STOCK AND WARRANT PURCHASE AGREEMENT
ParkerVision, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned, ___________________ (the "Investor"), hereby confirms its
agreement with you as follows:
1. This Stock and Warrant Purchase Agreement (the "Agreement") is made as of
February __, 2006 between ParkerVision, Inc., a Florida corporation (the
"Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to ________ shares
(the "Shares") of common stock of the Company, $.01 par value per share (the
"Common Stock"), and Redeemable Warrants (the "Warrants") to purchase up to
_______ shares of Common Stock at an exercise price of $8.50 per share (the
"Warrant Shares"), to certain investors in a private placement (the "Offering").
3. The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor the number of Shares
and Warrants to purchase the number of Warrant Shares listed across from the
Investor's name on Schedule A hereto under the heading "Shares and Warrants
Purchased", for an aggregate purchase price of $7.50 per Share and Warrant to
purchase up to .25 Warrant Shares, or an aggregate purchase price in the amount
listed across from the Investor's name on Schedule A hereto under the heading
"Purchase Price", pursuant to the Terms and Conditions for Purchase of Shares
and Warrants attached hereto as Annex I and incorporated herein by reference as
if fully set forth herein (the "Terms and Conditions"). This Stock and Warrant
Purchase Agreement, together with the Terms and Conditions which are
incorporated herein by reference as if fully set forth herein, may hereinafter
be referred to as the "Agreement." Unless otherwise requested by the Investor,
certificates representing the Shares and the Warrant purchased by the Investor
will be registered in the Investor's name and address as set forth on Schedule
A. The Warrant shall have the rights, preferences, privileges, redemption
provisions and restrictions as set forth in the form of Warrant attached as
Exhibit B.
4. The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or persons known to it to be affiliates of the Company, (b) neither
it, nor any group of which it is a member or to which it is related,
beneficially owns (including the right to acquire or vote) any securities of the
Company and (c) it has no direct or indirect affiliation or association with any
NASD member as of the date hereof. Exceptions:
_______________________________________________________________________________.
(If no exceptions, write "none." If left blank, response will be deemed to be
"none.")
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose. By executing
this Agreement, the Investor acknowledges that the Company may use the
information in paragraph 4 above and the name and address information below in
preparation of the Registration Statement (as defined in Annex 1). This
Agreement may be executed in separate counterparts, each of which shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.
AGREED AND ACCEPTED: Investor:
ParkerVision, Inc. --------------------------------
By:
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Print Name:
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Title:
-----------------------------------
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By: Xxxxxxx Xxxxxxxx Address:
Title: Chief Financial Officer ---------------------------------
Tax ID No.:
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Contact name:
----------------------------
Telephone:
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Name in which shares should be registered
(if different):
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES AND WARRANTS
1. Authorization and Sale of the Shares. Subject to these Terms and
Conditions, the Company has authorized the sale of up to ________ Shares and
Redeemable Warrants to purchase up to _________ Warrant Shares. The Company
reserves the right to increase or decrease this number.
2. Agreement to Sell and Purchase the Shares; Subscription Date.
2.1 At the Closing (as defined in Section 3), the Company will sell
to the Investor, and the Investor will purchase from the Company, upon the terms
and conditions hereinafter set forth, the number of Shares and a Warrant to
purchase the number of Warrant Shares each as set forth in Section 3 of the
Stock and Warrant Purchase Agreement to which these Terms and Conditions are
attached at the purchase price set forth thereon.
2.2 The Company may enter into the same form of Stock and Warrant
Purchase Agreement, including these Terms and Conditions, with other investors
(the "Other Investors") and expects to complete sales of Shares and Warrants to
them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the "Investors," and the Stock and Warrant Purchase
Agreement to which these Terms and Conditions are attached and the Stock and
Warrant Purchase Agreements (including attached Terms and Conditions) executed
by the Other Investors are hereinafter sometimes collectively referred to as the
"Agreements.") The Company may accept executed Agreements from Investors for the
purchase of Shares and Warrants commencing upon the date on which the Company
provides the Investors with the proposed purchase price per Share and Warrant
exercise price and concluding upon the date (the "Subscription Date") on which
the Company has (i) executed Agreements with Investors for the purchase of at
least 2,000,000 Shares and Warrants to purchase at least 500,000 Warrant Shares,
and (ii) notified Xxxxxx Xxxxxxx Corp., in its capacity as placement agent for
this transaction, in writing that it is no longer accepting additional
Agreements from Investors for the purchase of Shares and Warrants. The Company
may not enter into any Agreements after the Subscription Date except in respect
of up to 54,330 Shares and warrants to purchase up to 13,583 Shares offered to
Tyco Sigma Limited and Xxxxx Xxxxxxx pursuant to the exercise of pre-emptive
rights previously granted to such persons (the "Pre-emptive Rights").
2.3 The obligations of each Investor under any Agreement are several
and not joint with the obligations of any Other Investor, and no Investor shall
be responsible in any way for the performance of the obligations of any other
Investor under any Agreement. Nothing contained herein, and no action taken by
any Investor hereto, shall be deemed to constitute the Investors as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Investors are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated hereby,
provided that such obligations or the transactions contemplated hereby may be
modified, amended or waived in accordance with Section 9 below. Each Investor
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement (provided, that such
rights may be modified, amended or waived in accordance with Section 9 below),
and it shall not be necessary for any Other Investor to be joined as an
additional party in any proceeding for such purpose.
3. Delivery of the Shares at Closing. The completion of the purchase and
sale of the Shares and Warrants (the "Closing") shall occur on February __, 2006
(the "Closing Date"), at the offices of the Company's counsel, or at such other
time as the Investor and Company may mutually agree. At the Closing, the Company
shall deliver to the Investor one or more stock certificates representing the
number of Shares and a Warrant representing the number of Warrant Shares, in
each case set forth pursuant to Section 3 of the Stock and Warrant Purchase
Agreement, each such certificate to be registered in the name of the Investor
or, if so indicated on the signature page of the Stock and Warrant Purchase
Agreement, in the name of a nominee designated by the Investor.
The Company's obligation to issue the Shares and Warrant to the Investor
shall be subject to the following conditions, any one or more of which may be
waived by the Company: (a) completion of the purchases and sales under the
Agreements with the Other Investors; and (b) the accuracy of the representations
and warranties made by the Investors and the fulfillment of those undertakings
of the Investors to be fulfilled prior to the Closing.
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The Investor's obligation to purchase the Shares and Warrant shall be
subject to the following conditions, any one or more of which may be waived by
the Investor: (a) receipt by the Investor of certificates evidencing the Shares
and Warrants, (b) Investors shall have executed Agreements for the purchase of
at least 2,000,000 Shares and Warrants to purchase at least 500,000 Warrant
Shares, (c) the representations and warranties of the Company set forth herein
shall be true and correct as of the Closing Date in all material respects
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such date)
and (d) the Investor shall have received such documents as such Investor shall
reasonably have requested, including, a standard opinion of the Company's
counsel, addressed to the Investors and the placement agent, as to the matters
set forth in Section 4.2 and as to exemption from the registration requirements
of the Securities Act of 1933, as amended (the "Securities Act"), of the sale of
the Shares and Warrants.
4. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Investor, as follows:
4.1 Organization. The Company is duly organized and validly existing
in good standing under the laws of the jurisdiction of its organization. Each of
the Company and its Subsidiaries (as defined in Rule 405 under the Securities
Act) has full power and authority to own, operate and occupy its properties and
to conduct its business as presently conducted and as described in the documents
filed by the Company under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), since the end of its most recently completed fiscal year
through the date hereof, including, without limitation, its most recent report
on Form 10-K (the "Exchange Act Documents") and is registered or qualified to do
business and in good standing in each jurisdiction in which the nature of the
business conducted by it or the location of the properties owned or leased by it
requires such qualification and where the failure to be so qualified would have
a material adverse effect upon the condition (financial or otherwise), earnings,
business, properties or operations of the Company and its Subsidiaries,
considered as one enterprise (a "Material Adverse Effect"), and no proceeding
has been instituted in any such jurisdiction, revoking, limiting or curtailing,
or seeking to revoke, limit or curtail, such power and authority or
qualification.
4.2 Due Authorization and Valid Issuance. The Company has all
requisite power and authority to execute, deliver and perform its obligations
under the Agreements and the Warrants, and the Agreements and the Warrants have
been duly authorized and validly executed and delivered by the Company and
constitute legal, valid and binding agreements of the Company enforceable
against the Company in accordance with their terms, except as rights to
indemnity and contribution may be limited by state or federal securities laws or
the public policy underlying such laws, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
The Shares and the Warrant being purchased by the Investor hereunder and the
Warrant Shares issuable pursuant to the Warrant will, upon issuance and payment
therefore pursuant to the terms hereof, be duly authorized, validly issued,
fully-paid and nonassessable.
4.3 Non-Contravention. The execution and delivery of the Agreements
and the Warrants, the issuance and sale of the Shares and the Warrants under the
Agreements and the Warrant Shares under the Warrant, the fulfillment of the
terms of the Agreements and the Warrants and the consummation of the
transactions contemplated thereby will not (A) conflict with or constitute a
violation of, or default (with the passage of time or otherwise) under, (i) any
material bond, debenture, note or other evidence of indebtedness, lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which the Company or any Subsidiary is a party
or by which it or any of its Subsidiaries or their respective properties are
bound (other than notice required to be delivered to each of Tyco Sigma Limited,
Leucadia National Corporation and Xxxxx Xxxxxxx relating to the Pre-emptive
Rights in respect of the Shares), (ii) the charter, by-laws or other
organizational documents of the Company or any Subsidiary, or (iii) any law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company or any
Subsidiary or their respective properties, except in the case of clauses (i) and
(iii) for any such conflicts, violations or defaults which are not reasonably
likely to have a Material Adverse Effect or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of the Company or any
Subsidiary or an acceleration of indebtedness pursuant to any obligation,
agreement or condition contained in any material bond, debenture, note or any
other evidence of indebtedness or any material indenture, mortgage, deed of
trust or any other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them is bound or to which any of the
material property or assets of the Company or any Subsidiary is subject. No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body in the United States or any other person is required for
the execution and delivery of the Agreements and the Warrants and the valid
issuance and sale of the Shares and Warrants to be sold pursuant to the
Agreements, and the valid issuance of the Warrant Shares under the Warrant,
other than such as have been made or obtained, and except for any post-closing
securities filings or notifications required to be made under federal or state
securities laws.
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4.4 Capitalization. The capitalization of the Company as of
September 30, 2005 is as set forth in the most recent applicable Exchange Act
Documents. As of December 31, 2005, the Company had 20,958,765 shares of Common
Stock outstanding and 6,383,963 stock options and warrants outstanding. The
Company has not issued any capital stock since that date other than pursuant to
(i) employee benefit plans disclosed in the Exchange Act Documents, or (ii)
outstanding warrants, options or other securities disclosed in the Exchange Act
Documents. The Shares and Warrants to be sold pursuant to the Agreements, and
the Warrant Shares to be issued pursuant to the Warrants, have been duly
authorized, and when issued and paid for in accordance with the terms of the
Agreements and the Warrants, as the case may be, will be duly and validly
issued, fully paid and nonassessable, subject to no lien, claim, or encumbrance.
The outstanding shares of capital stock of the Company have been duly and
validly issued and are fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and were not issued in
violation of any preemptive rights or similar rights to subscribe for or
purchase securities. Except as set forth in or contemplated by the Exchange Act
Documents, there are no outstanding rights (including, without limitation,
preemptive rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any unissued shares of capital stock or other equity
interest in the Company or any Subsidiary, or any contract, commitment,
agreement, understanding or arrangement of any kind to which the Company is a
party or of which the Company has knowledge and relating to the issuance or sale
of any capital stock of the Company or any Subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options. Without
limiting the foregoing, no preemptive right, co-sale right, right of first
refusal, registration right, or other similar right exists with respect to the
Shares, the Warrants or the Warrant Shares or the issuance and sale thereof. No
further approval or authorization of any stockholder, the Board of Directors of
the Company or others is required for the issuance and sale of the Shares, the
Warrants and the Warrant Shares. The Company owns the entire equity interest in
each of its Subsidiaries, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest, other than as described in the
Exchange Act Documents. Except as disclosed in the Exchange Act Documents, there
are no stockholders agreements, voting agreements or other similar agreements
with respect to the Common Stock to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company's stockholders.
4.5 Legal Proceedings. There is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened to which the
Company or any Subsidiary is or may be a party or of which the business or
property of the Company or any Subsidiary is subject that is not disclosed in
the Exchange Act Documents.
4.6 No Violations. Neither the Company nor any Subsidiary is in
violation of its charter, bylaws, or other organizational document, or in
violation of any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any Subsidiary, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, or is in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in any material respect in the performance of any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or by which the properties of the Company or any Subsidiary
are bound, which would be reasonably likely to have a Material Adverse Effect.
4.7 Governmental Permits, Etc. With the exception of the matters
which are dealt with separately in Sections 4.1, 4.12, 4.13 and 4.14, each of
the Company and its Subsidiaries has all necessary franchises, licenses,
certificates and other authorizations from any foreign, federal, state or local
government or governmental agency, department, or body that are currently
necessary for the operation of the business of the Company and its Subsidiaries
as currently conducted and as described in the Exchange Act Documents except
where the failure to currently possess could not reasonably be expected to have
a Material Adverse Effect.
