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Exhibit 10.9

REGISTRATION RIGHTS AGREEMENT

AGREEMENT dated as of the 6th day of August, 2008 between the person whose name
appears below (the “Investor”), and Material Technologies, Inc., a Delaware
Corporation, having its principal executive office at 11661 San Vicente
Boulevard, Suite 707, Los Angeles, CA 90048 (the “Company”).

WHEREAS, the Company has issued and sold to the Investor Secured Convertible
Debentures and will issue shares of its Common Stock, as well as additional
shares of the Company, upon conversion of the Debentures of the Company for an
aggregate face amount of $1.0 million (U.S.).  The Debentures and the Shares,
issuable upon exercise thereof, are sometimes referred to herein as the
“Securities”.

WHEREAS, the Company desires to grant to the Investor the registration rights
set forth herein with respect to the shares of Common Stock and the shares of
Common Stock issuable upon exercise of the Debentures issued to Investor;

NOW, THEREFORE, the parties hereto mutually agree as follows:

1.             Registrable Securities.  As used herein the term “Registrable
Security” means the Secured Convertible Debenture and shares of Common Stock
issued or issuable with respect to the Securities, including all shares issued
by the Company on a one (1) for one (1) basis, or issued or issuable by virtue
of any stock split, combination, stock dividend, merger, consolidation or other
similar event; provided, however, that with respect to any particular
Registrable Security, such security shall cease to be a Registrable Security
when, as of the date of determination, (i) it has been effectively registered
under the Securities Act of 1933, as amended (the “Securities Act”), and
disposed of pursuant thereto, or (ii) registration under the Securities Act is
no longer required by the Investor for the distribution or disposition of all of
the Registrable Securities beneficially owned by such Investor.  The term
“Registrable Securities” means any and/or all of the securities falling within
the foregoing definition of a “Registrable Security.”

2.             Registration.  The Company agrees to use its best efforts to file
a registration statement (a “Registration Statement”) with the Securities and
Exchange Commission (the “Commission”) within forty-five (45) days of the
closing date hereof in order to register the resale of the Registrable
Securities under the Securities Act.  Once effective, the Company will be
required to maintain the effectiveness of the Registration Statement until the
earlier of (i) the date that all of the Registrable Securities have been sold,
or (ii) the date that the Company receives an opinion of counsel to the Investor
that all of the Registrable Securities may be freely distributed, sold or
otherwise disposed of without registration under the Securities Act pursuant to
Rule 144(k) (or any similar provision then in force) promulgated under the
Securities Act.

 
 

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3.             Covenants of the Company With Respect to Registration.

The Company covenants and agrees as follows:
 
(a)           In connection with any registration filed pursuant hereto, the
Company shall use its best efforts to cause the Registration Statement to become
effective as promptly as possible.  Following the effective date of a
Registration Statement, the Company shall, upon the request of the Investor,
forthwith supply such reasonable number of copies of the Registration Statement
(including, without limitation, the exhibits and schedules thereto), preliminary
prospectus and prospectus meeting the requirements of the Securities Act
(including, without limitation, any and all amendments or supplements thereto),
and other documents necessary or incidental to the public offering of the
Registrable Securities, as shall be reasonably requested by the Investor to
permit the Investor to sell, distribute or otherwise dispose of the Investor’s
Registrable Securities.  The obligations of the Company hereunder with respect
to the Investor’s beneficially owned Registrable Securities are subject to the
Investor’s furnishing to the Company such appropriate information concerning the
Investor, the Investor’s Registrable Securities and the terms of the Investor’s
offering of such Registrable Securities as the Company may reasonably request in
writing.

(b)           The Company shall provide the Investor, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other agent retained by the Investor or underwriter
(each, an “Inspector” and, collectively, the “Inspectors”), the opportunity to
review and comment (including reviewing and commenting on relevant documents and
agreements) in the preparation of such Registration Statement, each prospectus
included therein or filed with the Commission and each amendment or supplement
thereto.

