Document:

matechexh10_15.htm

    
      
        
 
Exhibit 10.15

      AMENDMENT
DATED OCTOBER 27, 2006

      TO

      CLASS A
SENIOR SECURED CONVERTIBLE DEBENTURE

       

       

      
        	
                ORIGINAL
      ISSUANCE DATE

              	
                December
      1, 2003

              
	
                CONVERTIBLE
      DEBENTURE DUE

              	
                December
      31, 2008 (as amended)

              
	
                AMOUNT
      DUE AS OF OCTOBER 15, 2006

              	
                $1,634,901.76

              

      

       

      WHEREAS, Material
Technologies, Inc., a Delaware corporation (the “Company”) entered and executed
that certain Class A Senior Secured Convertible Debenture, dated December 1,
2003 (the “Debenture”), in favor of Hyde
Investments, Ltd. or registered assigns (the
“Holder”).

       

      WHEREAS, the Company and
Holder have agreed to amend the Debenture as set forth herein, with all other
terms remaining in full force and effect.  Capitalized terms used
herein shall have the same meaning as in the Debenture.

       

      NOW THEREFORE, the parties
hereby agree as follows:

       

      
        	
                 
      

              	
                1.

              	
                The
      Maturity Date shall be extended to December 31,
  2008.

              

      

       

      
        	
                 
      

              	
                2.

              	
                Section
      3.1(a) of the Debenture is hereby amended and restated to read as
      follows:

              

      

       

      The
Holder of this Debenture shall have the right, at its option, to convert this
Debenture into shares of Common Stock at any time following March 30,
2004.  The number of shares of Common Stock issuable upon the
conversion of this Debenture is determined pursuant to Section 3.2 and rounding
the result to the nearest whole share.  At any time after delivery by
Holder to the Company of a Notice of Intent to Convert, the Company shall not
have the right to pre-pay the balance due on the Debenture.  The
Holder of this Debenture may not convert any portion of this Debenture only to
the extent the issuance of the shares upon such conversion would cause the
Holder to beneficially own more than 4.99% of the issued and outstanding common
stock of the Company upon the date of such conversion.  The Company
will accept and rely upon the Holder’s written representation that the issuance
will not cause the holder to beneficially own more than 4.99% of the issued and
outstanding common stock of the Company.

       

      
        	 	3.	The
      seventy five (75) day period referred to in Section 3.1(b) of the
      Debenture is hereby amended to be five (5) days after receipt of notice by
      the Company.
	 	 	 
	
                 
      

              	
                4.

              	
                Section
      3.2(a) is hereby amended and restated to read as
  follows:

              

      

       

      Subject
to Section 3.1, upon the Company’s receipt of a facsimile or original of
Holder’s duly completed and signed Notice of Conversion (a copy of which is
attached hereto as Exhibit A), the Company shall instruct the escrow agent
pursuant to that certain Escrow Agreement of even date herewith to transfer to
the Holder that number of shares of Common Stock into which the Debentures are
convertible in accordance with the provisions regarding
conversion.

      
        
           

        

        
          1

          
            
 

        

        
           

        

      

       

      
        	 	5.	Section
      3.2(b) is amended to add the words “or if less than the total remaining
      balance of the Debenture is being converted” after the word “destroyed” in
      the parenthetical.
	 	 	 
	
                 
      

              	
                6.

              	
                The
      Company has informed the Holder that it is considering completing a
      reverse split of its common stock.  The Company acknowledges
      that the conversion price of the Debenture shall not be effected by any
      such reverse split, and that after giving effect to such reverse split,
      the conversion price shall remain the lesser of (i) 50% of the averaged
      ten closing prices for the Company’s Common Stock for the ten (10) trading
      days immediately preceding the Conversion Date or (ii)
    $0.10.

              

      

       

      
        	
                 
      

              	
                7.

              	
                Section
      6.3(d) is amended and restated to read: “The Company shall not increase
      the compensation paid or payable to any of its officers or directors by
      more than five percent (5%) in any one calendar year, except that Robert
      M. Bernstein’s compensation may be increased to a maximum of $250,000 per
      year starting with the 2007 calendar
year.”

              

      

       

      
        	
                 
      

              	
                8.

