matechexh10_44.htm


    
      

    

    Exhibit 10.44

     

    SETTLEMENT
AGREEMENT AND MUTUAL GENERAL RELEASE

     

    This
Settlement Agreement and Mutual General Release (hereinafter, the “Agreement”)
is made and entered into as of August 27, 2008 by and between La Jolla Cove
Investors, Inc., a California corporation (“LJCI”), Material Technologies, Inc.,
a Delaware corporation (the “Company”), Robert A. Brunette (“Brunette”), Hassel
(Bud) Hill, Jr. (“Hill”) and Barry Mitchell (“Mitchell,” together with Brunette
and Hill, the “Sellers,” and individually a “Seller”).  LJCI, the
Company, Brunette, Hill and Mitchell will sometimes be referred to individually
as a “Party” and collectively as the “Parties” throughout this
Agreement.

     

    RECITALS

     

    A.       WHEREAS,
LJCI and the Sellers entered into that certain Stock Sale Agreement dated as of
March 29, 2006, as amended (the “Sale Agreement”);

     

    B.        WHEREAS,
LJCI currently owes to the Sellers $50,000 (the “Outstanding Stock Payment”)
under the terms of the Sale Agreement;

     

    C.        WHEREAS,
LJCI and the Company are parties to that certain Securities Purchase Agreement
dated as of May 30, 2006 (the “Purchase Agreement”);

     

    D.        WHEREAS,
LJCI and the Company are also parties to that certain Warrant to Purchase Common
Stock issued as of May 30, 2006, as amended by that certain Addendum to Warrant
to Purchase Common Stock dated as of June 9, 2006 (the “Addendum”)
(collectively, the “Warrant”, together with the Purchase Agreement, the
“Transaction Documents”);

     

    E.        WHEREAS,
LJCI advanced an aggregate of $50,000 (the “Warrant Payment”) to the Company
under the Transaction Documents, the entire portion of which remains
outstanding;

     

    F.        WHEREAS,
a dispute has arisen regarding the disposition of the Outstanding Stock Payment
and the Warrant Payment; and

     

    G.        WHEREAS,
the Parties now wish to reach a final resolution of the obligations, rights and
duties between them.

     

    NOW,
THEREFORE, in consideration of the mutual promises made herein, the Parties
agree as follows:

     

    AGREEMENT

     

    1.           Recitals:  
The Recitals set forth above are an integral part of this Agreement, and shall
be used in any interpretation of this Agreement.

     

    2.           Consideration:  As
satisfaction of the obligations remaining between the Parties under the Sale
Agreement, the Transaction Documents and related transactions and in exchange
for the releases granted herein, the Sellers hereby jointly and severally
unconditionally, and


    
      
         


      

      
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    without
representation or warranty, relinquish and terminate any claim, right, title and
interest to the Outstanding Stock Payment or any other claim, right, title or
interest whatsoever pursuant to the Sale Agreement and related transactions and
LJCI hereby unconditionally, and without representation or warranty,
relinquishes and terminates any claim, right, title and interest to the Warrant
Payment or any other claim, right, title or interest whatsoever pursuant to the
Sale Agreement, Transaction Documents, and related transactions.

     

    3.           Mutual
Releases:

     

    (a)         Effective
upon execution of this Agreement and except as to obligations created herein,
LJCI, for itself and its past and present shareholders, officers, employees,
predecessors-in-interest, successors in-interest, assigns, administrators,
parent company, sister-company, and representatives, hereby fully releases,
remises, acquits and forever discharges each Seller, each of such Seller’s
predecessors, assigns, heirs, executors, administrators and representatives,
from any and all claims, demands, actions, losses, judgments, debts, covenants,
executions, liabilities, obligations and expenses of any kind or nature arising
out of any acts, omissions, liabilities, transactions, transfers, happenings,
violations, promises, facts or circumstances arising out of, related to or
described in the Sale Agreement, the Transaction Documents and the underlying
related transactions, whether or not now known or suspected or claimed, whether
in law, admiralty, arbitration, administrative, equity or otherwise, and whether
accrued or hereafter maturing.

     

    (b)         Effective
upon execution of this Agreement and except as to obligations created herein,
LJCI, for itself and its past and present shareholders, officers, employees,
predecessors-in-interest, successors in-interest, assigns, administrators,
parent company, sister-company, and representatives, hereby fully releases,
remises, acquits and forever discharges the Company, and its affiliates,
predecessors and successors, together with its past and present officers,
directors, shareholders, representatives, employees, consultants, attorneys,
fiduciaries, and assigns, from any and all claims, demands, actions, losses,
judgments, debts, covenants, executions, liabilities, obligations and expenses
of any kind or nature arising out of any acts, omissions, liabilities,
transactions, transfers, happenings, violations, promises, facts or
circumstances arising out of, related to or described in the Sale Agreement, the
Transaction Documents and the underlying related transactions, whether or not
now known or suspected or claimed, whether in law, admiralty, arbitration,
administrative, equity or otherwise, and whether accrued or hereafter
maturing.