(c)           For a reasonable period prior to the filing of any Registration
Statement pursuant to this Agreement, the Company shall make available for
inspection at the Company’s offices and copying by the Inspectors such financial
and other information and books and records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the officers,
directors, employees, counsel and independent certified public accountants of
the Company and its subsidiaries to respond to such inquiries, and to supply all
such information reasonably requested by any such Inspector in connection with
such Registration Statement, as shall be reasonably necessary, in the judgment
of the respective counsel of the Investor and any such underwriter, to conduct a
reasonable investigation within the meaning of the Securities Act.

(d)           The Company shall promptly notify in writing the Investor, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold, (i) when such Registration Statement or the prospectus
included therein or any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to any such Registration Statement
or any post-effective amendment, when the same has become effective, (ii) when
the Commission notifies the Company whether there will be a “review” of such
Registration Statement, (iii) of any comments (oral or written) by the
Commission and by the blue sky or securities commissioner or regulator of any
state with respect thereto or (iv) of any request by the Commission for any
amendments or supplements to such Registration Statement or the prospectus or
for additional information.

 
 

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(e)           The Company shall promptly notify in writing the Investor, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold pursuant to any Registration Statement at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
upon discovery that, or upon the happening of any event as a result of which,
any prospectus included in such Registration Statement (or amendment or
supplement thereto) contains an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, and the Company shall promptly prepare a supplement or amendment to
such prospectus and file it with the Commission promptly following notice of the
occurrence of such event to the Investor, the sales or placement agent and the
managing underwriter so that after delivery of such prospectus, as so amended or
supplemented, to the purchasers of such Registrable Securities, such prospectus,
as so amended or supplemented, shall not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made.

(f)           The Company shall promptly notify in writing the Investor, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold of the issuance by the Commission of (i) any stop order
issued or threatened to be issued by the Commission or (ii) any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose and the
Company agrees to use its commercially reasonable efforts to (x) prevent the
issuance of any such stop order, and in the event of such issuance, to obtain
the withdrawal of any such stop order and (y) obtain the withdrawal of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such Registration
Statement for sale in any jurisdiction at the earliest practicable date.

(g)           The Company shall prepare and file with the Commission such
amendments, including post-effective amendments to each Registration Statement
as may be necessary to keep such Registration Statement continuously effective
for the applicable time period required hereunder and, if applicable, file any
Registration Statements pursuant to Rule 462(b) (or any similar provision then
in force) under the Securities Act; cause the related prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act; and comply with the provisions of the Securities Act
and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement as
so amended or in such prospectus as so supplemented.  If the Investor so
requests, the Company shall request acceleration of effectiveness of the
Registration Statement from the Commission and any post-effective amendments
thereto, if any are filed.  If the Company wishes to further amend the
Registration Statement prior to requesting acceleration, it shall have five (5)
days to so amend prior to requesting acceleration.

(h)           The Company shall pay all costs, fees and expenses in connection
with all Registration Statements, pre-effective and post-effective amendments
thereto, including preliminary and final prospectuses contained therein and any
amendments and supplements thereto filed and

 
 

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maintained pursuant to Sections 2 and 3 hereof including, without limitation,
the Company’s legal and accounting fees, printing expenses, and blue sky fees
and expenses; provided, however, that the Investor shall be solely responsible
for the fees of any counsel retained by the Investor in connection with such
registration and any transfer taxes or underwriting discounts, commissions or
fees applicable to the Registrable Securities sold by the Investor pursuant
thereto.

(i)            The Company will take all necessary action which may be required
in qualifying or registering the Registrable Securities included in a
Registration Statement for offering and sale under the securities or blue sky
laws of such states as are reasonably requested by the Investors of such
securities; provided, that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign corporation
to do business under the laws of any such jurisdiction.

(j)            The Company shall cooperate with the Investor to facilitate the
timely preparation and delivery of certificates representing the securities to
be sold pursuant to the Registration Statement free of any restrictive legends
and in such denominations and registered in such names as the Investor may
request a reasonable period of time prior to sales of the securities pursuant to
such Registration Statement.