4.8 Intellectual Property. Except as specifically disclosed in the
Exchange Act Documents (i) to the knowledge of the Company, each of the Company
and its Subsidiaries owns or possesses sufficient rights to conduct its business
in the ordinary course, including, without limitation, rights to use all
material patents, patent rights, industry standards, trademarks, copyrights,
licenses, inventions, trade secrets, trade names and know-how (collectively,
"Intellectual Property") described or referred to in the Exchange Act Documents
as owned or possessed by it or that are necessary for the conduct of its
business as now conducted or as proposed to be conducted except where the
failure to currently own or possess would not have a Material Adverse Effect
("Company Intellectual Property"), (ii) to the knowledge of the Company, neither
the Company nor any of its Subsidiaries is infringing any rights of a third
party with respect to any Intellectual Property that, individually or in the
aggregate, would have a Material Adverse Effect, and neither the Company nor any
of its Subsidiaries has received any notice of, or has any knowledge of, any
asserted infringement by the Company or any of its Subsidiaries of, any rights
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of a third party with respect to any Intellectual Property that, individually or
in the aggregate, would have a Material Adverse Effect and (iii) neither the
Company nor any of its Subsidiaries has received any notice of, or has any
knowledge of, infringement by a third party with respect to any Intellectual
Property rights of the Company or of any Subsidiary that, individually or in the
aggregate, would have a Material Adverse Effect. Company Intellectual Property
does not include any Publicly Available Software and the Company has not used
Publicly Available Software in whole or in part in the development of any part
of Company Intellectual Property in a manner that may subject the Company or
Company Intellectual Property in whole or in part, to all or part of the license
obligations of any Publicly Available Software. "Publicly Available Software"
means each of (i) any software that contains, or is derived in any manner (in
whole or in part) from, any software that is distributed as free software, open
source software (e.g. Linux), or similar licensing and distribution models; and
(ii) any software that requires as a condition of use, modification, and/or
distribution of such software that such software or other software incorporated
into, derived from, or distributed with such software (a) be disclosed or
distributed in source code form; (b) be licensed for the purpose of making
derivative works; or (c) be redistributable at no or minimal charge. Publicly
Available Software includes, without limitation, software licensed or
distributed under any of the following licenses or distribution models similar
to any of the following: (a) GNU General Public License (GPL) or Lesser/Library
GPL (LGPL), (b) the Artistic License (e.g. PERL), (c) the Mozilla Public
License, (d) the Netscape Public License, (e) the Sun Community Source License
(SCSL), the Sun Industry Source License (SISL), and the Apache Server License.
4.9 Financial Statements. The financial statements of the Company
and the related notes contained in the Exchange Act Documents comply as to form
in all material respects with applicable rules and regulations of the SEC and
present fairly, in accordance with generally accepted accounting principles, the
financial position of the Company and its Subsidiaries as of the dates
indicated, and the results of its operations and cash flows for the periods
therein specified consistent with the books and records of the Company and its
Subsidiaries except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which are not expected to
be material in amount. Such financial statements (including the related notes)
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods therein specified, except
as may be disclosed in the notes to such financial statements, or in the case of
unaudited statements, as may be permitted by the Securities and Exchange
Commission (the "SEC") on Form 10-Q under the Exchange Act and except as
disclosed in the Exchange Act Documents. The other financial information
contained in the Exchange Act Documents has been prepared on a basis consistent
with the financial statements of the Company.
4.10 No Material Adverse Change. Except as disclosed in the Exchange
Act Documents, since September 30, 2005, there has not been (i) any material
adverse change in the financial condition or earnings of the Company and its
Subsidiaries considered as one enterprise, (ii) any material adverse event
affecting the Company or its Subsidiaries, (iii) any obligation, direct or
contingent, that is material to the Company and its Subsidiaries considered as
one enterprise, incurred by the Company, except obligations incurred in the
ordinary course of business, (iv) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company or any of its
Subsidiaries, or (v) any loss or damage (whether or not insured) to the physical
property of the Company or any of its Subsidiaries which has been sustained
which has a Material Adverse Effect.
4.11 Disclosure. The representations and warranties of the Company
contained in this Section 4 as of the date hereof and as of the Closing Date, do
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. Except
with respect to the material terms and conditions of the transaction
contemplated by the Agreements, which shall be publicly disclosed by the Company
pursuant to Section 16 hereof, the Company confirms that neither it nor any
person acting on its behalf has provided Investor with any information that the
Company believes constitutes material, non-public information. The Company
understands and confirms that Investor will rely on the foregoing
representations in effecting transactions in securities of the Company.
4.12 NASDAQ Compliance. The Company's Common Stock is registered
pursuant to Section 12(g) of the Exchange Act and is listed on The Nasdaq Stock
Market, Inc. National Market (the "Nasdaq National Market"), and the Company has
taken no action, or failed to take any action designed to, or likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or de-listing the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the SEC or the National Association of
Securities Dealers, Inc. ("NASD") is contemplating terminating such registration
or listing. The Company is currently in compliance with all NASD and Nasdaq
Marketplace rules necessary for the continued quotation of the Company's Common
Stock on the Nasdaq National Market. The issuance of the Shares and the Warrant
Shares does not require shareholder approval, including, without limitation,
under Nasdaq Marketplace Rule 4350(i).
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4.13 Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Exchange Act during
the 12 months preceding the date of this Agreement. The Company is eligible to
use Form S-3 to register the Shares to be offered for the account of the
Investors. The following documents complied in all material respects with the
SEC's requirements as of their respective filing dates, and the information
contained therein as of the date thereof did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances under
which they were made not misleading:
(a) Annual Report on Form 10-K for the year ended December 31,
2004, as amended on April 27, 2005 and September 28, 2005,
Quarterly Reports on Form 10-Q for the quarters ended
September 30, 2005, June 30, 2005 and March 31, 2005, Proxy
Statement on Schedule 14A filed on July 6, 2005 and Current
Report on Form 8-K filed on November 21, 2005; and
(b) all other documents, if any, filed by the Company with the
SEC during the one-year period preceding the date of this
Agreement pursuant to the reporting requirements of the
Exchange Act.
4.14 Listing. The Company shall comply with all requirements of the
NASD and pay any fees required thereby with respect to the issuance of the
Shares, the Warrants and the Warrant Shares, and the listing thereof on the
Nasdaq National Market.
4.15 No Manipulation of Stock. The Company has not taken and will
not, in violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares or
the Warrant Shares.
4.16 Company not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and immediately
after receipt of payment for the Shares and Warrants will not be, an "investment
company," an "affiliated person" of, "promoter" for or "principal underwriter"
for, or an entity "controlled" by an "investment company," within the meaning of
the Investment Company Act and shall conduct its business in a manner so that it
will not become subject to the Investment Company Act.
4.17 Foreign Corrupt Practices. Neither the Company, nor to the best
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (i) directly or indirectly, used any corrupt funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
4.18 Accountants. To the Company's knowledge,
PricewaterhouseCoopers, LLP, who the Company expects will consent to the
incorporation by reference of its report with respect to the consolidated
financial statements of the Company to be included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2005 into the Registration
Statement (as defined below) and the prospectus which forms a part thereof, are
independent accountants as required by the Securities Act and the rules and
regulations promulgated thereunder.
4.19 Contracts. The contracts described in the Exchange Act
Documents that are material to the Company are in full force and effect on the
date hereof, and neither the Company nor, to the Company's knowledge, any other
party to such contracts is in breach of or default under any of such contracts
which would have a Material Adverse Effect.
4.20 Taxes. The Company has filed all necessary federal, state and
foreign income and franchise tax returns when due (or obtained appropriate
extensions for filing) and has paid or accrued all taxes shown as due thereon,
and the Company has no knowledge of a tax deficiency which has been or might be
asserted or threatened against it which would have a Material Adverse Effect.
