matechexh10_1.htm


    
      

    

    Exhibit
10.1

    


    SETTLEMENT AGREEMENT AND
RELEASE

    


    THIS
SETTLEMENT AGREEMENT AND RELEASE (“Agreement”), dated as of August 19, 2008, is
by and among Material Technologies, Inc., a Delaware corporation (“MaTech”), RBC
Dexia Investor Services Bank Luxembourg (“Julius Baer”), Anima S.G.R.P.A.
Rubrica Anima America (“Anima”), and Kreuzfeld Ltd.,
(“Kreuzfeld”) (Julius Baer, Anima, and Kreuzfeld shall collectively be referred
to as, the “Claimants”) (individually, a “Party”; collectively, the
“Parties”).

    


    RECITALS

    


    WHEREAS, Claimants previously
purchased directly from MaTech shares of the restricted common stock of MaTech
(the “Common Stock”), and pursuant to such agreement, MaTech agreed to certain
registration rights, including filing a registration statement registering the
resale of the shares of Common Stock by Claimants; and

    


    WHEREAS, MaTech has not filed
the required registration statement, and has requested that Claimants waive all
registration rights arising from or related to the Common Stock, and Claimants
have agreed to such request subject to the terms hereof.

    


    NOW THEREFORE, in
consideration of the promises and respective mutual agreements herein contained,
it is agreed by and between the Parties hereto as follows:

    


    1.             
Consideration.  In
consideration for the Agreement, the receipt and adequacy of which are hereby
acknowledged, the Parties agree as follows:

    


    1.1           Claimants
hereby waive any registration rights they may have with respect to any shares of
common stock of MaTech currently held, including the Common Stock, and also
hereby waive any default by MaTech under its agreements with Claimants arising
from or related to the purchase by Claimants of the Common Stock;

    


    1.2           Claimants
hereby agree to return to MaTech, any and all shares of common stock held by
them, including the Common Stock, in exchange for an equal number of newly
issued shares of MaTech common stock (the “Shares”) to be issued after
completion of MaTech’s proposed stock split;

    


    1.4           Claimants
hereby agree that any and all warrants currently held by Claimants shall be
canceled;

    


    1.5           MaTech
hereby agrees to issue to Julius Baer warrants to purchase 5,000,000 shares of
MaTech common stock at $0.20 per share;

    


    1.6           MaTech
hereby agrees to issue to Anima warrants to purchase 5,000,000 shares of MaTech
common stock at $0.20 per share (together with the Julius Baer warrants, the
“Warrants”); and


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    1.7           MaTech
hereby agrees, within 45 days, to file a Registration Statement with the
Securities and Exchange Commission registering the Shares and the shares
underlying the Warrants (the “Registration Statement”) and to use best efforts
to have the Registration Statement declared effective, but if the Rule 144
holding period expires, MaTech can withdraw the Registration Statement;
and

    


    2.             
Mutual
Release.  Expressly conditioned upon timely completion of the
requirements set forth herein, the Parties, each for themselves, their
respective Boards of Directors, officers, shareholders, assigns, employees,
agents, predecessors, heirs, executors, and administrators, successors,
subsidiary entities, former entities, attorneys, and any others claiming under
or through them, both past and present, do hereby release and forever discharge
each other, and each of the others' Boards of Directors, officers, shareholders,
assigns, employees, agents, predecessors, successors, heirs, executors, and
administrators, subsidiary entities, former entities, attorneys, and all others
acting by, through, under, or in concert with the other, and each of them, from
any and all manner of action or actions, cause or causes of action, in law or in
equity, suits, debts, liens, contracts (express, implied in fact, or implied by
law), agreements, promises, liabilities, claims, set offs, rights and claims for
indemnity and/or contribution, refunds, overpayments, demands, damages, losses,
costs, or expenses, of any nature whatsoever, known or unknown, suspected or
unsuspected, fixed or contingent, which each now has or may hereafter have by
reason of any matter, cause, or thing whatsoever from the beginning of time to
the date hereof, including, without limiting the generality of the foregoing,
any matters that or might have been in any way raised, by complaint,
cross-complaint or otherwise and the Agreements shall be null and void and of no
effect.  Notwithstanding the above, or any other provisions of this
instrument, this Agreement shall not affect, discharge, or release any claims,
known or unknown, which arise from or relate to the rights or obligations of the
Parties hereto, whether presently existing or subsequently accruing, with
respect to the obligations created by or arising out of the provisions of this
Agreement.

    


    3.             
Waiver Under
California Civil Code Section 1542.  Expressly conditioned upon
timely completion of the requirements set forth herein, it is the intention of
the Parties in executing this Agreement that it shall be effective as a waiver
of any and all rights under section 1542 of the Civil Code of California, which
provides:

    


    “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.”

    


    Each
Party acknowledges that they may have sustained damages, losses, costs or
expenses that are presently unknown or unsuspected arising out of, relating to,
or otherwise in connection with this Action, and that such damages, losses,
costs or expenses as may have been sustained may give rise to additional
damages, losses, costs or expenses in the future.  Nevertheless, each
Party acknowledges that this Agreement has been negotiated and agreed upon in
light of this situation and expressly waives any and all rights which each may
have under section 1542 of the

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    California
Civil Code, or any other state or federal statute or common law principle of
similar effect.

