Document:

Exhibit 10.25

                               SECURITY AGREEMENT
                        (TO PAY FOR PAST LEGAL SERVICES)

         This Agreement is made as of August 1, 2002 by and between ROBERT A.
BRUNETTE, an individual who resides at 4443 Chevy Chase Drive, La Canada
Flintridge, CA 91011 (hereafter "BRUNETTE"), and HASSEL HILL, JR., an individual
who resides at 2219 Lenore Drive, Glendale, CA 91206 (hereafter "HILL"), and
MATERIAL TECHNOLOGIES, INC., a Delaware corporation with offices at 11661 San
Vicente Boulevard, #707, Los Angeles, CA 90049 (hereafter "MATECH"), with
reference to the following facts:

         Whereas, on March 23, 2001 BRUNETTE and HILL entered into a Basic
Attorney Representation Agreement with MATECH and its current President and
majority shareholder ROBERT M. BERNSTEIN (hereafter "BERNSTEIN") to represent
them in any legal action against them subsequently brought by Stephen Forrest
Beck (a copy of which is attached as Exhibit A hereto);

         Whereas, on April 30, 2001 MATECH filed a lawsuit in the Los Angeles
Superior Court entitled Material Technologies, Inc. v. Stephen Forrest Beck,
LASC Civil No. BC249495, seeking the return of 244,427 shares of MATECH common
stock, or the reasonable value thereof, and on April 30, 2001 BECK filed a
lawsuit in said Court entitled Stephen Forrest Beck v. Robert M. Bernstein,
Material Technologies, Inc., et al, LASC Civil No. BC249547 seeking damages for
breach of contract, and other claims (hereafter collectively called the
"Superior Court Actions");

         Whereas, on or about April 25, 2002 said Court granted MATECH/
BERNSTEIN's Summary Adjudication motion in Beck v. Bernstein, et al, BC249547
denying Beck's breach of contract and related causes of action, thereby
rendering Beck's remaining claims similarly vulnerable, and the Matech v. Beck
BC249495 action subject to Summary Judgment for MATECH; and

         Whereas, on or about July 15, 2002 Stephen Forrest Beck and MATECH/
BERNSTEIN entered into a written Settlement Agreement to avoid further
litigation, which the parties hereto deem to be a successful defense of the Beck
lawsuit under the said Basic Attorney Representation Agreement.

         Therefore, the undersigned parties agree as follows:

1.       Consideration
         (a)      In return for past legal services rendered by BRUNETTE and HILL
                  to MATECH and BERNSTEIN, and in addition to any previous
                  monies or MATECH Common Stock issued to them for such
                  services, MATECH agrees to promptly enter into a Promissory
                  Note payable jointly to BRUNETTE and HILL 50-50 percent each
                  in the amount of $1,481,895.00 U.S., plus interest thereon at
                  the rate of eight percent (6%) per annum commencing on August
                  1, 2002 until paid by MATECH from its earnings before
                  interest, taxes, depreciation and amortization ("EBITDA"),
                  which will be determined in accordance with generally accepted
                  accounting principles consistently applied until paid in full,
                  in the form and on the terms in that Promissory Note attached
                  hereto and made a part hereof by this reference as Exhibit B.
                  (hereafter the "Note").

         (b)      Said payments on said Note shall be made from time to time
                  EBIDTA to BRUNETTE and HILL in equal amounts until the entire
                  debt is paid in the names of "Robert A. Brunette" for
                  BRUNETTE, and "Hassel Hill, Jr." for HILL.  Said monies
                  actually paid shall then be reportable by MATECH for federal
                  and state governments on Form 1099 as Independent Consultant
                  income to BRUNETTE and HILL, respectively, and not as
                  employees of MATECH.

2.       Entire Agreement
         The parties acknowledge that they have had sufficient opportunity to
         make diligent inquiry into and consult with independent counsel
         concerning this Agreement.  This Agreement contains the entire
         Agreement between the parties as to the above subject matter and
         supercedes in its entirety the Basic Attorney Representation Agreement
         attached as Exhibit A and the letter dated March 23, 2001 which
         supplemented the Basic Attorney Representation Fee Agreement.

3.       Invalid Provisions
         If, after the date hereof, any provisions of this Agreement is held to
         be illegal, invalid or unenforceable under present or future laws
         effective during the terms of this Agreement, such provision shall be
         fully severable.  In lieu thereof, there shall be added a provision as
         similar in terms to such illegal, invalid or unenforceable provisions
         as may be possible and be legal, valid and enforceable.

4.       Successors
         This Agreement shall be binding upon all assignees, affiliates and
         successors in interest to MATECH to the full extent of the law
         applicable hereto.

5.       Audit and Inspection
         BRUNETTE and HILL, either individually or jointly, may, at their sole
         discretion, and upon reasonable prior notice to MATECH, but not less
         than three calendar days, be granted access to the financial ledgers,
         books of account and similar business records of MATECH for the purpose
         of auditing its income, expenses, tax records, public filings, and the
         like to determine amounts payable to BRUNETTE and Hill on such Note
         EBIDTA.  And, they may make copies of such records as they deem
         reasonably necessary at their sole expense.

6.       Supplemental Documents
         All parties agree to promptly sign and return any and all forms or
         supplementary documents, in good faith, and take additional actions
         which are necessary to give full force and effect to the basic terms
         and intent of this Agreement.

