matechexh10_20.htm


    
      
 

     

    Exhibit 10.20

     

     

    STOCK
GRANT AND
GENERAL RELEASE AGREEMENT


     

    
                This
Stock Grant and General Release Agreement (“Agreement”) is entered into
effective this 21st day of November, 2006 (the “Effective Date”) by and between
Material Technologies, Inc., a Delaware corporation (“MaTech”), and Robert M.
Bernstein, an individual (“Bernstein”).  MaTech and Bernstein shall each be
referred to as a “Party” and collectively as the “Parties.”


       

    

    
      RECITALS


       

    

    
                WHEREAS,
Bernstein has recently signed a new employment agreement with Ma Tech for a
three (3) year term (the “Employment
Agreement”);

          WHEREAS,
the Board of Directors of MaTech (the “Directors”) wishes to issue to Bernstein
shares of MaTech’s Class A common stock in appreciation of his work over the
past several years, as well as a bonus for signing the Employment
Agreement;

          WHEREAS,
the Directors and Bernstein have agreed that a forfeiture restriction will be
placed on any and all shares of its Class A common stock issued under this
Agreement such that if Bernstein is not employed continuously from the Effective
Date and for the next thirty six (36) months, then he will forfeit the shares
back to MaTech, unless such termination of employment is without cause or
Bernstein is forced to resign for good reason, as defined
herein;

          NOW,
THEREFORE, for good and adequate consideration, the receipt of which is hereby
acknowledged, without admitting or denying any wrongdoing by any Party hereto,
the Parties wish to resolve the dispute in full and therefore, covenant, promise
and agree as follows:


       

    

    
      AGREEMENT


       

    

    
                1.       Issuance
of MaTech Shares.  As a bonus for Bernstein’s past work and his
execution of the Employment Agreement, MaTech agrees to issue to Bernstein, as
soon as possible, Thirty Million (30,000,000) shares of MaTech Class A common
stock, restricted in accordance with Rule 144 and has set forth in Section 3,
below (the “MaTech
Shares”).   

          2.       Consideration
of Bernstein.  In exchange for the MaTech Shares, Bernstein agrees
that any outstanding amounts that are currently due and owing to Bernstein from
MaTech will be considered satisfied in their entirety and fully releases MaTech
for all such amounts as set forth
herein.

          3.       Vesting
of MaTech Shares.

    

    
      
                  (a)       The
  MaTech Shares will be “unvested shares” until the date which is thirty six
  (36) months from the Effective Date (the “Forfeiture Period”).  If
  Bernstein is not continuously employed by MaTech during and at the end of the
  Forfeiture Period, then Bernstein will be forced to forfeit the MaTech Shares
  to MaTech upon the cessation of his employment (a “Share
  Forfeiture”).


      

    

    
      
         

      

      
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                (b)       Notwithstanding
  the above, if Bernstein ceases to be employed by MaTech as the result of a
  “Termination Without Cause” or a “Resignation For Good Reason,” as defined
  herein, then he will not be required to forfeit the MaTech Shares upon
  termination of his
  employment.

          (c)       Under
  the terms of Bernstein’s Employment Agreement with MaTech dated October 1,
  2006, MaTech is entitled to terminate Bernstein’s employment at any time with
  or without cause.  For the purposes of this Agreement, MaTech’s
  termination of Bernstein is a “Termination For Cause” if it is due to
  Bernstein: i) committing any material act of dishonesty, ii) disclosing
  Confidential Information, (as defined in the Employment Agreement), iii) is
  guilty of gross carelessness or gross misconduct, iv) engages in unfair
  competition (as defined in the Employment Agreement), or v) unjustifiably
  and materially neglects his duties under the Employment Agreement.  Any
  termination by MaTech of Bernstein’s employment for any reason other than
  those delineated in this Section will be considered a “Termination Without
  Cause.”

