matechexh10_30.htm


    
      
 

     

    Exhibit 10.30

    

 

    
      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,
 7,695,273 shares of Class A common stock of the Company (the “Option
Shares”) upon exercise at a purchase price of $0.025 per Option Share (the
“Option Price”), representing the fair market value of a share of Class A Common
Stock on the date hereof, it being intended that the Holder shall receive Option
Shares which, upon their exercise, will represent 4% of the Company’s total
outstanding Class A common stock.  This Option is fully
vested. 

          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 Company 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 Company 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:

      
 

      
        
           

        

        
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        (i)       Cash
Exercise: cash, bank or cashiers check, or wire
transfer;

         

        (ii)       Cashless
Exercise: surrender of this Option at the principal office of the
Company together with notice of cashless election, in which event the Company
shall issue Holder a number of shares of common stock computed using the
following formula:

         

        X = Y
(A-B)/A

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.

B = the Exercise
Price.

      

    

     

              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)       Net
Issuance:  through a special sale and remittance procedure
(“Net Issuance Procedure”) pursuant to which the Holder (or any other person or
persons exercising the Option) 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 Option
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;
or

          (iv)       Promissory
Note: through a promissory note payable to the Company, but only
to the extent authorized by the Company.

     

     

    
      
         

      

      
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          In
case of the purchase of less than all the Option Shares, the Company 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 Company 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 Company 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 Company the amount of any such Transfer Tax or
shall have established to the satisfaction of the Company that any such Transfer
Tax has been
paid.

          3.       NO
STOCKHOLDER RIGHTS.  Unless and until this Option is exercised, this
Option shall not entitle the Holder hereof to any voting rights or other rights
as a stockholder of the Company, or to any other rights whatsoever except the
rights herein expressed, and, no dividends shall be payable or accrue in respect
of this
Option.

          4.       RECAPITALIZATION. 
Subject to any required action by the stockholders of the Company, the number of
Option Shares covered by this Option, and the Option Price per Option Share thereof, shall
be proportionately adjusted for any increase or decrease in the number of issued
Option Shares resulting from a subdivision or consolidation of shares or the
payment of a stock dividend, or any other increase or decrease in the number of
such shares affected without receipt of consideration by the Company; provided
however that the conversion of any convertible securities of the Company shall
not be deemed having been “effected without receipt of consideration by the
Company.”

          In
the event of a proposed dissolution or liquidation of the Company, a merger or
consolidation in which the Company is not the surviving entity, or a sale of all
or substantially all of the assets of the Company, at the option of the Holder,
the Holder shall be kept in a position equal to the Option by retaining the
Option or by receiving a similar option in any successor to the Company or,
alternatively, at the election of the Holder, shall be treated as if the Holder
had exercised his right to purchase all or part of the Option Shares immediately
prior to the consummation of the subject
transaction.

          Subject
to any required action by the stockholders of the Company, if the Company shall
be the surviving entity in any merger or consolidation, this Option thereafter
shall pertain to and apply to the securities to which a holder of shares equal
to the Option Shares subject to this Option would have been entitled by reason
of such merger or
consolidation.

          In
the event of a change in the shares of the Company as presently constituted,
which is limited to a change of all of its authorized shares without par value
into the same number of shares with a par value, the shares resulting from any
such change shall be deemed to be the Option Shares within the meaning of this
Agreement.

     

     

    
      
         

      

      
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          To
the extent that the foregoing adjustments relate to shares or securities of the
Company, such adjustments shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive.  Except as
hereinbefore expressly provided, Holder shall have no rights by reason of any
subdivision or consolidation of share of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class, and the number and Option Price of Option
Shares subject to this Option
shall not be affected by, and no adjustments shall be made by reason of, any
dissolution, liquidation, merger or consolidation, or any issue by the Company
of shares of stock of any class or securities convertible into shares of stock
of any
class.

          The
grant of this Option shall not affect in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes in
its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or
assets.