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4.21 Transfer Taxes. On the Closing Date, all stock transfer or
other taxes (other than income taxes) which are required to be paid in
connection with the sale and transfer of the Shares and the Warrant to be sold
to the Investor hereunder will be, or will have been, fully paid or provided for
by the Company and all laws imposing such taxes will be or will have been fully
complied with. Upon the issuance of the Warrant Shares pursuant to the Warrant,
all stock transfer or other taxes (other than income taxes) which are required
to be paid in connection therewith will be, or will have been, fully paid or
provided for by the Company and all laws imposing such taxes will be or will
have been fully complied with.
4.22 Private Offering. Assuming the correctness of the
representations and warranties of the Investors set forth in Section 5 hereof,
the offer and sale of Shares and Warrants hereunder is exempt from registration
under the Securities Act. The Company has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
this Offering and sale of the Shares and the Warrants other than the documents
of which this Agreement is a part or the Exchange Act Documents. The Company has
not in the past nor will it hereafter take any action independent of the
placement agent to sell, offer for sale or solicit offers to buy any securities
of the Company which would bring the offer, issuance or sale of the Shares and
the Warrants as contemplated by this Agreement, within the provisions of Section
5 of the Securities Act, unless such offer, issuance or sale was or shall be
within the exemptions of Section 4 of the Securities Act. Neither the Company
nor any person acting on behalf of the Company (other than Xxxxxx Xxxxxxx Corp.
and other permitted sellers) has offered or sold any of the Shares by any form
of general solicitation or general advertising. The Company has offered the
Shares for sale only to the Investors and certain other "accredited investors"
within the meaning of Rule 501 under the Securities Act.
4.23 Disclosure Controls and Procedures; Internal Controls. At all
times since first required by all applicable Exchange Act rules, the Company has
established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls
and procedures to ensure that material information relating to the Company,
including its Subsidiaries, is made known to the certifying officers by others
within those entities, particularly during the period in which the Form 10-K or
Form 10-Q, as the case may be, is being prepared. The Company's certifying
officers have evaluated the effectiveness of the Company's disclosure controls
and procedures as of the end of the period covered by each Form 10-K or Form
10-Q for which such evaluation was required by applicable Exchange Act rules, as
the case may be (each such date, the "Evaluation Date"). The Company presented
in each such Form 10-K or Form 10-Q, as the case may be, the conclusions of the
certifying officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date. Since the most
recent Evaluation Date, there have been no significant changes in the Company's
internal controls (as such term is used in Item 307(b) of Regulation S-K under
the Exchange Act) or, to the Company's knowledge, in other factors that could
significantly affect the Company's internal controls.
4.24 Transactions With Affiliates. Except as disclosed in the
Exchange Act Documents, none of the officers or directors of the Company is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer or director or, to the knowledge of
the Company, any entity in which any officer or director has a substantial
interest or is an officer, director, trustee or partner.
4.25 Non-Public Information. The Company has not disclosed to the
Investor information that would constitute material non-public information as of
the Closing Date other than the existence of the transaction contemplated
hereby.
4.26 Insurance. The Company maintains insurance of the types and in
the amounts that the Company reasonably believes is adequate for its businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against by similarly situated
companies, all of which insurance is in full force and effect.
4.27 Placement Agent. The Company shall be responsible for the
payment of any placement agent's fees, financial advisory fees, or brokers'
commissions (other than for persons engaged by an Investor or its investment
advisor) relating to or arising out of the transactions contemplated by the
Agreements. The Company shall pay, and hold the Investor harmless against, any
liability, loss or expense (including, without limitation, attorney's fees and
out-of-pocket expenses) arising in connection with any claims relating to
placement agent fees, financial advisory fees or brokers' commissions.
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5. Representations, Warranties and Covenants of the Investor.
5.1 The Investor represents and warrants to, and covenants with, the
Company that: (i) either (A) the Investor is an "accredited investor" as defined
in Regulation D under the Securities Act and the Investor is also knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions with
respect to investments in shares presenting an investment decision like that
involved in the purchase of the Shares and the Warrant, including investments in
securities issued by the Company and investments in comparable companies, and
has requested, received, reviewed and considered all information it deemed
relevant in making an informed decision to purchase the Shares and the Warrant
or (B) the Investor is not a U.S. Person (as such term is defined in Rule 902(k)
of the Securities Act), the Investor was physically outside of the United States
at the time the offer to purchase the Shares was received by the Investor, the
Investor does not currently reside in the United States and the Investor
understands and acknowledges that (a) the Shares and the Warrant Shares have not
been and will not be at the time of issuance registered under the Securities
Act, and may not be offered or sold in the United States or to, or for the
account or benefit of, any U.S. person, unless such Shares and Warrant Shares
are registered under the Securities Act or such offer or sale is made pursuant
to an exemption from the registration requirements of the Securities Act and (b)
the Shares and Warrant are being offered and sold to the Investor pursuant to
the terms of Regulation S under the Securities Act, which permit securities to
be sold to non-U.S. persons in transactions consummated outside of the United
States, subject to certain conditions; (ii) the Investor is acquiring the number
of Shares and Warrant to purchase the number of Warrant Shares set forth in
Section 3 of the Stock and Warrant Purchase Agreement in the ordinary course of
its business and for its own account for investment only and with no present
intention of distributing any of such Shares or Warrant Shares or any
arrangement or understanding with any other persons regarding the distribution
of such Shares or Warrant Shares; (iii) the Investor will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares or Warrant Shares except in compliance with the Securities Act,
applicable state securities laws and the respective rules and regulations
promulgated thereunder; (iv) the Investor has answered all questions on the
Investor Questionnaire for use in preparation of the Registration Statement and
the answers thereto are true, correct and complete as of the date hereof and
will be true, correct and complete as of the Closing Date; (v) the Investor will
notify the Company immediately of any change in any of such information until
such time as the Investor has sold all of its Shares and Warrant Shares or until
the Company is no longer required to keep the Registration Statement effective;
and (vi) the Investor has, in connection with its decision to purchase the
number of Shares and Warrant Shares set forth in Section 3 of the Stock and
Warrant Purchase Agreement, relied only upon the Exchange Act Documents and the
representations and warranties of the Company contained herein. The Investor
understands that its acquisition of the Shares and Warrant has not been
registered under the Securities Act or registered or qualified under any state
securities law in reliance on specific exemptions therefrom, which exemptions
may depend upon, among other things, the bona fide nature of the Investor's
investment intent as expressed herein. Subject to compliance with the Securities
Act, applicable securities laws and the respective rules and regulations
promulgated thereunder, nothing contained herein shall be deemed a
representation or warranty by such Investor to hold the Shares or Warrant Shares
for any period of time. Investor has completed or caused to be completed and
delivered to the Company the Investor Questionnaire, which questionnaire is
true, correct and complete in all material respects.
5.2 The Investor acknowledges, represents and agrees that no action
has been or will be taken in any jurisdiction outside the United States by the
Company that would permit an offering of the Shares, Warrant or Warrant Shares,
or possession or distribution of offering materials in connection with the issue
of the Shares, Warrant or Warrant Shares, in any jurisdiction outside the United
States where legal action by the Company for that purpose is required. Each
Investor outside the United States will comply with all applicable laws and
regulations in each foreign jurisdiction in which it purchases, offers, sells or
delivers Shares, the Warrant or Warrant Shares or has in its possession or
distributes any offering material, in all cases at its own expense.