7.       Corporate Authority
         BERNSTEIN represents and warrants that MATECH has fully authorized the
         execution of this Agreement under its Bylaws and Articles and Delaware
         law, and that MATECH's Board of Directors has approved and/or ratified
         his signing this Agreement on MATECH's behalf.

8.       Construction Under California Law
         This Agreement is entered into in the State of California, and shall be
         construed and interpreted in accordance with its laws, except for its
         choice of law principles.  In any action to interpret or enforce the
         terms of this Agreement the prevailing party shall be reimbursed its
         costs, including reasonable attorneys fees, by the other party.

9.       Arbitration of Disputes
         If a dispute arises between Attorneys and client regarding fees or
         services in connection with the above-referenced transaction, such
         dispute shall be submitted to binding arbitration.  This includes any
         claim for breach of contract, negligence, breach of fiduciary duty or
         other wrongdoing.

         Any actions, controversies, claims, disputes and/or other factual or
         legal matters in question arising out of or relating to this Agreement,
         or the alleged breach thereof, shall be settled by arbitration
         conducted in accordance with the California Arbitration Act (Code of
         Civil Procedure Section 1280, et seq.) as then in effect except as
         provided herein.

         The parties to such arbitration shall be entitled to conduct discovery
         and take depositions pursuant to the provisions of Code of Civil
         Procedure Section 1283.05, without giving effect to the limitations
         contained in Code of Civil Procedure Section 1283.059(e).

         Unless the parties agree otherwise, any arbitration shall be held in
         Los Angeles County, California, before three independent arbitrators
         appointed by the Judicial Arbitration and Mediation Services.  In the
         event that the Judicial Arbitration and Mediation Services shall not
         then exist or fail or refuse to appoint such arbitrators, one
         arbitrator shall be selected by one party or factions and one
         arbitrator shall be selected by the other party or faction.  The two
         arbitrators shall select a third arbitrator to arbitrate the dispute.
         If either party or faction party does not timely select an arbitrator,
         the arbitrator selected by the other party or faction shall arbitrate
         the dispute.

         Costs and fees of the arbitrators shall be borne by the non-prevailing
         party, unless the arbitrators determine otherwise. The award of the
         arbitrators, which may include equitable relief, shall be final and
         judgment may be entered upon it in accordance with applicable law in
         any court having jurisdiction thereof. Any demand for arbitration
         shall be in writing and must be made within a reasonable time after the
         claim, dispute or other matter in questions has arisen.  In no event
         shall the demand for arbitration be made after the date that
         institution of legal or equitable proceedings based upon such claim,
         dispute or other matter would be barred by the applicable statute of
         limitations or the date specified in this Agreement, whichever is the
         earlier.

Such arbitration shall be conducted in accordance with the rules of California
Code of Civil Procedures § 1280 et seq. The arbitrator shall have the discretion
to order the losing party in the arbitration proceedings to reimburse the
prevailing party for all costs and fees incurred in connection with the
arbitration, including without limitation, attorney fees and arbitrator's fee.

YOUR INITIALS         You acknowledge that we have explained to you that such binding
BELOW SIGNIFY         arbitration may deprive you of various rights that you otherwise
ACKNOWLEDGMENT OF     might have in a legal action, including without limitation the right
THIS EXPLANATION      to a jury trial, the right to appeal, and full discovery rights.

        (initials)

10.      Effectiveness
         This Agreement shall become effective as of the date first stated above
         upon mutual execution by the parties, and may be executed in several
         counterparts, each of which shall be deemed an original but all of
         which together shall constitute one and the same Agreement.

11.      No Personally Liability
         Each of the parties hereto acknowledge and agree that Bernstein shall
         have no obligation to pay any sums under this agreement or the note,
         and all personal obligations of Bernstein under the Basic Attorney
         Representation Agreement attached as Exhibit A and the letter dated
         March 23, 2001, are hereby null and void.

ROBERT M. BERNSTEIN                           MATERIAL TECHNOLOGIES, INC.

By                                            By
     Robert M. Bernstein                         Robert M. Bernstein
     Individually                                President
                                                 (corporate seal)

HASSEL HILL, JR.                              ROBERT A. BRUNETTE

By                                            By
     Hassel Hill, Jr., Esq.                      Robert A. Brunette, Esq.Exhibit 10.26

                                LICENSE AGREEMENT

        This License Agreement ("Agreement") is entered into and effective as of
April ___, 2003 between Matech International, Inc, a Nevada corporation
("Licensee"), and Material Technologies, Inc., a Delaware corporation
("Licensor") with regard to the following facts. The principal business address
for the Licensor and Licensee is 11661 San Vicente Boulevard, Suite 707, Los
Angeles, California 90049:

                                 R E C I T A L S

        WHEREAS, Licensor has developed certain proprietary technology for
detecting metal fatigue and measuring metal stress, including products in the
development stage known as the fatigue fuse, electrochemical fatigue sensor and
the borescope (hereinafter more particularly defined as the "Technology"); and

        WHEREAS, Licensee is a newly formed corporate subsidiary of the
Licensor, formed for the purpose of continuing the commercial and market
distribution of the Technology; and

        WHEREAS, Licensee desires to obtain certain rights to use and
commercialize the Technology in the Territory (as hereinafter defined) and
Licensor desires to license the Technology to the Licensee pursuant to the terms
and conditions set forth herein; and

         WHEREAS, the parties hereto may have access to the other party's
Proprietary Information (as hereinafter defined) as a result of the rights and
obligations as provided herein; and

