Document:

Exhibit 10.5

                          Strategic Alliance Agreement

         This Strategic Alliance Agreement (the "Agreement") made and entered
into this 3rd day of October, 2002 by and between HydroFlo Incorporated, a North
Carolina corporation located at 3721 Junction Blvd. Raleigh, NC 27615 (the
"Company") and Tri-Weld, Inc. located at 2801 Troxler Road, Burlington, NC 27215
(the "Manufacturer").

                                    RECITALS

         A.  The Company is engaged in the sale of water treatment products,
certain of which products are more particularly described in the attached
Schedule A, as the same may be hereafter amended by the mutual consent of the
parties (collectively and including any other products listed in the Company's
catalogues from time to time, the "Products"); and

         B.  The Manufacturer engages to fabricate such Products for the
Company; and design to meet ASME code and potentially other such codes as may be
required from time to time.

         NOW THEREFORE, in consideration of the promises and the mutual promises
and covenants set forth herein, the parties hereby agree as follows:

1.       MANUFACTURING RIGHTS.  Subject to the terms and conditions set forth
herein, the Company hereby appoints the Manufacturer as producer of the Products
for the Company for the term of this Agreement as provided in Section 2 below.
The Manufacturer agrees that it shall not, directly or indirectly, offer, market,
sell or otherwise deal in any products substantially similar in design or usage
to the Products for sale to the Customers.  No other right or license to
manufacture the Products is granted to the Manufacturer by this Agreement.

2        TERM.  This agreement shall commence on October 1, 2002 and, unless
sooner terminated as provided in Section 7, shall continue in full force and
effect for a period of one (1) year at which time the agreement shall
automatically renew for a like term (the "Term").

3.       DUTIES OF THE MANUFACTURER.

         (a)      The Manufacturer shall use his best efforts to provide the
                  finished Products within the times quoted.

         (b)      The Manufacturer shall comply with all appropriate federal,
                  state, county and local laws, rules and regulations pertaining
                  to this Agreement.

         (c)      The Manufacturer shall, at its own expense, make, execute or
                  file such reports and obtain such licenses as are required by
                  law or any public authority with respect to this Agreement and
                  the design or manufacturing of the Products.

         (d)      The Manufacturer shall be solely responsible for the
                  declaration and payment of all local, state and federal taxes
                  as may accrue because of the Manufacturer's activities in
                  connection with this Agreement.

         (e)      The Manufacturer shall maintain as confidential and
                  proprietary all non-public information and details concerning
                  (i) this Agreement; (ii) the Products and (iii) the Company's
                  Products or Prototypes in Development. Notwithstanding the
                  foregoing, either party to this Agreement may disclose any
                  otherwise confidential information if the disclosure is
                  required by a court or governmental authority.

         (f)      Bear its own costs and expenses incurred in performing its
                  obligations hereunder.

4.       ORDERS AND DELIVERY.  The Manufacturer shall receive submitted purchase
orders for Products signed by a duly authorized Company officer and which shall
contain complete information regarding Product price, item number, quantity,
requested delivery dates, shipping instructions and shipping address (each, a
"Purchase Order"). Promptly following receipt of Purchase Order, the
Manufacturer shall acknowledge and confirm the order. Confirmed Purchase Orders
shall be governed by the terms set forth herein to the exclusion of any
additional or contrary terms set forth in the parties' standard sales
transaction forms.

5.       LIMITED TRADEMARK LICENSE.  During the Term, the Company grants to the
Manufacturer a limited, non-exclusive, royalty-free right to fabricate equipment
for the Company's use or sale. Except as provided in this Section 6, the
Representative agrees not to utilize the HydroFlo logo, trade name or trademarks
in any way or to name HydroFlo executives, employees, members or affiliates in
any advertising format or medium without the express written consent of
HydroFlo.

6.       TERMINATION.  In the event the Manufacturer breaches any provision of
this Agreement, the Company may terminate this Agreement immediately upon
providing Manufacturer a thirty (30) day right to cure period and the Company
shall have the right to seek all other available remedies. Upon the termination
of this Agreement by The Company, The Company will complete the manufacture of
all in-process orders subject to a Confirmed Purchase Order as provided in
Section 4 and the Manufacturer will complete the fabrication of the same at the
prices then in effect.

7.       STATUS OF THE MANUFACTURER. The Manufacturer is duly organized and is
qualified and has all consents, permits and authorizations required to perform
its obligations under this Agreement.

