January 24 2005 8K Exhibit 10.1




EXHIBIT 10.1




SETTLEMENT AGREEMENT



     1.This Settlement Agreement (the "Agreement") is made
by and between Paul Davis Automation, Inc. ("PDA") and Scientific Technologies,
Inc. ("STI"), collectively referred to as the "Parties."

     2.This Agreement is made as a compromise among the
Parties for the complete and final settlement of their claims, disputes and
differences, whether asserted in the action brought by PDA against STI and
styled Paul Davis Automation, Inc. v. Scientific Technologies, Inc.,
United States District Court, Eastern Division, Case No. 1:03 CV 1292 (the
"Lawsuit") or not. The Parties have entered into this Agreement, among other
reasons, to avoid the further expense, inconvenience and burden of protracted
litigation and to completely and finally settle their claims, disputes and
differences, as set forth herein.

     3.This Agreement, and any and all negotiations, documents
and discussions associated with it, shall not in any event be construed or be
deemed to be an admission of any liability or wrongdoing on the part of either
Party.

     4.The Parties agree that the terms and conditions of this
Agreement bind the Parties hereto, their assigns, successors in interest,
directors, officers, employees, executors, administrators, estates, and
heirs.

     5.This Agreement contains the entire agreement between
the Parties with regard to the matters set forth herein. There are no other
representations, understandings, promises or agreements, whether verbal or
otherwise, in relation thereto, between the Parties, except as are expressly set
forth herein.

     6.No later than 5:00 p.m. on February 15, 2005 and no
earlier than noon on February 1, 2005, STI shall deliver to counsel for PDA,
Wilsman & Schoonover, LLC at the address set forth in the pleadings of the
Lawsuit, a certified or cashier's check in the amount of $600,000.00, made out
to Wilsman & Schoonover, LLC, attorneys for PDA, for deposit into its IOLTA
account, or shall wire transfer $600,000.00 into the IOLTA account of Wilsman
& Schoonover, LLC pursuant to instructions from Wilsman & Schoonover,
LLC.

     7.STI, on behalf of itself and any respective
predecessors, successors, assigns, directors, officers, employees, agents and
representatives (the "STI Releasing Parties") hereby releases and
unconditionally discharges PDA, together with PDA's respective predecessors,
successors and assigns, directors, officers, employees, agents and
representatives (the "PDA Released Parties), from any and all such claims,
demands, suits, causes of actions, rights, debts, liabilities, assessments,
obligations or damages, of any kind that were or could have been raised in the
Lawsuit, whether such claim, demand, suit, cause of action, right, debt,
liability, assessment, obligation or damage, was known or unknown to any or all
of the STI Releasing Parties on or before the date of the execution of this
Agreement, was asserted or not asserted by any or all of the STI Releasing
Parties against any or all of the PDA Released Parties on or before the date of
the execution of this Agreement, was threatened to be asserted or not by any or
all of STI Releasing Parties against any or all of the PDA Released Parties on
or before the date of the execution of this Agreement, or was matured,
contingent or otherwise on or before the date of the execution of this
Agreement.

     8.PDA, on behalf of itself and any respective
predecessors, successors, assigns, directors, officers, employees, agents and
representatives (the "PDA Releasing Parties") hereby releases and
unconditionally discharges STI, together with STI's respective predecessors,
successors and assigns, directors, officers, employees, agents and
representatives (the "STI Released Parties), from any and all such claims,
demands, suits, causes of actions, rights, debts, liabilities, assessments,
obligations or damages, of any kind that were or could have been raised in the
Lawsuit, whether such claim, demand, suit, cause of action, right, debt,
liability, assessment, obligation or damage, was known or unknown to any or all
of the PDA Releasing Parties on or before the date of the execution of this
Agreement, was asserted or not asserted by any or all of the PDA Releasing
Parties against any or all of the STI Released Parties on or before the date of
the execution of this Agreement, was threatened to be asserted or not by any or
all of PDA Releasing Parties against any or all of the STI Released Parties on
or before the date of the execution of this Agreement, or was matured,
contingent or otherwise on or before the date of the execution of this
Agreement.

     9.Notwithstanding the releases contained in Sections 7
and 8 of this Agreement, the Parties shall retain the right to bring actions or
requests for relief against each other that relate to any breach of this
Agreement or to enforce the terms and conditions of this Agreement.

     10.This Agreement will be governed by, and construed and
enforced under, the laws of the State of Ohio. The Parties agree that Judge
Patricia Gaughan, the presiding judge in the Lawsuit, shall retain jurisdiction
over this Agreement. Any disputes among the Parties relating to this Agreement
shall be brought in the United States District Court, Eastern Division (to be
heard by Judge Gaughan, if feasible, with the opposing party agreeing not to
object to the Court's jurisdiction of this matter or its assignment to Judge
Gaughan).

     11. This Agreement is the result of negotiations between
equally situated Parties who have the ability to advance and protect their
respective legal and other interests, and each of the Parties have had a full
and complete opportunity to review, analyze, evaluate, negotiate, edit and draft
the terms and conditions of this Agreement. Accordingly, this Agreement shall
not be strictly construed or enforced against any Party, and any ambiguity in
any term or condition contained in this Agreement shall not be interpreted in
favor of one Party and against another Party, based upon any rule of
construction whose premise is draftsmanship of this Agreement or upon the
relative bargaining position of the Parties.

     12. No amendment, modification or waiver of this Agreement,
or any of its terms or conditions, shall be binding unless executed in writing
and signed by the Party to be bound thereby.

     No failure or delay on the part of a Party to exercise any
right under this Agreement or to enforce any obligation of the other Party under
this Agreement shall operate as a waiver, except as expressly set forth herein,
nor shall a single, partial or limited exercise of a right or enforcement of an
obligation thereof preclude any other or further exercise of the right or
enforcement of the obligation, or of the exercise of any other right or
enforcement of any other obligation. 

     13.This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, and all of which shall
constitute one single document. Facsimile signatures are permitted, and such
signatures shall be treated as original signatures for any and all purposes.

     14.Each Party represents and warrants for itself that:
(a) it and the person signing for such Party has the authority to enter into
this Agreement (b) it has read this Agreement; (c) it understands all of its
terms and conditions (both individually and taken as a whole); and (d) it has
executed this Agreement voluntarily, knowingly, and without duress or
coercion.


PAUL DAVIS AUTOMATION, INC.



			
	     /s/ Paul Davis



By: Paul Davis

Title: President
	   

	
                          1/21/2005



Date







SCIENTIFIC TECHNOLOGIES, INC.




			
	     /s/ Joseph J. Lazzara



By: Joseph J. Lazzara

Title: President
	   

	
                          1/20/2005



Date