        WHEREAS, the parties desire to confirm in writing the nature of their
confidential relationship in regard to each other's Proprietary Information and
the terms by which each party will maintain and agree to maintain the secrecy of
the other party's Proprietary Information; and

        WHERAS, the parties contemplate the development by the Licensee and its
sub-licensees of markets which will make use of the Technology in the Territory;
and

        NOW, THEREFORE, in consideration of the mutual promises, covenants,
agreements, representations and warranties contained herein, the parties agree
as follows:

        1.        Definitions.

                  A.         An "Affiliate" of a party shall mean an entity
directly or indirectly controlling, controlled by or under common control with
that party where control means the ownership or control, directly or indirectly,
of more than fifty percent (50%) of all of the voting power of the shares (or
other securities or rights) entitled to vote for the election of directors or
other governing authority, as of the date of this Agreement or hereafter during
the term of this Agreement; provided that such entity shall be considered an
Affiliate only for the time during which such control exists.

                  B.         "Disclosing Party" shall mean a party hereto that
discloses its Proprietary Information to the other party.

                  C.         "Improvements" shall mean all inventions,
modifications, revisions, alterations, enhancements, betterments, ideas, and
discoveries (whether or not patentable) conceived or reduced to practice
(actually or constructively) by Licensor or Licensee either individually,
jointly or with others which are based in any way on the Licensor's Proprietary
Information, Licensor's Proprietary Rights, or the Licensor's Technology or any
such invention, modification, revision, alteration, enhancement, betterment,
idea or discovery developed through reverse engineering or independent
derivation.

                  D.         "Proprietary Information" of a Disclosing Party
shall mean the following, to the extent previously, currently or subsequently
disclosed to the other party hereunder or otherwise: all trade secrets,
confidential knowledge and proprietary data of any kind or relating to the
Disclosing Party's business including, but not limited to, the Proprietary
Rights, and the Technology and all the Improvements thereto. Proprietary
Information shall also include information provided to a party by or on behalf
of the other party prior to the date of this Agreement as well as information
obtained through reverse engineering or independent derivation. Proprietary
Information by way of example shall include, but not be limited to, technical
specifications, diagrams, flow charts, methods, processes, discoveries,
concepts, calculations, techniques, formulas, systems, plans, designs, research
and development plans, cost and pricing data, records and general engineering
know-how. Proprietary Information shall include all information and any idea in
whatever form, tangible or intangible, including electronic data recorded or
retrieved by any means. Proprietary Information shall not apply to information a
party can prove by presently existing written documentation which: (i) is in or
(through no improper action or inaction by the party or any Affiliate, agent, or
employee) enters the public domain and is readily available without substantial
effort; (ii) was rightfully in its possession or known by it prior to receipt
from the Disclosing Party; or (iii) was rightfully disclosed to the
non-disclosing party by another person without restrictions or breach of any
agreement express or implied. The non-disclosing party must promptly notify the
Disclosing Party of any information it believes comes within any circumstance
listed in the immediately preceding sentence and will bear the burden of proving
the existence of any such circumstance by a preponderance of the evidence.

                  E.         "Proprietary  Rights" shall mean patent rights,
copyrights, trade secret rights and similar rights including all rights to any
Proprietary Information.

                  F.         "Receiving Party" shall mean a party hereto that
receives Proprietary Information of the other party.

                  G.         "Technology" shall mean inventions (whether or not
patentable), ideas, processes, formulas and know-how owned or controlled by
Licensor and used by it as of the date of this Agreement, as described in
Exhibit "A" attached hereto, and all Improvements together with detailed
reports, records, explanations, Licensor's Proprietary Information, Licensor's
Proprietary Rights and other materials relating to the Technology and
Improvements and their use.

                  H.         "Territory" shall mean: (i) during the first six
(6) months of the Term of this Agreement, all countries except within the United
States of America; and (ii) for the remainder of the term of this Agreement
commencing on the seventh month hereof without further grant or action of the
Licensor, the Territory shall automatically expand to include the United States
of America.

             2.   License Grant.

                  A.  General.  Subject to the terms and conditions set forth in
this Agreement, and further subject to the delivery and payment to Licensor by
Licensee of the consideration in support of this Agreement ("License Fee"),
Licensor hereby grants Licensee an exclusive license to use and practice the
Proprietary Rights in the Technology in the Territory during the Term (as
hereinafter defined) of, and for the permitted uses (the "Uses") set forth in
Exhibit A-1 of this Agreement. Licensee shall have the right to sublicense its
rights under this Agreement, but as a condition to any sublicense, each such
sub-licensee shall agree to be bound by the terms and conditions set forth
herein. Licensee shall be primarily liable for the acts of each of its
sub-licensees. Notwithstanding, the foregoing Licensee shall not be liable for
any acts or omissions of its sub-licensees to the extent such acts or omissions
were performed or omitted pursuant to directions, orders, instructions,
recommendations or supervision of Licensor. Licensor agrees to license to
Licensee, on the same terms and conditions contained in this Agreement, any
patent that Licensor may obtain with respect to the Technology that is
enforceable in the Territory.

                  B.  License Fee. Licensee shall pay to Licensor a continuing
monthly License Fee equal to seven (7%) percent of the Licensee's gross revenues
derived from Licensee's uses of the Technology and Proprietary Rights granted
under this Agreement for each month during the term of this Agreement.

