PDT, INC.
AMENDED AND RESTATED SELLING AGENT
OPTION AGREEMENT
This PDT, Inc. Selling Agent Option Agreement (the "Agreement") is made and
entered into at Santa Barbara, California, on the date hereinafter set forth by
and between PDT, INC., a Delaware Corporation, hereinafter called the "Company",
and the undersigned, hereinafter called the "Optionee".
WHEREAS:
A. The Optionee has had this Agreement transferred from a person or persons
who acted as an agent of the Company in selling Convertible Notes for the
Company pursuant to the Proposed Terms for Convertible Notes dated (DATE)
(the "Note Offering") pursuant to which the Company offered for sale THREE
MILLION DOLLARS ($3,000,000) of 3 Year Convertible Notes, convertible into
Common Stock of the Company at a price which is the lesser of: (i) the
Offering Price per Share at the Company's Initial Public Offering (the
"IPO"); or (ii) F: per Share; and FOUR DOLLARS ($4.00) per Share; and
B. The Optionee is entitled to an option to acquire the amount of Common Stock
of the Company as set forth on the signature page hereof (the "Option
Shares") at a price per share (the "Option Price") as set forth on the
signature page hereof in the manner hereinafter provided, as of the date
set forth on the signature page hereof (the "Grant Date").
NOW, THEREFORE, in consideration of the premises and promises, warranties and
representations herein contained, it is agreed as follows:
1. GRANT OF OPTION. Subject to the conditions set forth herein, the Company
hereby grants to the Optionee the right, privilege and option to purchase the
Option Shares.
2. METHOD OF EXERCISE. Stock purchased under this Option shall, at the time
of purchase, be paid for in full. To the extent that the right to purchase
shares has accrued hereunder, this Option may be exercised, from time to time,
by written notice to the Company stating the number of shares with respect to
which this Option is being exercised and the time of delivery thereof, which
shall be at least thirty (30) days after the giving of such notice, unless an
earlier date shall have been mutually agreed upon. At the time specified in such
notice, the Company shall, without transfer or issue tax to the Optionee,
deliver to him by certified mail, a certificate or certificates for such shares,
against the payment of the Option Price, in full, for the number of shares to be
delivered, by certified or bank cashier's check, or the equivalent thereof
acceptable to the Company. Provided, however, that the time of such delivery may
be postponed by the Company for such period as may be required for it, with
reasonable diligence, to comply with any requirements of any state or federal
agency or any securities exchange. If the Optionee fails to accept delivery of
and pay for all or any part of the number of shares specified in the notice
given by the Optionee, upon tender and delivery of said shares, the Optionee's
right to exercise this Option with respect to such undelivered shares shall be
terminated. The Option may only be exercised in increments of ONE HUNDRED (100)
shares, or more.
3. TERMINATION OF OPTION. Except as herein otherwise stated, this Option,
to the extent not theretofore exercised, shall terminate forthwith on: December
31, 1999.
4. REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE. The Optionee hereby
represents and warrants to the Company, as of the date hereof and as of the date
or dates on which any Option Shares are purchased hereunder, that Optionee is an
Accredited Investor within the meaning of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act"). The specific category or
categories of Accredited Investor applicable to the undersigned are as follows:
4.1 A. THROUGH C ARE APPLICABLE TO INDIVIDUALS (Please INITIAL applicable
blanks):
A________ Optionee is a director or executive of officer of the Company
B.________ Optionee is a natural person and has a net worth either alone or
with Optionee's spouse, of more than $1,000,000
C._______ Optionee is a natural person and had income in excess of $200,000
($300,000 including income of spouse) during each of the previous two
years and expects to have income in excess of such amounts during the
current year.
4.2 D. THROUGH N ARE APPLICABLE TO NON-INDIVIDUALS (Please INITIAL
applicable blanks):
D. _______Optionee is a trust with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the Securities, and
the purchase is directed by a person with such knowledge and
experience in financial and business matters that he is capable of
evaluating the merits and risks of the potential investment.
E._________ Optionee is a bank as defined in Section 3(a)(2) of the Act.
F.________ Optionee is a savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the Act, whether acting in its
individual or fiduciary capacity.