          5.       EXCHANGE. 
This Option is exchangeable upon the surrender hereof by the Holder to the
Company for new Options of like tenor representing in the aggregate the right to
purchase the number of securities purchasable hereunder, each of such new
Options to represent the right to purchase such number of securities as shall be
designated by the Holder at the time of such
surrender.

          Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Option, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it and
reimbursement to the company of all reasonable expenses incidental thereto, and
upon surrender and cancellation hereof, if mutilated, the Company will make and
deliver a new Option of like tenor and amount, in lieu
hereof.

          6.       ELIMINATION
OF FRACTIONAL INTERESTS.  The Company shall not be required to issue
certificates representing fractions of securities upon the exercise of this
Option, nor shall it be required to issue scrip or pay cash in lieu of
fractional interests.  All fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of securities, properties
or rights receivable upon exercise of this
Option.

          7.       RESERVATION
AND LISTING OF SECURITIES.  The Company shall at all times reserve
and keep available out of its authorized shares of common stock or other
securities, solely for the purpose of issuance upon the exercise of this Option,
such number of shares of common stock or other securities, properties or rights
as shall be issuable upon the exercise hereof.  The Company covenants and
agrees that, upon exercise of this Option and payment of the Option Price, all
shares of common stock and other securities issuable upon such exercise shall be
duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any
stockholder.

          8.       ANTIDILUTION
PROTECTION.  The number of Option Shares that Holder is entitled to
purchase upon the exercise of the Option, and the purchase price of those Option
Shares are subject to the adjustments described in Section 4 hereof. 
Further, for the entire term 

    

    
 

    
      
         

      

      
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specified in Section 1
hereof, the Holder (and Holder’s permitted transferees, on a pro rata basis)
shall receive additional options, from time to time, in order to preserve
Holder’s right to purchase at least 4% of the Company’s shares of Class A common
stock then issued, it being agreed that any additional grant will be made on the
business day nearest June 30 and December 31 of each year to adjust the number
of Option Shares which Holder is entitled to purchase such that the combined
total Option Shares that Holder is entitled to purchase pursuant to this Option
(including the number of shares of Class A Common Stock that Holder has
purchased previously pursuant to this Option) when combined with the number of
shares of Class A common stock underlying each such additional grant, comprise
at least 4% of the Company’s total shares of Class A common stock issued and
outstanding.  Each such subsequent option grant for additional Class A
common stock shall be made with an exercise price per share of no greater than
the then current fair market value per share of Class A common
stock.

          9.       RESTRICTION
ON EXERCISE; RESTRICTION ON SALE OF OPTION SHARES.  Pursuant to the
terms of the Amendment to Class A Senior Secured Convertible Debenture, dated
October 27, 2006, between the Company and Palisades Capital, LLC (the “Senior
Debenture”), Holder hereby agrees that he is limited in the number of Options that she may
exercise, such that her receipt
of Option Shares will not exceed an amount equal to $37,500 per month, divided
by the average closing price of the Company’s Class A common stock for the month
prior to such issuance of Option Shares (the “Exercise Restriction”). 
Further, Holder hereby agrees that he shall not (1) sell Option Shares in an
amount more than 1% of the total volume of
the Company’s shares traded during the most recently completed
month
prior to the sale of such Option Shares (the “Prior Month’s Volume”) in any
single trading day, non-cumulative, and
may also not (2) sell, in any single 30-day
period, Option Shares in an
amount that exceeds 20% of the Prior
Month’s Volume (collectively, the “Selling
Restriction”). 

          If,
in the future, the terms of the Senior Debenture cease to be in effect, for any
reason whatsoever, the Exercise Restriction described above shall cease to be in
effect.  Further, the Selling Restriction will be replaced as follows:
Holder hereby agrees that she shall not sell, in any single three-month period,
Option Shares in an amount that exceeds 1% of the outstanding shares of the
Company’s Class A common
stock.

