Document:

nnpp_8k-ex1001.htm

    
      
        

      

    

    EXHIBIT
10.1

    
 

    SETTLEMENT
AGREEMENT

     

    This
Settlement Agreement (“Agreement”) is made as of this 29th day of
February, 2008, by and between NANO-PROPRIETARY, INC., a
Texas corporation, having its principal place of business at 3006 Longhorn
Boulevard, Suite 107, Austin, Texas 78758, USA (“NPI”), and IP VERWERTUNGS GmbH (“IPV”), a
German corporation having its business at Toelzer Str. 5, D-82031, Grünwald,
Germany, JK PATENTPORTFOLIO
GmbH & CO. LIMA KG, NPV NANO PATENT GmbH & CO. KG, JOCHEN KAMLAH,
and ARNOLD
AMSINCK (collectively “the Defendants”).

     

    RECITALS:

     

    WHEREAS,
NPI possesses a worldwide exclusive license to patents pertaining to carbon
nanotubes as cathodes for field emission display under an agreement with Till
Keesmann (“Keesmann”) executed on May 26, 2000 (the “Keesmann License
Agreement”);

     

    WHEREAS,
NPI commenced Civil Action No. 06-C-2689, as amended, against the Defendants in
the United States District Court for the Northern District of Illinois alleging
breach of contract, conversion, aiding and abetting conversion, conspiracy to
commit conversion, misappropriation, aiding and abetting misappropriation,
conspiracy to commit misappropriation, federal Lanham Act violations, tortious
interference with a prospective economic relationship, aiding and abetting
tortious interference with a prospective economic relationship, and conspiracy
to tortiously interfere with a prospective economic relationship (the “Illinois
Litigation”);

     

    WHEREAS,  Defendants
deny liability for the claims asserted against it in the Illinois
Litigation;

    
      
         

      

      
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    WHEREAS,
NPI and Defendants desire to resolve amicably, without admitting wrongdoing or
liability, any and all claims and causes of action that have been or could have
been asserted in the Illinois Litigation and seek amicably to resolve their
differences that have given rise to this controversy and to avoid future
controversies between themselves;

     

    WHEREAS,
the Parties agree that the Settlement Agreement shall have no effect as to the
continuation of the Illinois Litigation with regard to any other defendants that
are not expressly included in this Agreement.

     

    NOW,
THEREFORE, in consideration of mutual covenants, agreements and understandings
hereinafter contained, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Parties agree as
follows:

     

    1.           Payment.  Upon
execution of this Agreement, IPV, on behalf of Defendants, shall
immediately pay $500,000.00 USD into an escrow account that shall be
identified in writing to NPI at the time the deposit is made.  In such
writing, IPV shall: (a) notify NPI that the deposit has been made;
(b) identify the account; (c) provide evidence of the deposit; and
(d) name The PrivateBank and Trust Company of Chicago as the escrow
agent.  Such funds shall be released and paid to NPI upon written
order from the United States District Court for the Northern District of
Illinois that all claims brought by NPI against the Defendants in the
Illinois Litigation have been dismissed with prejudice.  Each Party
shall bear its own attorney fees and costs incurred in the Illinois
Litigation.  The Defendants shall not provide Mr. Till Keesmann with
any new funding which has not been committed prior to the Letter of Intent
executed on January 23, 2008.

    
      
         

      

      
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    2.           Dismissal.  Within
seven (7) days of the execution of this Agreement, NPI shall file a stipulation
with the District Court providing that all claims against the Defendants in the
Illinois Litigation be dismissed with prejudice.  For each day
beyond the date of execution of this Agreement that payment is not paid into an
escrow account as required by Section 1, the time period in which NPI must cause
and permit all claims against the Defendants to be dismissed with prejudice
shall be extended by an equal number of days.