              	
                The
      Company has informed the Holder that it intends to issue up to 70 million
      post-split shares of Class A common stock to Robert M. Bernstein, or his
      designees or assigns, after the effectiveness of a reverse split of its
      common stock, to induce Mr. Bernstein to enter into a new employment
      agreement with the Company and to release the Company from any claims that
      may be owed to Mr. Bernstein.

              

      

       

      
        	
                 
      

              	
                a.

              	
                With
      respect to all shares issued to Mr. Bernstein, the Company agrees that the
      Company shall require Mr. Bernstein to execute the Stockholder Lockup
      Agreement attached hereto as Exhibit
      A, and the Company shall not waive or modify any of the provisions
      of the Stockholder Lockup Agreement in connection with such shares of
      Class A Common Stock issued to Robert M. Bernstein, or any transferee or
      assignee of such shares, and shall not permit any of such shares to be
      transferred without legend at any time prior to the date which is three
      years from the date thereof, except that the Company shall have the right
      to terminate any such Stockholder Lockup Agreement and restriction in the
      event this Debenture is paid in full or converted in full by the
      Holder.

              

      

       

      
        	 	 	The
      Company will place a legend on each certificate of the shares issued to
      Mr. Bernstein or his designees or assignees stating “this certificate may
      not be transferred until October 27, 2009” and such legend shall not be
      removed from such certificate except in accordance with the Stockholder
      Lockup Agreement.  In the event Mr. Bernstein transfers any of
      the shares represented by such certificate, such legend shall be placed on
      each certificate representing such shares, and any transferee, and any
      subsequent transferee, shall agree to be bound by such provision until the
      termination of the Stockholder Lockup Agreement.
	 	 	 
	
                 
      

              	
                9.

              	
                The
      following is added to the Debenture, after Section
  6.3(g):

              

      

       

      
        	
                 
      

              	
                a.

              	
                (h).

              	
                Except
      for the stock split contemplated above, the Company will not permit any
      split or combination of the common stock of the Company, and shall not
      declare or pay any dividend (stock, cash or any other distribution) on its
      common or preferred stock, without the written consent of the
      Holder.

              

      

      
        
           

        

        
          2

          
            
 

        

        
           

        

      

      
        	
                 
      

              	
                b.

              	
                (i)

              	
                The
      Company shall not issue any shares of its common stock which are
      registered on a registration statement on Form S-8 (a “Form S-8”) without
      the written consent of the Holder, except if each and every of the
      following conditions are met:

              

      

       

      
        	
                 
      

              	
                i.

              	
                The
      shares are issued as compensation for bonafide consulting services,
      pursuant to a written consulting agreement containing each and every
      understanding and term of the agreement between the consultant and the
      Company, and such shares are lawfully issuable under the rules and
      regulations relating to the use of Form
S-8;

              

      

       

      
        	
                 
      

              	
                ii.

              	
                The
      Company has provided to its securities counsel copies of all agreements
      with the consultant and each and every recipient of shares that have been
      registered on the Form S-8, has fully explained to such counsel in writing
      all of the services to be provided by such consultant and any person,
      entity or business affiliated in any way with such consultant, and the
      Company has received the written opinion of such counsel that the issuance
      of shares registered on the Form S-8 to such consultant complies in all
      respects with applicable securities laws, including, without limitation,
      those rules and regulations relating to the use of registration statements
      on Form S-8 and the issuance of shares registered
  thereon;

              

      

       

      
        	
                 
      

              	
                iii.

              	
                The
      issuance of the shares registered on the Form S-8 will not exceed an
      amount equal to $75,000 per month, beginning with November 2006, divided
      by the average closing price of the Company’s common stock for the month
      prior to such issuance (after giving effect to any split of the Company’s
      common stock (forward or reverse);

              

      

       

      
        	
                 
      

              	
                iv.

              	
                Any
      person who receives such shares shall agree not to sell more than
      (i) 1/20th
      of 20% of the total volume of the Company’s shares traded during the month
      prior to the issuance of such shares (the “Prior Month’s Volume”) in any
      single trading day, non-cumulative, or (ii) 20% of the Prior Months Volume
      in any single thirty day period.  For example, if the Prior
      Month’s Volume is 1,000,000 shares, the daily trading limit would be
      10,000 shares, and the monthly trading limit would be 200,000
      shares.  In the event such person breaches this limitation, it
      will be an Event of Default under the
Debenture.