             3. License Scope. Licensee's license hereunder is exclusive in the
Territory for the Uses stated in Section 2, and Licensor shall not grant further
licenses for any Use of the Technology in the Territory to any other third
party, except as provided in Section 13. No Proprietary Rights granted under
this Agreement will be marketed directly or indirectly by or under the authority
of Licensee outside the Territory or by Licensor inside the Territory. Licensee
shall not knowingly make any use of the Technology which is not a permitted Use
or which would violate local law. Provided further, the Licensor and Licensee
acknowledge that the Territory for the Uses granted under this License Agreement
automatically expand in scope as provided in Section 1.H hereof, during the Term
of this License Agreement.

           4.     Ownership and Improvements.

                  A.         Licensor as Sole Owner. Licensee acknowledges and
agrees that it does not now own, nor will it obtain any interest in, the
Proprietary Information, Proprietary Rights or the Technology except for the
license granted herein.

                  B.         All Improvements Assigned to Licensor. Licensee
acknowledges and agrees that all Improvements with respect to the Licensor's
Proprietary Information, Proprietary Rights or the Technology which are based in
any way on the Licensor's Proprietary Information, Proprietary Rights or the
Technology, or any Improvement thereto shall be the exclusive property of
Licensor. Licensee agrees to assign, and does hereby assign, and agrees to cause
each of its Affiliates and sub-licensees to assign to Licensor any and all
right, title, and interest it may obtain in any such Improvements, including but
not limited to, any and all applications for Letters Patent and all divisions,
renewals, continuations and continuations-in-part thereof, and all Letters
Patent of the United States which may be granted thereon and all reissues and
extensions thereof, and all rights of priority under international conventions
and applications for Letters Patent which may hereafter be filed for such
Improvements in any country or countries foreign to the United States, and all
Letters Patent which may be granted for such Improvements in any country or
countries foreign to the United States and all extensions, renewals, and
reissues thereof. Licensor agrees to license, and does hereby license, without
further consideration to Licensor, all such Improvements to Licensee pursuant to
the terms and conditions of this Agreement.

                  C.         Cooperation. Licensee agrees to communicate to
Licensor, in writing and promptly upon becoming aware thereof, any facts known
to Licensee respecting the Licensor's Proprietary Information, Proprietary
Rights and the Technology, and all Improvements thereto, and testify in any
legal proceedings, sign all lawful papers, execute all divisional, continuing
and reissue applications, make all rightful oaths and in general do everything
possible to cooperate to effectuate the terms of this Section 4, all at
Licensor's expense.

                  D.         No Challenge to Ownership. Except in asserting
rights granted hereunder, each party agrees not to take any action challenging
or opposing, on any grounds whatsoever, the ownership of any Proprietary
Information, Proprietary Rights, Technology, Improvements, intellectual property
rights of the other party therein, or the validity or enforceability thereof.

        5.        No Restriction on Competition. Nothing in this Agreement shall
be deemed to prohibit Licensee from developing, making, using, marketing or
otherwise distributing or promoting any proprietary rights competitive with the
Technology licensed hereunder, provided that:

                  i)         Licensee does not breach any provision of Section 9
or disparage the Proprietary Rights licensed hereunder in doing so; and

                  ii)        Licensee will use its reasonable best efforts to
primarily promote, market, and use the Technology.

        6.        Representations and Warranties of Licensor. Licensor hereby
makes the following representations and warranties as of the date of this
Agreement.

                  A.         Organization and Power of Licensor. Licensor is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, with all necessary corporate power and corporate
authority to execute this Agreement, perform its obligations hereunder and
conduct its business and own its properties as presently conducted and owned.

                  B.         Authority Relative to this Agreement. The
execution, delivery and performance of this Agreement by Licensor and the
consummation of the transactions contemplated hereunder have been duly
authorized by any and all necessary corporate action of Licensor and this
Agreement constitutes a legal, valid and binding obligation of Licensor
enforceable against Licensor in accordance with its terms.

                  C.         No Violation of Other Instruments. The execution,
delivery and performance of this Agreement by Licensor does not, and the
consummation by Licensor of the transactions contemplated hereunder will not:
(a) violate any provision of the Certificate of Incorporation or Bylaws of
Licensor; (b) require the consent of third parties, (c) violate any provision
of, or constitute a default under or breach of, or result in the imposition of
any lien or encumbrance or the acceleration of any obligation under, or result
in the termination of, any contract, mortgage, franchise, court order,
arbitration award, judgment or decree to which Licensor is a party, or (d)
violate any statute, rule, regulation or prohibition imposed by any regulatory
authority making it illegal for Licensor to consummate the transactions
contemplated by this Agreement.

                  D.         License Grant. Licensor has the sole right to grant
the licenses granted by it hereunder.

                  E.         Rights Granted.

                  (a) to the best knowledge of Licensor, Licensor owns the
                      patent or other rights granted hereunder and Licensor's
                      ownership does not, and will not, conflict with, infringe
                      on, or otherwise violate any rights of others;

                  (b) Licensor has not sold, transferred or assigned, or agreed
                      to sell, transfer or assign, any patent or other rights
                      granted hereunder for the Permitted Uses and in the
                      Territory described herein; and

                  (c)  Licensor is informed and to its best knowledge, is not
                       aware of any infringement or alleged infringement by
                       others of any such patent or other rights granted
                       hereunder. Licensor has not infringed, and is not now
                       infringing, on any patent or other rights granted
                       hereunder belonging to any other person or firm.