     

    3.           Release by NPI.  Subject
to IPV’s timely and satisfactory performance of all of its obligations under
this Agreement, NPI, and each of its parent companies, subsidiaries, successors,
affiliates, and predecessors, and each of their partners, officers, directors,
shareholders, agents, servants, employees, representatives, successors and
assigns (“NPI Parties”) shall hereby release, relinquish, waive, covenant not to
sue, and discharge the Defendants and each of its or their parent
companies, subsidiaries, successors, affiliates, and predecessors, and each of
their partners (other than Keesmann), officers, directors, shareholders, agents,
servants, employees, representatives, successors and assigns from any and all
claims, suits, damages, and/or causes of action, whether at law, equity, or
otherwise, whether known or unknown, that the NPI Parties asserted or could
have asserted against the Defendants in the
Illinois Litigation.

     

    4.           Release by the
Defendants.  Subject to NPI’s timely and satisfactory
performance of all of its obligations under this Agreement, the Defendants
hereby release, relinquish, waive, covenant not to sue, and discharge NPI from
any claims, suits, damages, and/or causes of action, whether at law, equity, or
otherwise, whether known or unknown, that the Defendants asserted or could
have asserted against NPI in the Illinois Litigation.

    
      
         

      

      
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    5.           Covenants.  The
Parties represent, warrant, and covenant that they shall not engage in, nor
permit third parties to engage in on their behalf, any additional measures
against each other related to the Illinois Litigation, except for any reasonable
measures taken to enforce this Agreement.  For the purposes of this
Agreement, the Defendants’ continued passive ownership in the subject matter of
the Illinois Litigation, and any ongoing litigation between NPI and any
remaining defendants in the Illinois Litigation, shall not be considered a
breach of this Section 5.  Defendants represent, warrant and covenant
that Keesman is not an officer, director, shareholder, agent, servant, employee,
representative, successor or assign of any of the Defendants.

     

    6.           Scope of
Agreement.  The application and scope of this Agreement is
worldwide, subject to enforcement as provided in Paragraph 12.

     

    7.           Entire
Agreement.  This Agreement constitutes the entire agreement of
the Parties hereto and supersedes all prior negotiations, understanding and
agreements whether written or oral.  This Agreement is entered into
and executed without reliance upon any promise, warranty or representation by
any Party or any representative of any Party hereto, other than those expressly
contained herein.  This Agreement shall not be interpreted or
construed against the drafter.  Each Party has carefully read this
Agreement, has been advised of its meaning and consequences by its respective
counsel, and executes this Agreement of its own free will.

     

    8.           Non-Disparagement.  The
Parties hereto agree that they and their agents and attorneys will not make any
voluntary statements, written or verbal, or cause or encourage others to make
such statements relating to the facts that formed the basis of the Illinois
Litigation, which defame or disparage the personal or business reputation,
practices, or conduct of the other Parties hereto.  Notwithstanding
the foregoing, NPI shall not be liable under this Agreement for any statements
made in the course of prosecuting the Illinois Litigation to final
adjudication.

    
      
         

      

      
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    9.           Confidentiality.  Each
Party hereto shall keep the terms of this Agreement strictly
confidential.  No Party shall make any disclosure of the terms of this
Agreement except such disclosure as may be required by law in response to a
validly issued subpoena, incident to obtaining judicial enforcement of the terms
of this Agreement, or required in filings with the Securities and Exchange
Commission or foreign equivalent thereof, which may include describing or
providing portions of this Agreement, or the Agreement in its entirety, to such
regulatory bodies.  In the event any Party hereto is served with
judicial process seeking disclosure of this Agreement, in whole or part, then
such Party shall, within three (3) business days of receipt of such process,
notify every other Party hereto, in writing by certified mail with return
receipt requested, as well as promptly by facsimile or electronic mail, that it
has been served with judicial process seeking disclosure of some or all of this
Agreement.  In such event, and prior to making any disclosure of the
terms of this Agreement or its performance, the Party served with judicial
process shall not make any disclosure of this Agreement if the party seeks a
protective order in the appropriate forum to limit or preclude disclosure of
this Agreement.