              

      

       

      
        	
                 
      

              	
                10.

              	
                Any
      default under this Debenture, or any of the debentures executed on the
      same date as this Debenture, as amended by an amendment dated as of the
      same date as this Agreement, and any default under or breach of that
      certain Settlement Agreement and General Release dated as of the same date
      hereof, shall be an Event of Default under this
  Debenture.

              

      

       

      
        	
                 
      

              	
                11.

              	
                To
      induce the Holder to extend the Maturity Date of the Debenture, the
      Company hereby agrees to pay an extension fee of $213,248, and hereby
      confirms that the balance of the Debenture as of October 15, 2006, is
      agreed to be $1,634,901.76, which includes all advances, accrued interest
      and the above fee to date.

              

      

      
        
           

        

        
          3

          
            
 

        

        
           

        

      

       

      
        	 	 	
                To
      further induce the Debenture Holder to enter into this Agreement, the
      Company shall execute and deliver to the Holder a seven-year warrant to
      purchase 8,000,000 shares of post-split common stock, at a purchase price
      of the lesser of (i) $0.001 per share, or (ii) fifty percent (50%) of
      market price, which warrants shall contain a cashless exercise provision
      and piggy-back registration rights; provided, that the maximum number of
      shares that the Company shall be required to register on any one
      registration statement shall not exceed thirty percent (30%) of the total
      number of shares of common stock registered for other parties on such
      registration statement.  All other terms of the Debenture, as
      amended to date, shall remain the
same.

              

      

       

      IN
WITNESS WHEREOF, the Company has duly executed this Debenture as of the date
first written above.

       

      
        	
                MATERIAL
      TECHNOLOGIES, INC.

                a
      Delaware corporation

              	
                HYDE
      INVESTMENTS, LTD.

              
	 	 
	 	 
	By:  /s/
      Robert Bernstein	By:  /s/
      Carsten Rykov
	     
      Robert Bernstein	     
      Carsten Rykov
	     
      Chairman and CEO	     
      Director

      

       

       

       

       

       

       

       

      

        
          
             

          

          
            4matechexh10_16.htm

    
      
        
 
Exhibit 10.16

       

      AMENDMENT
DATED OCTOBER 27, 2006

      TO

      CLASS A
SENIOR SECURED CONVERTIBLE DEBENTURE

       

       

      
        	
                ORIGINAL
      ISSUANCE DATE

              	
                December
      1, 2003

              
	
                CONVERTIBLE
      DEBENTURE DUE

              	
                December
      31, 2008 (as amended)

              
	
                AMOUNT
      DUE AS OF OCTOBER 15, 2006

              	
                $534,924.27

              

      

       

      WHEREAS, Material
Technologies, Inc., a Delaware corporation (the “Company”) entered and executed
that certain Class A Senior Secured Convertible Debenture, dated December 1,
2003 (the “Debenture”), in favor of Livingston
Investments, Ltd. or registered assigns (the
“Holder”).

       

      WHEREAS, the Company and
Holder have agreed to amend the Debenture as set forth herein, with all other
terms remaining in full force and effect.  Capitalized terms used
herein shall have the same meaning as in the Debenture.

       

      NOW THEREFORE, the parties
hereby agree as follows:

       

      
        	
                 
      

              	
                1.

              	
                The
      Maturity Date shall be extended to December 31,
  2008.

              

      

       

      
        	
                 
      

              	
                2.

              	
                Section
      3.1(a) of the Debenture is hereby amended and restated to read as
      follows:

              

      

       

      The
Holder of this Debenture shall have the right, at its option, to convert this
Debenture into shares of Common Stock at any time following March 30,
2004.  The number of shares of Common Stock issuable upon the
conversion of this Debenture is determined pursuant to Section 3.2 and rounding
the result to the nearest whole share.  At any time after delivery by
Holder to the Company of a Notice of Intent to Convert, the Company shall not
have the right to pre-pay the balance due on the Debenture.  The
Holder of this Debenture may not convert any portion of this Debenture only to
the extent the issuance of the shares upon such conversion would cause the
Holder to beneficially own more than 4.99% of the issued and outstanding common
stock of the Company upon the date of such conversion.  The Company
will accept and rely upon the Holder’s written representation that the issuance
will not cause the holder to beneficially own more than 4.99% of the issued and
outstanding common stock of the Company.

