AGREEMENT AND PLAN OF ACQUISITION

Exhibit 10.1

ACQUISITION OF STRESS ANALYSIS TECHNOLOGIES, INC.
by
MATERIAL TECHNOLOGIES, INC.


AGREEMENT AND PLAN OF ACQUISITION

This Agreement and Plan of Acquisition (the “Agreement”) is entered into by and between Stress Analysis Technologies, Inc., a Florida corporation (“ SATI” ), UTEK CORPORATION, a Delaware corporation (“ UTEK” ), and Material Technologies, Inc, a Delaware corporation (“ MTNA” ).

WHEREAS, UTEK owns 100% of the issued and outstanding shares of common stock of SATI;

WHEREAS , before the Closing Date (as defined in Section 1.04), SATI will acquire the license for the fields of use as described in the License Agreement which is attached hereto as part of Exhibit A and made a part of this Agreement (the “License Agreement”) and the rights to develop and market a patented and proprietary technology for the fields of uses specified in the License Agreement (the “Technology”);

WHEREAS , the parties desire to provide for the terms and conditions upon which SATI will be acquired by MTNA in a stock-for-stock exchange (the “Acquisition”) in accordance with the respective corporation laws of their state, upon consummation of which all outstanding securities of SATI (the “SATI Shares”) will be owned by MTNA, and all issued and outstanding SATI Shares will be exchanged for Class E Convertible Preferred Stock of MTNA (the “Preferred Stock”) with terms and conditions as set forth more fully in Exhibit E to this Agreement; and

WHEREAS , for federal income tax purposes, it is intended that the Acquisition qualifies within the meaning of Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended (“Code”).

NOW, THEREFORE , in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are by this Agreement acknowledged, the parties agree as follows:

ARTICLE 1
THE STOCK-FOR-STOCK ACQUISITION

1.01         The Acquisition

               (a)         Acquisition Agreement .  Subject to the terms and conditions of this Agreement, at the Effective Date, as defined below, all SATI Shares shall be acquired from UTEK by MTNA in accordance with the respective corporation laws of their states and the provisions of this Agreement and the separate corporate existence of SATI, as a wholly-owned subsidiary of MTNA, shall continue after the closing.

               (b)        Effective Date. The date of execution of this Agreement shall be the “Effective Date.”

1.02         The Consideration.

               a)         On the Closing Date, MTNA shall acquire the SATI Shares and shall issue 50,000 Preferred Shares to UTEK, which Preferred Shares shall have a face value of $975,000.

               b)         At any time after twelve (12) months from the Closing Date, UTEK shall have the right to convert part or all its Preferred Shares into restricted common stock of MTNA on the terms and conditions set forth in the Certificate of Designation attached hereto as Exhibit E (the “Certificate of Designation”).

Page 1 of 21

               c)         The IRREVOCABLE TRANSFER AGENT INSTRUCTIONS, attached hereto, instructs the Transfer Agent to effectuate UTEK’S conversion of the Preferred Shares. 

1.03         Effect of Acquisition.

               (a)        Rights in SATI Cease. At and after the Effective Date, UTEK shall cease to have any rights as a shareholder of SATI.

               (b)        Closure of SATI Shares Records. From and after the Effective Date, the stock transfer books of SATI shall be closed, and there shall be no further registration of stock transfers on the records of SATI.

1.04         Closing. Subject to the terms and conditions of this Agreement, the Closing of the Acquisition shall be the date of the last executed signature affixed to this Agreement, but in no event later than January 31, 2007 (the “Closing Date”).

1.05         License Agreement .  SATI is a party to the License Agreement.  SATI represents and warrants that, prior to the date of this Agreement, it has paid, in full, the Signing Fee to Isis Innovation Limited (“IIL”) under Section 8.1 of the License Agreement.

ARTICLE 2
REPRESENTATIONS AND WARRANTIES

2.01         Representations and Warranties of UTEK and SATI.   UTEK and SATI jointly and severally represent and warrant to MTNA that the facts set forth below are true and correct:

               (a)        Organization. SATI and UTEK are corporations duly organized, validly existing and in good standing under the laws of their respective states of incorporation, and they have the requisite power and authority to conduct their business and consummate the transactions contemplated by this Agreement. True, correct and complete copies of the articles of incorporation, bylaws and all corporate minutes of SATI have been provided to MTNA and such documents are presently in effect and have not been amended or modified.

