matechexh10_19.htm


    
      
 

     

    Exhibit 10.19

     

     

    EMPLOYMENT
AGREEMENT


     

    
                THIS
EMPLOYMENT AGREEMENT (“Agreement”) is effective as of October 1, 2006, between
Material Technologies, Inc., a Delaware corporation (“Company”), and Robert M.
Bernstein, an individual (“Employee”).



       

    

    
      RECITALS

       

    

    
                WHEREAS,
each party desires to memorialize in writing, the terms and conditions of
Employee’s employment as set forth in this
Agreement. 

          NOW,
THEREFORE, the parties agree as
follows:

          1.       Employment.

          Except
as otherwise provided in Section 8, Company hereby agrees and promises to employ
Employee for a period of three (3) years commencing October 1, 2006, and ending
September 30, 2009 (“Term”), and Employee hereby accepts and agrees to said
employment on the terms and conditions set forth herein. This Agreement shall be
renewed automatically for succeeding terms of one (1) year each, unless either
party gives notice to the other at least ninety (90) days prior to the
expiration of any term of his or its intention not to renew.  These dates
shall be
calendared.

          2.       Position.

                    2.1.     
General
Duties.  During the term of his employment hereunder, Employee shall
be employed as Chief Executive Officer, President and Chairman of the
Board.   Employee shall devote such time and services to Company as is
reasonably necessary to perform the duties of his position pursuant to this
Agreement, with fidelity, to the best of his ability, and in the best interest
of
Company.

                    2.2.     
Matters
Requiring Consent of the Board of Directors. In his position as Chief
Executive Officer, etc., Employee shall not, without specific written approval
of the Company’s Board of Directors, do or contract to do any of the
following:

       

      
        	
                 
      

              	
                (1)

              	
                Bind
      the Company to a liquidation event, such as liquidation, dissolution or
      winding up of the Company, whether voluntary or
    involuntary;

              


      

      
        	
                 
      

              	
                (2)

              	
                Bind
      the Company to a sale of all or substantially all of the assets of the
      Company;

              


      

      
        	
                 
      

              	
                (3)

              	
                Bind
      the Company to a transaction that would result in a change of the control
      of the Company

              


      

       

      
        
           

        

        
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          3.       Compensation.

                    3.1      
Base
Salary.  During the term of this Agreement, Company agrees to pay
Employee a Base Salary of $250,000 per year.  The Base Salary shall be
payable as current salary, in semi-monthly installments subject to all
applicable withholdings and deductions.  Any increases in the Base Salary
will be at the sole discretion of the Company’s Board of
Directors.      

          4.       Additional
Benefits.

          During
the employment term, Employee shall be entitled to receive all other benefits of
employment generally available to Chief Executive Officers with similar
companies, including medical, dental, life and disability insurance benefits,
and participation in Company’s pension plan and profit-sharing
plan.

          Employee
shall be entitled to an aggregate of four (4) weeks vacation during each
calendar year of the Term hereof.  Vacation days may be accumulated and
shall not be lost if not used prior to the end of any calendar year. 
Vacation days shall be prorated for partial calendar
years.

          Employee
shall be entitled to such holidays as are established by Company for all
employees.

          Company
reserves the right to modify, suspend or discontinue any and all of the above
benefit plans, policies, and practices at any time without notice to or recourse
by Employee, so long as such action is taken generally with respect to other
similarly situated persons and does not single out
Employee.

          5.       Expense
Reimbursement.

          During
the Term, to the extent that such expenditures satisfy the criteria under the
Internal Revenue Code for deductibility by Company (whether or not fully
deductible) for federal income tax purposes as ordinary and necessary business
expenses, Company shall reimburse Employee promptly for reasonable business
expenses, including travel, entertainment, parking, business meetings, and
professional dues, made and substantiated in accordance with the policies and
procedures established from time to time by Company with respect to Company’s
other executive and managerial
employees.