(k)            The Company agrees generally to cooperate with Investors in
effecting compliant resale of the Registrable Securities, including comfort and
other customary broker agreements and documentations and certificates

4.             Additional Terms.

(a)            To the extent permitted by law, the Company will indemnify and
hold harmless the Investor, its agents, trustees and beneficiaries, partners,
officers, directors,  shareholders and members of the Investor, legal counsel
and accountants for the Investor, and each person who controls the Investor
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or any state
securities laws, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a “Violation”): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
Registration Statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities laws or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities laws; and the
Company will reimburse the indemnified party under this Section 4(a), for any
reasonable legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity described herein shall not apply any loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation that occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by the Investor; provided further, however, that the foregoing
indemnity agreement with respect to any preliminary

 
 

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prospectus shall not inure to the benefit of the Investor, from whom the person
asserting any such losses, claims, damages or liabilities purchased shares in
the offering, if a copy of the prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Investor to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the shares to such person, and if the prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.

(b)           To the extent permitted by law, the Investor will severally, and
not jointly, indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act and legal counsel and accountants for the Company, against any
losses, claims, damages or liabilities to which any of the foregoing persons may
become subject, under the Securities Act, the Exchange Act or any state
securities laws, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information specifically furnished
by the Investor expressly for use in connection with such registration which
consists solely of the information specified in Section 4(d); and the Investor
will reimburse any person intended to be indemnified pursuant to the foregoing,
for any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity obligation of the Investor
hereunder shall not in any event exceed the net proceeds received by the
Investor from the offering giving rise to such liability.

(c)           Promptly after receipt by an indemnified party of notice of the
commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
reasonably satisfactory to each party; provided, however, that an indemnified
party (together with all other indemnified parties that may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding.  The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if materially prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party,
but the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this paragraph.  After notice from an indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of this paragraph for any legal or other expense subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, unless (i) the indemnified party shall
have employed counsel in accordance with the first sentence of this paragraph or
(ii) the indemnifying party has authorized the employment of counsel for the

 
 

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indemnified party at the expense of the indemnifying party. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent.  No indemnifying party shall, without the prior written consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.  Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the indemnified party with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made.

(d)           The Investor confirms, and the Company acknowledges, that the
information to appear in the table in the section entitled “Principal and
Selling Shareholders” or equivalently named section in the Registration
Statement under the headings “Name of Beneficial Owner,” “Shares Beneficially
Owned Prior to Offering – Number of Shares,” “Maximum Number of Shares Offered
in this Offering,” or equivalently named headings in the Registration Statement
and in the footnote related to such information pertaining to the Investor
constitute the only information concerning the Investor that will be furnished
in writing to the Company by or on behalf of the Investor for inclusion in the
Registration Statement.

(e)            If the indemnification provided for above is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations.  The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties’ relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.  No person guilty of
fraudulent misrepresentations (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.  Notwithstanding any other
provision of this Section, the Investor shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
Investor from the sale of the shares of the Common Stock and Debentures in each
case, pursuant to a Registration Statement, exceeds the amount of damages which
the Investor has otherwise been required to pay by reason of such untrue or
alleged untrue statement or alleged omission.  The obligation of the Investor
obliged to make contribution pursuant to this Section shall be several and not
joint.

(f)            Neither the filing of a Registration Statement by the Company
pursuant to this Agreement nor the making of any request for prospectuses by the
Investor shall impose upon the Investor any obligation to sell the Investor’s
beneficially owned Registrable Securities.

 
 

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(g)           The Investor, upon receipt of notice from the Company that an
event has occurred which requires a Post-Effective Amendment to the Registration
Statement or a supplement to the prospectus included therein, shall promptly
discontinue the sale of Registrable Securities until the Investor receives a
copy of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as practicable after such notice.