     

    10.           Liquidated
Damages.  The Parties agree that, in the event any Party
breaches the confidentiality or non-disparagement provisions of this Agreement,
the exact amount of damages are and would be difficult if not impossible to
ascertain.  Therefore, any Party breaching either of these provisions
shall be liable for $10,000.00 USD per occurrence.

     

    11.           Jurisdiction.  The
Parties acknowledge the jurisdiction of the United States District Court for the
Northern District of Illinois, if federal court subject matter jurisdiction
exists, as the exclusive forum to enforce the terms of this
Agreement.

    
      
         

      

      
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    12.           Modification.  No
modification, amendment, or waiver of any of the provisions contained in this
Agreement, or any future representation, promise, or condition in connection
with the subject matter of this Agreement, shall be binding upon any Party to
this Agreement unless made in writing and signed by such Party or by a duly
authorized officer or agent of such Party.

     

    13.           Relationship of
Parties.  Neither Party shall be, nor represent itself to be,
the joint venturer, franchiser, franchisee, partner, broker, employee, servant,
agent or representative of the other Party for any purpose.  Neither
Party shall have the authority to make any representations or incur any
obligations on behalf of the other Party and neither Party shall be responsible
for the acts or omissions of the Party, except as expressly provided
herein.

     

    14.           Severability.  If
any provision of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be of no
force and effect, but the illegality or unenforceability of such provision shall
not have an effect upon and shall not impact the enforceability of any other
provision of this Agreement.  Furthermore, in lieu of the illegal,
invalid or unenforceable provision, there will be added automatically as part of
this Agreement a provision as similar in its terms to the illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.

     

    15.           No Prior Assignments.  The
Parties represent and warrant that they have not assigned or transferred any
portion of the claims released under this Agreement to any other person, firm,
corporation, or other entity, and that no other person, firm, corporation, or
other entity has any lien or interest in any such claims.  Each Party
will indemnify the other Party and defend and hold them
harmless from and against any liability, loss, cost, and expense whatsoever
(including, without limitation, attorneys’ fees and costs) incurred as a direct
or indirect result of any breach of this section of this
Agreement.

    
      
         

      

      
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    16.           Notices.  Any
notice provided for under this Agreement shall be in writing and shall be
delivered by personal delivery or certified United States mail, return receipt
requested, or by facsimile, telegram, or cable addressed to the Parties at the
following addresses:

     

    
      	
              If to
      NPI:

            	
              Nano-Proprietary,
      Inc.

            

    

    3006
Longhorn Boulevard

    Suite
107

    Austin,
Texas 78758

    USA

    Attn:  Douglas
Baker

    Fax:  (512)
339-5021

    

    
      	
              With a copy
      to:

            	
              David
      J. Ervin, Esq.

            

    

    Kelley
Drye Collier Shannon

    3050 K
Street, NW, Suite 400

    Washington,
DC  20007

    USA

    (202)
342-8451 (Fax)

    

    
      	
              If to IPV or
      Defendants:

            	
               IP
      Verwertungs GmbH

            

    

    Toelzer
Str. 5

    82031
Grünwald

    Germany

    Attn:  Jochen
Kamlah

    Fax:
011-49-89-98109886

    

    
      	
              With a copy
      to:

            	
              Foley
      & Lardner

            

    

    3000 K
Street NW, Suite 500

    Washington,
DC 20007

    USA

    Attn:  Peter
Linzmeyer, Esq.

    Fax:  (202)
672-5399

    

    Each
Party may, by notice to the other Party, change its address or other coordinates
hereunder by delivering notice of the change as set forth above.

     

    17.           Governing
Law.  This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Illinois applicable to agreements
entered into and to be performed wholly in Illinois, without regard to its
conflict of laws and/or choice of law provisions.

    
      
         

      

      
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    18.           Counterparts and
Facsimile.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall continue one and the same instrument.  A facsimile
signature will be deemed to be an original signature.