8.       RELATIONSHIP OF THE PARTIES.  The Representative acknowledges that it
is an independent contractor. Nothing in this Agreement, its provisions or the
transactions, obligations and relationships contemplated hereby shall constitute
either party to this Agreement as the agent, employee or legal representative
for the other party hereto for any purpose whatsoever, nor shall any party to
this Agreement hold itself out as such. This Agreement does not create and shall
not be deemed to create a relationship of partners, joint venturers, associates
or principal and agent between the parties hereto, and the parties acknowledge
that each is acting as a principal hereunder. This Agreement does not constitute
either the sale of a franchise or a dealership to the Representative.

9.       AMENDMENT.  This Agreement may only be amended by mutual written
agreement of the parties.

10.      ENTIRE AGREEMENT.  It is expressly agreed by the Parties that there are
no verbal or written representations, understandings, stipulations, agreements,
or promises relating to the subject matter of the Agreement not incorporated in
writing in the Agreement. This Agreement constitutes the entire Agreement
between the Parties hereto, and it cannot be amended except as provided in
Section 10 above.

11.      BINDING AGREEMENT; GOVERNING LAW AND VENUE.  The Representative
acknowledges that it has read and understands this Agreement and that this
Agreement shall become binding upon the Representative upon execution by both
parties. This Agreement shall be governed by the laws of the State of North
Carolina. Any action or other proceeding initiated by one party to this
Agreement against the other party relating to or for the enforcement of this
Agreement shall be brought in any court of competent jurisdiction in Raleigh,
North Carolina.

12.      NOTICE.  Any notice or invoice required or permitted herein shall,
unless otherwise specified in this Agreement, be given by facsimile, telex,
cable, registered mail-return receipt requested, or receipted overnight delivery
properly addressed to the party to be notified at its address as stated below,
and shall be deemed delivered when so transmitted.

         If to the Company:
         HydroFlo, Inc.
         3721 Junction Blvd.
         Raleigh, NC 27615
         Attn Mr. Tom Barbee
         Telephone: 919-772-9925
         Facsimile: 919-772-1220

         If to the Manufacturer:
         Tri-Weld, Inc
         PO Drawer 2410
         Burlington, NC 27216
         Attn: Mr. Ricky May
         Telephone: 336-570-2924
         Facsimile: 336-227-0680

13.      FORCE MAJURE.  Except as to payment obligations, neither party shall be
liable or considered in default under this Agreement when the delay of
performance is caused by circumstances beyond its reasonable control and
occurring without its fault or negligence, including failure of suppliers,
subcontractors, and carriers, acts of civil or military authorities, national
emergencies, fire, flood, hurricane, acts of God, insurrection, and war,
provided the affected party immediately provides notice thereof to the other and
does those things reasonably possible to resume the timely performance of its
obligations under this Agreement.

14.      VALIDITY.  In the event that any provision of this Agreement (a) is
found to be invalid or unenforceable by final decision of a court of competent
jurisdiction, or (b) is rendered invalid by reason of subsequently enacted
legislation then that provision shall be of no force or effect, but the
remainder of the Agreement shall continue in full force and effect. If a
provision of this Agreement fails for either of the reasons listed above, the
parties shall enter into immediate negotiations for the purpose of arriving at a
mutually satisfactory replacement for such provision.

15.      During the term of this agreement The Manufacturer will maintain in
full force and effect, general liability insurance in dollar values commensurate
with appropriate business practices.

17.      The Company shall defend, indemnify and hold Manufacturer harmless from
any claim for The Company's infringement or violation of patent rights of
companies or patents other than The Company's patents.

         IN WITNESS WHEREOF, the parties hereto, through their duly authorized
officers, have executed this Agreement as of the date first written above.

         HYDROFLO, INC.                              Tri-Weld, Inc

         By:   /s/ T F Barbee               By:   /s/ Rickey May
           -------------------                 -----------------------
         Name:   T F Barbee                 Name:     Mr. Rickey May
         Title:  President                  Title:    President<PAGE>
EXHIBIT 10.12

                        SECURITIES SUBSCRIPTION AGREEMENT
                      -----------------------------------

     THIS  SECURITIES  SUBSCRIPTION  AGREEMENT,  dated  as  of  June  27th, 2002
("Agreement"),  is  executed  in  reliance  upon the exemption from registration
  ----------
afforded  by  Rule  506  promulgated  under  Regulation  D by the Securities and
Exchange  Commission  ("SEC"),  under  the  Securities  Act of 1933, as amended.
                        ---
Capitalized  terms  used herein and not defined shall have the meanings given to
them  in  Rule  506  and  Regulation  D.