        7.        Representations and Warranties of Licensee.

                  A.  Organization and Power of Licensee. Licensee is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state of Nevada with all necessary corporate power and corporate
authority to execute this Agreement, perform its obligations hereunder and
conduct its business and own its properties as presently conducted and owned.

                  B.  Authority Relative to this Agreement. The execution,
delivery and performance of this Agreement by Licensee and the consummation of
the transactions contemplated hereunder have been duly authorized by any and all
necessary corporate action of Licensee and this Agreement constitutes a legal,
valid and binding obligation of Licensee enforceable against Licensee in
accordance with its terms.

                  C.  No Violation of Other Instruments. The execution, delivery
and performance of this Agreement by Licensee does not, and the consummation by
Licensee of the transactions contemplated hereunder will not: (a) violate any
provision of the Certificate of Incorporation or Bylaws of Licensee; (b) require
the consent of third parties, (c) violate any provision of, or constitute a
default under or breach of, or result in the imposition of any lien or
encumbrance or the acceleration of any obligation under, or result in the
termination of, any contract, mortgage, franchise, court order, arbitration
award, judgment or decree to which Licensee is a party, or (d) violate any
statute, rule, regulation or prohibition imposed by any regulatory authority
making it illegal for Licensee to consummate the transactions contemplated by
this Agreement.

        8.        Patent Matters.

                  A.         Patent Applications. Licensor retains the sole
right and discretion to file and prosecute patent applications and maintain
patents in the Territory relating to the Proprietary Rights or any Improvements
made by Licensor. At Licensee's request while Licensee remains an exclusive
licensee hereunder, Licensor will discuss its decisions on these matters with
Licensee, but Licensee will not attempt to file or prosecute any such patent
applications or maintain any such patent (i) except as Licensor may, in its sole
discretion, approve in writing, and (ii) except that Licensee may continue
maintenance of licensed patents issued in the Territory if Licensor elects not
to do so. Any improvements to Technology (whether or not patentable or
copyrightable) that are developed by either party shall be owned solely by
Licensor. Each party shall have the right, at its own expense, and solely in its
own name, to apply for, prosecute and defend its Proprietary Rights. Licensor's
existing relevant patents and patent applications in the United States of
America and the Territory are listed on Exhibit "B".

                  B.         Patent Infringement. If Licensee becomes aware of
any product or activity of any third party that involves infringement or
violation of any Licensor patent or other Proprietary Right with respect to the
Technology in the Territory, then Licensee shall promptly notify Licensor in
writing of such infringement or violation. Licensor may in its discretion take
or not take whatever action it believes is appropriate; if Licensor elects to
take action, Licensee will fully cooperate therewith at Licensor's expense. If
Licensor does not, within 90 days after receipt of such a notice of a patent
infringement or other infringement or violation within the scope of the
exclusivity of Licensee's license hereunder, commence action directed towards
restraining or enjoining such patent infringement, Licensee, so long as it is an
exclusive licensee hereunder, may take such legally permissible action as it
deems necessary or appropriate to enforce Licensor's patent or other rights and
restrain such infringement or violation. Licensor agrees to cooperate reasonably
in any such action initiated by Licensee including supplying essential
documentary evidence and making essential witnesses then in Licensor's
employment available. As part of such cooperation, Licensee may join Licensor as
a party, if the need arises.

                  C.         Patent Awards. If Licensor initiates and prosecutes
any such an action under this Section 10, all legal expense (including court
costs and attorneys' fees) shall be for Licensor's account and Licensor shall be
entitled to all of the amounts awarded by way of judgment, settlement or
compromise after deduction of legal expenses. Similarly, if Licensee initiates
and prosecutes such an action, all legal expenses (including court costs and
attorneys' fees) shall be for Licensee's account and Licensee shall be entitled
to all amounts awarded by way of judgment, settlement, or compromise and no
royalties shall be owed Licensor on said sums. Any non-monetary awards shall
inure to the benefit of the Licensor.

                  D.         Patent Searches. Licensee and Licensor understand
that each of the parties has not conducted comprehensive patent searches in the
Territory. Licensor and Licensee agree to work cooperatively regarding issues
concerning patents and Proprietary Rights and similar matters and to exercise
reasonable business judgment in carrying out the objects of this Agreement to
avoid exposing either party to liability under patent or similar laws in the
Territory. Each party represents and warrants that it is not aware of
infringement or potential infringement issues that have not been communicated to
the other in writing before execution of this Agreement.

        9.        Term and Termination.

                  This Agreement will remain in effect until December 31, 2012
("Term"), unless terminated pursuant to this Section.

                  If a party materially breaches a material provision of this
Agreement, the other party may terminate this Agreement upon 60 days written
notice unless the breach is cured within the notice period or if the breach is
incapable of being cured within the notice period the breaching party commences
curative action and diligently prosecutes curative action to completion.
Notwithstanding, the foregoing if Licensee fails to make payments of all License
Fees pursuant to this Agreement and such breach is not cured within thirty (30)
days after written notice of such breach, Licensor may terminate this Agreement.