G.________ Optionee is an insurance company as defined in Section 2(13) of
the Act.
H. ________Optionee is an investment company registered under the
Investment Company Act of 1940 or a business development company as
defined in Section 2(a)(48) of the Act.
I _________Optionee is a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d)
ofthe Small Business Investment Act of 1958.
J._________ Optionee is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974 that
either (i) has its investment decisions made by a plan fiduciary, as
defined by Section 3(21) of such Act, which is a bank, savings and
loan association, insurance company or a registered investment
adviser, or (ii) has total assets in excess of $5,000,000 or, if a
self-directed plan, the investment decisions are made solely by
persons who are Accredited Investors as described herein.
K._________ Optionee is a private business development company as defined
by Section 202(a)(22) of the Investment Advisors Act of 1940.
L._________ Optionee is an organization described in Section 501(c)(3) of
the Internal Revenue Code that has assets in excess of $5,000,000.
M._________ Optionee is a Corporation or Partnership, not formed for the
specific purpose of acquiring the Notes, with total assets in excess
of $5,000,000.
N._________ Optionee is an entity in which all of the equity owners are
Accredited Investors within categories A through M (but not L) above.
4.3 Optionee has a pre-existing personal or business relationship with the
Company or one or more of its officers, directors or controlling persons as more
fully described as follows:
(Describe relationship - if none, so state)
4.4 Optionee is, by reason of Optionee's business or financial experience,
capable of evaluating the merits and risks of this Investment and of protecting
Optionee's own interests in connection with this investment. Briefly described
Optionee's business or financial experience with purchasing securities similar
to the Option Shares or otherwise:
4.5 Optionee acknowledges that Optionee has received and carefully reviewed
a copy of the Note Offering and has read the disclosures set forth in the Note
Offering and any other materials that may have been provided to Optionee.
Optionee has had the opportunity to ask questions and receive answers from the
Company concerning the terms and conditions of the Offering and the Company.
Optionee recognizes that the Company has a limited operating history and is a
speculative venture, and that if an investment is made therein, Optionee may
lose the entire amount of Optionee's investment. Optionee acknowledges that
Optionee has been provided with the opportunity to obtain any additional
information necessary to verify the accuracy of all information provided to
Optionee in the Note Offering.
4.6 In deciding whether to acquire the Option Shares, the Optionee has
relied, and will rely, exclusively upon consultations with his legal, financial
and tax advisors with respect to the nature of the investment and the
information provided by the Company in the Note Offering. None of the Optionee's
advisors are affiliated with, or compensated directly or indirectly, by the
Company or any affiliate or selling agent of the Company.
4.7 Optionee understands that neither the Department of Corporations of the
State of California, nor the Securities and Exchange Commission, nor any other
governmental agency having jurisdiction over the sale and issuance of the Option
Shares will make any finding or determination relating to the appropriateness
for investment of the Option Shares and that none of them has or will recommend
or endorse the Option Shares.
4.8 The Optionee represents that the Option Shares will be purchased for
Optionee's own account for investment and will not be purchased with a view to
the sale or distribution thereof, and that the Optionee has no intention of
distributing or reselling any portion of the Option or the Option Shares which
Optionee is receiving or may purchase. Optionee acknowledges that the Option and
the Option Shares have not been, and will not be, registered under the Act, and
must be held indefinitely unless subsequently registered under the Act or an
exemption for such registration is available. The Optionee also acknowledges
that Optionee is fully aware of the restrictions on disposing of the Option
Shares resulting from the provisions of the Act and the General Rules and
Regulations of the Securities and Exchange Commission thereunder. Optionee
further understands that the Option Shares have not been, and will not be,
qualified under the California Law on the ground that the sale thereof is exempt
under the applicable provisions of the California Law.
4.9 Optionee understands that the ability to transfer the Option Shares is
also restricted under the terms of the Company's Certificate of Incorporation,
and that the Company and the other shareholders of the Company have certain
rights of first refusal with respect to the Option Shares.
4.10 Optionee recognizes that there is not a public market for the shares
of the Company and that there is no assurance that there will be such a market
for these securities. Optionee understands that the shares may have to be held
indefinitely due to the lack of such a market.