     This  Agreement  has  been executed and entered into by and between Gregory
Bartko,  Esq.,  3475 Lenox Road, Suite 400, Atlanta, Georgia 30326 ("Buyer"), to
                                                                     -----
purchase  shares  of  the  Class  A  preferred  stock, par value $.001 per share
("Preferred  Stock"),  of  Material  Technologies, Inc., a corporation organized
under  the laws of Delaware, with executive offices 11661 San Vicente Boulevard,
Suite  707, Los Angeles, California 90049  (the "Seller@) at a purchase price of
$1.00  per  share,  with  the  aggregate purchase price equaling $50,000.  Buyer
hereby  represents  and  warrants  to,  and  agrees  with  Seller:

          THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
          WITH  THE  UNITED  STATES  SECURITIES  AND  EXCHANGE COMMISSION OR THE
          SECURITIES  COMMISSION  OF  ANY  STATE  PURSUANT  TO AN EXEMPTION FROM
          REGISTRATION  PROVIDED  BY SECTION 3(B) OF THE SECURITIES ACT OF 1933,
          AS  AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE
          "1933  ACT"),  AND  RULE  506  OF REGULATION D PROMULGATED THEREUNDER.

          THE  SECURITIES PURCHASED UNDER THIS AGREEMENT WILL BEAR A RESTRICTIVE
          LEGEND  REFLECTING  THAT  THE  SHARES  OF PREFERRED STOCK THAT ARE THE
          SUBJECT  OF  THIS  AGREEMENT  ARE  "RESTRICTED  SECURITIES" WITHIN THE
          DEFINITION  OF  REGULATION  D  OF  THE  1933  ACT.

     1.     Agreement  to  Subscribe;  Purchase  Price.
            ------------------------------------------

     (a)     Subscription.     The  undersigned  Buyer hereby subscribes for and
agrees  to  purchase  the  Seller's Class A Preferred Stock, par value $.001 per
share,  in the amount of 50,000 shares at a price of $1.00 per share for a total
aggregate  purchase  price  of  $50,000  ("Purchase  Price").

     (b)     Payment.  The  Purchase  Price  for  the  Preferred  Stock shall be
delivered  to  the Seller at the date of this Agreement, against the delivery to
the  Buyer  of  duly  authorized  shares of the Seller's Preferred Stock, in the
amount  set  forth  above  in  Section  1(a)  of  this  Agreement.

<PAGE>
     (c)     Closing.  Subject  to  the satisfaction of the conditions set forth
in  Sections  7, 8 and 11 below, the Closing of the transactions contemplated by
this  Agreement  shall  take place (AClosing Date@) when (i) Seller delivers the
                                     ------------
Preferred  Stock  to  the  Buyer,  (ii)  Seller  executes this Agreement and any
transaction  documents,  including  appropriate  resolutions  of  its  Board  of
Directors,  and  (iii)  Buyer pays the Purchase Price for the Preferred Stock as
shown  in  Section  1(a)  of  this  Agreement.

     2.     Buyer  Representations  and  Covenants;
               Access  to  Information.
               -----------------------

     In  connection  with  the  purchase  and sale of the Preferred Stock, Buyer
represents  and  warrants  to,  and covenants and agrees with Seller as follows:

(a)     Buyer  is  not,  and  on  the  closing date will not be, an affiliate of
Seller;

(b)     Buyer  is  an Aaccredited investor@ as defined in Rule 501 of Regulation
D  promulgated under the 1933 Act, and is purchasing the Preferred Stock for his
own  account and Buyer is qualified to purchase the Preferred Stock Shares under
the  laws  of  the  State  of  California

(c)     All  offers  and  sales  of any of the Preferred Stock by Buyer shall be
made
in compliance with any applicable securities laws of any applicable jurisdiction
and  in  accordance with Rule 506, as applicable, of Regulation D or pursuant to
registration  of  securities under the 1933 Act or pursuant to an exemption from
registration;