               (b)        Authorization. The execution of this Agreement and the consummation of the Acquisition and the other transactions contemplated by this Agreement have been duly authorized by the board of directors and shareholders of SATI and the board of directors of UTEK; no other corporate action by the respective parties is necessary in order to execute, deliver, consummate and perform their respective obligations hereunder; and SATI and UTEK have all requisite corporate and other authority to execute and deliver this Agreement and consummate the transactions contemplated by this Agreement.

               (c)        Capitalization .  The authorized capital of SATI consists of 1,000,000 shares of common stock with a par value $.01 per share. At the date of this Agreement, 1,000 SATI Shares are issued and outstanding as follows:

All issued and outstanding SATI Shares are currently owned by UTEK, have been duly and validly issued and are fully paid and non-assessable shares, and have not been issued in violation of any preemptive or other rights of any other person or any applicable laws. SATI is not authorized to issue any preferred

Page 2 of 21

stock. All dividends on SATI Shares which have been declared prior to the date of this Agreement have been paid in full. There are no outstanding options, warrants, commitments, calls or other rights or agreements requiring SATI to issue any SATI Shares or securities convertible, exercisable or exchangeable into SATI Shares to anyone for any reason whatsoever. None of the SATI Shares is subject to any charge, claim, condition, interest, lien, pledge, option, security interest or other encumbrance or restriction, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

               (d)        Binding Effect. The execution, delivery, performance and consummation of this Agreement, the Acquisition and the transactions contemplated by this Agreement will not violate any obligation to which SATI or UTEK is a party and will not create a default under any such obligation or under any Agreement to which SATI or UTEK is a party.  This Agreement constitutes a legal, valid and binding obligation of SATI, enforceable in accordance with its terms, except as the enforcement may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditor’s rights generally and by the availability of injunctive relief, specific performance or other equitable remedies.

               (e)        Litigation Relating to this Agreement. There are no suits, actions or proceedings pending or, to the best of SATI’s and UTEK’s knowledge, information and belief, threatened, which seek to enjoin the Acquisition or the transactions contemplated by this Agreement or which, if adversely decided, would have a materially adverse effect on the business, results of operations, assets or prospects of SATI.

               (f)         No Conflicting Agreements. Neither the execution and delivery of this Agreement nor the fulfillment of or compliance by SATI or UTEK with the terms or provisions of this Agreement nor all other documents or agreements contemplated by this Agreement and the consummation of the transaction contemplated by this Agreement will result in a breach of the terms, conditions or provisions of, or constitute a default under, or result in a violation of, SATI’s or UTEK’s articles of incorporation or bylaws, the Technology, the License Agreement, or any agreement, contract, instrument, order, judgment or decree to which SATI or UTEK is a party or by which SATI or UTEK or any of their respective assets is bound, or violate any provision of any applicable law, rule or regulation or any order, decree, writ or injunction of any court or government entity which materially affects their respective assets or businesses.

               (g)        Consents. No consent from or approval of any court, governmental entity or any other person is necessary in connection with execution and delivery of this Agreement by SATI and UTEK or performance of the obligations of SATI and UTEK hereunder or under any other agreement to which SATI or UTEK is a party; and the consummation of the transactions contemplated by this Agreement will not require the approval of any entity or person in order to transfer the Technology, the License Agreement, or any other material right, privilege, license or agreement relating to SATI or its assets or business.

               (h)        Title to Assets. SATI has or has agreed to enter into the agreements as listed on Exhibit A attached hereto. These agreements and the assets shown on the balance sheet of attached Exhibit B are the sole assets of SATI.  SATI has, and on the Closing Date will have, good and marketable title to its assets, free and clear of all liens, claims, charges, mortgages, options, security agreements and other encumbrances of every kind or nature whatsoever.

               (i)         Intellectual Property

       (1)  IIL owns the Technology and has all right, power, authority and ownership and entitlement to file, prosecute and maintain in effect the Patent application with respect to the inventions listed in Exhibit A hereto (the “Inventions”).

       (2)  The License Agreement between IIL and SATI covering the Inventions is legal, valid, binding and will be enforceable in accordance with its terms as contained in Exhibit A .