(h)           If the Company fails to keep the Registration Statement referred
to above continuously effective during the requisite period, then the Company
shall, promptly upon the request of the Investor, use its best efforts to update
the Registration Statement or file a new registration statement covering the
Registrable Securities remaining unsold, subject to the terms and provisions
hereof.

(i)            The Investor agrees to provide the Company with any information
or undertakings reasonably requested by the Company in order for the Company to
include any appropriate information concerning the Issuer in the Registration
Statement or in order to promote compliance by the Company or the Issuers with
the Securities Act.

(j)            With a view to making available to the Investor the benefits of
Rule 144 and Rule 144A promulgated under the Securities Act and other rules and
regulations of the Commission that may at any time permit the Investor to sell
securities of the Company to the public without registration, the Company
covenants that it shall use commercially reasonable efforts to (i) file in a
timely manner all reports and other documents required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the Commission thereunder and (ii) take such further action as the Investor may
reasonably request (including providing any information necessary to comply with
Rule 144 and Rule 144A, if available with respect to resales of the Registrable
Securities under the Securities Act), at all times, all to the extent required
from time to time to enable the Investor to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (x) Rule 144 and Rule 144A (if available with respect to resales of
the Registrable Securities) under the Securities Act, as such rules may be
amended from time to time, or (y) any other rules or regulations now existing or
hereafter adopted by the Commission.

(k)           The Company agrees to pay all legal fees and expenses of Company’s
counsel in connection with the review of all Securities and Exchange Commission
(“SEC”) filings and exhibits, and all amendments with respect to said filings,
and that Investor’s counsel will have a reasonable opportunity to review all
filings.

5.             Governing Law.  This Agreement shall be deemed to have been made
and delivered in the State of New York and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
substantive laws of the State of New York, without giving effect to the choice
of law rules thereof.

6.             Amendment.  This Agreement may only be amended by a written
instrument executed by the Company and the Investor.

 
 

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7.             Entire Agreement.  This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.

8.             Execution in Counterparts.  This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.

9.             Notices.  All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand or mailed by registered or certified mail, postage prepaid, return receipt
requested, as set forth in the Warrant.

10.           Binding Effect; Benefits.  The Investor may assign his, her or its
rights hereunder as set forth in the Warrant.  This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
legal representatives and successors. Nothing herein contained, express or
implied, is intended to confer upon any person other than the parties hereto and
their respective heirs, legal representatives, successors and assigns, any
rights or remedies under or by reason of this Agreement.

11.           Transfer of Registration Rights. The rights of the Investor under
this Agreement may be transferred or assigned in connection with a transfer of
Registrable Securities to any transferee or assignee.  Notwithstanding the
foregoing, such rights may only be transferred or assigned if all of the
following additional conditions are satisfied:  (a) such transfer or assignment
is effected in accordance with applicable securities laws; (b) such transferee
or assignee agrees in writing to become subject to the terms of this Agreement;
and (c) the Company is given written notice by the Investor of such transfer or
assignment, stating the name and address of the transferee or assignee and
identifying the Registrable Securities with respect to which such rights are
being transferred or assigned.

12.           Headings.  The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.

13.           Severability.  Any provision of this Agreement which is held by a
court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.

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MATERIAL TECHNOLOGIES, INC.

By: /s/ Robert M.
Bernstein                                                                                                           
Name:  Robert M. Bernstein
Title:    CEO

 
INVESTOR:

 
By:                                                                 
Name:
Title:
 
 
 
 

 
 
 

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INFORMATION TO BE PROVIDED UPON EFFECTIVE DATE OF REGISTRATION STATEMENT OF THE
SHARES UNDERLYING THE CONVERTIBLE DEBENTURE AND THE SHARES ISSUED BY THE COMPANY
IN ACCORDANCE WITH THE CONVERTIBLE DEBENTURE.