(d)     Buyer  understand  that the Preferred Stock is not registered under
the 1933 Act and is being offered and sold to in reliance on specific exemptions
from  the  registration  requirements  of Federal and State securities laws, and
that  Seller  is  relying  upon  the  truth and accuracy of the representations,
warranties,  agreements,  acknowledgments  and understandings of Buyer set forth
herein  in  order  to  determine  the  applicability  of such exemptions and the
suitability  of  Buyer  to  acquire  the  Preferred  Stock;

(e)     Buyer  shall  comply  with Rule 506 promulgated under Regulation D;

(f)     Buyer  has  the  full right, power and authority to enter into this
Agreement and to consummate the transaction contemplated herein.  This Agreement
has  been duly authorized, validly executed and delivered on behalf of Buyer and
is  a  valid  and  binding  agreement  in  accordance with its terms, subject to
general  principles  of  equity  and  to  bankruptcy or other laws affecting the
enforcement  of  creditors'  rights  generally;

(g)     As  to any Buyer that is a corporations, the execution and delivery
of  this  Agreement  and the consummation of the purchase of the Preferred Stock

                                      -2-
<PAGE>

and the transactions contemplated by this Agreement do not and will not conflict
with  or  result  in  a breach by Buyer of any of the terms or provisions of, or
constitute a default under, the articles of incorporation or by-laws (or similar
constitutive  documents)  of Buyer or any indenture, mortgage, deed of trust, or
other  material agreement or instrument to which Buyer is a party or by which it
or  any  of  its properties or assets are bound, or any existing applicable law,
rule  or  regulation of the United States or any State thereof or any applicable
decree,  judgment  or  order  of  any  Federal  or State court, Federal or State
regulatory  body, administrative agency or other United States governmental body
having  jurisdiction  over  Buyer  or  any  of  its  properties  or  assets;

     (h)     All  invitations,  offers and sales of or in respect of, any of the
Preferred  Stock,  by  Buyer  and  any  distribution  by  Buyer of any documents
relating  to any invitation, offer or sale by them of any of the Preferred Stock
will be in compliance with applicable laws and regulations, will be made in such
a  manner  that  no prospectus need be filed and no other filing need be made by
Seller  with  any  regulatory  authority or stock exchange in any country or any
political sub-division of any country, and Buyer will make no misrepresentations
nor  omissions  of  material  fact  in  the  invitation,  offer or resale of the
Preferred  Stock;

     (i)     The Buyer (or others for whom it is contracting hereunder) has been
advised  to  consult  his  own legal and tax advisors with respect to applicable
resale restrictions and applicable tax considerations and he (or others for whom
it is contracting hereunder) is solely responsible (and the Seller is not in any
way  responsible)  for  compliance  with  applicable  resale  restrictions  and
applicable  tax  legislation;

     (j)     Buyer  understands  that  no Federal or State or foreign government
agency  has
passed  on  or  made  any  recommendation or endorsement of the Preferred Stock;

     (k)     Buyer  has  had  an  opportunity to receive and review all material
information  and  financial data and to discuss with the officers of Seller, all
matters  relating  to  the  securities,  financial  condition,  operations  and
prospects  of  Seller  and  any  questions  raised by Buyer has been answered to
Buyer's  satisfaction.

     (l)     Buyer  acknowledges  that  the  purchase  of  the  Preferred  Stock
involves  a  high
degree  of  risk.  Buyer  has  such  knowledge  and  experience in financial and
business  matters  that  he  is  capable  of  evaluating the merits and risks of
purchasing  the  Preferred  Stock. Buyer understands that the Preferred Stock is
not being registered under the 1933 Act, or under any state securities laws, and
therefore Buyer must bear the economic risk of this investment for an indefinite
period  of  time;

     (m)     The  Buyer is not a "10-percent Shareholder" (as defined in Section
871(h)(3)(B)  of  the  U.S.  Internal  Revenue  Code)  of  Seller;  and

     (n)  Buyer  acknowledges  and  agrees that the transactions contemplated by
this  Agreement  have  taken  place  solely  and exclusively within the State of
California.

                                      -3-
<PAGE>

     3.     Seller  Representations  and  Covenants.
            ---------------------------------------

     (a)     Seller  is  a corporation duly organized and validly existing under
the  laws  of the State of Delaware and is in good standing under such laws with
its  principal  executive office located in the State of California.  The Seller
has  all  requisite  corporate power and authority to own, lease and operate its
properties and assets, and to carry on its business as presently conducted.  The
Seller is qualified to do business as a foreign corporation in each jurisdiction
in  which  the  ownership of its property or the nature of its business requires
such qualification, except where failure to so qualify would not have a material
adverse  effect  on  the  Seller.