          10.       NOTICE. 
Any notice, request, instruction, or other document required by the terms of
this Option, or deemed by any of the Parties hereto to be desirable, to be given
to any other party hereto shall be in writing and shall be given by personal
delivery, overnight delivery, mailed by registered or certified mail, postage
prepaid, with return receipt requested, or sent by facsimile transmission to the
addresses of the Parties as follows:

     

    
      	
               i.   

            	To:    “Company”	
              Material
      Technologies, Inc.

              Attn: Robert
      M. Bernstein, Chief Executive Officer

              11661 San
      Vicente Boulevard, Suite 707

              Los Angeles,
      California 90049 

              Fax:
      (310) 473-3177

            
	 	 	 
	 ii.  	To:    “Holder”	
              Kelly
      Shuster

              320 N 30th
      St

              Camp
      Hill, Pennsylvania  17011

              Fax:
      (717) 233-0852

            


    

     

     

    
      
         

      

      
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The persons
and addresses set forth above may be changed from time to time by a notice sent
as aforesaid.  If notice is given by personal delivery or overnight
delivery in accordance with the provisions of this Section, such notice shall be
conclusively deemed given at the time of such delivery provided a receipt is
obtained from the recipient.  If notice is given by mail in accordance with
the provisions of this Section, such notice shall be conclusively deemed given
upon receipt and delivery or refusal.  If notice is given by facsimile
transmission in accordance with the provisions of this Section, such notice
shall be conclusively deemed given at the time of delivery if during business
hours and if not during business hours, at the next business day after delivery,
provided a confirmation is obtained by the
sender.

          11.       CONSENT
TO JURISDICTION AND SERVICE.  The Company consents to the
jurisdiction of any court of the State of California, and of any federal court
located in California, in any action or proceeding arising out of or in
connection with this Option.  Orange County, California shall be proper
venue. 

          12.       ASSIGNABILITY. 
This Option may only be exercised by the Holder (including permitted
transferees) during the term of this
Option.  Holder may
transfer or assign this Option, or any rights hereunder, by will, the laws of
intestate succession, gift or for other estate planning
purposes.

          13.       SUCCESSORS. 
All the covenants and provisions of this Option shall be binding upon and inure
to the benefit of the Company, the Holder and their respective legal
representatives, successors and
assigns.

          14.       ATTORNEYS
FEES.  If any legal action or any other proceeding, including
arbitration or action for declaratory relief is brought for the interpretation
or enforcement of this Option, the prevailing party shall be entitled to recover
reasonable attorneys’ fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled. 
“Prevailing Party” shall include without limitation (a) a Party who dismisses an
action in exchange for sums allegedly due; (b) the Party who receives
performance from the other Party of an alleged breach or a desired remedy that
is substantially equivalent to the relief sought in an action or proceeding; or
(c) the Party determined to be the prevailing Party by an arbitrator or a court
of
law.

          15.       GOVERNING
LAW.  This Option shall be governed, construed and interpreted under
the laws of the state of California, without giving effect to the rules
governing conflicts of
law.

          16.       NOTICE
OF RIGHT TO COUNSEL.  Each of the Parties has had the opportunity
to, and has had, this Option reviewed by their respective attorney.  Each
of the Parties affirms to the other that they have apprised themselves of all
relevant information giving rise to this Option and has consulted and discussed
with their independent advisors the provisions of this Option


     

    
      
         

      

      
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and fully understands the
legal consequences of each provision.  Each Party further affirms to the
other that they have not, and do not, rely upon any representation of advice
from the other or from the other Parties’
counsel.

          17.       REPRESENTATIONS
OF
COMPANY.

                     (a)       The
Company agrees to register the shares underlying the Option by filing a
Registration Statement on Form S-8 no later than 30 days from the date hereof,
to permit the public sale by the Holder, and will use its reasonable best
efforts to maintain the effectiveness of this Registration Statement for so long
as an effective Registration Statement is required for the public sale by the
Holder of the Option
Shares.

