ACORN FACTOR, INC. PLACEMENT AGENT AGREEMENT

Acorn Factor, Inc., a Delaware corporation (the “Company” or “Acorn”), proposes to offer for sale (the "Offering") in a private offering pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and/or Regulation D promulgated thereunder, convertible redeemable subordinated debentures (“Debentures”) convertible into shares of its Common Stock, par value $.01 per share (“Shares”) and (ii) warrants to purchase a number of share equal to 25% of the Shares issuable upon conversion of 100 % of the initial principal amount of the Debentures (“Warrants”). The Debentures and Warrants to be offered and sold are sometimes referred to herein as the “Securities”. The Offering is being conducted on a “best efforts, all or none” basis for a minimum of $2,000,000 of gross proceeds (the “Minimum Offering ”) and up to $6,000,000 of gross proceeds (the “Maximum Offering”). The Maximum Offering is subject to an increase of 15%, or $950,000 upon the agreement of the Company and the Placement Agent (as defined below) for an aggregate Maximum Offering of $6,950,000 (the “Over-Allotment Amount.”) Offers and sales of the Securities shall be made solely to Accredited Investors (as defined in Regulation D). This letter agreement shall confirm our agreement concerning First Montauk Securities Corp. acting as our placement agent (the “Placement Agent” or “First Montauk”) in connection with the sale of the Securities.

l. Appointment of Placement Agent.

On the basis of the representations and warranties contained herein, and subject to the terms and conditions set forth herein, the Company hereby appoints First Montauk as its Placement Agent and grants to First Montauk the exclusive right to offer, as its agent, the Securities through the Offering Period (as defined below). The Company expressly acknowledges and agrees that First Montauk's obligations hereunder are not on a firm commitment basis and that the execution of this Agreement does not constitute a commitment by First Montauk to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof. Further, First Montauk's obligation to use its best efforts to assist the Company in the Offering is subject to the completion of a due diligence review of the Company, the industry and the market for such securities generally, as well as general market conditions. On the basis of such representations and warranties, and subject to such conditions, First Montauk hereby accepts such appointment and agrees to use its reasonable commercial efforts to secure subscriptions for the purchase of Securities up to the Maximum Offering.

2.   Terms of the Offering.

(a) The Company has prepared and delivered to the Placement Agent copies of a Confidential Private Placement Memorandum (as may be amended from time to time, and including the exhibits thereto, the “Memorandum”), relating to, among other things, the business of the Company, its financial condition, the Securities and the terms of Offering.

(b)   Pursuant to the Offering as further described in the Memorandum the Company intends to offer Debentures with an aggregate purchase price of $6,000,000, exclusive of the over-allotment option for an additional $950,000 of gross proceeds. The minimum subscription amount per purchaser shall be $25,000. Each Debenture will be convertible into Shares at a price of $3.80 per Share in accordance with the terms thereof. From the date of issuance to, and including, the first anniversary of the Final Closing Date (as defined below) (the “First Anniversary Date”) each Debenture shall be convertible as to the lesser of (i) 50% of the original principal amount stated on the face thereof on the date of issuance, or (ii) the principal amount of such Debenture then outstanding. Following the First Anniversary Date and up to and including the maturity thereof, each Debenture shall be convertible as to the principal amount then outstanding. The Debentures shall be subordinated to other debt of the Company and may be redeemed by the Company, respectively, in the manner described in the Memorandum. In addition, each purchaser in the Offering will receive Warrants equal to 25% of the Shares issuable upon conversion of 100 % of the initial principal amount of the Debentures (“Warrants”). The Warrants will have a term of five (5) years and will be exercisable at an exercise price of $4.50 per Share. The Warrants are callable at the option of the Company in the manner described therein. The investors shall be entitled to such “registration rights”, anti-dilution protection, and other rights as are described in the Offering Documents (as defined below).