4.11 Optionee represents that Optionee possesses such knowledge and
experience in business and financial matters that he is capable of evaluating
the merits and risks of investment in the Option Shares. Optionee also has the
degree of sophistication in these matters necessary to understand (1) the
financial and operational information provided to Optionee relating to the
Company, and (2) the potential risk of losing all or a portion of Optionee's
investment in the Option Shares. The Optionee represents that Optionee is able
to bear the economic risk of a loss of investment in the securities, that
Optionee has funds adequate to meet personal needs and contingencies, and that
Optionee has no need for liquidity of the investment in the Option Shares.
4.12 Optionee recognizes that "stop transfer" instructions will be issued
against any stock certificates under this Option and that the following legends
will be placed on the stock certificates issued for the securities:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED SOLELY FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ADDITIONAL TRANSFER
AND OTHER RESTRICTIONS AND A RIGHT OF FIRST REFUSAL CONTAINED IN THE CERTIFICATE
OF INCORPORATION OF THE CORPORATION. ANY ATTEMPTED TRANSFER WHICH WOULD VIOLATE
THESE RESTRICTIONS IS VOID. COPIES OF THE CERTIFICATE OF INCORPORATION ARE ON
FILE WITH THE SECRETARY OF THE CORPORATION.
5. RECLASSIFICATION, CONSOLIDATION OR MERGER. If, and to the extent that
the number of issued shares of Common Stock of the Company shall be increased or
reduced by a change in par value, split-up, reclassification, distribution of a
dividend payable in stock, or the like (but excluding dividends payable in
cash), the number of Option Shares subject to this Option, and the Option Price
therefore, shall be proportionately adjusted. If the Company is reorganized or
consolidated, or merged with any other corporation, the Optionee shall be
entitled to receive options covering shares of such reorganized, consolidated or
merged Company in the same proportion, at an equivalent price, and subject to
the same conditions. For purposes of the preceding sentence, the excess of the
aggregate fair market value of the shares subject to this Option immediately
after the reorganization, consolidation or merger over the aggregate Option
Price of such shares, shall not be more than the excess of the aggregate fair
market value of all shares subject to this Option immediately before such
reorganization, consolidation or merger over the aggregate Option Price of such
shares, and the new option or the assumption of the old option shall not give
the Optionee additional benefits which he did not have under the old option.
6. RIGHTS PRIOR TO EXERCISE OF OPTION. The Optionee shall have no rights as
a shareholder of shares subject to this Option until payment of the Option Price
and the delivery of such shares as herein provided.
7. RESTRICTIONS ON ISSUANCE OF SHARES. The Company shall not be obligated
to sell and issue any shares pursuant to this Option, unless permission to issue
said shares has first been obtained from the Commissioner of Corporations of the
State of California, and further, unless the shares with respect to which this
Option is exercised are, a the time, effectively registered, or exempt from
registration, under the Securities Act of 1933, as amended.
8. TRANSFER OF OPTION. This Option may be transferred by the Optionee with
the prior written consent of the Company, which shall not be unreasonably
withheld, and subject to the transferee qualifying as an Accredited Investor and
making the same representations to the Company as set forth in Paragraph 5.
hereof.
9. COMPLETE PAYMENT AND RELEASE. The Optionee acknowledges by the
Optionee's signature hereto that Option has received full payment from the
Company for any and all compensation due the Optionee pursuant to the Note
Offering and that the Optionee unconditionally and fully releases the Company
from and against any and all claims against the Company, of any kind or nature,
and whether known or unknown.
The Optionee waives the rights of Section 1542 of the California Civil
Code, which provides:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor."
10. BINDING EFFECT. This Option shall be binding upon the heirs, executors,
administrators and successors of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Selling Agent Option Agreement
to be executed on this _____day of (MONTH) (YEAR).
"Company"
PDT, INC., a Delaware Corporation
By: /s/ Xxxx X. Xxxxxxx
------------------------
Xxxx X. Xxxxxxx
CEO and Chairman
"Optionee"
(NAME)
Address:
(ADDRESS)
Tax Id. or Soc. Sec. Number:
(Social Security #)
OPTION SHARES: NUMBER ( #)
OPTION PRICE: $4.00