                     (b)       Company
will pay, when due and payable, any and all federal and state taxes or fees that
may be payable by Company with respect to the grant of this Option or the
issuance of any Option Shares.  However, this does not include any federal,
state or other personal income tax payable by the Holder by virtue of (i) the
grant of this Option; (ii) the issuance of any Option Share upon exercise of the
Option; or (iii) any subsequent disposition of such Option
Shares.

          18.       REPRESENTATIONS
OF
HOLDER.

                     (a)       Holder
has adequate means of providing for current needs and contingencies, has no need
for liquidity in the investment, and is able to bear the economic risk of an
investment in the Option Shares offered by Company of the size
contemplated.  Holder represents that Holder is able to bear the economic
risk of the investment and at the present time could afford a complete loss of
such investment.  Holder has had a full opportunity to inspect the books
and records of the Company and to make any and all inquiries of Company officers
and directors regarding the Company and its business as Holder has deemed
appropriate.

                     (b)       Holder
is an “Accredited Investor” as defined in Regulation D of the Securities Act of
1933 (the “Act”) or Holder, either alone or with Holder’s professional advisers
who are unaffiliated with, have no equity interest in and are not compensated by
Company or any affiliate or selling agent of Company, directly or indirectly,
has sufficient knowledge and experience in financial and business matters that
Holder is capable of evaluating the merits and risks of an investment in the
Option Shares offered by Company and of making an informed investment decision
with respect thereto and has the capacity to protect Holder’s own interests in
connection with Holder’s proposed investment in the Option
Shares.

                     (c)       Holder
is acquiring the Option Shares solely for Holder’s own account as principal, for
investment purposes only and not with a view to the resale or distribution
thereof, in whole or in part, and no other person or entity has a direct or
indirect beneficial interest in such Option
Shares.

                     (d)       Holder
will not sell or otherwise transfer the Option Shares without registration under
the Act or an exemption therefrom and fully understands and agrees that Holder
must bear the economic risk of Holder's purchase for an indefinite period of
time 

    

     

    
 

    
      
         

      

      
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because,
among other reasons, the Option Shares have not been registered under the Act or
under the securities laws of any state and, therefore, cannot be resold,
pledged, assigned or otherwise disposed of unless they are subsequently
registered under the Act and under the applicable securities laws of such states
or unless an exemption from such registration is
available. 

          IN
WITNESS WHEREOF, intending to be legally bound, the Parties hereto have
executed this Stock Option Agreement on the 9th day of April, 2008.

      
 


      
        	COMPANY: 	 	 	HOLDER:	 
	 	 	 	 	 
	
                MATERIAL TECHNOLOGIES, INC.,

                a Delaware
      corporation

              	 	 	
                KELLY
      SHUSTER

                an
      individual

              	 
	 	 	 	 	 
	 	 	 	 	 
	
                /s/ Robert M.
      Bernstein

              	 	 	
                /s/ Kelly
      Shuster 

              	 
	
                By: Robert M.
      Bernstein 

              	 	 	
                By: Kelly
      Shuster

              	 
	
                Its: 
      Chief Executive Officer

              	 	 	
                 

              	 


      

       

       

       

       

       

      
 

    

    
      
         

      

      
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      FORM
OF ELECTION TO PURCHASE

       

    

    
                The
undersigned, a Holder of the attached Option, hereby irrevocably elects to
exercise the purchase right represented by the attached Option Agreement for,
and to purchase shares of common stock of Material Technologies, Inc., a
Delaware corporation and herewith makes payment of $                    
           
therefor, and requests that the certificates for such securities be
issued in the name of, and delivered to                                                                             
, whose address is                                                                                                                    
.




        
          	 Dated:	Signature	 
	 	 	 
	
                   

                	 	 
	 	
                  (Signature
      must conform in all respects to name

                  of Holder of
      such partial interest as specified on the 

                  face of
      the Option Certificate)

                	 
	 	 	 
	 	 	 
	 	
                  (Insert
      Social Security or Other

                  Identifying
      Number of Holder)

                	 


        







 

      
        
           

        

        
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