                  In the event of any  termination of this Agreement, the rights
and licenses granted Licensee under this Agreement and Licensee's obligation
hereunder shall terminate and Licensor's obligations to negotiate or provide
goods, services, facilities, technology or information shall cease but all other
provisions of this Agreement will continue in accordance with their terms. Any
sublicenses surviving termination may be terminated by the granting party in the
same manner as provided in this Section 11 if the other party materially
breaches a material surviving provision of this Agreement. A sublicense will
survive termination and continue according to its terms provided that (i) it was
properly granted, (ii) all the restrictions and limitations of this Agreement
shall apply to the sub-licensee as though this Agreement continued in effect,
(iii) Licensor shall receive all consideration due, if any, in connection with
the sublicense and (iv) in addition to any termination rights under the
sublicense agreement, Licensor shall be entitled to terminate such sublicense on
the same basis as is provided herein for termination of this Agreement.

                  Neither party shall incur any liability whatsoever for any
damage, loss or expenses of any kind suffered or incurred by the other arising
from or incident to any termination of this Agreement (or any part thereof) by
such party which complies with the terms of the Agreement whether or not such
party is aware of any such damage, loss or expenses.

                  Termination is not the sole remedy under this Agreement and,
whether or not termination is effected, all other remedies will remain available.

        10.       Independent Contractors. The parties are independent
contractors and not partners, joint venturers or otherwise affiliated and
neither has any right or authority to bind the other in any way.

        11.       Assignment. The rights and obligations of the parties under
this Agreement may not be assigned or transferred, without the prior written
consent of the other party which consent may be withheld in either party's sole
and absolute discretion.

        12.       Successors and Assigns. This Agreement and all the covenants,
promises and agreements contained herein shall be binding upon and inure to the
benefit of Licensor and Licensee and their respective successors and assigns.

        13.       Infringement. In the event of institution of any suit against
Licensee alleging infringement or misappropriation of any patent or other rights
of a third party by reason of the use of the Technologies or the Proprietary
Rights to the Technology, Licensor agrees, on request of Licensee, made
immediately after institution thereof,

                  (a)  to undertake and diligently conduct, at Licensor's
                       expense, defense of such suit, and

                  (b) to indemnify and hold Licensee and its officers,
                      directors, agents and employees harmless from liability
                      resulting from infringement or misappropriation of any
                      patents, copyrights or other rights and any judgments,
                      awards of damages, settlements, attorneys' fees and
                      expenses which may result therefrom.

Licensee shall render all reasonable assistance to Licensor in connection with
any suit to be defended by Licensor under this Section 16. Licensor shall have
full control of the defense of any such suit, but shall not be free to settle
the same without the consent of Licensee if by the settlement Licensee would be
obliged to make payments, or if the settlement would cause a material impairment
of the ability of Licensee to continue its operations.

        14.       Miscellaneous.

                  A.         Amendment and Waiver. Except as otherwise expressly
provided herein, any provision of this Agreement may be amended and the
observance of any provision of this Agreement may be waived (either generally or
any particular instance and either retroactively or prospectively) only with the
written consent of the parties.

                  B.         Governing Law and Legal Actions. This Agreement
shall be governed by and construed under the laws of the state of California and
the United States without regard to conflicts of laws provisions thereof and
without regard to the United Nations Convention on Contracts for the
International Sale of Goods. The sole jurisdiction and venue for actions related
to the subject matter hereof shall be the California state and U. S. Federal
courts having within their jurisdiction the County of Los Angeles. Both parties
consent to the jurisdiction of such courts and agree that process may be served
in the manner provided herein for giving of notices or otherwise as allowed by
California or federal law. In any action or proceeding to enforce rights under
this Agreement, the prevailing party shall be entitled to recover costs and
attorneys' fees.

                  C.         Headings. Headings and captions are for convenience
only and are not to be used in the interpretation of this Agreement.

                  D.         Notices. All  notices required or permitted under
this Agreement shall be in writing, shall be sent to the party's address as set
forth immediately below, shall reference this Agreement, and shall be deemed
given (i) when delivered personally; (ii) three (3) days after having been sent
by registered or certified mail, return receipt requested, postage prepaid;
(iii) one (1) day after deposit with a commercial overnight carrier with
verification of receipt; or (iv) when sent by confirmed telex or facsimile.

             "Licensor"                Material Technologies, Inc.
                                       11661 San Vicente Blvd., Ste 707
                                       Los Angeles, CA  90049
                                       Fax: (310) 473-3177

             "Licensee"                Matech International, Inc.
                                       11661 San Vicente Blvd., Ste 707
                                       Los Angeles, CA  90049
                                       Fax: (310) 473-3177

A party may change its address for purposes of receiving notices by giving
notice of said change of address in the manner provided for herein.

                  E.         Entire Agreement. This Agreement supersedes all
proposals, oral or written, all negotiations, conversations, or discussions
between or among the parties relating to the subject matter of this Agreement
and all past dealing or industry custom. This Agreement and the attached
Exhibits contains the entire agreement and understanding of the parties hereto
and there are no promises, representations, warranties, or understandings other
than those contained herein.

                  F.         Force Majeure. Neither party hereto shall be
responsible for any failure to perform its obligations under this Agreement if
such failure is caused by acts of God, war, strikes, revolutions, lack or
failure of transportation facilities, laws or governmental regulations or other
causes which are beyond the reasonable control of such party. Obligations
hereunder, however, shall in no event be excused but shall be suspended only
until the cessation of any cause of such failure. In the event that such force
majeure should obstruct performance of this Agreement for more than six (6)
months, the parties hereto shall consult with each other to determine whether
this Agreement should be modified. The party facing an event of force majeure
shall use its best endeavors in order to remedy that situation as well as to
minimize its effects. A case of force majeure shall be notified to the other
party by telex or telefax within thirty (30) days after its occurrence and shall
be confirmed by a letter.