          6.       Termination
of
Employment.

                    6.1      
For
Cause Termination of Agreement.  Company may terminate this
Agreement at any time without notice if Employee commits any material act of
dishonesty, discloses Confidential Information, (as defined in Paragraph 7.2) is
guilty of gross carelessness or gross misconduct, engages in unfair competition
(as defined in Paragraph 7.1), or unjustifiably and materially neglects his
duties under this
Agreement.

                    6.2      
Disability
Defined.  Employee shall be considered “disabled” under this
Agreement on the date Company determines (“Determination Date”) that Employee is
unable to

       

       

      
        
           

        

        
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      substantially perform his
duties under this Agreement by reason of one or more physical or mental
impairments which the Company has reasonable cause to expect to: (i) result in
death or permanent mental or physical incapacitation within twelve (12) months;
or (ii) last for a continuous period of nine (9)
months.

                    6.3      
Termination
Date.  The date Employee’s employment hereunder is deemed terminated
shall hereinafter be referred to as the “Termination Date”.  Upon the
Termination Date, all obligations of Company under this Agreement shall
immediately terminate, and Company shall have no further liability to Employee
under this Agreement, except for any accrued but unpaid obligations
hereunder.  The Termination Date shall be determined as
follows:

                                6.3.1   
Employee’s employment shall be deemed terminated immediately upon the date of
the event permitting the Company to terminate the Employee for cause as defined
in Section 6.1
above.

                                6.3.2   
Employee’s employment shall be deemed terminated immediately upon Employee’s
death; in such case, the Termination Date shall be the date of
death.

                                6.3.3   
In the event of Employee’s Disability, the Termination Date shall be the date
Company gives written notice to Employee of its election to terminate Employee’s
employment in accordance with the notice provisions of Paragraph 8
herein.

                                6.3.4   
In the event Company elects to terminate Employee’s employment, except for cause
under Section 6.3.1 (in which case termination is immediate), it shall give
Employee written notice of its election to terminate such employment in
accordance with Paragraph 8 herein.  The Termination Date in such case
shall be deemed to be thirty (30) days following the date Employee is deemed to
have received notice in accordance with the provisions of Paragraph 8
herein.

                                6.3.5   
In the event Employee elects to terminate his employment, he shall give Company
written notice of his election to terminate such employment in accordance with
Paragraph 8 herein.  The Termination Date in such case shall be deemed to
be thirty (30) days following the date Company is deemed to have received notice
in accordance with the provisions of Paragraph 8
herein.

                                6.3.6   
If not otherwise terminated in accordance with the terms contained herein, the
Termination Date shall be September 29, 2009, unless renewed in accordance with
this
Agreement.

                    6.4      
Pro-rations. 
Any Base Compensation payable to Employee hereunder shall be prorated through
the Termination Date.  Bonuses, if any, shall be prorated through the
Termination Date.

       

       

      
        
           

        

        
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                    6.5      
Severance
Payment/Options.

                                6.5.1   
If the Termination Date is determined pursuant to Paragraph 6.3.1,  
or 6.3.5: (i) Employee shall not be entitled to receive any Severance Payment,
as hereinafter defined.  If the Termination Date is determined pursuant to
Paragraph 6.3.2, 6.3.3, or 6.3.4 Employee, or his estate if he is deceased shall
be entitled to receive a severance payment equal to one (1) full year of
Employee’s Base Compensation as of that Termination Date (the “Severance
Payment”), said payments to be made in accordance with the normal payroll cycle
of Company and subject to any required tax withholdings and
deductions

