**CONSULTING AGREEMENT**

          This Consulting Agreement (the “Agreement”) is entered into effective as of October 11, 2007, by and between Material Technologies, Inc., a Delaware corporation (the “Company”), and Palisades Capital, LLC, a Nevada limited liability company (“Consultant”).

RECITALS

          WHEREAS, the Company previously acquired 4,000,000 shares of Rocket City Automotive Group (“Rocket City”) in exchange for 10,000,000 shares of the Company (the “Matech Shares”) pursuant to that certain Stock Exchange Agreement, dated April 27, 2007 (the “Stock Exchange Agreement”);				          WHEREAS, the price of the Rocket City shares has fallen from approximately $4.00 per share when they were acquired, to approximately $0.0275 (split adjusted), which results in a very large capital loss for the Company;				          WHEREAS, the Company believes it to be in the best interest of the Company and its shareholders to rescind the transaction with Rocket City by delivering to Rocket City the 4,000,000 shares the Company received from Rocket City, and receiving back the 10,000,000 shares of the Company’s common stock that Rocket City received (the “Company Objectives”);				          WHEREAS, the Company believes it to be in the best interest of the Company and its shareholders and to the Company’s general interest to engage the services of the Consultant, on an exclusive basis, to assist the Company in achieving the Company Objectives.				          WHEREAS, Consultant is the holder of that certain Class A Senior Secured Convertible Debenture, dated December 1, 2003, as amended to date (the “Debenture”); and				          WHEREAS, Consultant has agreed to perform the Services (as defined below) in exchange for the sum of $1,000,000, which amount shall be added to the Debenture.				          NOW THEREFORE, in view of the foregoing and in consideration of the premises and mutual representations, warranties, covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

AGREEMENT

          NOW THEREFORE, in consideration of the mutual promises contained herein, the Company and Consultant agree as follows:				          1.      Services.  Consultant agrees to perform the following services (the “Services”) in a workmanlike manner.  The Consultant shall use its best efforts to negotiate a rescission of the Stock Exchange Agreement, whereby all of the Matech Shares shall be returned to the Company.   Consultant shall also take such action as is necessary to secure the return to the Company of 1,000,000 shares of 

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**(SIGNATURE PAGE IMMEDIATELY FOLLOWS)**

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| **Material Technologies, Inc.,****a Delaware corporation**By: /s/ Robert M. Bernstein                             Name: Robert M. Bernstein								Title: Chairman and CEO

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**Palisades Captial, LLC.,****a Nevada limited liability company**By: /s/ Reid Breitman                          Name: Reid Breitman								Title: President

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[signature page to Consulting Agreement]

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