for investment and may
not be sold, transferred, pledged or hypothecated in the absence of an effective
registration statement for such shares under the Securities Act of 1933, unless,
in the opinion (which shall be in form and substance satisfactory to the
company) of counsel satisfactory to the company, such registration is not
required.
The shares represented by this certificate are subject to certain restrictions
upon transfer as set forth in an agreement between the Company and Xxxxxx X.
Xxxxxxxxx, as the same may be amended from time to time, a copy of which is on
file with the secretary of the Company, and, without limiting the generality of
the foregoing, no sale, assignment, transfer or other disposition of these
Shares shall be valid or effective unless made in compliance with all of the
terms and conditions of such agreement.
7. Adjustment for Stock Split. All references to the number of Shares and
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the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares that may be made by the Company after the date of this Agreement.
8. Indemnification. Xxxxxxxxx agrees to hold harmless and indemnify the
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Company for any and all liabilities resulting to it through violation by
Xxxxxxxxx of the warranties, representations, and comments made by Xxxxxxxxx in,
and other provisions of, this Agreement.
9. Termination. This Agreement, and the respective rights and obligations of
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Xxxxxxxxx hereto, shall terminate upon the earliest to occur of the following:
(i) the written agreement among the parties hereto to terminate the Agreement,
or (ii) the expiration or other disposition of all Stock Issuance Obligations
(satisfactory to the Company).
10. Investment Representations. By executing this Agreement, Xxxxxxxxx makes
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the following representations, declarations, warranties and covenants to the
Company, with the intent and understanding that the Company will rely thereon:
(a) Xxxxxxxxx acknowledges that these securities have not been registered
with the United States Securities and Exchange Commission ("SEC") in reliance
upon an exemption from such registration from the Securities Act of 1933, as
Amended (the "Act"), nor have they been registered with any state regulatory
authorities in reliance upon exemptions from state securities laws. Neither the
SEC nor the securities commission of any state has passed on the adequacy or the
accuracy of this Agreement.
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(b) The Shares are being acquired for investment and not with a view to
distribution or resale. The Shares must be held indefinitely unless the shares
are registered under the Act or the applicable state securities laws or there is
an applicable exemption from registration (in which case the undersigned may be
required to provide the Company with an opinion of counsel that registration is
not required).
(c) Xxxxxxxxx understands that the offer and grant of the Shares have not
been passed upon, nor have the merits of this investment been endorsed or
approved by, any state or federal authorities.
(d) Xxxxxxxxx understands the meaning and legal consequences of the
foregoing representations and warranties. Xxxxxxxxx certifies that each of the
representations and warranties set forth in this Section10 is true and correct
as of the date hereof and shall survive such date.
11. General Provisions.
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(a) This Agreement shall be governed by the internal substantive laws, but
not the choice of law rules, of California.
(b) Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to Xxxxxxxxx at his address shown on the Company's employment
records and to the Company at the address of its principal corporate offices
(attention: President) or at such other address as such party may designate by
ten (10) days' advance written notice to the other party hereto.
Any notice to the Escrow Agent shall be sent to the Company's address with a
copy to the other party hereto.
(c) The rights of the Company under this Agreement shall be transferable to
any one or more persons or entities, and all covenants and agreements hereunder
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Xxxxxxxxx under this Agreement may be
assigned, provided that any assignee of Xxxxxxxxx shall agree to the terms and
conditions of this Agreement and shall assume the obligations contained herein.
Any assignee of Xxxxxxxxx shall further agree upon request to execute any
further documents or instruments necessary or desirable to carry out the
purposes or intent of this Agreement.
(d) Either party's failure to enforce any provision of this Agreement shall
not in any way be construed as a waiver of any such provision, nor prevent that
party from thereafter enforcing any other provision of this Agreement. The
rights granted both parties hereunder are cumulative and shall not constitute a
waiver of either party's right to assert any other legal remedy available to it.
(e) Xxxxxxxxx agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
(f) Captions in this Agreement are for convenience of reference only and
shall not be considered in the construction hereof. Words used herein,
regardless of the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context requires. Any requirement of time
made hereinabove shall be of the essence of this Agreement.
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(g) Xxxxxxxxx agrees to take any action the Company reasonably deems
necessary in order to comply with federal and state laws, or the rules and
regulations of the National Association of Securities Dealers, Inc. (the "NASD")
or any stock exchange or quotation system, or any other obligation of the
Company or Xxxxxxxxx relating to the Shares or this Agreement.
(h) This Agreement shall be binding upon the heirs, executors,
administrators, and successors of the parties. This Agreement and the Plan
constitute the entire agreement between the parties with respect to the Shares,
and supersede any prior agreements or documents with respect thereto. No
amendment, alteration, suspension, discontinuation, or termination of this
Agreement, which may impose any additional obligation upon the Company or
materially impair the rights of Xxxxxxxxx with respect to the Shares, shall be
valid unless in each instance such amendment, alteration, suspension,
discontinuation, or termination is expressed in a written instrument duly
executed in the name and on behalf of the Company and by Xxxxxxxxx.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year first
written above.
XXXXXX X. XXXXXXXXX
/s/ Xxxxxx X. Xxxxxxxxx
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Signature
MATERIAL TECHNOLOGIES, INC.
/s/ Xxxx Xxxxxxxx
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By: Xxxx Xxxxxxxx
Title: Director
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