     

    19.           Further
Assurances.  Each Party agrees to execute and deliver any and
all additional documents and instruments, and take all other actions, which may
be necessary to give effect to this Agreement and the transactions contemplated
hereby.

     

    20.           Authority.  Each
of NPI, IPV and Defendants represent and warrant that it is duly authorized
to enter into this Agreement.

    
      
         

      

      
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    IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by
their duly authorized officers or representatives.

    
    

     

    
      	
              NANO-PROPRIETARY,
      INC.: 

               

              Dallas, TX 
      02/29/08                                 
      

              (City, Date)

               

              /s/ Thomas F.
      Bijou                                 
       

              Thomas
      F. Bijou (Chairman & CEO)

               

               

            	
              IP VERWERTUNGS,
      GmbH:

               

               Grünwald,
      29.Feb.'08                                    

              (City, Date)

               

              /s/ Jochen
      Kamlah                                           
      

              Jochen Kamlah (Managing Director)

               

               

              /s/ Reiko
      Koban                                              
      

              Reiko Koban (Chief Financial Officer)

               

               

              JK
      PATENTPORTFOLIO GmbH & CO. LIMA KG

               

              Grünwald,
      29.Feb.'08                                     

              (City,
      Date)

               

              
                /s/ Jochen
      Kamlah                                           
      

                Jochen Kamlah (Managing Director)

              

               

               

              NPV
      NANO PATENT GmbH & CO. KG

               

              Hamburg,
      29.Feb.2008                                   
      

              (City,
      Date)

               

              /s/ Arnold
      Amsinck                                    
      

              Arnold
      Amsinck (Managing
      Director)

            

    

     

     

    
      
         

      

      
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              JOCHEN
      KAMLAH:

               

              Grünwald, 29.Feb.'08

              (City, date)

               

               

              /s/ Jochen
      Kamlah                         
      

              Jochen Kamlah

               

               

              ARNOLD AMSINCK:

               

              
                Hamburg,
      29.Feb.2008                                   
      

                (City,
      Date)

                 

                /s/ Arnold
      Amsinck                                    
      

                Arnold
      Amsinck
  

              

            

    

     

     

     

     

     

    10<PAGE>
Exhibit 10.1

                               AMENDMENT NO. 1 TO

                              EMPLOYMENT AGREEMENT

This Amendment No. 1 to Employment Agreement (this "AMENDMENT") is made and
entered into as of the 4th day of March 2008 (the "AMENDMENT EFFECTIVE DATE") by
and among Reclamation Consulting and Applications, Inc. (the "COMPANY"), and
Paul Hughes (the "EMPLOYEE"). The Company and Employee are sometimes referred to
herein individually as a "PARTY" and collectively as the "PARTIES." Capitalized
terms used but not defined herein have the meanings assigned to them in the
Employment Agreement dated as of June 11, 2007 and entered into by the Parties
(the "AGREEMENT").

         The Parties hereby amend the Agreement as follows:

I.       AMENDMENTS TO THE AGREEMENT

         From the Amendment Effective Date, Employee shall no longer serve as
the Company's Chief Operating Officer, but Employee shall continue serving as
the Company's Chief Financial Officer pursuant to the terms of the Agreement.

II.      GENERAL PROVISIONS

         A. Except as expressly amended by this Amendment, the Parties agree
that all other provisions of the Agreement remain unchanged and that the
Agreement remain in full force and effect.

         B. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

         C. The Agreement, as hereby amended, 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. No understanding, promise,
inducement, statement of 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, as
hereby amended, 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.

                             SIGNATURES ON NEXT PAGE

<PAGE>

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

THE COMPANY:

RECLAMATION CONSULTING AND APPLICATIONS, INC.

      By:  /s/ Michael C. Davies
          ----------------------------
          Michael C. Davies
          Chief Executive Officer

EMPLOYEE:

         /s/ Paul Hughes
         -----------------------------
         Paul Hughes

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