          (d)       If
  Bernstein resigns from his employment with MaTech, then his resignation will
  be deemed a “Resignation for Good Reason” under the terms of this Agreement
  if, and only if, one or more of the following conditions occur and such
  condition(s) is (are) not fully corrected within ten (10) business days after
  written notice from Bernstein to MaTech:

      
                  (i)       the
    assignment to Bernstein of any duties or responsibilities materially
    inconsistent with the job description outlined in Section 2 of the
    Employment Agreement;
    or

          (ii)      the
    failure by MaTech to either pay Bernstein any salary or bonus due hereunder
    within ten (10) business days of the date that such payment is due and/or to
    provide any employment benefits as required by his Employment
    Agreement.

      

    

              4.       Shareholder
Rights.  During the Forfeiture Period, Bernstein (or any successor
in interest) shall have all stockholder rights (including voting, dividend and
liquidation rights) with respect to the MaTech Shares, subject, however, to the
forfeiture  restrictions discussed
herein.

          5.       Representation
and Warranties of Bernstein.  Bernstein hereby represents and
warrants that:

    
                (a)       Bernstein
  is an individual with authority to execute and deliver this Agreement, and to
  carry out the provisions of this
  Agreement.

          (b)       The
  Agreement, when executed and delivered, will create valid and binding
  obligations of Bernstein, enforceable in accordance with their terms, except
  (i) as limited by applicable bankruptcy, insolvency, reorganization,
  moratorium or other laws 


    

    
      
         

      

      
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      of general
  application affecting enforcement of creditors’ rights, and (ii) general
  principles of equity that restrict the availability of equitable
  remedies.

          (c)       Bernstein
  acknowledges that by executing this Agreement he is extinguishing all debts
  and/or other obligations owed to him by MaTech as of the date of this
  Agreement. 

          (d)       Bernstein
  acknowledges and represents that in executing this Agreement, Bernstein has
  not relied on any inducements, promises, or representations made by any Party
  or any party representing or serving such Party, unless expressly set forth
  herein.

          (e)       The
  MaTech Shares will be held in Bernstein’s own account, and not as a nominee or
  agent, and not with a view to the resale or distribution of all or any part of
  the MaTech Shares. Bernstein is prepared to hold the MaTech Shares for an
  indefinite period and has no present intention of selling, granting any
  participating interest in, or otherwise distributing any of the MaTech Shares.
   Bernstein does not have any contract, undertaking, agreement or
  arrangement with any person to sell, transfer or grant a participating
  interest in, any of the MaTech
  Shares.

          (f)       Bernstein
  has a preexisting business relationship with MaTech, which is of a nature and
  duration sufficient to make Bernstein aware of the character, business acumen
  and general business and financial circumstances of the.  In addition,
  Bernstein has been furnished with, and has had access to, such information
  concerning MaTech’s business, management and financial condition as he
  considers necessary or appropriate for deciding whether to accept the MaTech
  Shares, and Bernstein has had an opportunity to ask questions and receive
  answers from MaTech regarding the terms and conditions of the issuance of the
  MaTech
  Shares.

          (g)       Bernstein
  is fully aware of: (i) the speculative nature of the MaTech Shares; (ii) the
  lack of liquidity for the MaTech Shares and (iii) the transfer restrictions
  and repurchase rights applicable to the MaTech
  Shares.

          (h)       Bernstein
  is aware the MaTech Shares have not been registered under the 1933 Act and are
  being issued to Bernstein in reliance upon the exemption from such
  registration provided by Section 4(2) of the 1933 Act.  Bernstein hereby
  confirms that he has been informed that the MaTech Shares are restricted
  securities under the 1933 Act and may not be resold or transferred unless the
  MaTech Shares are first registered under the Federal securities laws or unless
  an exemption from such registration is available. Accordingly, Bernstein
  hereby acknowledges that Bernstein is prepared to hold the MaTech Shares for
  an indefinite period and that Bernstein is aware that SEC Rule 144 issued
  under the 1933 Act which exempts certain resales of unrestricted securities is
  not presently available to exempt the resale of the MaTech Shares from the
  registration requirements of the 1933 Act.