       (3)   Except as otherwise set forth in this Agreement, MTNA acknowledges and understands that SATI and UTEK make no representations and provide no assurances that the rights to the Technology and Intellectual Property contained in the License Agreement do

Page 3 of 21

not, and will not in the future, infringe or otherwise violate the rights of third parties; however, SATI and UTEK have no knowledge of pending or threatened claims by, or any basis for any claims by, any third parties alleging such infringement or other violation, and

       (4)   Except as otherwise expressly set forth in this Agreement, SATI and UTEK make no representations and extend no warranties of any kind, either express or implied, including, but not limited to warranties of merchantability, fitness for a particular purpose, non-infringement and validity of the Intellectual Property.

               (j)         Liabilities of SATI. SATI has no assets, no liabilities or obligations of any kind, character or description except those listed on the attached schedules and exhibits.

               (k)        Financial Statements. The unaudited financial statements of SATI, including a balance sheet, attached as Exhibit B and made a part of this Agreement, are, in all respects, complete and correct and present fairly SATI’s financial position and the results of its operations on the dates and for the periods shown in this Agreement; provided, however, that interim financial statements are subject to customary year-end adjustments and accruals that, in the aggregate, will not have a material adverse effect on the overall financial condition or results of its operations. SATI has not engaged in any business not reflected in its financial statements. There have been no material adverse changes in the nature of its business, prospects, the value of assets or the financial condition since the date of its financial statements. There are no, and on the Closing Date there will be no, outstanding obligations or liabilities of SATI except as specifically set forth in the financial statements and the other attached schedules and exhibits.  There is no information known to SATI or UTEK that would prevent the financial statements of SATI from being audited in accordance with generally accepted accounting principles.

               (l)         Taxes. All returns, reports, statements and other similar filings required to be filed by SATI with respect to any federal, state, local or foreign taxes, assessments, interests, penalties, deficiencies, fees and other governmental charges or impositions have been timely filed with the appropriate governmental agencies in all jurisdictions in which such tax returns and other related filings are required to be filed; all such tax returns properly reflect all liabilities of SATI for taxes for the periods, property or events covered by this Agreement; and all taxes, whether or not reflected on those tax returns, and all taxes claimed to be due from SATI by any taxing authority, have been properly paid, except to the extent reflected on SATI’s financial statements, where SATI has contested in good faith by appropriate proceedings and reserves have been established on its financial statements to the full extent if the contest is adversely decided against it. SATI has not received any notice of assessment or proposed assessment in connection with any tax returns, nor is SATI a party to or to the best of its knowledge, expected to become a party to any pending or threatened action or proceeding, assessment or collection of taxes. SATI has not extended or waived the application of any statute of limitations of any jurisdiction regarding the assessment or collection of any taxes. There are no tax liens (other than any lien which arises by operation of law for current taxes not yet due and payable) on any of its assets. There is no basis for any additional assessment of taxes, interest or penalties. SATI has made all deposits required by law to be made with respect to employees’ withholding and other employment taxes, including without limitation the portion of such deposits relating to taxes imposed upon SATI. SATI is not and has never been a party to any tax-sharing agreements with any other person or entity.

               (m)       Absence of Certain Changes or Events. From the Effective Date until the Closing Date, SATI will not have:

       (1)    Sold, encumbered, assigned let lapsed or transferred any of its material assets, including without limitation the Intellectual Property, the License Agreement or any other material asset;

       (2)    Amended or terminated the License Agreement or other material agreement or done any act or omitted to do any act which would cause the breach of the License Agreement or any other material agreement;

       (3)    Suffered any damage, destruction or loss whether or not in control of SATI;

Page 4 of 21

       (4)    Made any commitments or agreements for capital expenditures or otherwise;

       (5)    Entered into any transaction or made any commitment not disclosed to MTNA;

       (6)    Incurred any material obligation or liability for borrowed money;

       (7)    Done or omitted to do any act, or suffered any other event of any character, which is reasonable to expect, would adversely affect the future condition (financial or otherwise), assets or liabilities or business of SATI; or

       (8)    Taken any action, which could reasonably be foreseen to make any of the representations or warranties made by SATI or UTEK untrue as of the date of this Agreement or as of the Closing Date.