(c)   The Offering shall commence on the date hereof and shall expire at 3:00 p.m., New York time, on March 30, 2007; provided however, that if the Minimum Offering has not been deposited into escrow on or before March 30, 2007, the Company and Placement Agent may agree to extend the Offering until April 16, 2007, and provided further that if subscriptions representing the Minimum Offering have been deposited into escrow on or before March 30, 2007, or April 16, 2007, as the case may be, then the offering period may be extended at the option of the Placement Agent and the Company until May 30, 2007. Such period, as the same may be so extended, shall hereinafter be referred to as the “Offering Period.”

(d)   Each prospective investor (“Prospective Investor”) who desires to purchase Securities shall deliver to the Placement Agent a fully executed Subscription Agreement, Investor Questionnaire , and such other agreements as are required to be signed in connection with the Offering (together with the Memorandum, Subscription Agreement, Investor Questionnaire, and other exhibits thereto, the “Offering Documents”) along with payment in the form of immediately available funds in the amount of the principal amount of the Debenture that such Prospective Investor desires to purchase. Upon receipt of the executed Offering Documents, the Placement Agent shall forward such documents to the Company for review, keeping a copy of such documents for its records. The Placement Agent shall not have any obligation to independently verify the accuracy or completeness of any information contained in any Subscription Agreement or the authenticity, sufficiency, or validity of any check delivered by any Prospective Investor in payment for Securities.

(e)   The Placement Agent shall deliver all subscription funds received from a Prospective Investor to Signature Bank for deposit in a segregated escrow account pursuant to an escrow deposit agreement among the Company, Placement Agent and Signature Bank, as escrow agent, and shall deliver the executed copies of the Subscription Agreement received from such Prospective Investor to the Company. All funds shall be held in the segregated non-interest-bearing account pending acceptance of the subscription and no funds shall be released without execution of a written notice by the Company and the Placement Agent. The Company shall notify the Placement Agent promptly of the acceptance or rejection or any subscription.

(f)   Subject to the approval of the Company and the conditions set forth herein, which approval shall not be unreasonably withheld, First Montauk may engage other persons selected by First Montauk to assist First Montauk in the Offering (each such broker/dealers being hereinafter referred to as a “Selling Group Member”) and First Montauk may allow such Selling Group Member such part of the compensation and payment of expenses payable to First Montauk under Section 5 hereof as First Montauk shall determine. Any such Selling Group Member shall be a member firm in good standing as a broker-dealer under the rules of the NASD. The Company hereby agrees to make such representations and warranties to, and covenants and agreements with, any Selling Group Member (including an agreement to indemnify such Selling Group Member on terms substantially similar to Section 12 hereof) as provided herein.

3. Closings: Release of Funds.

(a)   The date that cleared funds representing the Minimum Offering together with completed subscription agreements are received by the parties (including the funds held in escrow), or reasonably soon thereafter, the parties shall hold an initial closing for acceptance of subscriptions by the Company and the release of funds from the escrow account (the “Initial Closing”). At least one (1) day prior to the release of funds, the Company and the Placement Agent shall send written notice to each other, which notice shall state the amount of funds to be released, the name and address of each subscriber whose subscription has been accepted by the Company, and the amount of each subscription.

(b)   At any time prior to the expiration of the Offering Period following the Initial Closing and after acceptance by the Company of subscriptions for the sale of additional Securities up to the Maximum Offering (or the Over Allotment Amount, as the case may be), one or more closings (each an "Interim Closing") shall take place in the manner herein set forth with respect to the Initial Closing. The final Interim Closing to be held in accordance herewith shall be deemed the “Final Closing” and the date thereof shall be the ”Final Closing Date”. References herein to a "Closing" shall mean the Initial Closing, any Interim Closing or the Final Closing, as the context requires, and the date thereof shall be referred to as a ”Closing Date”. Prior to each Closing, Placement Agent will furnish to the Company appropriate records indicating the name and address of each person subscribing in the Offering and a copy of the executed Subscription Agreement for each subscriber. The Company shall have discretion as to whether or not to accept any Subscription Agreement; provided , however any rejection of a subscription shall be in good faith on the basis of a reasonable business purpose

4.   Representations and Warranties of the Placement Agent.

The Placement Agent represents, warrants to and agrees with the Company as follows:

(a)   The Placement Agent is duly incorporated and validly existing and in good standing under the laws of the State of New York.