    

    
      
         

      

      
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          6.       Representations
and Warranties of MaTech.

    

    
                (a)       MaTech
  is a corporation duly organized, validly existing and in good standing under
  the laws of the State of Delaware.  MaTech has all requisite corporate
  power and authority to own and operate its properties and assets, to execute
  and deliver this Agreement, and to carry out the provisions of this
  Agreement.

          (b)       All
  corporate action on the part of MaTech, its officers and directors necessary
  for the authorization of this Agreement, the performance of all obligations of
  MaTech hereunder, and the authorization and issuance of the MaTech Shares
  pursuant hereto, has been taken.  The Agreement, when executed and
  delivered, will create valid and binding obligations of MaTech enforceable in
  accordance with their terms, except (i) as limited by applicable
  bankruptcy, insolvency, reorganization, moratorium or other laws of general
  application affecting enforcement of creditors’ rights, and (ii) general
  principles of equity that restrict the availability of equitable
  remedies. 

          (c)       MaTech
  acknowledges and represents that in executing this Agreement, it has not
  relied on any inducements, promises, or representations made by any Party or
  any party representing or serving such Party, unless expressly set forth
  herein.

          (d)       Neither
  this Agreement nor the consummation of the transactions provided for herein
  conflicts with or violates (i) any provision of MaTech’s Certificate of
  Incorporation, as amended, or Bylaws, (ii) any agreement by which MaTech or
  its stockholders, or any of its or their respective properties, is bound, or
  (iii) any federal, state or local law, rule or regulation or judicial
  order.

          (e)       The
  MaTech Shares have been duly authorized and are fully paid and non-assessable
  and are being issued to Bernstein free and clear of any liens, claims or
  rights of any entity or person.

    

              7.       Disposition
of the MaTech Shares.  Bernstein shall make no disposition of the
MaTech Shares during the Forfeiture Period and will not make disposition of the
MaTech Shares after the Forfeiture Period unless and until there is compliance
with all of the following requirements:

    
                (a)       Bernstein
  shall have complied with all requirements of this Agreement applicable to the
  disposition of the MaTech
  Shares.

          (b)       Bernstein
  shall have provided MaTech with written assurances, in form and substance
  satisfactory to MaTech, that (i) the proposed disposition does not require
  registration of the MaTech Shares under the 1933 Act or (ii) all appropriate
  action necessary for compliance with the registration requirements of the 1933
  Act or any exemption from registration available under the 1933 Act (including
  Rule 144) has been taken.

       

    

    
      
         

      

      
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          MaTech
shall NOT be required (i) to transfer on its books any MaTech Shares which have
been sold or transferred in violation of the provisions of this Agreement OR
(ii) to treat as the owner of the MaTech Shares, or otherwise to accord voting,
dividend or liquidation rights to, any transferee to whom the MaTech Shares have
been transferred in contravention of this
Agreement.

          A
Permitted Transfer shall mean a transfer of title to the MaTech Shares effected
pursuant to Bernstein’s will or the laws of intestate succession following
Bernstein’s
death.

          8.       Restrictive
Legends.  The stock certificates for the MaTech Shares shall be
endorsed with one or more of the following restrictive legends and any legend
required to be placed thereon by the applicable blue sky laws of any
state:

    

    
      “The shares
  represented by this certificate have not been registered under the Securities
  Act of 1933.  The shares may not be sold or offered for sale in the
  absence of (a) an effective registration statement for the shares under such
  Act, (b) a “no action” letter of the Securities and Exchange Commission with
  respect to such sale or offer or (c) satisfactory assurances to Material
  Technologies, Inc. that registration under such Act is not required with
  respect to such sale or offer.”

“The shares represented by this
  certificate are subject to certain forfeiture rights granted to Material
  Technologies, Inc. and accordingly may not be sold, assigned, transferred,
  encumbered, or in any manner disposed of except in conformity with the terms
  of the Stock Grant and Release Agreement dated November 21, 2006, between
  Material Technologies, Inc. and Robert M. Bernstein (or the predecessor in
  interest to the shares).  A copy of such agreement is maintained at
  Material Technologies, Inc.’s principal corporate
offices.”