          7.       Restrictive
Covenants. 

                    7.1       Nondisclosure
of Confidential Information.  Company has and will continue to
develop, compile, and own certain Confidential Information (as defined below)
that has a great value in and to its business.  Employee has and will
continue to have access to Confidential Information of Company’s clients. 
Clients shall mean any persons or entities for whom Company performs services or
from whom Company obtains information.  Employee and Company acknowledge
and agree that in the course of working with each other pursuant to this
Agreement, Employee will have access to Confidential Information of Company,
that such Confidential Information is the property of the Company and shall
remain so.  Employee hereby agrees that he will not publish, disclose,
disseminate nor communicate, at any time during or after the termination of this
Agreement, to any third party or make any use of the Confidential Information
except for the benefit of Company.  Employee hereby understands and agrees
that the Confidential Information is important, material, and gravely affects
the effective and successful conduct of Company’s business and goodwill and that
any unauthorized use of Company’s Confidential Information shall constitute
unfair competition and a material breach of this Agreement.  Employee shall
be liable for any and all damages incurred as a result of any such unauthorized
use in addition to the remedies provided in Section 7.5
below.

                    7.2       Definition. 
Confidential Information includes not only information disclosed by Company or
its clients to Employee in the course of its employment but also: (1)
information developed or learned by Employee during the term of this Agreement
with Company; (2)  information that has or could have commercial value or
other utility in the business in which Company or its clients are engaged or in
which they contemplate engaging; or (3) information of which the unauthorized
disclosure could be detrimental to the interest of Company or its clients,
whether or not such information is identified as Confidential Information by
Company or its
clients.

          Confidential
Information means any and all information and data concerning Company’s
marketing, sales and seminar techniques, tax strategies, estate planning
strategies and models, processes, formulas, pricing, trade secrets, innovations,
inventions, discoveries, improvements, research or development and test results,
specifications, data, know-how, formats, marketing plans, business plans and
strategies, forecasts, financial information, budgets, projections, and client
and supplier identities characteristics, and agreements.  Such information
may be contained in materials such as customer, price and supplier lists;
reports; or computer programs; or may constitute unwritten information,
techniques, processes, practices or knowledge.

       

       

      
        
           

        

        
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                    7.3.       Devotion
to Company’s
Business. 

                    (a)         Subject
to the exceptions set forth herein, Employee shall devote the requisite levels
of his time, ability, and attention to the business of Company during the term
of his employment necessary to effectively and efficiently execute all job
responsibilities set forth in Section 2.1.  Employee may devote time and
attention to other activities that do not compete with Company or interfere with
Employee’s obligations, duties and responsibilities to Company
hereunder.

                    (b)        During
Employee’s employment with Company, Employee shall not engage in any other
business duties or pursuits whatsoever, or directly or indirectly render any
services of a business, commercial, or professional nature to any other person
or organization, whether for compensation or otherwise, that competes or could
compete with Company or interfere with Employee’s obligations, duties and
responsibilities to Company hereunder, without the prior written consent of
Company’s Board of Directors.  However, the expenditure of reasonable
amounts of time for educational, charitable, or professional activities shall
not be deemed a breach of this agreement if those activities do not materially
interfere with the services required under this agreement and shall not require
the prior unanimous written consent of Company’s Board of
Directors.

                    This
Agreement shall not be interpreted to prohibit Employee from making passive
personal investments or conducting private business affairs if those activities
do not interfere or conflict with the services required under this
agreement.  However, during the term of Employee’s employment, Employee
shall not directly or indirectly acquire, hold, or retain any interest in any
business competing with or similar in nature to the business of
Company.

                    7.4.        Competitive
Activities.  While Employee is an employee of Company, and for a
period of six (6) months after termination, Employee shall not, directly or
indirectly, either as an employee, employer, consultant, agent, principal
partner, stockholder, corporate officer, director, or in any other individual or
representative capacity, engage or participate in any business that is in the
industry as Company.  In the event Employee is terminated by Company
without cause then the provisions of this Section 7.4 will not be
applicable.  Employee further acknowledges that this non-compete provision
itself survives the termination of this
Agreement.