               (n)        Material Agreements. Exhibit A attached contains a true and complete list of all contemplated and executed agreements between SATI and any third party. A complete and accurate copy of all material agreements, contracts and commitments of the following types, whether written or oral, to which it is a party or is bound (the “Contracts”), has been provided to MTNA.  Such executed Contracts are, and such contemplated Contracts will be, at the Closing Date, in full force and effect without modifications or amendment and constitute the legally valid and binding obligations of SATI in accordance with their respective terms and will continue to be valid and enforceable following the Acquisition. SATI is not, and will not be at the Closing Date, in default of any of the Contracts. In addition:

       (1)    There are no outstanding unpaid promissory notes, mortgages, indentures, deed of trust, security agreements and other agreements and instruments relating to the borrowing of money by or any extension of credit to SATI;

       (2)    There are no outstanding operating agreements, lease agreements or similar agreements by which SATI is bound;

       (3)    The complete final draft of the License Agreement has been provided to MTNA;

       (4)    Except as set forth in (3) above, there are no outstanding licenses to or from others of any intellectual property and trade names;

       (5)    There are no outstanding agreements or commitments to sell, lease or otherwise dispose of any of SATI’s property; and

       (6)    There are no breaches of any agreement to which SATI is a party.

               (o)        Compliance with Laws. SATI is in compliance with all applicable laws, rules, regulations and orders promulgated by any federal, state or local government body or agency relating to its business and operations.

               (p)        Litigation.   There is no suit, action or any arbitration, administrative, legal or other proceeding of any kind or character, or any governmental investigation pending or to the best knowledge of SATI or UTEK, threatened against SATI, the Technology, or License Agreement, affecting its assets or business (financial or otherwise), and neither SATI nor UTEK is in violation of or in default with respect to any judgment, order, decree or other finding of any court or government authority relating to the assets, business or properties of SATI or the transactions contemplated hereby. There are no pending or threatened actions or proceedings before any court, arbitrator or administrative agency, which would, if adversely determined, individually or in the aggregate, materially and adversely affect the assets or business of SATI or the transactions contemplated hereby.

Page 5 of 21

               (q)        Employees. SATI has no and never had any employees. SATI is not a party to or bound by any employment agreement or any collective bargaining agreement with respect to any employees. SATI is not in violation of any law, rule or regulation relating to employment of employees.

               (r)         Adverse Effect .  Neither SATI nor UTEK has any knowledge of any existing or threatened occurrence, action or development that could cause a material adverse effect on SATI or its business, assets or condition (financial or otherwise) or prospects.

               (s)        Employee Benefit Plans.   There are no and have never been any employee benefit plans, and there are no commitments to create any, including without limitation as such term is defined in the Employee Retirement Income Security Act of 1974, as amended, in effect, and there are no outstanding or un-funded liabilities nor will the execution of this Agreement and the actions contemplated in this Agreement result in any obligation or liability to any present or former employee.

               (t)         Books and Records. The books and records of SATI are complete and accurate in all material respects, fairly present its business and operations, have been maintained in accordance with good business practices, and applicable legal requirements, and accurately reflect in all material respects its business, financial condition and liabilities.

               (u)        Full Disclosure.    All representations or warranties of UTEK and SATI are true, correct and complete in all material respects to the best of UTEK’s and SATI’s knowledge on the date of this Agreement and shall be true, correct and complete in all material respects as of the Closing Date as if they were made on such date.  No statement made by them in this Agreement or in the exhibits and schedules to this Agreement or any document delivered by them or on their behalf pursuant to this Agreement contains an untrue statement of material fact or omits to state all material facts necessary to make the statements in this Agreement not misleading in any material respect in light of the circumstances in which they were made.

2.02         Representations and Warranties of MTNA.   MTNA represents and warrants to UTEK and SATI that the facts set forth below are true and correct.

               (a)        Organization.   MTNA is a corporation duly organized, validly existing and in good standing under the laws of Delaware, is qualified to do business as a foreign corporation in other jurisdictions in which the conduct of its business or the ownership of its properties require such qualification, and have all requisite power and authority to conduct its business and operate its properties.

               (b)        Authorization.   The execution of this Agreement and the consummation of the Acquisition and the other transactions contemplated by this Agreement have been duly authorized by the boar