5.3 The Investor hereby covenants with the Company not to make any
sale of the Shares, Warrant or Warrant Shares without complying with the
provisions of this Agreement and without causing the prospectus delivery
requirement under the Securities Act to be satisfied (whether by delivery of the
Prospectus or pursuant to and in compliance with an exemption from such
requirement), and the Investor acknowledges that the certificates evidencing the
Shares and Warrant Shares will be imprinted with a legend that prohibits their
transfer except in accordance therewith. The Investor acknowledges that there
may occasionally be times when the Company determines that it must suspend the
use of the Prospectus forming a part of the Registration Statement, as set forth
in Section 7.2(c).
5.4 The Investor further represents and warrants to, and covenants
with, the Company that (i) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
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limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Investors
herein may be legally unenforceable.
5.5 Prior to the execution of this Agreement, the Investor has not
traded in the Company's securities from the date it was contacted by the Company
or by persons acting on its behalf, regarding the sale of the Shares and
Warrants by the Company. Without limiting the foregoing, Investor represents,
warrants and agrees that, since the earlier to occur of (i) the date on which
the placement agent first contacted Investor about the Offering and (ii) the
date that is the tenth (10th) trading day prior to the date of this Agreement,
it has not engaged in any short selling of the Company's securities, or
established or increased any "put equivalent position" as defined in Rule
16(a)-1(h) under the Securities Exchange Act of 1934 with respect to the
Company's securities. The Investor will comply with Federal and state securities
laws in the holding and the sale of the Shares, the Warrant and the Warrant
Shares.
5.6 The Investor understands that nothing in the Exchange Act
Documents, this Agreement or any other materials presented to the Investor in
connection with the purchase and sale of the Shares and the Warrant constitutes
legal, tax or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Shares and the Warrant.
5.7 The Company acknowledges and agrees that Investor does not make
or has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Sections 5 and 16(a) of this Agreement, or in the Investor Questionnaire.
6. Survival of Representations, Warranties and Agreements. Notwithstanding
any investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made by the Company and the Investor
herein shall survive the execution of this Agreement, the delivery to the
Investor of the Shares and the Warrant being purchased and the payment therefor.
7. Registration of the Shares and Warrant Shares; Compliance with the
Securities Act.
7.1 Registration Procedures and Other Matters. The Company shall:
-----------------------------------------
(a) subject to receipt of necessary information from the
Investors after prompt request from the Company to the Investors to provide such
information, prepare and file with the SEC, within 50 days after the Closing
Date, a registration statement on Form S-3 (the "Registration Statement") to
enable the resale of the Shares and the Warrant Shares by the Investors from
time to time through the automated quotation system of the Nasdaq National
Market or in privately-negotiated transactions;
(b) subject to receipt of necessary information from the
Investors after prompt request from the Company to the Investors to provide such
information, use its reasonable commercial efforts to cause the Registration
Statement to become effective on or prior to the 90th day after the Closing
Date, or if reviewed by the SEC, then 120 days after the Closing Date (the
"Effective Date");
(c) use its reasonable commercial efforts to prepare and file
with the SEC such amendments and supplements to the Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep the
Registration Statement current, effective and free from any material
misstatement or omission to state a material fact for a period (the
"Registration Period") not exceeding, with respect to each Investor's Shares
purchased hereunder and the Warrant Shares purchased under the Warrant, the
earlier of (i) the second anniversary of the Closing Date, (ii) the date on
which the Investor may sell all Shares and Warrant Shares then held by the
Investor without restriction by the volume limitations of Rule 144(e) of the
Securities Act, or (iii) such time as all Shares purchased by such Investor in
this Offering and Warrant Shares issuable pursuant to the Warrant have been sold
pursuant to a registration statement ;
(d) furnish to the Investor with respect to the Shares and the
Warrant Shares registered under the Registration Statement such number of copies
of the Registration Statement, Prospectuses and Preliminary Prospectuses in
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conformity with the requirements of the Securities Act and such other documents
as the Investor may reasonably request, in order to facilitate the public sale
or other disposition of all or any of the Shares or Warrant Shares by the
Investor; provided, however, that the obligation of the Company to deliver
copies of Prospectuses or Preliminary Prospectuses to the Investor shall be
subject to the receipt by the Company of reasonable assurances from the Investor
that the Investor will comply with the applicable provisions of the Securities
Act and of such other securities or blue sky laws as may be applicable in
connection with any use of such Prospectuses or Preliminary Prospectuses;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Investor and use its reasonable
commercial efforts to maintain such blue sky qualifications during the period
the Company is required to maintain the effectiveness of the Registration
Statement pursuant to Section 7.1(c); provided, however, that the Company shall
not be required to qualify to do business or consent to service of process in
any jurisdiction in which it is not now so qualified or has not so consented;
(f) bear all expenses in connection with the procedures in
paragraph (a) through (e) of this Section 7.1 (other than underwriting discounts
or commissions, brokers' fees and similar selling expenses, and any other fees
or expenses incurred by the Investor, including attorney fees of the Investor)
and the registration of the Shares and Warrant Shares pursuant to the
Registration Statement; and
(g) advise the Investor, promptly after it shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC delaying
or suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its reasonable commercial efforts to prevent the issuance of any stop order
or to obtain its withdrawal at the earliest possible moment if such stop order
should be issued.
Notwithstanding anything to the contrary herein, the Registration
Statement shall cover only the Shares and the Warrant Shares. In no event at any
time before the Registration Statement becomes effective with respect to the
Shares and the Warrant Shares shall the Company publicly announce or file any
other registration statement, other than registrations on Form S-8, without the
prior written consent of a majority in interest of the Investors.
The Company understands that the Investor disclaims being an underwriter,
but if the SEC deems the Investor to be an underwriter the Company shall not be
relieved of any obligations it has hereunder; provided, however that if the
Company receives notification from the SEC that the Investor is deemed an
underwriter, then the period by which the Company is obligated to submit an
acceleration request to the SEC shall be extended to the earlier of (i) the 90th
day after such SEC notification, or (ii) 120 days after the initial filing of
the Registration Statement with the SEC.
7.2 Transfer of Shares and Warrant Shares After Registration;
Suspension.
(a) The Investor agrees that it will not effect any
disposition of the Shares or its right to purchase the Shares or the Warrant
Shares that would constitute a sale within the meaning of the Securities Act
except as contemplated in the Registration Statement referred to in Section 7.1
and as described below or as otherwise permitted by law, and that it will
promptly notify the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its plan of distribution.
(b) Except in the event that paragraph (c) below applies, the
Company shall (i) if deemed necessary by the Company, prepare and file from time
to time with the SEC a post-effective amendment to the Registration Statement or
a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that such Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and so that, as
thereafter delivered to purchasers of the Shares and Warrant Shares being sold
thereunder, such Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (ii) provide the Investor copies of any documents
filed pursuant to Section 7.2(b)(i) as the Investor may reasonably request; and
(iii) inform each Investor that the Company has complied with its obligations in
Section 7.2(b)(i) (or that, if the Company has filed a post-effective amendment
to the Registration Statement which has not yet been declared effective, the
Company will notify the Investor to that effect, will use its reasonable
commercial efforts to secure the effectiveness of such post-effective amendment
as promptly as possible and will promptly notify the Investor pursuant to
Section 7.2(b)(i) hereof when the amendment has become effective).