(b)   The Placement Agent is, and at the time of each Closing will be, duly registered as a broker/dealer pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and a member in good standing of the NASD, and each of the Placement Agent's representatives is, and at the time of each Closing will be, registered as an agent or salesman of the Placement Agent and in good standing with the NASD.

(c)   Sales of Securities by the Placement Agent will only be made in such jurisdictions in which the Placement Agent is a registered broker-dealer or where an applicable exemption from such registration exists.

(d)   Offers and sales of Securities by the Placement Agent will be made only in accordance with this Agreement and in compliance with the provisions of Rule 506 of Regulation D (it being understood and agreed that the Placement Agent shall be entitled to rely upon the information and statements provided by the Prospective Investors in the Subscription Agreement and Investor Questionnaires), and the Placement Agent will furnish to each Prospective Investor a copy of the Offering Documents prior to the receipt thereby of any Subscription Agreement from such Prospective Investor.

(e)   During the course of the Offering, the Placement Agent and its representatives will not make any untrue statement of a material fact or omit to state a material fact required to be stated, or necessary to make any statement made, by the Placement Agent or its representatives, not misleading concerning the Offering or any matters set forth in or contemplated by the Offering Documents (it being understood that the statements made in the Offering Documents are deemed to be made by the Company and not the Placement Agent, except for information set forth therein based upon written information provided by, or on behalf of, the Placement Agent or any of its representatives for inclusion therein).

(f)   Neither the Placement Agent nor any of its representatives or affiliates, has engaged or will engage, directly or indirectly, in any act or activity that may jeopardize the status of the Offering and sale of the Securities as an exempt transaction under the Act or under all applicable federal and/or state securities or blue sky laws of any jurisdiction in which the Securities may be offered or sold.

5. Placement Agent Compensation; Future Financing.

(a)   The Placement Agent shall be entitled, on each Closing Date, as compensation for its services as Placement Agent under this Agreement, to (i) selling commissions equal to 7% of the gross proceeds received by the Company from the sale of the Debentures (ii) a management fee of 3% of the gross proceeds received by the Company from the sale of the Debentures and (iii) a non-accountable expense allowance equal to 2% of the gross proceeds received by the Company from the sale of the Debentures. All payments hereunder shall be effected at each Closing in immediately available funds.

(b)   In addition to the forgoing cash compensation, the Placement Agent will be entitled to receive placement agent warrants to purchase a number of Shares equal 10% of the shares issuable upon the conversion of the original principal amount of Debentures based upon $3.80 per share (“Agent Warrants”). The Agent Warrants shall be on the same terms as the Investor Warrants except that the Agent Warrants shall contain provisions for “cashless exercise” on the same basis as available to investors and shall not be redeemable for a period equal to nine (9) months after effectiveness of the registration statement be filed by the Company on behalf of the investors in the Offering and provided the registration statement is effective at the time of redemption. The shares underlying the agent Warrants shall be included in the registration statement to be filed by the Company on behalf of the investors in the Offering. The Placement Agent shall have the right, at its option, to request that the Agent Warrants be issued in the names of its officers, employees and registered representatives.

(c)   For a period of 18 months following the end of the Exclusive Period, the Company agrees to pay to Placement Agent at each closing of any other equity financing, convertible debt financing or any instrument convertible into Shares from any Source contacted by Placement Agent on the Company’s behalf and disclosed to the Company in writing: (i) a cash transaction fee in the amount of 10% of the amount of the gross proceeds received by the Company from any such financing, (ii) a non-accountable expense allowance of 1% of the amount of gross proceeds received by the Company from any such financing and (iii) additional Agent Warrants (reflective of 10% of the equity securities issued or equity underlying any convertible securities) . As used in this Agreement, the term “Source” shall be broadly interpreted to include, without limitation, any corporation, company, institution, partnership, individual and all of the Source’s affiliates that are directly or indirectly contacted by Placement Agent for the purpose of investing in the Offering. Placement Agent will periodically provide the Company with a written list of all Sources contacted by Placement Agent.