                  G.         Export Control. Each party hereby agrees to comply
with all export laws and restrictions and regulations of the Department of
Commerce or other United States or foreign agency or authority, and not to
knowingly export, or allow the export or re-export of any Technology or
Proprietary Information or any direct product thereof in violation of any such
restrictions, laws or regulations, without all required licenses and
authorizations.

                  H.         Severability. If any provision of this Agreement is
held illegal, invalid or unenforceable by a court of competent jurisdiction,
that provision will be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and effect and
enforceable.

                  I.         Basis of Bargain. Each party recognizes and agrees
that the liability and remedy limitations in this Agreement are a materially
bargained for basis of this Agreement and that they have been taken into account
and reflected in determining the consideration to be given by each party under
this Agreement and in the decision by each party to enter into this Agreement.

                  J.         Counterparts. This Agreement may be executed in any
number of counterparts and by facsimile, and each such counterpart hereof shall
be deemed to be an original instrument, but all such counterparts together shall
constitute but one agreement. In the event of facsimile signature, the parties
hereto agree to deliver the original signature pages to counsel for the
respective parties within ten (10) calendar days after the date of this
Agreement.

                  K.         Further Actions. The parties hereto hereby agree to
execute such other documents and to take such other action as may be reasonably
necessary to further the purposes of this Agreement.

        IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first written above.

LICENSEE:                                           LICENSOR:

MATECH INTERNATIONAL, INC.                          MATERIAL TECHNOLOGIES, INC.

_________________________________                   _________________________________
By: Robert M. Bernstein                            By: Robert M. Bernstein
Title: President  and Chief Executive              Title: Chief Executive Officer and President
Officer

                                    EXHIBIT A
                                   TECHNOLOGY

                                (See Attachments)

                                   EXHIBIT A-1
                                 PERMITTED USES

                                (See Attachments)

                                    EXHIBIT B
                         PATENTS AND PATENT APPLICATIONS

                                (See Attachments)