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(c) Subject to paragraph (d) below, in the event (i) of any
request by the SEC or any other federal or state governmental authority during
the period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information; (ii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Shares or the Warrant Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; or (iv) of any event or
circumstance which, upon the advice of its counsel, necessitates the making of
any changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; then the Company shall
deliver a certificate in writing to the Investor (the "Suspension Notice") to
the effect of the foregoing and, upon receipt of such Suspension Notice, the
Investor will refrain from selling any Shares and Warrant Shares pursuant to the
Registration Statement (a "Suspension") until the Investor's receipt of copies
of a supplemented or amended Prospectus prepared and filed by the Company, or
until it is advised in writing by the Company that the current Prospectus may be
used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in any such Prospectus. In the
event of any Suspension, the Company will use its reasonable commercial efforts
to cause the use of the Prospectus so suspended to be resumed as soon as
reasonably practicable within 20 business days after the delivery of a
Suspension Notice to the Investor. In addition to and without limiting any other
remedies (including, without limitation, at law or at equity) available to the
Investor, the Investor shall be entitled to specific performance in the event
that the Company fails to comply with the provisions of this Section 7.2(c).
(d) Notwithstanding the foregoing paragraphs of this Section
7.2, the Investor shall not be prohibited from selling Shares or Warrant Shares
under the Registration Statement as a result of Suspensions on more than two
occasions of not more than 30 days each in any twelve month period, unless, in
the good faith judgment of the Company's Board of Directors, upon the written
opinion of counsel of the Company, the sale of Shares and Warrant Shares under
the Registration Statement in reliance on this Section 7.2(d) would be
reasonably likely to cause a violation of the Securities Act or the Exchange Act
and result in liability to the Company.
(e) Provided that a Suspension is not then in effect, the
Investor may sell Shares and Warrant Shares under the Registration Statement,
provided that it arranges for delivery of a current Prospectus to the transferee
of such Shares and Warrant Shares. Upon receipt of a request therefor, the
Company has agreed to provide an adequate number of current Prospectuses to the
Investor and to supply copies to any other parties requiring such Prospectuses.
(f) In the event of a sale of Shares and Warrant Shares by the
Investor pursuant to the Registration Statement, the Investor must also deliver
to the Company's transfer agent, with a copy to the Company, a Certificate of
Subsequent Sale substantially in the form attached hereto as Exhibit A, so that
the Shares and Warrant Shares may be properly transferred.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" means the Investor and any
affiliate of such Investor;
(ii) the term "Registration Statement" shall include the Prospectus
in the form first filed with the SEC pursuant to Rule 424(b) of the Securities
Act or filed as part of the Registration Statement at the time of effectiveness
if no Rule 424(b) filing is required, and any exhibit, supplement or amendment
included in or relating to the Registration Statement referred to in Section
7.1; and
(iii) the term "Untrue Statement" means any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
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(a) The Company agrees to indemnify and hold harmless each
Selling Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon (i) any
breach of the representations or warranties of the Company contained herein or
failure to comply with the covenants and agreements of the Company contained
herein, (ii) any Untrue Statement, or (iii) any failure by the Company to
fulfill any undertaking included in the Registration Statement as amended or
supplemented from time to time, and the Company will reimburse such Selling
Stockholder for any reasonable legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim, or preparing to defend any such action, proceeding or claim, provided,
however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an
Untrue Statement made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in preparation of the Registration Statement, as amended or
supplemented from time to time (including, without limitation, information set
forth in the Investor Questionnaire), or the failure of such Selling Stockholder
to comply with its covenants and agreements contained in Section 7.2 hereof
respecting sale of the Shares or Warrant Shares or any statement or omission in
any Prospectus that is corrected in any subsequent Prospectus that was delivered
to the Selling Stockholder prior to the pertinent sale or sales by the Selling
Stockholder. The Company shall reimburse each Selling Stockholder for the
indemnifiable amounts provided for herein on demand as such expenses are
incurred.
(b) The Investor agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each director of the Company) from and against any
losses, claims, damages or liabilities to which the Company (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure to comply with the covenants and agreements
contained in Section 7.2 hereof respecting sale of the Shares and Warrant
Shares, or (ii) any Untrue Statement if such Untrue Statement was made in
reliance upon and in conformity with written information furnished by or on
behalf of the Investor specifically for use in preparation of the Registration
Statement, as amended or supplemented from time to time (including, without
limitation, information set forth in the Investor Questionnaire), and the
Investor will reimburse the Company (or such officer, director or controlling
person), as the case may be, for any legal or other expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim. The Investor shall reimburse the Company or such officer, director or
controlling person, as the case may be, for the indemnifiable amounts provided
for herein on demand as such expenses are incurred. Notwithstanding the
foregoing, the Investor's aggregate obligation to indemnify the Company and such
officers, directors and controlling persons shall be limited to the net amount
received by the Investor from the sale of the Shares and Warrant Shares pursuant
to the Registration Statement.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Section 7.3,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, but the omission to so notify the
indemnifying person will not relieve it from any liability which it may have to
any indemnified person under this Section 7.3 (except to the extent that such
omission materially and adversely affects the indemnifying person's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified person promptly after receiving the aforesaid
notice from such indemnified person, shall be entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election
to assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided
that such consent shall not be unreasonably withheld or delayed. No indemnifying
person shall, without the prior written consent of the indemnified person,
effect any settlement of any pending or threatened proceeding in respect of
which any indemnified person is or could have been a party and indemnification
could have been sought hereunder by such indemnified person, unless such
settlement includes an unconditional release of such indemnified person from all
liability on claims that are the subject matter of such proceeding.
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(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying person shall contribute to the amount paid or payable by
such indemnified person as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Investor,
as well as any other Selling Shareholders under such Registration Statement on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
Untrue Statement, whether the Untrue Statement relates to information supplied
by the Company on the one hand or an Investor or other Selling Shareholder on
the other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such Untrue Statement. The Company and the
Investor agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation (even if the
Investor and other Selling Shareholders were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified person in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), the Investor shall not be required to contribute any amount in
excess of the amount by which the net amount received by the Investor from the
sale of the Shares and Warrant Shares to which such loss relates exceeds the
amount of any damages which such Investor has otherwise been required to pay by
reason of such Untrue Statement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Investor's obligations in this subsection to
contribute shall be in proportion to its sale of Shares and Warrant Shares to
which such loss relates and shall not be joint with any other Selling
Shareholders.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 7.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 7.3
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement as required by the Securities Act and the Exchange
Act. The parties are advised that federal or state public policy as interpreted
by the courts in certain jurisdictions may be contrary to certain of the
provisions of this Section 7.3, and the parties hereto hereby expressly waive
and relinquish any right or ability to assert such public policy as a defense to
a claim under this Section 7.3 and further agree not to attempt to assert any
such defense.
7.4 Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of the
Shares and Warrant Shares shall cease and terminate as to any particular number
of the Shares when such Shares and Warrant Shares shall have been effectively
registered under the Securities Act and sold or otherwise disposed of in
accordance with the intended method of disposition set forth in the Registration
Statement covering such Shares and Warrant Shares or at such time as an opinion
of counsel reasonably satisfactory to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act.