(d)   The Placement Agent shall also be entitled to receive, during the term of the Warrants, a warrant solicitation fee (“Solicitation Fee”) equal to five percent (5%) of the exercise price of the Warrants, which fee shall be payable within five business days of receipt by the Company of the exercise price from a holder of the Warrants. The Solicitation Fee shall be payable in accordance with the applicable rules of the NASD and the form of warrants issuable to investors shall disclose shall include appropriate disclosure regarding the payment of the Solicitation Fee upon terms acceptable to the Placement Agent. The Company shall not hire any other broker dealer firm other than the Placement Agent to assist it in connection with the solicitation of the exercise of the Warrants.

(e)   The Placement Agent shall not be entitled to additional compensation with respect to any investment in this Offering by investors in the private placement offering completed in July 31, 2006, it being understood and agreed that the sole compensation for an investment from these prior investors shall be determined in accordance with this Section 5. The Company hereby agrees that it shall not call for redemption the warrants held by the Placement Agent (and its associated persons) which were issued in connection with the private placement offering completed in July 2006 prior to June 20, 2006  

6. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the Placement Agent that as of the date hereof and as of each Closing Date (except as disclosed in the Memorandum or contemplated therein):

(a)   Assuming the accuracy of the representations and warranties of the Prospective Investors set forth in the Subscription Agreement and Investor Questionnaire and the representations and warranties of the Placement Agent set forth herein, the Offering Documents (including, without limitation, the Company Documents as defined in clause (c) below) (i) contain at all times during the period from the date hereof to and including each Closing Date, all information required to be contained therein, if any, pursuant to a private offering to all “accredited investors“ under Rule 506 of Regulation D and all applicable federal and/or state securities and blue sky laws, and (ii) do not, and during such period will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances in which they were made, not misleading. Each contract, agreement, instrument, lease, license, or other document required to be described in the Offering Documents shall be, and have been, accurately described therein in all material respects.

(b)   The Offering Documents do not and shall not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements made therein, in the light of the circumstances in which they were made, not misleading.

(c)   The authorized capital stock of the Company consists of 20,000,000 Shares. As of the date hereof, 9,412,259 shares of Common Stock are issued and outstanding, and all such shares are, duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights. In addition, there are (i) warrants outstanding to acquire an aggregate of approximately 614,039 shares of Common Stock and (ii) options outstanding to acquire an aggregate of approximately 2,049,035 shares of Common Stock. The Securities, when issued in accordance with the terms of the Offering, will be validly issued, fully paid and nonassessable and not subject to preemptive or any other similar rights and no personal liability will attach to the ownership thereof. The Shares, when issued in accordance with the terms of the Debentures and/or Warrants, will be validly issued, fully paid and nonassessable and not subject to preemptive or any other similar rights and no personal liability will attach to the ownership thereof . The outstanding options, warrants and other convertible securities of the Company are as set forth in the Memorandum and the Company’s filings with the SEC under the Exchange Act attached as exhibits to the Memorandum (sometimes collectively referred to as the “Company Documents” ). Except as set forth in the warrants issued, and subscription agreements entered into, in connection with Company’s offering completed on July 31, 2006 (the “Prior Offering”), neither the Company nor any Subsidiary is a party to an agreement, instrument or understanding which calls for, and no securities of the Company or any Subsidiary contain provisions relating to, the resetting or repricing of any debt or equity security instrument of the Company or any Subsidiary. The issuance of the Securities or the consummation of the Offering will not trigger any resetting or repricing of any debt or equity security instrument of the Company or any Subsidiary and will not result in any preemptive rights to acquire securities of the Company in favor of any third party.

(d)   Each statute, regulation, legal and governmental proceeding, contract, agreement, instrument, lease, license, or other document required to be described in the Offering Documents has been accurately described therein in all material respects.

(e)   All prior offerings of the Company’s securities complied in all respects with the Act and the rules and regulations promulgated thereunder and all applicable blue sky laws. There are no existing claims, to the knowledge of the Company, which would require the Company to rescind or offer to rescind and outstanding securities of the Company.

