Exhibit 10.32
STOCK OPTION AGREEMENT
MATERIAL
TECHNOLOGIES, INC.,
a Delaware corporation (the “Company”)
THIS
STOCK OPTION AGREEMENT (this “Option”) is intended to
certify that, pursuant to that certain Consulting Agreement with
the Company of even date herewith, Kelly Shuster, an individual, or
his assigns (collectively, the “Holder”) is entitled,
subject to the terms and conditions set forth herein, to purchase,
24,000 shares of Class B common stock of the Company (the
“Option Shares”) from Robert M. Bernstein, an
individual (the “Seller”), upon exercise at a purchase
price of $0.50 per Option Share (the “Option
Price”).
1.
TERM. Subject to the terms of this Option, the Holder
shall have the right, at any time during the period commencing at
9:00 a.m., Pacific Time, on the 9th day of April, 2008 and ending
at 5:00 p.m., Pacific Time, on the 8th day of April, 2018 (the
“Termination Date”), to purchase from the Seller the
Option Shares upon payment to the Seller of the Option
Price.
Notwithstanding
anything to the contrary contained in this Option or otherwise, the
Holder shall not be required, although it shall have the right, to
exercise this Option.
2.
MANNER OF EXERCISE . Payment of the aggregate Option
Price shall be made as described below. The exercise shall be
made no sooner than 70 days following
delivery by the Holder to Seller of a “notice of
intent” to exercise the Option.
No sooner than 70 days following the receipt of such “notice
of intent” and upon the payment of all or a portion of the
Option Price and delivery of the Election to Purchase, a form of
which is attached hereto, the Seller shall cause to be issued and
cause to be delivered within ten business days to or upon the
written order of the Holder, and in such name or names as the
Holder may designate, a certificate or certificates for the number
of full Option Shares so purchased upon each exercise of the
Option. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such
securities as of the date which is 61 days following surrender of
the Option (or if less than the entire Option is exercised, upon
the delivery of the new Option described below) and payment of the
Option Price, as aforesaid, notwithstanding that the certificate or
certificates representing such securities shall not actually have
been delivered or that the stock transfer books of the Company
shall then be closed. The Option shall be exercisable, at the
election of each Holder, either in full or from time to time in
part and, in the event that a certificate evidencing the Option is
exercised in respect of less than all of the Option Shares
specified therein at any time prior to the Termination Date, a new
certificate evidencing the remaining portion of the Option shall be
issued by the Company to such Holder.
Payment
of the Option Price may be made by either of the following, or a
combination thereof, at the election of Holder:
(i)
Cash Exercise : cash, bank or cashiers check, or wire
transfer;
(ii)
Cashless Exercise : surrender of this Option at the
known address of the Seller together with notice of cashless
election, in which event the Seller shall issue Holder a number of
shares of common stock computed using the following
formula:
where: X
= the number of shares of common stock to be issued to
Holder.
Y = the number
of shares of common stock for which this Option is being
exercised.
A = the Market
Price of one share of common stock (for purposes of this Section
3(ii), the “Market Price” shall be defined as the
average closing price of the common stock for the five trading days
prior to the date of exercise of this Option (the “Average
Closing Price”), as reported by the OTC Bulletin or in any
over-the-counter market, provided, however, that if the common
stock is listed on a stock exchange, the Market Price shall be the
Average Closing Price on such exchange for the five trading days
prior to the date of exercise of the Options. If the common
stock is/was not traded during the five trading days prior to the
date of exercise, then the closing price for the last publicly
traded day shall be deemed to be the closing price for any and all
(if applicable) days during such five trading day
period.
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 cashless exercise
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 cashless exercise transaction
shall be deemed to have commenced on the date this Option was
issued.
(iii)
Promissory Note : through a promissory note payable
to the Seller, but only to the extent authorized by the Seller.
In case
of the purchase of less than all the Option Shares, the Seller
shall cancel this Option upon the surrender hereof and shall
execute and deliver a new Option of like tenor for the balance of
the Option Shares. Upon the exercise of this Option, the
issuance of certificates for securities, properties or rights
underlying this Option shall be made forthwith (and in any event
within five business days thereafter) without charge to the Holder
including, without limitation, any tax that may be payable in
respect of the issuance thereof, and such certificates shall be
issued in such names as may be directed by the Holder: provided,
however, that the Seller shall not be required to pay any tax in
respect of income or capital gain of the Holder or any tax which
may be payable in respect of any transfer involved in the issuance
and delivery of any such certificates in a name other than that of
the Holder (a “Transfer Tax”), and the Seller shall not
be required to issue or deliver such certificates unless or until
the person or persons requesting the issuance thereof shall have
paid to the Seller the amount of any such Transfer Tax or shall
have established to the satisfaction of the Seller that any such
Transfer Tax has been paid.
3.
NO STOCKHOLDER RIGHTS . Unless and until this Option
is e
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