7.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares and Warrant Shares owned by the
Investor, the Company will furnish to the Investor:
(a) as soon as practicable after it is available, one copy of
(i) its Annual Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants), (ii) its Annual
Report on Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing,
in each case, excluding exhibits);
(b) upon the request of the Investor, all exhibits excluded by
the parenthetical to subparagraph (a) of this Section 7.5 as filed with the SEC
and all other information that is made available to shareholders; and
(c) upon the reasonable request of the Investor, the President
or the Chief Financial Officer of the Company (or an appropriate designee
thereof) will meet with the Investor or a representative thereof at the
Company's headquarters to discuss all information relevant for disclosure in the
Registration Statement covering the Shares and Warrant Shares and will otherwise
cooperate with any Investor conducting an investigation for the purpose of
-13-
reducing or eliminating such Investor's exposure to liability under the
Securities Act, including the reasonable production of information at the
Company's headquarters; provided, that the Company shall not be required to
disclose any confidential information to or meet at its headquarters with any
Investor until and unless the Investor shall have entered into a confidentiality
agreement in form and substance reasonably satisfactory to the Company with the
Company with respect thereto.
7.6 Legend; Restrictions on Transfer. The certificate or
certificates for the Shares and the Warrants (and any securities issued in
respect of or exchange for the Shares or Warrant Shares or exercise of the
Warrants) shall be subject to a legend or legends restricting transfer under the
Securities Act and referring to restrictions on transfer herein, such legend to
be substantially as follows:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT, SOLD PURSUANT TO RULE 144 UNDER SUCH ACT, OR, IN THE
OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER OR HYPOTHECATION
IS IN COMPLIANCE THEREWITH.
The Company and the Investor acknowledge and agree that the Investor may, as
permitted by law, from time to time pledge pursuant to a bona fide margin
agreement or grant a security interest in some or all of the Shares, Warrant
Shares and in the Warrant and, if required under the terms of such arrangement,
Investor may, as permitted by law, transfer pledged or secured Shares, Warrant
Shares and the Warrant to the pledgees or secured parties. So long as Investor
is not an affiliate of the Company, such a pledge or transfer would not be
subject to approval or consent of the Company, provided that, upon the request
of the Company, a legal opinion of legal counsel to the pledgee, secured party
or pledgor shall be obtained. At the Investor's expense, so long as the Shares,
Warrant Shares and the Warrant are subject to the legend required by this
Section 7.6, the Company will use its reasonable commercial efforts to execute
and deliver such reasonable documentation as a pledgee or secured party of
Shares, Warrant Shares or the Warrant may reasonably request in connection with
a pledge or transfer of the Shares, Warrant Shares or the Warrant including such
amendments or supplements to the Registration Statement and Prospectus as may be
reasonably required. The foregoing does not affect Investor's obligations
pursuant to Section 7.2(a).
7.7 Liquidated Damages. The Company and Investor agree that Investor
will suffer damages if the Company fails to fulfill its obligations pursuant to
Section 7.1 and 7.2 hereof and that it would not be possible to ascertain the
extent of such damages with precision. Accordingly, the Company hereby agrees to
pay liquidated damages ("Liquidated Damages") to Investor under the following
circumstances: (a) if the Registration Statement is not filed by the Company on
or prior to 50 days after the Closing Date (such an event, a "Filing Default");
(b) if the Registration Statement is not declared effective by the SEC on or
prior to the 90th day after the Closing Date, or if reviewed by the SEC, then
the 120th days after the Closing Date (such an event, an "Effectiveness
Default"); and/or (c) if the Registration Statement (after its effectiveness
date) ceases to be effective and available to Investor for any continuous period
that exceeds 30 days or for one or more period that exceeds in the aggregate 60
days in any 12-month period (such an event, a "Suspension Default" and together
with a Filing Default and an Effectiveness Default, a "Registration Default").
In the event of a Registration Default, the Company shall as Liquidated Damages
pay to Investor, for each 30-day period of a Registration Default, an amount in
cash equal to 1% of the aggregate purchase price paid by Investor pursuant to
this Agreement up to a maximum of 10% of the aggregate purchase price, provided
that Liquidation Damages shall not be payable in relation to any Shares not
owned by the Investor at the time of the Registration Default. The Company shall
pay the Liquidated Damages as follows: (i) in connection with a Filing Default,
on the 51st day after the Closing Date, and each 30th day thereafter until the
Registration Statement is filed with the SEC; (ii) in connection with an
Effectiveness Default, on the 120th day or the 150th day, as the case may be,
after the Closing Date and each 30th day thereafter until the Registration
Statement is declared effective by the SEC; or (iii) in connection with a
Suspension Default, on either (x) the 31st consecutive day of any Suspension or
(y) the 61st day (in the aggregate) of any Suspensions in any 12-month period,
and each 30th day thereafter until the Suspension is terminated in accordance
with Section 7.2. Notwithstanding the foregoing, all periods shall be tolled
during delays directly caused by the action or inaction of any Investor, and the
Company shall have no liability to any Investor in respect of any such delay.
The Liquidated Damages payable herein shall apply on a pro rata basis for any
portion of a 30-day period of a Registration Default. Liquidated Damages shall
not be paid with regard to Warrants or Warrant Shares.
-14-
7.8 Legend Removal.
(a) The legend set forth in Section 7.6 shall be removed and the
Company shall issue a certificate without such legend or any other legend to the
holder of the Shares and Warrant Shares (whose name is listed in the selling
security holders section of the Registration Statement), if (a) such Shares and
Warrant Shares are registered for resale under the Securities Act and the
Registration Statement is effective, (ii) in connection with a sale, assignment
or other transfer, such holder provides the Company with an opinion of counsel,
in a form reasonably acceptable to the Company, to the effect that such sale,
assignment or transfer of the Shares or Warrant Shares, as the case may be, may
be made without registration under the applicable requirements of the Securities
Act, or (iii) such holder provides the Company with reasonable assurance that
such Shares or Warrant Shares, as the case may be, can be sold, assigned or
transferred pursuant to Rule 144(k).
(b) The Company agrees that it shall, on the same day as the
Registration Statement being declared effective if declared effective before
4:00PM EST or the next business day after the Registration Statement is declared
effective if declared effective after 4:00 PM EST, deliver to its transfer agent
an opinion letter of Company counsel, opining that at any time the Registration
Statement is effective, the transfer agent shall be authorized to issue, in
connection with the sale of the Shares and Warrant Shares, certificates
representing such securities without restrictive legend, provided the Shares and
Warrant Shares are to be sold pursuant to the Prospectus contained in the
Registration Statement and the Investor acknowledges its obligation to comply
with applicable prospectus delivery requirements. Upon receipt of such opinion,
the Company shall cause the transfer agent to confirm, for the benefit of the
Investor, that no further opinion of counsel is required at the time of transfer
in order to issue certificates for the Shares and Warrant Shares without
restrictive legend. Following the effective date of the Registration Statement
or at such earlier time as a legend is no longer required for the Shares and
Warrant Shares, and prior to a transfer under the prospectus contained in the
Registration Statement, the Company will use its commercially reasonable efforts
following the delivery by the Investor to the Company or the Company's transfer
agent of a legended certificate representing the Shares and Warrant Shares, to
deliver or cause to be delivered to the Investor, in Investor's name, a
certificate representing such Shares that is free from all restrictive and other
legends. Following the effective date of the Registration Statement and upon the
delivery to the Investor of any certificate representing Shares and Warrant
Shares that is free from all restrictive and other legends, the Investor agrees
that any sale or transfer of such securities shall be made pursuant to the
effective Registration Statement and, in compliance with applicable prospectus
delivery requirements, and in accordance with the plan of distribution described
therein or pursuant to an available exemption from the registration requirements
of the Securities Act.