(f)   The Company and its Controlled Subsidiaries, are (a) corporations duly organized, validly existing and in good standing under the laws of the respective state of their incorporation, each have full power and authority to own or lease all of the assets owned or leased by each of them and to conduct their respective business as described in the Offering Documents and (b) are duly qualified to do business and in good standing as a foreign corporation in all jurisdictions in which the nature of the activities conducted or the character of the assets owned or leased makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the Company's presently conducted business (taken as a whole with the business of the Controlled Subsidiaries). Complete and correct copies of the certificate of incorporation and of the by-laws of the Company and its Controlled Subsidiaries as in effect on the date hereof have been delivered to First Montauk, and no changes therein will be made on or subsequent to the date hereof and prior to the Final Closing Date except as may be disclosed in the Offering Documents or required pursuant to this Agreement. The term “Controlled Subsidiaries” means any corporation or other organization in which the Company owns, directly or indirectly, (i) an equity or other ownership interest equal to or greater than 50 % or (ii) the right to vote more than 50% of the outstanding voting stock or to elect or appoint a majority of the members of the board of directors.

(g)   Since the dates as of which information is given in the Offering Documents, other than as set forth or contemplated therein, (A) there has not been any material adverse change in the business, prospects, properties, management, financial condition or results of operations of the Company or its Controlled Subsidiaries, (B) the Company has not and will not have paid or declared any dividends or other distributions on its capital stock and (C) there has not been any change in the capital stock of the Company or any material change in the short-term or long-term debt of the Company or its Controlled Subsidiaries.

(h)   The consolidated financial statements, together with related notes and schedules of the Company and its Controlled Subsidiaries, included as part of the Offering Documents (including the financial statements contained in the Company Documents), present fairly the financial position of the Company and its Controlled Subsidiaries in all material respects as of the respective dates and for the periods indicated therein. All audited financial statements, and related notes and schedules, of the Company have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis and the rules of the SEC through the entire period involved. Except as stated in the Offering Documents, the unaudited statements contained in the Offering Documents are consistent with, and have been prepared from the books and records kept by the Company in a manner consistent with past practice and fairly and accurately represent the financial condition of the Company.

(i)   Except as described in the Offering Documents, there is no action, suit, investigation or proceeding pending or, to the Company's knowledge, threatened before or by any Federal or state court, commission, regulatory body, administrative agency or other governmental body, domestic or foreign, or arbitrator to which the Company or its Controlled Subsidiaries is or may become a party or of which any property of the Company or its Controlled Subsidiaries is subject or affected that (i) might affect the consummation of the transactions contemplated under this Agreement, including the issuance or validity of the Securities offered or (ii) would have a material adverse effect on the financial condition, properties, results of operations or businesses of the Company and its Controlled Subsidiaries, taken as a whole (“Material Adverse Effect”).

(j)   The Company and its Controlled Subsidiaries have all approvals, licenses, franchises, authorizations and permits (collectively, “permits”) necessary under all applicable statutes, codes, rules, regulations, orders and decrees of governments or governmental bodies (collectively, “laws”), which are material to the ownership, lease or use of their respective properties or the conduct of their respective businesses as described in the Offering Documents. Neither the Company nor its Controlled Subsidiaries has received notice of any proceedings relating to the revocation or modification of any such permits which, singly or in the aggregate, would have a Material Adverse Effect, and each of the Company and its Controlled Subsidiaries is in all material respects in compliance with such permits and laws.

(k)   The Company and its Controlled Subsidiaries own or are licensed to use all patents, patent applications, inventions, trademarks, trade names, applications for registration of trademarks, copyrights, know-how, trade secrets, licenses and rights in any thereof (“Proprietary Rights”) which are material to the business of the Company and its Controlled Subsidiaries taken as a whole as now conducted and as proposed to be conducted, in each case as described in the Offering Documents. Except as described in the Offering Documents:

(i) the Company and its Controlled Subsidiaries do not have any knowledge of, and the Company and its Controlled Subsidiaries have not given or received any notice of any pending conflict with or infringement of, the rights of others with respect to any Proprietary Rights or with respect to any license of Proprietary Rights;

