INCENTIVE STOCK OPTION AGREEMENT

THIS INCENTIVE STOCK OPTION AGREEMENT is made and entered into as of this 23rd day of May, 2008, by and between Material Technologies, Inc., a Delaware corporation (“Company”), and Robert M. Bernstein (referred to herein as the “Optionee”), with reference to the following recitals of facts:

WHEREAS, the Board has authorized the granting to Optionee of an incentive stock option (“Option”) to purchase shares of common stock of the Company (the “Shares”) upon the terms and conditions hereinafter stated; and

WHEREAS, the Board and stockholders of the Company have heretofore adopted a 2008 Incentive and Nonstatutory Stock Option Plan, as amended (the “Plan”), pursuant to which this Option is being granted;

WHEREAS, it is the intention of the parties that this Option be an Incentive Stock Option (a “Qualified Stock Option”);

NOW, THEREFORE, in consideration of the covenants herein set forth, the parties hereto agree as follows:

1.             Shares; Price.   The Company hereby grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, 300,000,000 Shares for cash (or other consideration acceptable to the Board of Directors of the Company, in their sole and absolute discretion) at the price of $0.005082 per Share, such price being not less than the fair market value per share of the Shares covered by these Options as of the date hereof and as determined by the Board of Directors of the Company.

2.             Term of Option; Continuation of Employment .  This Option shall expire, and all rights hereunder to purchase the Shares shall terminate, ten years from the date hereof.  This Option shall earlier terminate as set forth in Paragraphs 5 and 6 hereof.  Nothing contained herein shall be construed to interfere in any way with the right of the Company to terminate the employment or engagement, as applicable, of Optionee or to increase or decrease the compensation of Optionee from the rate in existence at the date hereof.

3.             Vesting of Option .  Subject to the provisions of Paragraphs 5 and 6 hereof, this Option shall vest and become exercisable during the term of Optionee's employment or engagement in whole or in part beginning on the date of this Agreement.

4.             Exercise .  In order to exercise this Option with respect to all or any part of the Shares for which this Option is at the time exercisable, Optionee must take the following actions:

(a)           Execute and deliver to the Company a written notice of exercise stating the number of Shares being purchased (in whole shares only) and such other information set forth on the form of Notice of Exercise attached hereto as Appendix A; and

(b)           Pay the aggregate Exercise Price for the purchased shares in one or more of the following forms:

(ii)           A promissory note payable to the Company, but only to the extent authorized by the Company.

Should the Common Stock be registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) at the time the Option is exercised, then the Exercise Price may also be paid as follows:

(iii)           In shares of Common Stock held by Optionee for the requisite period necessary to avoid a charge to the Company’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date; or

(iv)           To the extent the Option is exercised for vested Shares, through a special sale and remittance procedure pursuant to which Optionee shall concurrently provide irrevocable instructions (a) to a Company-approved brokerage firm to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable Federal, State and local income and employment taxes required to be withheld by the Company by reason of such exercise; and (b) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale (a “cashless exercise transaction”).

X = Y (A-B)

A

Where    X =          the number of shares of Common Stock to be issued to the Optionee

A =          the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)

For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended, understood and acknowledged that the Common Stock issuable upon exercise of this Option in a net issuance transaction shall be deemed to have been acquired at the time this Option was issued.  Moreover, it is intended, understood and acknowledged that the holding period for the Common Stock issuable upon exercise of this Option in a net issuance transaction shall be deemed to have commenced on the date this Option was issued.

5.              Termination of Employment or Engagement .  If Optionee shall cease to serve as an employee of the Company for any reason, whether voluntarily or involuntarily, Optionee shall have the right, during the remaining term of the Option, to exercise in whole or in part this Option to the extent, but only to the extent, that this Option was exercisable as of the last day of employment, and had not previously been exercised. The Option may be exercised only with respect to installments that the Optionee could have exercised at the date of termination of employment.

 Notwithstanding anything herein to the contrary, all rights under this Option shall expire in any event on the date specified in Paragraph 2 hereof.

6.              Death of Optionee .  If the Optionee shall die while an employee of the Company, Optionee’s personal representative or the person entitled to Optionee’s rights hereunder may at any time during the remaining term of this Option, exercise this Option and purchase Shares to the extent, but only to the extent, that Optionee could have exercised this Option as of the date of Optionee’s death; provided, in any case, that this Option may be so exercised only to the extent that this option has not previously been exercised by Optionee.

7.              No Rights as Stockholder .  Optionee shall have no rights as a stockholder with respect to the Shares covered by any installment of this Option until the date of the issuance of a stock certificate to Optionee, and no adjustment will be made for dividends or other rights for which the record date is prior to the dat