                    7.5.        Uniqueness
of Employee’s Services. 
Employee hereby represents and agrees that the services to be performed by
Employee under this agreement are of a special, unique, unusual, extraordinary
and intellectual character that gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in an action at
law.  Employee therefore expressly agrees that Company, in addition to any
other rights or remedies that Company may posses, shall be entitled to
injunctive and other equitable relief to prevent or remedy a breach of this
contract by Employee.  The parties are aware that under California law
specific performance may not be available to enforce all breaches of this
agreement but acknowledge that for all such material breaches of this agreement
the non-breaching party would be harmed and both parties agree that this harm
will be recoverable through monetary damages.

     

     

    
      
         

      

      
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          8.       Notices.

          Any
notices to be given hereunder by either party to the other shall be in writing
and may be transmitted by personal delivery or facsimile or overnight
mail.  Notices shall be addressed to the parties at the addresses
below.  Such notice or communication shall be deemed to have been given or
made, as of the date of delivery, as evidenced by a signed declaration under
penalty of perjury in the event of personal delivery, as evidenced by a
facsimile confirmation sheet in the event of facsimile delivery, or as evidenced
by proof of overnight delivery in the event of delivery by overnight
courier.

     

    
      	 	If to
      Employer: 	
              Material
      Technologies, Inc.

              11661 San
      Vicente Boulevard, Suite 707

              Los Angeles,
      CA 90049

              Facsimile:
      (310) 473-3177

            
	 	 	 
	 	with a copy
      to: 	
              The Lebrecht
      Group, APLC

              9900 Research
      Drive

              Irvine,
      CA  92618

              Attn: 
      Craig V. Butler, Esq.

              Facsimile:  (949) 635-1244

            
	 	 	 
	 	If to
      Employee: 	
              Robert M.
      Bernstein

              11661 San
      Vicente Boulevard, Suite 707

              Los Angeles,
      CA 90049

              Facsimile:
      (310) 473-3177

            


    

                  
          9.       Further
Assurances.

          Employee
agrees to execute and deliver such further documents and instruments and do such
further acts and things as Company may reasonably request to carry out the
purposes and intents of this
Agreement.

          10.      Employee
Acknowledgments.

          Employee
acknowledges that Employee has received a copy of this
Agreement. 

          11.      Employee’s
Duties on
Termination.

          In
the event of termination of Employee’s employment as provided herein, Employee
agrees to deliver promptly to Company all notebooks, documents, memoranda,
reports, files, correspondence, keys and other property belonging to Company
relating to the business of Company, which are in Employee’s possession or under
Employee’s control.

     

     

     

    
      
         

      

      
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          12.      Entire
Agreement of the
Parties/Modification.

          This
Agreement supersedes any and all agreements, either oral or written, between the
parties hereto with respect to Employee’s employment with Company and contains
all of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever.  Any modification of this Agreement
will be effective only if it is in writing and signed by the Employee and
Company. 

          13.      Waiver.

          Either
Party’s failure to enforce any provision or provisions of this Agreement shall
not in any way be construed as a waiver of any such provisions or prevent that
party thereafter from enforcing such provision or any other provision of this
Agreement.

          14.      Severable
Provisions.

          The
intent of each of Company and Employee is that the restrictions and limitations
on each of Company and Employee described herein shall apply and be enforceable
to the fullest extent allowed by law and shall under no circumstances be
terminated in full in the event that any portion of such limitations or
restrictions exceed applicable law.  In the event any court of competent
jurisdiction determines that any of the provisions hereof exceed any applicable
geographical, temporal or other legal or equitable limitations or restrictions,
then such court is hereby authorized and requested by the parties to “blue
pencil” or otherwise reform the applicable limitations and restrictions, and
this Agreement shall thereupon be deemed to be reformed, only to the minimum
extent necessary to meet such legal or equitable limitations and
restrictions.  The illegality, invalidity or unenforceability of any term
or provision of this Agreement shall have no effect on any other term or
provision of this
Agreement.

          15.      Governing
Law/Venue.

          This
Agreement shall be governed by and construed in accordance with the laws of the
State of California.  Any legal action, suit, arbitration, or proceeding
arising from or relating to this Agreement shall be brought and maintained in
the appropriate court or arbitrator located in and with jurisdiction over Los
Angeles County, California and the parties hereby submit to the jurisdiction
thereof.