    

              9.       Section
83(b) Election. 

    
                (a)       Under
  Code Section 83, the excess of the fair market value of the MaTech Shares on
  the date any forfeiture restrictions applicable to such shares lapse over any
  price paid for such shares will be reportable as ordinary income on the lapse
  date.  For this purpose, the term “forfeiture restrictions” includes the
  forfeiture of the MaTech Shares pursuant to Section 3 of this Agreement.
   Bernstein may elect under Code Section 83(b) to be taxed at the time the
  MaTech Shares are acquired, rather than when and as such MaTech Shares cease
  to be subject to such forfeiture restrictions.  Such election must be
  filed with the Internal Revenue Service within thirty (30) days after the date
  of this Agreement.  Even if the fair market value of the MaTech Shares on
  the date of this Agreement is $0 (and thus no tax is payable), the election
  must be made to avoid adverse tax consequences in the future.
   

          (b)       Bernstein
  acknowledges that it is Bernstein’s sole responsibility, and not MaTech’s, to
  file a timely election under code section 83(b), even if Bernstein requests
  MaTech or its representatives to make this filing on his
behalf.

    

    
      
         

      

      
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                (c)       Bernstein
  acknowledges that it is his sole responsibility to make MaTech’s Board of
  Directors aware immediately upon filing an election under Code Section
  83(b).

    

              10.      General
Release.  Effective on the date hereof, the Parties, and their
respective agents, affiliates, divisions, predecessors, successors and assigns,
hereby release the other Parties, and each and all of their present and former
agents, officers, directors, attorneys, and employees, from and against any and
all claims, agreements, contracts, covenants, representations, obligations,
losses, liabilities, demands and causes of action which it may now or hereafter
have or claim to have against that Party, as a result of any amounts owed by
MaTech to Bernstein as of the date of this Agreement.  This release of
claims and defenses shall not alter the prospective duties between the Parties
under this
Agreement.

          11.      Acknowledgment
of Effect of Release.  The Parties acknowledge and agree that this
release applies to all claims that one Party may have against any other Party
arising out of, or pertaining to, any amounts alleged to be owed by MaTech to
Bernstein as of the date of this Agreement, including, but not limited to,
causes of action, injuries, damages, claims for costs or losses to a Party’s
person and property, real or personal, whether those injuries, damages, or
losses are known or unknown, foreseen or unforeseen, or patent or latent. 
The Parties agree not to file any complaints, causes of action, or grievances
with any governmental, state or county entity against the other Party arising
out of, or pertaining to any amounts alleged to be owed by MaTech to Bernstein
as of the date of this Agreement.  Each Party further agrees and
understands that the above releases will be effective as of the date of this
Agreement and any Party’s sole remedy against any other Party regarding any
amounts alleged to be owed by MaTech to Bernstein will be for breach of this
Agreement.

          12.      Section
1542 Release. It is understood and agreed by the Parties hereto that all
rights under Section 1542 of the Civil Code of California, which provides as
follows:

    
      “A general
  release does not extend to claims which the creditor does not know or suspect
  to exist in his favor at the time of executing the release, which if known by
  him must have materially affected his settlement with the
debtor,”

    

    are hereby
expressly waived.  The Parties acknowledge, agree and understand the
consequences of a waiver of Section 1542 of the California Civil Code and
assumes full responsibility for any and all injuries, damages, losses or
liabilities that may hereinafter arise out of or be related to matters released
hereunder.  Releasing Party understands and acknowledges that the
significance and consequence of this waiver of Section 1542 of the Civil Code is
that even if a Party should eventually suffer additional damages arising out of
the subject matter hereof, it will not be permitted to make any claim for those
damages.  Furthermore, all Parties acknowledge that they intend these
consequences even as to claims for damages that may exist as of the date of this
Agreement but which the Parties do not know exist, and which, if known, would
materially affect the Parties’ decision to execute this Agreement, regardless of
whether the Parties’ lack of knowledge is the result of ignorance, oversight,
error, negligence, or any other cause.