     (b)     There  are  200,000,000  shares  of  Seller's Class A Common Stock,
$.001  par value per share ("Class A Common Stock") authorized and approximately
149,125,389  outstanding  as  of  March 31, 2002; and there is 100,000 shares of
Seller's  Class  B  Common  Stock,  $.001  par  value per share ("Class B Common
Stock")  authorized  and  100,000  shares  outstanding as of March 31, 2002; and
there  are  50,000,000  shares  of Seller's Preferred Stock, $.001 par value per
share  ("Preferred  Stock")  authorized  and  approximately  337,471  shares
         ----------------
outstanding  as  of  that  same  date.  All issued and outstanding shares of our
Common and Preferred Stock have been authorized and validly issued and are fully
paid  and  non-assessable.  The Class A Preferred Stock shall be convertible, at
the  Buyer's  election,  into  a number of shares of Common Stock, calculated by
multiplying  the  number  of  Shares of Class A Preferred Stock purchased by the
Buyer  by  2  (i.e.  100,000 shares). After conversion, the Seller shall deliver
replacement Common Stock certificates to the Buyer within 10 business days after
written  notice of conversion is sent to the Seller's address by the Buyer. Upon
receipt of the Common Stock certificates after conversion, the Class A Preferred
Stock shall be canceled on the stock transfer records maintained by the Seller's
stock  transfer  agent.

     (c)     The  execution  and  delivery  of  this  Agreement  do not, and the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or  both),  or give rise to a right of termination, cancellation or acceleration
of  any  obligation  or to a loss of a material benefit, under, any provision of
the Articles of Incorporation, and any amendments thereto, By-Laws, Stockholders
Agreements  and  any  amendments thereto of the Seller or any material mortgage,
indenture,  lease  or  other  agreement  or  instrument,  permit,  concession,
franchise,  license,  judgment,  order,  decree, statute, law ordinance, rule or
regulation  applicable  to  the  Seller,  its properties or assets.  There is no
action,  suit  or  proceeding  pending,  or  to  the  knowledge  of  the Seller,
threatened  against the Seller, before any court or arbitrator or any government
body, agency or official, which would have a material adverse affect on Seller=s
operations  or  financial  condition.

                                      -4-
<PAGE>

     (d)     The  Seller is subject to the reporting requirements of Sections 13
or  15(d)  of  the Securities and Exchange Act. The Preferred Stock when issued,
will  be  issued  in  compliance  with  all  applicable  U.S.  federal and state
securities laws.  The execution and delivery by the Seller of this Agreement and
the  issuance of the Preferred Stock will not contravene or constitute a default
under  any  provision  of  applicable  law  or  regulation.  The  Seller  is  in
compliance  with and conforms with, and will continue to comply with and conform
with,  all  securities  laws, state and federal, ordinances, rules, regulations,
orders, restrictions and all other legal requirements of any domestic or foreign
government  or  any instrumentality thereof having jurisdiction over the conduct
of  its businesses or the ownership of its properties, including but not limited
to  all  laws concerning investor relations, public relations, disclosures under
the  securities  laws  and  broker-dealers  statutes  and  laws.

     (e)     There  is  no  material  fact known to the Seller that has not been
publicly  disclosed  by  the  Seller  or disclosed in writing to the Buyer which
could  reasonably be expected to have a material adverse effect on the condition
(financial  or  otherwise)  or  on the earnings, business affairs, properties or
assets  of  the  Seller,  or  could  reasonably  be  expected  to materially and
adversely  affect  the ability of the Seller to perform its obligations pursuant
to  this  Agreement.  The  information  furnished  by  the  Seller  to Buyer for
purposes of or in connection with this Agreement or any transaction contemplated
hereby does not contain any untrue statement of a material fact or omit to state
a  material fact necessary in order to make the statements contained therein, in
light  of  the  circumstances  under  which  they  are  made,  not  misleading.