          16.      Employee’s
Representations.

          Employee
represents and warrants that Employee is free to enter into this Agreement and
to perform each of its terms, covenants and agreements.  Employee
represents and warrants that Employee is not restricted or prohibited,
contractually or otherwise, from entering into and performing this Agreement,
and that Employee’s execution and performance of this Agreement is not a
violation or breach of any other agreement between Employee and any other person
or entity.

       

       

       

      
        
           

        

        
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                  17.      Assignment.   

          This
Agreement and the respective rights and obligations hereunder may not be
assigned by either party hereto without the express written consent of the other
party, except for an assignment by Company to any successor to all or any
substantial portion of the business of Company.  This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective permitted assigns and successors by operation of
law.

          18.      This
Agreement.

          All
references contained herein to this Agreement are intended and shall be deemed
to mean this Agreement, inclusive of and together with any exhibits which may be
appended hereto, all of which are deemed hereby to be fully incorporated herein
by
reference.

          19.      Captions
and
Interpretations.

          Paragraph
titles or captions contained herein are inserted as a matter of convenience and
for reference only, and in no way define, limit, extend or describe the scope of
this Agreement or any provision hereof.  This Agreement is to be
interpreted without regard to the draftsman.  The terms and intent of this
Agreement, with respect to the rights and obligations of Employee and Company,
shall be interpreted and construed on the express assumption that each party
participated equally in its
drafting.

          20.      Agreement
Survives Combination or
Dissolution. 

          This
Agreement shall not be terminated by any merger in which Company is not the
surviving or resulting corporation, or on any transfer of all or substantially
all of Company’s assets.  In the event of any such merger or transfer of
assets, the provisions of this Agreement shall be binding on and inure to the
benefit of the surviving business entity or the business entity to which such
assets shall be
transferred.

          21.      Attorney’s
Fees and Costs. 

          If
any action at law or in equity is necessary to enforce or interpret the terms of
this agreement, the prevailing party shall be entitled to reasonable attorney’s
fees, costs, and necessary disbursements in addition to any other relief to
which that party may be entitled.  This provision shall be construed as
applicable to the entire
Agreement.

          22.      Counterparts. 

          This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original, but such counterparts, when taken together, shall constitute but
one (1) Agreement.

         

         

        
          
             

          

          
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          IN
WITNESS WHEREOF, the parties hereto, by their duly authorized officers or other
authorized signatory, have executed this Amendment as of the date first above
written.  This agreement may be signed in counterparts and facsimile
signatures are treated as original signatures.




    
      	
              “Company”

            	 	
              “Employee”

            
	 	 	 
	
              Material
      Technologies, Inc,
a Delaware corporation

            	

               

            	
              Robert M.
      Bernstein,
an individual

            
	
               

            	

               

            	

               

            
	  	 	 
	
                /s/
      Joel R.
      Freedman                          
      

            	

               

            	
                /s/
      Robert M.
      Bernstein                      
      

            
	
              By: 
      Joel R. Freedman

            	

               

            	
              By: 
      Robert M. Bernstein

            
	
              Its: 
      Director

            	

               

            	

               

            
	
                

            	

               

            	

               

            
	
                

            	

               

            	

               

            
	
                /s/
      William I.
      Berks                            
      

            	

               

            	

               

            
	
              By: 
      William I. Berks

            	

               

            	

               

            
	
              Its: 
      Director

            	

               

            	

               

            
	
                

            	

               

            	

               

            
	
                

            	

               

            	

               

            
	
                /s/
      John
      Goodman                              

            	

               

            	

               

            
	
              By: 
      Dr. John Goodman

            	

               

            	

               

            
	
              Its: 
      Director

            	

               

            	

               

            


    

     

     

    



 

     

    
      
         

      

      
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