                                    EXHIBIT A

-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
#        Title1                            Pat Pend ProvDisc                       Comments
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   1     USP 4,590,804:  Device for        X                 Short lived and not current state of the art
         Monitoring Fatigue Life
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   2     USP 4,639,997: Method of Making   X                 Short lived and not current state of the art
         a Device for Monitoring Fatigue
         Life
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   3     USP 5,237,875:  Metal Fatigue     X                 The current notched configuration, which will
         Detector                                            eventually fight it out with the Dogbone Fuse.
                                                             Through 2011
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   4     USP 5,319,982:  Device for        X                 Expansion on the 875 patent; same arguments.
         Monitoring the Fatigue Life of                      Through 2012
         a Structural Member and a
         Method of Making Same
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   5     USP 5,425,274:  Device for        X                 Further expansion on the 875 and 982 patents,
         Monitoring the Fatigue Life of                      broadening application of the notched Fuse design.
         a Structural Member and a                           Through 2011
         Method of Making Same
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   6     Differential Length Dogbone                    X    An alternative and almost certainly patentable
         Fatigue Fuse                                        concept, which at least guards against a notched
                                                             Fuse end run and could replace it.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   7     Removable Dogbone Fuse                         X    Variation of #6, to be included on the same
                                                             application
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   8     Weld Monitoring Fuse                           X    Variation of #6, to be included on the same
                                                             application
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
   9     Differential Pre-fatigued                      X    Variation on #9; Fuse, which derives its accelerated
         Dogbone Fuse                                        failure protocol from stress preconditioning.  Can
                                                             be grouped with #6
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  10     Visual Indicating Fatigue Fuse                 X    Applicable to both notched and Dogbone Fuses, a
                                                             simple and inexpensive method to make visible the
                                                             failure occurrence.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  11     Instantaneous Fuse Mounting                    X    Rather simple but crucial recognition that bridges
         Procedure                                           do not like to be closed while epoxy dries.
                                                             Applicable to all Fuses
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  12     Apparatus for and Method for               X        Slick way to electrically interrogate a notched or
         Interrogating a Fatigue Fuse                        dogbone Fuse. Not applicable to Antaeus bridge
                                                             monitoring, but very applicable to other
                                                             applications such as airframe.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  13     Indicator for Fatigue Fuse                 X
                                                             Applicable to both notched and Dogbone Fuses, a
                                                             simple and inexpensive method to make visible the
                                                             failure occurrence.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
14       USP 5,419,201:  Methods and       X                 Foundation of EFS fatigue and crack detection
         Devices for Electro Chemically                      system.  Almost certainly the most valuable asset,
         Determining Metal Fatigue Status                    except in new bridge construction. Through 2013
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  15     Harmonics Metric for EFS                       X    When submitted as a patent this will certainly issue
         Assessment of Fatigue Level                         as a landmark almost as important as the 201
                                                             patent.  It will carry protection through 2020.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  16     Combined EFS Metal Fatigue &                   X    Technically trivial EFS extension with momentous
         Corrosion Assessment                                impact for corrosion monitoring by rendering it in
                                                             terms of residual lifetime.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  17     Calibrating Weld EFS                           X    No earth-shaker concept, but carries EFS beyond
                                                             uniform structures into welded joints
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  18     Fastener Tension Indicator            X             Doubles as an inexpensive reversible fastener clamp
                                                             load indicator and also a discrete strain gauge when
                                                             attached elsewhere.  High novelty.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  19     USP 5,722, 807:  Clamp Load       X                 A basic but less elegant fastener clamp
         Indicator                                           load-monitoring system than the 647 patent.  Covers
                                                             against end runs through 2016.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  20     Strain Indicating Device              X             Instrumented version of the system covered in #22
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  21     Tension Indicator Fastener            X             Instrumented version of previous property
         Devices
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  22     CIPO 2275872:  Fastener Tension   X
         Indicator
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  23     USP 5,913,647:  Fastener          X                 A side-deployed fastener indicating system, amenable
         Tension Indicator                                   to bar code interrogation for bridge cable and bolt
                                                             monitoring.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  24     Structural Monitoring Sensor          X             The only known integrated monitoring system
         System                                              specifically designed to operate in a long-term
                                                             bridge environment.  Digital motion tracking using
                                                             an inert fiber optic harness forms its base.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  25     Structural Monitoring Sensor          X             This component is the only environmentally designed
         System:  Optical Encoder                            encoder (LMD) suitable for long term bridge
                                                             monitoring.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  26     Structural Monitoring Sensor          X             An almost trivial feature that assures an absence of
         System:  Through Shaft                              dirt aspiration during repeated encoder actuation by
                                                             removing any tendency to pump.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  27     Structural Monitoring Sensor          X             Another means for simplifying high sensor count
         System:  Time Delay System                          harness design and therefore improving durability
                                                             and overall monitoring function
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  28     Structural Monitoring Sensor      X                 The only retrofitted corrosion sensor that
         System:  Rebar Corrosion Sensor                     integrates all corrosion-engendering factors and
                                                             yields a real time picture of internal concrete
                                                             matrix environments.  Endorsed by Sam Schwartz for a
                                                             wide range of applications.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  29      Structural Monitoring Sensor         X             The concrete corollary of #29, it is not yet clear
         System:  Concrete Rot Sensor                        that the information derived from this sensor will
                                                             be individually valued.  As part of the Antaeus
                                                             system, its input will corroborate other
                                                             sensor-sourced data.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  30     Structural Monitoring Sensor          X             We already have input to support the desire for this
         System:  Pothole Sensor                             type of sensing system from ConnDOT.  Its value in
                                                             the northeast will be quite high.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  31     Structural Monitoring Sensor          X             Principally the touchstone for expansion joint
         System:  Temperature Sensor                         monitoring (and any future weather related data
                                                             sales), this sees its principal value as part of the
                                                             sensor referencing system.
  32     Structural Monitoring Sensor          X             One of the key structural metrics will be changes in
         System:  Deck Deflection Sensor                     the set or transient deflection of the bridge
                                                             decks.  Monitoring span end rotation obviates
                                                             multiple strain gauge placement and delivers the
                                                             integrated behavior of the span's support system
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  33     Structural Monitoring Sensor          X             Time division multiplexing optical harness for
         System:  Monitoring Harness                         multiple sensor interrogation
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  34     Structural Monitoring Sensor                   X    The glue which holds the entire system together and
         System:  Integrated Algorithm                       inter-relates the real time data streams from the
                                                             myriad sensors, this is the basis of the redundant
                                                             and ultimately AI component of the system.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  35     Integrated Algorithm:  Deck           X             Linked with both deflection and expansion bearing
         Vibration and Rotation                              behavior, transient vibration has, in the past, been
                                                             touted as the sole indicator of bridge structural
                                                             health.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  36     Integrated Algorithm:  Deck                    X    Depending upon the location, this "freebie"
         Crosswind Detection                                 capability derives from the algorithm treatment of
                                                             expansion encoders.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  37     Integrated Algorithm:  Vehicle                 X    Another capability difficult to assess, it derives
         Weigh-in-motion Detector                            from data manipulation from pre-existing sensors.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  38     Integrated Algorithm:  Rogue                   X    Another capability difficult to assess, it derives
         Load Overweight Vehicle Detector                    from data manipulation from pre-existing sensors.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  39     Integrated Algorithm:  Pier                    X    Another capability derived from data manipulation
         Tilt Monitor                                        from pre-existing sensors. Most valuable and
                                                             accurate in predicting the single biggest cause of
                                                             bridge catastrophes in the USA.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  40     Integrated Algorithm:  Pier                    X    Unlike #41, this is inferential.  However it does
         Scour Detector                                      support and help corroborate both #41 and #43
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  41     Integrated Algorithm:  Pier                    X    Another capability derived from data manipulation
         Subsidence Monitor                                  from pre-existing sensors. Most valuable and
                                                             accurate in predicting the single biggest cause of
                                                             bridge catastrophes in the USA.
  42     Integrated Algorithm:                          X    The only intentionally translating component on a
         Expansion Bearing Function                          bridge, it is typically the weakest point.   This is
         Monitor                                             the only known system for continuously tracking its
                                                             function.
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------
  43     Distributed Fiber Optic Strain                 X    Novel means for both locating and measuring the
         System (DFOSS)                                      magnitude of strain along a substantial length of
                                                             optical fiber
-------- --------------------------------- --- ---- --- ---- -------------------------------------------------

                            Additional Patent Numbers

Patents

6,012,337

Patent Applications

09/404,931
09/481,289
09/430,093
US99/22,155
005-723-300
60/003,640
60/050,268
60/004,217
60/084,248
60/081,158

                    BORESCOPE AS DEVELOPED FOR THE AIR FORCE
                            50% OWNERSHIP WITH OPTIM

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