     (f)     No  consent,  approval  or  authorization  of  or  designation,
declaration  or filing with any governmental authority on the part of the Seller
is  required  in  connection  with  the  valid  execution  and  delivery of this
Agreement,  or  the  offer, sale or issuance of the Preferred Stock or Preferred
Stock,  or the consummation of any other transaction contemplated hereby, except
the  filing  with the SEC and certain other states of a Form D Notice of Sale of
Securities.

     (g)     There  is no action, proceeding or investigation pending, or to the
Seller's  knowledge,  threatened,  against the Seller which might result, either
individually  or  in  the  aggregate,  in  any  material  adverse  change in the
business,  prospects,  conditions,  affairs  or  operations  of the Seller.  The
Seller  is  not  a  party  to  or  subject to the provisions of any order, writ,
injunction,  judgment  or  decree  of  any  court  or  government  agency  or
instrumentality.  There  is  no  action, suit proceeding or investigation by the
Seller  currently  pending or which the Seller intends to initiate.  The SEC has
not  issued any order suspending trading in the Seller's Preferred Stock and the
Seller  is  not  under  investigation  by the SEC or the National Association of
Securities  Dealers,  and  there are no proceedings pending or threatened before
either  regulatory  body.

     (h)     There  are  no other material outstanding debt or equity securities
presently  convertible  into  Preferred  Stock.

                                      -5-
<PAGE>

     (i)     The  issuance,  sale  and  delivery of the Preferred Stock has been
duly  authorized by all required corporate action on the part of the Seller, and
when  issued, sold and delivered in accordance with the terms hereof and thereof
for  the  consideration  expressed  herein and therein, will be duly and validly
issued,  fully  paid and non-assessable.  There are no pre-emptive rights of any
shareholder  of  Seller.

     (j)     This  Agreement  has  been  duly  authorized,  validly executed and
delivered on behalf of Seller and is a valid and binding agreement in accordance
with  its  terms,  subject  to general principles of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights generally.  The Seller
has  all  requisite  right,  power  and  authority  to  execute and deliver this
Agreement and to consummate the transactions contemplated hereby.  All corporate
action  on  the part of the Seller, its directors and shareholders necessary for
the authorization, execution, delivery and performance of this Agreement and the
Preferred Stock has been taken.  Upon their issuance to the Buyer, the Preferred
Stock  will  be validly issued and non-assessable, and will be free of any liens
or  encumbrances.

     (k)  Seller  acknowledges  and agrees that the transactions contemplated by
this  the  Agreement have taken place solely and exclusively within the State of
California.

     4.     Exemption;  Reliance on Representations.  Buyer understands that the
            ---------------------------------------
offer  and  sale  of the Securities are not being registered under the 1933 Act.
Seller  and  Buyer  are  relying  on  the  rules governing offers and sales made
pursuant  to Rule 506 promulgated under Regulation D.  The offer and sale of the
Shares  are  made  solely  within  the  State  and  jurisdiction  of California.

     5.     Delivery  Instructions.  The  Preferred  Stock  being  purchased
            ----------------------
hereunder  shall  be  delivered  to  the Buyer, and the Purchase Price, shall be
delivered  to  the  Seller.

     6.     Conditions  To  Seller's Obligation To Sell.  Seller's obligation to
            -------------------------------------------
sell  the  Preferred  Stock  is  conditioned  upon:

     (a)     The  receipt and acceptance by Seller of this Agreement as executed
by  Buyer.

     (b)     All of the representations and warranties of the Buyer contained in
this Agreement shall be true and correct on the Closing Date with the same force
and  effect  as  if  made  on  and as of the Closing Date.  The Buyer shall have
performed  or  complied  with all agreements and satisfied all conditions on its
part  to  be  performed,  complied  with or satisfied at or prior to the Closing
Date.

     (c)     No  order  asserting  that  the  transactions  contemplated by this
Agreement  are  subject  to  the registration requirements of the Act shall have
been  issued,  and  no proceedings for that purpose shall have been commenced or
shall  be  pending  or, to the knowledge of the Seller, be contemplated. No stop
order  suspending  the sale of the Preferred Stock or Preferred Stock shall have
been  issued,  and  no proceedings for that purpose shall have been commenced or
shall  be  pending  or,  to  the  knowledge  of  the  Seller,  be  contemplated.

                                      -6-
<PAGE>

     7.     Conditions  To  Buyer' Obligation To Purchase.  Buyer' obligation to
            ---------------------------------------------
purchase  the  Preferred  Stock  is  conditioned  upon:

     (a)     The  confirmation  of  receipt  and  acceptance  by  Seller of this
Agreement  as  evidenced  by  execution  of  this Agreement by a duly authorized
officer  of  Seller.

