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Exhibit 10.6
This
Consulting Agreement (the “Agreement”) is entered into
effective as of October 11, 2007, by and between Material
Technologies, Inc., a Delaware corporation (the
“Company”), and Palisades Capital, LLC, a Nevada
limited liability company (“Consultant”).
WHEREAS,
the Company previously acquired 4,000,000 shares of Rocket City
Automotive Group (“Rocket City”) in exchange for
10,000,000 shares of the Company (the “Matech Shares”)
pursuant to that certain Stock Exchange Agreement, dated April 27,
2007 (the “Stock Exchange Agreement”);
WHEREAS,
the price of the Rocket City shares has fallen from approximately
$4.00 per share when they were acquired, to approximately $0.0275
(split adjusted), which results in a very large capital loss for
the Company;
WHEREAS,
the Company believes it to be in the best interest of the Company
and its shareholders to rescind the transaction with Rocket City by
delivering to Rocket City the 4,000,000 shares the Company received
from Rocket City, and receiving back the 10,000,000 shares of the
Company’s common stock that Rocket City received (the
“Company Objectives”);
WHEREAS,
the Company believes it to be in the best interest of the Company
and its shareholders and to the Company’s general interest to
engage the services of the Consultant, on an exclusive basis, to
assist the Company in achieving the Company Objectives.
WHEREAS,
Consultant is the holder of that certain Class A Senior Secured
Convertible Debenture, dated December 1, 2003, as amended to date
(the “Debenture”); and
WHEREAS,
Consultant has agreed to perform the Services (as defined below) in
exchange for the sum of $1,000,000, which amount shall be added to
the Debenture.
NOW
THEREFORE, in view of the foregoing and in consideration of the
premises and mutual representations, warranties, covenants and
promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
NOW
THEREFORE, in consideration of the mutual promises contained
herein, the Company and Consultant agree as follows:
1.
Services . Consultant agrees to perform the following
services (the “Services”) in a workmanlike
manner. The Consultant shall use its best efforts to
negotiate a rescission of the Stock Exchange Agreement, whereby all
of the Matech Shares shall be returned to the Company.
Consultant shall also take such action as is necessary
to secure the return to the Company of 1,000,000 shares of
Rocket City which had previously been paid to a consultant of the
Company, so that such shares can be returned to Rocket City by the
Company as part of a rescission agreement.
2.
Payment for Services . As full consideration for the
performance of the Services described in Section 1 above, the
Company shall pay Consultant compensation as follows:
(a)
Increase in Debenture . The Company shall pay to
Consultant the sum of $1,000,000 upon the delivery to the Company
of an executed rescission agreement between the Company and Rocket
City, which amount shall be added to the Debenture.
Consultant agrees that the increase in the Debenture shall
constitute payment in full for the Services.
(b)
Expenses . Consultant shall be reimbursed for all
out-of-pocket expenses upon submission of receipts or accounting to
the Company, including, but not limited to, all travel expenses,
research material and charges, computer charges, long-distance
telephone charges, facsimile costs, copy charges, messenger
services, mail expenses and such other Company related charges as
may occur exclusively in relation to the Company’s business
as substantiated by documentation. Any expenditure above $500
will require written pre-approval of the Company.
3.
Term of Agreement . This Agreement shall be in full
force and effect commencing upon the date hereof. This
Agreement shall terminate upon the delivery to the Company of the
Matech Shares issued to Rocket City.
4.
Waiver . No course of dealing or any delay on the part
of either party in exercising any rights hereunder will operate as
a waiver of any rights of such party. No waiver of any
default or breach of this Agreement or application of any term,
covenant or provision hereof shall be deemed a continuing waiver or
a waiver of any other breach or default or the waiver of any other
application of any term, covenant or provision.
5.
Definition of “Reasonable and Best Efforts
.” Reasonable and best efforts shall mean such efforts
as are commensurate with the duties reasonably carried out by a
consultant performing similar services. Consultant shall in
no event be obligated to pay any
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