       

      
        	 	3.	The
      seventy five (75) day period referred to in Section 3.1(b) of the
      Debenture is hereby amended to be five (5) days after receipt of notice by
      the Company.
	 	 	 
	
                 
      

              	
                4.

              	
                Section
      3.2(a) is hereby amended and restated to read as
  follows:

              

      

       

      Subject
to Section 3.1, upon the Company’s receipt of a facsimile or original of
Holder’s duly completed and signed Notice of Conversion (a copy of which is
attached hereto as Exhibit A), the Company shall instruct the escrow agent
pursuant to that certain Escrow Agreement of even date herewith to transfer to
the Holder that number of shares of Common Stock into which the Debentures are
convertible in accordance with the provisions regarding
conversion.

      
        
           

        

        
          1

          
            
 

        

        
           

        

      

       

      
        	 	5. 	Section
      3.2(b) is amended to add the words “or if less than the total remaining
      balance of the Debenture is being converted” after the word “destroyed” in
      the parenthetical.
	 	 	 
	
                 
      

              	
                6.

              	
                The
      Company has informed the Holder that it is considering completing a
      reverse split of its common stock.  The Company acknowledges
      that the conversion price of the Debenture shall not be effected by any
      such reverse split, and that after giving effect to such reverse split,
      the conversion price shall remain the lesser of (i) 50% of the averaged
      ten closing prices for the Company’s Common Stock for the ten (10) trading
      days immediately preceding the Conversion Date or (ii)
    $0.10.

              

      

       

      
        	
                 
      

              	
                7.

              	
                Section
      6.3(d) is amended and restated to read: “The Company shall not increase
      the compensation paid or payable to any of its officers or directors by
      more than five percent (5%) in any one calendar year, except that Robert
      M. Bernstein’s compensation may be increased to a maximum of $250,000 per
      year starting with the 2007 calendar
year.”

              

      

       

      
        	
                 
      

              	
                8.

              	
                The
      Company has informed the Holder that it intends to issue up to 70 million
      post-split shares of Class A common stock to Robert M. Bernstein, or his
      designees or assigns, after the effectiveness of a reverse split of its
      common stock, to induce Mr. Bernstein to enter into a new employment
      agreement with the Company and to release the Company from any claims that
      may be owed to Mr. Bernstein.

              

      

       

      
        	
                 
      

              	
                a.

              	
                With
      respect to all shares issued to Mr. Bernstein, the Company agrees that the
      Company shall require Mr. Bernstein to execute the Stockholder Lockup
      Agreement attached hereto as Exhibit
      A, and the Company shall not waive or modify any of the provisions
      of the Stockholder Lockup Agreement in connection with such shares of
      Class A Common Stock issued to Robert M. Bernstein, or any transferee or
      assignee of such shares, and shall not permit any of such shares to be
      transferred without legend at any time prior to the date which is three
      years from the date thereof, except that the Company shall have the right
      to terminate any such Stockholder Lockup Agreement and restriction in the
      event this Debenture is paid in full or converted in full by the
      Holder.

              

      

       

      The
Company will place a legend on each certificate of the shares issued to Mr.
Bernstein or his designees or assignees stating “this certificate may not be
transferred until October 27, 2009” and such legend shall not be removed from
such certificate except in accordance with the Stockholder Lockup
Agreement.  In the event Mr. Bernstein transfers any of the shares
represented by such certificate, such legend shall be placed on each certificate
representing such shares, and any transferee, and any subsequent transferee,
shall agree to be bound by such provision until the termination of the
Stockholder Lockup Agreement.

       

      
        	
                 
      

              	
                9.

              	
                The
      following is added to the Debenture, after Section
  6.3(g):

              

      

       

      
        	
                 
      

              	
                a.

              	
                (h).

              	
                Except
      for the stock split contemplated above, the Company will not permit any
      split or combination of the common stock of the Company, and shall not
      declare

              

      

      
        
           

        

        
          2

          
            
 

        

        
           

        

      

      
        	
                 
      

              	
                or
      pay any dividend (stock, cash or any other distribution) on its common or
      preferred stock, without the written consent of the
  Holder.