     (b)     Delivery  of  the  Preferred  Stock  to  the  Buyer.

8.     Miscellaneous.
       -------------

     (a)     Entire Agreement.  This Agreement, constitutes the entire agreement
between  the parties, and neither party shall be liable or bound to the other in
any  manner  by  any  warranties,  representations  or  covenants  except  as
specifically set forth herein.  Any previous agreement among the parties related
to  the  transactions  described  herein  is  superseded  hereby.  The terms and
conditions  of  this Agreement shall inure to the benefit of and be binding upon
the  restrictive  successors and assigns of the parties hereto.  Nothing in this
Agreement,  express or implied, is intended to confer upon any party, other than
the  parties  hereto,  and  their respective successors and assigns, any rights,
remedies,  obligations  or  liabilities  under  or  by reason of this Agreement,
except  as  expressly  provided  herein.

     (b)     Survival.  All  representations  and  warranties  contained in this
Agreement  by  Seller  and  Buyer  shall survive the closing of the transactions
contemplated  by  this  Agreement.

     (c)     Governing  Law.  This  Agreement  shall  be construed in accordance
with  the  laws  of  California  applicable  to  contracts made and wholly to be
performed  within  the  State  of  California  and  shall  be  binding  upon the
successors  and  assigns of each party hereto.  Buyer and Seller hereby mutually
waive  trial  by  jury  and  consent  to exclusive jurisdiction and venue in the
courts  of  the  State of California.  At the Buyer's sole election, any dispute
between  the  parties  may  be  arbitrated  rather than litigated in the courts,
before  the  arbitration  board  of  the American Arbitration Association in Los
Angeles, California and pursuant to its rules.  Upon demand made by the Buyer to
the Seller, such Seller agrees to submit to and participate in such arbitration.
This  Agreement  may be executed in counterparts, and the facsimile transmission
of  an executed counterpart to this Agreement shall be effective as an original.

     (d)  Seller  Indemnification.  Seller  agrees  to  indemnify and hold Buyer
harmless  from any and all claims, damages and liabilities arising from Seller's
breach  of  its  representations  and/or  covenants  set  forth  herein.

                                      -7-
<PAGE>

     (e)     Buyer'  Indemnification.  Buyer agrees to indemnify and hold Seller
harmless  from  any  and all claims, damages and liabilities arising from Buyer'
breach  of  their  representations  and  warranties set forth in this Agreement.

     (f)  Form  D.  If required, Seller shall filed a Form D with the Commission
and  all  filings required by the applicable securities regulatory agencies upon
the  Closing  of  this  transaction.

     (g)  Notices.  All  notices,  requests,  consents  and other communications
hereunder  shall  be in writing, shall be delivered by hand or sent by Fedex for
next  day  delivery.  Each  such  notice  or  other  communication shall for all
purposes  of  Agreement  be  treated  as  effective  or  having  been given when
delivered,  if  delivered  personally,  or,  if  sent  by overnight express mail
service,  1  day  after  the  same  has been depos-ited with the Fedex. All such
notices  must  also  be  sent  by  facsimile  on  the same day to the parties as
follows:

If  to  Seller:          Material  Technologies,Inc.
                         11661  San  Vicente  Boulevard,  Suite  707
                         Los  Angeles,  California  90049
                         Attn:  Robert  M.  Bernstein,  CEO  and  President
                         Fax:  310-473-3177

If  to  Buyer:           See  Page  1  of  this  Agreement

     (i)     Counterparts.  This  Agreement  may  be  executed  in  one  or more
counterparts,  each of which shall be deemed to be an original, but all of which
together  shall  constitute  one  and  the  same  instrument.

     IN  WITNESS  WHEREOF, the undersigned has executed this Agreement as of the
date  first  set  forth  above.

                    Official  Signatory  of  Seller:
                    -------------------------------
                    MATERIAL  TECHNOLOGIES,  INC.

                           /s/ Robert M. Bernstein
                    By:  __________________________________________
                    Title:  President and  Chief  Executive  Officer

                    Signatory  of  Buyer:
                    --------------------

                         /s/ Gregory Bartko
                    By:  ________________________
                    Gregory   Bartko,  Esq.

                                      -8-

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