     

    (c)         Effective
upon execution of this Agreement and except as to obligations created herein,
each of the Sellers, for themselves and their respective predecessors, assigns,
heirs, executors, administrators and representatives, hereby fully releases,
remises, acquits and forever discharges LJCI and its affiliates, predecessors
and successors, together with its past and present officers, directors,
shareholders, representatives, employees, consultants, attorneys, fiduciaries,
and assigns from any and all claims, demands, actions, losses, judgments, debts,
covenants, executions, liabilities, obligations and expenses of any kind or
nature arising out of any acts, omissions, liabilities, transactions, transfers,
happenings, violations, promises, facts or circumstances arising out of, related
to or described in the Sale Agreement, the Transaction Documents and the
underlying related transactions, whether or not now known or suspected
or


    
      
         


      

      
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    claimed,
whether in law, admiralty, arbitration, administrative, equity or otherwise, and
whether accrued or hereafter maturing.

     

    (d)     
   Effective upon execution of this Agreement and except as to
obligations created herein, the Company, for itself and its past and present
shareholders, officers, employees, predecessors-in-interest, successors
in-interest, assigns, administrators, parent company, sister-company, and
representatives, hereby fully releases, remises, acquits and forever discharges
LJCI and its affiliates, predecessors and successors, together with its past and
present officers, directors, shareholders, representatives, employees,
consultants, attorneys, fiduciaries, and assigns, from any and all claims,
demands, actions, losses, judgments, debts, covenants, executions, liabilities,
obligations and expenses of any kind or nature arising out of any acts,
omissions, liabilities, transactions, transfers, happenings, violations,
promises, facts or circumstances arising out of, related to or described in the
Sale Agreement, the Transaction Documents and the underlying related
transactions, whether or not now known or suspected or claimed, whether in law,
admiralty, arbitration, administrative, equity or otherwise, and whether accrued
or hereafter maturing.

     

    4.           Section
1542 Waiver:  Each Party to this Agreement acknowledges and
affirms that it is familiar with Section 1542 of the California Civil Code,
which provides that:

     

    A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.

     

    Each
Party knowingly and voluntarily waives the provisions of Section 1542 of the
California Civil Code, as against each Party released hereby, and acknowledges
and agrees that this waiver is an essential and material term of this settlement
which led to this Agreement, and that without such waiver, the settlement
reflected in this Agreement would not have been entered into.  Each
Party acknowledges that such Party may have sustained damages, losses, costs or
expenses that are presently unknown or unsuspected, arising out of, or relating
to, or otherwise in connection with the 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 that are each being released
under this Agreement.  Each Party further acknowledges the
significance and consequence of the release and the specific waiver of Section
1542 of the California Civil Code.

     

    5.           No
Admission of Liability: The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement of disputed claims and is made
to buy peace and for no other reason.  No action taken by the Parties
hereto either previously or in connection with this Agreement shall be deemed or
construed to be an admission of the truth or falsity of any claims heretofore
made, or an acknowledgement or admission by any Party of any fault or liability
whatsoever to the other Parties or third parties.

     

     

    
      
         


      

      
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    6.           Authority:  The
Parties represent and warrant that the undersigned individuals have the
authority to act on behalf of the signing Party and have the authority to bind
that Party, and all that may claim through it, to the terms and conditions of
this Agreement.  Each Party warrants and represents that there are no
liens or claims of lien or assignment or equity or otherwise of or against any
of the claims or causes of action released herein.

     

    7.           Representation:  The
Parties represent and warrant that they have each had an opportunity to consult
with an attorney, and have carefully read and understand the scope and effect of
the provisions of this Agreement.  No Party has relied upon any
representations or statements made by any other Party, which are not
specifically set forth in this Agreement.  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.

     

    8.           No
Prior Assignment Indemnity.  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
such Party has not hereto assigned or transferred, or purported to assign or
transfer, to any person or entity any right, title or interest in any such claim
or other matter herein released.  In the event that any Party shall
have assigned and transferred, or purported to assign or transfer, any claim or
other matter herein released, such Party shall indemnify, defend and hold
harmless the other Parties from and against any loss, cost, or claim or expense
(including, but not limited to, all costs related to defense of any action
including reasonable attorneys’ fees) based upon, arising out of or occurring as
a result of any such claim or assignment to transfer.

     

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

     

    10.         No
Right to Rescission:  The Parties represent and warrant that
they have conducted all necessary investigations and have consulted with counsel
and are not relying on any representations, except those contained in this
Agreement and the Parties assume the risk of any untruths regarding any matters
upon which they have relied and forever waive any rights to rescind this
Agreement and the sole remedy for the Parties is to enforce the terms of this
Agreement.