PLAN OF DISTRIBUTION
 
The Selling Stockholders and any of their pledgees, donees, transferees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of Common Stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions.  These sales may be
at fixed or negotiated prices.  The Selling Stockholders may use any one or more
of the following methods when selling shares:
 
 
·
ordinary brokerage transactions and transactions in which the broker-dealer
solicits Investors;

 
 
·
block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

 
 
·
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 
 
·
an exchange distribution in accordance with the rules of the applicable
exchange;

 
 
·
privately negotiated transactions;

 
 
·
to cover short sales made after the date that this Registration Statement is
declared effective by the Commission;

 
 
·
broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

 
 
·
a combination of any such methods of sale; and

 
 
·
any other method permitted pursuant to applicable law.

 
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
 
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
 
The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of Common Stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable
 
 
 

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provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
 
Upon the Company being notified in writing by a Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
Common Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such shares of Common Stock were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this prospectus,
and (vi) other facts material to the transaction.  In addition, upon the Company
being notified in writing by a Selling Stockholder that a donee or pledge
intends to sell more than 500 shares of Common Stock, a supplement to this
prospectus will be filed if then required in accordance with applicable
securities law.
 
The Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.
 
The Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales.  In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.  Discounts, concessions, commissions and
similar selling expenses, if any, that can be attributed to the sale of
Securities will be paid by the Selling Stockholder and/or the purchasers.  Each
Selling Stockholder has represented and warranted to the Company that it
acquired the securities subject to this registration statement in the ordinary
course of such Selling Stockholder’s business and, at the time of its purchase
of such securities such Selling Stockholder had no agreements or understandings,
directly or indirectly, with any person to distribute any such securities.
 
If a Selling Stockholder uses this prospectus for any sale of the Common Stock,
it will be subject to the prospectus delivery requirements of the Securities
Act.  The Selling Stockholders will be responsible to comply with the applicable
provisions of the Securities Act and Exchange Act, and the rules and regulations
thereunder promulgated, including, without limitation, Regulation M, as
applicable to such Selling Stockholders in connection with resales of their
respective shares under this Registration Statement.
 
The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock.  The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.  If the Selling Stockholders use this
prospectus for any sale of the Common Stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
 

 
 

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MATERIAL TECHNOLOGIES, INC.
 
Selling Securityholder Notice and Questionnaire
 
The undersigned beneficial owner of common stock (the “Common Stock”), of
Material Technologies, Inc. (the “Company”) understands that the Company has
filed or intends to file with the Securities and Exchange Commission (the
“Commission”) a Registration Statement for the registration and resale of the
Registrable Securities, in accordance with the terms of the Registration Rights
Agreement, dated as of _________________ (the “Registration Rights Agreement”),
among the Company and the Investors named therein.  A copy of the Registration
Rights Agreement is available from the Company upon request at the address set
forth below.  All capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Registration Rights Agreement.
 
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
 
QUESTIONNAIRE
1.  Name.
 
 
(a)
Full Legal Name of Selling Securityholder
           

 
 
(b)
Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
           

 
 
(c)
Full Legal Name of Natural Control Person (which means a natural person who
directly you indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
           

 
2.  Address for Notices to Selling Securityholder:
 

 
Telephone:
   
Fax:
   
Contact Person:
 

 
 

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3.  Beneficial Ownership of Registrable Securities:
 
 
(a)
Type and Number of Registrable Securities beneficially owned:

 

               

4.  Broker-Dealer Status:
 
 
(a)
Are you a broker-dealer?

 
Yes                         No   
 

 
Note:
If yes, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 
 
(b)
Are you an affiliate of a broker-dealer?

 
Yes                         No   
 
 
(c)
If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of
the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the
Registrable Securities?

 
Yes                         No   
 

 
Note:
If no, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 
5.  Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
 
Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
 
 
(a)
Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

 

           

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6.  Relationships with the Company:
 
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
 
 
State any exceptions here:

 

           

 
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.
 
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus.  The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
 
Dated:                                                      Beneficial
Owner:                                                                         
 
 
By:                                                                                     
            
             Name:
             Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL,
TO:         BARATTA, BARATTA & AIDALA LLP
546 Fifth Avenue
New York, NY 10036
(T) 212-750-9700
(F) 212-750-8297

 
 
 

 

 
 

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