(ii) no action, suit, arbitration, or legal, administrative or other proceeding, or domestic or foreign governmental investigation is pending or, to the best of the Company's knowledge, threatened, which involves any Proprietary Rights and would have a Material Adverse Effect;

(iii) neither the Company nor its Controlled Subsidiaries is subject to any judgment, order, writ, injunction or decree of any court or any Federal, state, local, foreign or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or any arbitrator, which restricts or impairs the use of any such Proprietary Rights in a manner which would have a Material Adverse Effect on the use of any of the Proprietary Rights;

(iv) no Proprietary Rights used by the Company or its Controlled Subsidiaries and no services or products sold by the Company or its Controlled Subsidiaries, conflict with or infringe upon, to the knowledge of the Company and its Controlled Subsidiaries, any proprietary rights available to any third party;

(v) neither the Company nor its Controlled Subsidiaries has entered into any consent, indemnification, forbearance to sue or settlement agreement with respect to Proprietary Rights other than in the ordinary course of business;

(vi) to the best knowledge of the Company, no claims have been asserted by any person with respect to the validity of or the Company's or its Controlled Subsidiaries' ownership of or right to use the Proprietary Rights and, to the best knowledge of the Company, there is no reasonable basis for any such claim;

(vii) to the best knowledge of the Company, the Proprietary Rights are valid and enforceable and no registration relating thereto has lapsed, expired or been abandoned or canceled or is the subject of cancellation or other adversarial proceedings which would have a Material Adverse Effect, and any applications therefore are pending and are in good standing;

(viii) the Company and its Controlled Subsidiaries have complied, in all material respects, with their respective contractual obligations relating to the protection of the Proprietary Rights used pursuant to licenses; and

(ix) to the best knowledge of the Company, no person is infringing on or violating the Proprietary Rights owned or used by the Company or its Controlled Subsidiaries.

(l)   Except as described in the Offering Documents, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities being registered pursuant to any registration statement filed by the Company under the Act.

(m)   All offers and sales of securities of the Company issued during the three year period prior to the date hereof were at all relevant times duly registered or exempt from the registration requirements of the Act and the rules and regulations thereunder and were duly registered or the subject of an available exemption from the registration requirements of the applicable state securities or Blue Sky laws. The Company has not, directly or indirectly, solicited any offer to buy or offered to sell any securities during the twelve-month period ending on the date hereof which, to the knowledge of the Company, would be integrated with the Offering.

(n)   Neither the Company nor its Controlled Subsidiaries are (i) in violation of its certificate of incorporation or by-laws, (ii) to the best knowledge of the Company, in violation of any statute, law, rule, code, administrative regulation, ordinance, judgment, order or decree of any government, governmental instrumentality, court, domestic or foreign, or arbitration panel or other body applicable to it where such violation would have a Material Adverse Effect or (iii) to the best knowledge of the Company, in default in the performance or observance of any obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, voting agreement, voting trust agreement, loan agreement, bond, debenture, note or other evidence of indebtedness, lease, sublease, license agreement, contract or other agreement or instrument to which it is a party or by which it or any of its respective properties are bound or affected (“Contracts”), where such defaults, singly or in the aggregate, would have a Material Adverse Effect. To the knowledge of the Company, no other party under any Contract is in default in any material respect thereunder which affects the Company.

(o)   The Company has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, the Securities and the Subscription Agreement. This Agreement, the Debentures and Warrants and the Subscription Agreement have been or will be duly and validly authorized, executed and delivered by the Company, and each such agreement constitutes a legal, valid and binding agreement of the Company enforceable against the Company in accordance with its respective terms, except as rights to indemnity and contribution hereunder and thereunder may be limited by the securities laws and public policy of the United States and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws or equitable principles affecting the enforcement of creditors' rights generally;

(p)   The issuance of the Securities and the execution, delivery and performance of this Agreement and the Subscription Agreement, and the consummation of the transactions contemplated hereby and thereby, do not and will not conflict with or result in a material breach or violation of any of the terms or provisions of, or constitute a material default under, or give rise to rights of termination under, or result in the acceleration of any obligation under, or result in the creation or imposition of any lien, charge or encumbrance upon any material property or