     

    4.             
Attorney
Advice.  Each of the Parties warrant and represent that in
executing this Agreement, such Party has relied on legal advice from the
attorney of its choice, that the terms of this release and its consequences have
been completely read and explained to such Party by that attorney, and that such
Party fully understands the terms of this Agreement.

    


    5.             
No
Representations.  Each of the Parties acknowledge and represent
that, in executing this Agreement, such Party 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.

    


    6.             
Disputed
Claim.  This Agreement pertains to a disputed claim and does
not constitute an admission of liability or wrongdoing by any Party for any
purpose.

    


    7.            
 Covenant
Regarding Assignment.  The Parties represent and warrant that
they are the sole and lawful owner of all right, title and interest in and to
every claim and other matter which each purports to release herein, and that
they have not heretofore assigned or transferred, or purported to assign or
transfer, to any person, firm, association, corporation or other entity, any
right, title or interest in any such claim or other matter.  In the
event that such representation is false, and any such claim or matter is
asserted against any Party hereto (and the successor of such Party) by any party
or entity who is the assignee or transferee of such claim or matter, the Party
shall fully indemnify, defend and hold harmless the Party against who such claim
or matter is asserted (and its successors) from and against such claim or matter
and from all actual costs, demands, fees, expenses, liabilities, and damages
which that Party (and its successors) incurs as a result of the assertion of
such claim or matter.  It is the intention of the Parties that this
indemnity does not require payment as a condition precedent to recovery by a
Party under this indemnity.

    


    8.             
Covenant Regarding
Authority to Bind Parties.  Each Party executing this Agreement
represents and warrants to the other Party that the individual executing this
Agreement on behalf of each Party has the power and authority to execute this
Agreement and to bind the Party to the terms and conditions of this Agreement by
executing this Agreement.

    


    9.            
 Survival of
Warranties.  The representations and warranties contained in
this Agreement are deemed to and do survive the execution hereof.

    


    10.        
   Modifications.  This
Agreement may not be amended, canceled, revoked or otherwise modified except by
written agreement subscribed by the Parties to be charged with such
modification.

     

    11.         
  Entire
Agreement.  This Agreement sets forth the entire agreement and
understanding of the Parties hereto with respect to the transactions
contemplated hereby and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof.

    


    12.          
 Severability.  In
the event that any of the covenants herein contained shall be held

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    unenforceable
or declared invalid for any reason whatsoever, such unenforceability or
invalidity shall not affect the enforceability or validity of the remaining
provisions of this Agreement and such unenforceable or invalid portion shall be
severable from the remainder of this Agreement.

     

    13.        
   Headings. The
headings and captions used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.

     

    14.        
   Construction. This
Agreement has been negotiated by the Parties and their respective legal counsel
at arm’s length and thus shall be interpreted fairly in accordance with its
terms and without any strict construction in favor of or against either
Party.

     

    15.         
  Assignment.  This
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and assigns.

     

    16.         
  Choice of
Law.  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.

    


    17.          
 Jurisdiction.  The
Parties submit to the jurisdiction of the Courts of the County of Orange, State
of California or a Federal Court empaneled in the State of California for the
resolution of all legal disputes arising under the terms of this
Agreement.

    


    18.          
 Counterparts;
Facsimile Signatures.  This Agreement may be executed in
several counterparts and it shall not be necessary for each Party to execute
each of such counterparts, but when all of the Parties have executed and
delivered one of such counterparts, the counterparts, when taken together, shall
be deemed to constitute one and the same instrument, enforceable against each
Party in accordance with its terms.  The Parties hereto agree that
this Agreement may be executed by facsimile signatures and such signatures shall
be deemed originals.

    


    19.        
   Attorneys’
Fees.  In the event any Party hereto shall commence legal
proceedings against the other to enforce the terms hereof, or to declare rights
hereunder, as the result of a breach of any covenant or condition of this
Agreement, the prevailing Party in any such proceeding shall be entitled to
recover from the losing Party its costs of suit, including reasonable attorneys’
fees, as may be fixed by the court.

    


    20.         
  Incorporation of
Recitals.  The above recitals are incorporated into this
Agreement by this reference.

    


    (SIGNATURE
PAGE IMMEDIATELY FOLLOWS)

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of
the date first written hereinabove.

     

    
      
        	
                MATERIAL TECHNOLOGIES,
      INC.,

                a
      Delaware corporation

              	 	 	
                RBC DEXIA INVESTOR
      SERVICES

                BANK
      LUXEMBOURG,

              	 
	 	 	 	 	 
	
                /s/
      Robert M. Bernstein

              	 	 	
                /s/
      Christian Munger

              	 
	
                By:
      Robert M. Bernstein

              	 	 	
                By:
      Christian Munger

              	 
	
                Its:
      Chief Executive Officer 

              	 	 	
                Its:
      Fund Manager

              	 
	 	 	 	 	 
	 	 	 	 	 
	
                ANIMA S.G.R.P.A. RUBRICA
      ANIMA

                AMERICA, 

              	 	 	
                KREUZFELD
      LTD.,

                a
      Swiss corporation

              	 
	 	 	 	 	 
	 	 	 	 	 
	By:	 	 	By:	 
	Its:	 	 	Its:	 


      

    

     

     

     

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