              

      

       

      
        	
                 
      

              	
                b.

              	
                (i)

              	
                The
      Company shall not issue any shares of its common stock which are
      registered on a registration statement on Form S-8 (a “Form S-8”) without
      the written consent of the Holder, except if each and every of the
      following conditions are met:

              

      

       

      
        	
                 
      

              	
                i.

              	
                The
      shares are issued as compensation for bonafide consulting services,
      pursuant to a written consulting agreement containing each and every
      understanding and term of the agreement between the consultant and the
      Company, and such shares are lawfully issuable under the rules and
      regulations relating to the use of Form
S-8;

              

      

       

      
        	
                 
      

              	
                ii.

              	
                The
      Company has provided to its securities counsel copies of all agreements
      with the consultant and each and every recipient of shares that have been
      registered on the Form S-8, has fully explained to such counsel in writing
      all of the services to be provided by such consultant and any person,
      entity or business affiliated in any way with such consultant, and the
      Company has received the written opinion of such counsel that the issuance
      of shares registered on the Form S-8 to such consultant complies in all
      respects with applicable securities laws, including, without limitation,
      those rules and regulations relating to the use of registration statements
      on Form S-8 and the issuance of shares registered
  thereon;

              

      

       

      
        	
                 
      

              	
                iii.

              	
                The
      issuance of the shares registered on the Form S-8 will not exceed an
      amount equal to $75,000 per month, beginning with November 2006, divided
      by the average closing price of the Company’s common stock for the month
      prior to such issuance (after giving effect to any split of the Company’s
      common stock (forward or reverse);

              

      

       

      
        	
                 
      

              	
                iv.

              	
                Any
      person who receives such shares shall agree not to sell more than
      (i) 1/20th
      of 20% of the total volume of the Company’s shares traded during the month
      prior to the issuance of such shares (the “Prior Month’s Volume”) in any
      single trading day, non-cumulative, or (ii) 20% of the Prior Months Volume
      in any single thirty day period.  For example, if the Prior
      Month’s Volume is 1,000,000 shares, the daily trading limit would be
      10,000 shares, and the monthly trading limit would be 200,000
      shares.  In the event such person breaches this limitation, it
      will be an Event of Default under the
Debenture.

              

      

       

      
        	
                 
      

              	
                10.

              	
                Any
      default under this Debenture, or any of the debentures executed on the
      same date as this Debenture, as amended by an amendment dated as of the
      same date as this Agreement, and any default under or breach of that
      certain Settlement Agreement and General Release dated as of the same date
      hereof, shall be an Event of Default under this
  Debenture.

              

      

      
        
           

        

        
          3

          
            
 

        

        
           

        

      

       

      
        	 	11. 	To
      induce the Holder to extend the Maturity Date of the Debenture, the
      Company hereby agrees to pay an extension fee of $69,773, and hereby
      confirms that the balance of the Debenture as of October 15, 2006, is
      agreed to be $534,924.27, which includes all advances, accrued interest
      and the above fee to date.
	 	 	 
	 	 	To
      further induce the Debenture Holder to enter into this Agreement, the
      Company shall execute and deliver to the Holder a seven-year warrant to
      purchase 5,500,000 shares of post-split common stock, at a purchase price
      of the lesser of (i) $0.001 per share, or (ii) fifty percent (50%) of
      market price, which warrants shall contain a cashless exercise provision
      and piggy-back registration rights; provided, that the maximum number of
      shares that the Company shall be required to register on any one
      registration statement shall not exceed thirty percent (30%) of the total
      number of shares of common stock registered for other parties on such
      registration statement.  All other terms of the Debenture, as
      amended to date, shall remain the same.

      

       

      IN
WITNESS WHEREOF, the Company has duly executed this Debenture as of the date
first written above.

       

      
        	
                MATERIAL
      TECHNOLOGIES, INC.

                a
      Delaware corporation

              	
                LIVINGSTON
      INVESTMENTS, LTD.

              
	 	 
	 	 
	By:  /s/
      Robert Bernstein	By:  /s/
      Carsten Rykov
	     
      Robert Bernstein	      Carsten
      Rykov
	     
      Chairman and CEO 	     
      Director

      

       

       

       

       

       

       

      
        
          
             

          

          
            4

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