     

    11.         Severability:  In
the event that any provision hereof becomes declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said illegal provision.

     

    12.         Entire
Agreement: This Agreement represents the entire agreement and
understanding between the Parties, and represents the complete, final and
exclusive embodiment of their agreement concerning the matters set forth in the
Recitals.  Further, this Agreement shall supersede and replace any and
all prior and contemporaneous agreements, representations and understandings
regarding the subject of this Agreement.  Notwithstanding the
provisions of

     

     

    
      
         


      

      
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    California
Evidence Code Section 1152, this Agreement is admissible for purposes of
enforcement.

     

    13.         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.

     

    14.         Governing
Law, Exclusive Jurisdiction:  This Agreement shall be governed
by 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. By signing this Agreement, the Parties hereby
agree and submit to the jurisdiction of the courts in the downtown branch of the
courts of San Diego County, California.  Each of the Parties consents
to the exclusive jurisdiction of the federal courts whose districts encompass
any part of the City of San Diego or the state courts of the State of California
sitting in the City of San Diego in connection with any dispute arising under
the terms of this Agreement and the transactions contemplated
herein.  Each Party hereby irrevocably and unconditionally waives, to
the fullest extent it may effectively do so, any defense of an inconvenient
forum or improper venue to the maintenance of such action or proceeding in any
such court and any right of jurisdiction on account of its place of residence or
domicile.  Each Party irrevocably and unconditionally consents to the
service of any and all process in any such action or proceeding in such courts
by the mailing of copies of such process by registered or certified mail (return
receipt requested), postage prepaid, at its address specified in Section 15 of
this Agreement.  Each Party agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.

     

    15.         Notices.  Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile; (iii) three (3) days after
being sent by U.S. certified mail, return receipt requested, or (iv) one (1) day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the Party to receive the same. The addresses and
facsimile numbers for such communications shall be:

     

    If to the
Company, to:

     

    Material
Technologies, Inc.

    11661 San
Vicente Blvd., Suite 707

    Los
Angeles, CA  90049

    Telephone:   
(310) 208-5589

    Facsimile:      
(310) 473-3177

     

    If to
Brunette, to:

     

    Robert A.
Brunette

    ____________________________

    ____________________________

    Telephone:   
 ____________________________

    Facsimile:       ____________________________

     

     

    
      
        
        

      

      
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    If to
Hill, to:

     

    Hassel
(Bud) Hill, Jr.

    ____________________________

    ____________________________

    Telephone:     ____________________________

    Facsimile:       ____________________________

     

    If to
Mitchell, to:

     

    Barry
Mitchell

    ____________________________

    ____________________________

    Telephone:     ____________________________

    Facsimile:       ____________________________

     

    If to
LJCI, to:

     

    La Jolla
Cove Investors, Inc.

    1150
Silverado Street, Suite 220

    La Jolla,
California 92037

    Telephone:     858-551-8789

    Facsimile:       
858-551-8779

     

    Each of
the Parties may change its foregoing address by notice given pursuant to this
Section 15.

     

    16.         Counterparts:  This
Agreement may be executed in counterparts each counterpart shall have the same
force and effect as an original and constitute an effective, binding agreement
on the part of each of the undersigned.  This Agreement may be
transmitted by facsimile or otherwise.

     

    17.         No
Construction Against the Drafter:  This Agreement shall be
deemed jointly drafted and written by all parties to it and shall not be
construed or interpreted against any particular Party, regardless of which Party
or counsel originated or drafted any portion of it.

     

    18.         Enforcement
of Settlement:  In the event of any litigation to enforce the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys’ fees, as well as to such costs as may be awardable to the prevailing
party by rule or statute in the court in which the action is
brought.

     

    19.         No
Implied Waiver:  No action or failure to act shall constitute a
waiver of any right or duty afforded under this Agreement, nor shall any action
or failure to act constitute an approval of, or acquiescence in, any breach,
except as may be specifically agreed in writing.  Waiver of any on
provision herein shall not be deemed to be a waiver of any other provision
herein.

     

     

    
      
         


      

      
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    IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
set forth above.

     

    La Jolla
Cove Investors, Inc.

     

    By:  /s/
Travis W.
Huff                           


    Name:
Travis W. Huff

    Title:
Portfolio Manager

     

     

    Material
Technologies, Inc.

     

    By:  /s/
Robert M.
Bernstein                 


    Name:  Robert
M. Bernstein

    Title:  Chief
Executive Officer

     

     

    /s/
Robert A.
Brunette                           


    Robert A.
Brunette

     

     

    /s/
Hassel Hill
Jr,                                     


    Hassel
(Bud) Hill, Jr.

     

     

    /s/
Barry
Mitchell                                   


    Barry
Mitchell

     

     

     

     

     

     

     

    
      
         


      

      
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