    
      
         

      

      
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          13.      No
Employment Agreement or Contract.  The Employment Agreement will
govern the terms of Bernstein’s employment and nothing in this Agreement shall
confer upon Bernstein any right to continue in employment for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of MaTech (or any parent or subsidiary company employing or retaining Bernstein)
or of Bernstein, which rights are hereby expressly reserved by each, to
terminate Bernstein’s employment at any time for any reason, with or without
cause.

          14.      No
Admission of Liability.  This Agreement pertains to an undetermined
amount of money owed and does not constitute an admission of liability by any
Party for any purpose, except as otherwise provided
herein.

          15.      Survival
of Representations and Warranties.  The representations and
warranties contained in this Agreement are deemed to and do survive the
execution
hereof.

          16.      Amendments. 
This Agreement may not be amended, canceled, revoked or otherwise modified
except by written agreement subscribed by all of the Parties to be charged with
such
modification.

          17.      Successors. 
This Agreement shall be binding upon and shall inure to the benefit of the
Parties hereto and their respective partners, employees, agents, servants,
heirs, administrators, executors, successors, representatives and
assigns.

          18.      Attorney’s
Fees.  All Parties hereto agree to pay their own costs and
attorneys’ fees except as follows:

    
                (a)       In
  the event of any action, suit or other proceeding instituted to remedy,
  prevent or obtain relief from a breach of this Agreement, arising out of a
  breach of this Agreement, involving claims within the scope of the releases
  contained in this Agreement, or pertaining to a declaration of rights under
  this Agreement, the prevailing Party shall recover all of such Party’s
  reasonable attorneys’ fees and costs incurred in each and every such action,
  suit or other proceeding, including any and all appeals or petitions
  therefrom.

          (b)       As
  used herein, attorneys’ fees shall be deemed to mean the full and actual costs
  of any legal services actually performed in connection with the matters
  involved, calculated on the basis of the usual fee charged by the attorneys
  performing such services.

    

              19.      Jurisdiction. 
This Agreement and the rights of the Parties hereunder shall be governed by and
construed in accordance with the laws of the State of California including all
matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of
laws.

          20.      Integration. 
This Agreement sets forth the entire agreement and understanding of the Parties
hereto and supersedes any and all prior agreements, arrangements and
understandings related to the subject matter hereof.  No understanding,
promise, inducement, statement of 

     

     

    
      
         

      

      
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intention,
representation, warranty, covenant or condition, written or oral, express or
implied, whether by statute or otherwise, has been made by any party hereto
which is not embodied in this Agreement or the written statements, certificates,
or other documents delivered pursuant hereto or in connection with the
transactions contemplated hereby, and no Party hereto shall be bound by or
liable for any alleged understanding, promise, inducement, statement,
representation, warranty, covenant or condition not so set
forth.


[signature
page immediately follows]


     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
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          IN
WITNESS WHEREOF, the Parties hereto, agreeing to be bound hereby, execute this
Agreement upon the date first set forth above.

       

       

    

    
      	
              “MaTech”

            	 	
              “Bernstein”

            
	 	 	 
	
              Material
      Technologies, Inc.,

            	 	
              Robert M.
      Bernstein,

            
	
              a
      Delaware corporation

            	 	
              an
      individual

            
	 	 	 
	 	 	 
	
              /s/
      William I.
      Berks                              
      

            	 	
              /s/
      Robert M.
      Bernstein                       
      

            
	
              By:      
      William I. Berks

            	 	
              By:      
      Robert M. Bernstein

            
	
              Its:       
      A Director of MaTech acting on authority of the Board of Directors of
      MaTech by Board of Directors’ Resolution dated November 21,
      2006

               

            	 	
                         
      

               

            


    

    

 

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
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