(c) The Company shall cause its transfer agent to issue a
certificate without any restrictive legend to a purchaser or transferee of any
Shares and Warrant Shares from the Investor, if (a) the sale or transfer of such
securities is registered under the Registration Statement (including
registration pursuant to Rule 415 under the Securities Act) and the Investor has
delivered a Certificate of Subsequent Sale to the transfer agent; (b) the holder
has provided the Company with an opinion of counsel, in form, substance and
scope customary for opinions of counsel in comparable transactions, to the
effect that a public sale or transfer of such securities may be made without
registration under the Securities Act; or (c) such securities are sold in
compliance with Rule 144 under the Securities Act. In addition, the Company
shall, at the request of the Investor, remove the restrictive legend from any
Shares held by the Investor following the expiration of the holding period
required by Rule 144(k) under the Securities Act (or any successor rule), if not
previously removed.
(d) The Investor will indemnify the Company and hold the Company and
its directors, officers, shareholders, employees and agents (each a "Company
Party") harmless form any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs, administrative hearing costs, and reasonable
attorneys' fees and costs of investigation (collectively "Losses") that any
Company Party may suffer or incur as a result of or relating to any breach by
the Investor of its obligations under the Securities Act and any state
securities laws in respect of the sale or transfer of the Shares and Warrant
Shares.
8. Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed (A) if within the United States
by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if delivered
from outside the United States, by International Federal Express (or other
recognized international express courier) or facsimile, and shall be deemed
given (i) if delivered by first-class registered or certified mail, three
business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express (or other recognized international express
courier), two business days after so mailed, (iv) if delivered by facsimile,
upon electronic confirmation of receipt and shall be delivered as addressed as
follows:
-15-
(a) if to the Company, to:
ParkerVision, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx and Xxxxx Xxxxxxxx
(b) with a copy to:
Xxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxx Xxxxxx
(c) if to the Investor, at its address on the signature page
hereto, or at such other address or addresses as may have been
furnished to the Company in writing.
9. Changes. This Agreement may be modified, amended or waived only
pursuant to a written instrument signed by the Company and (a) Investors holding
a majority of the Shares issued and sold in the Offering, provided that such
modification, amendment or waiver is made with respect to all Agreements and
does not adversely affect the Investor without adversely affecting all Investors
in a similar manner; or (b) the Investor.
10. Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
11. Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
14. Entire Agreement. This Agreement constitute the entire agreement
between the parties hereto and supersedes any prior understandings or agreements
concerning the purchase and sale of the Shares and the Warrant and the resale
registration of the Shares and Warrant Shares.
15. Rule 144. The Company covenants that it will timely file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Investor holding
Shares purchased hereunder or Warrant Shares purchased under the Warrant, make
publicly available such information as necessary to permit sales pursuant to
Rule 144 under the Securities Act), and it will take such further action as any
such Investor may reasonably request, all to the extent required from time to
time to enable such Investor to sell Shares purchased hereunder and Warrant
Shares purchased under the Warrant without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of the
Investor, the Company will deliver to such holder a written statement as to
whether it has complied with such information and requirements.
16. Confidential Information.
(a) The Investor represents to the Company that, at all times during
the Company's offering of the Shares and the Warrants, the Investor has
maintained in confidence all non-public information regarding the Company
-16-
received by the Investor from the Company or its agents, and covenants that it
will continue to maintain in confidence such information until such information
(a) becomes generally publicly available other than through a violation of this
provision by the Investor or its agents or (b) is required to be disclosed in
legal proceedings (such as by deposition, interrogatory, request for documents,
subpoena, civil investigation demand, filing with any governmental authority or
similar process), provided, however, that before making any use or disclosure in
reliance on this subparagraph (b) the Investor shall give the Company at least
thirty (30) days prior written notice (or such shorter period as required by
law) specifying the circumstances giving rise thereto and will furnish only that
portion of the non-public information which is legally required and will
exercise its reasonable commercial efforts to obtain reliable assurance that
confidential treatment will be accorded any non-public information so furnished.
(b) The Company shall on the Closing Date issue a press release
disclosing the material terms of the transactions contemplated hereby (including
at least the number of Shares and Warrants sold and proceeds therefrom). The
Company shall not publicly disclose the name of Investor, or include the name of
Investor in any filing with the SEC or any state and federal regulatory agency
or the Nasdaq (other than the filing of the Agreements with the SEC pursuant to
the Exchange Act), without the prior written consent of Investor, except to the
extent such disclosure is required by law, regulation, Nasdaq regulations or
requested by the SEC.
17. No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
18. Knowledge. The term "knowledge" in this Agreement shall mean the
knowledge of the directors and officers of the Company after due inquiry.
-17-
ParkerVision, Inc.
INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To: ParkerVision, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
This Investor Questionnaire ("Questionnaire") must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $.01 per share (the "Common Stock"), and Warrants to
purchase shares of Common Stock, of ParkerVision, Inc. (collectively, the
"Securities"). The Securities are being offered and sold by ParkerVision, Inc.
(the "Corporation") without registration under the Securities Act of 1933, as
amended (the "Act"), and the securities laws of certain states, in reliance on
the exemptions contained in Section 4(2) of the Act and on Regulation D
promulgated thereunder and in reliance on similar exemptions under applicable
state laws. The Corporation must determine that a potential investor meets
certain suitability requirements before offering or selling Securities to such
investor. The purpose of this Questionnaire is to assure the Corporation that
each investor will meet the applicable suitability requirements. The information
supplied by you will be used in determining whether you meet such criteria, and
reliance upon the private offering exemption from registration is based in part
on the information herein supplied.
This Questionnaire does not constitute an offer to sell or a solicitation
of an offer to buy any security. Your answers will be kept strictly
confidential. However, by signing this Questionnaire you will be authorizing the
Corporation to provide a completed copy of this Questionnaire to such parties as
the Corporation deems appropriate in order to ensure that the offer and sale of
the Securities will not result in a violation of the Act or the securities laws
of any state and that you otherwise satisfy the suitability standards applicable
to purchasers of the Securities. All potential investors must answer all
applicable questions and complete, date and sign this Questionnaire. Please
print or type your responses and attach additional sheets of paper if necessary
to complete your answers to any item.
A. BACKGROUND INFORMATION
Name: __________________________________________________________________________
Contact Address: _______________________________________________________________
Telephone Number: _________________________________
Residence Address:______________________________________________________________
(Number and Street)
________________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number: (___) ________________________________________________________
If an individual:
Age: _____ Citizenship: _________ Where registered to vote: ____________
If a corporation, partnership, limited liability company, trust or other entity:
Type of entity: ________________________________________________________
State of formation:________________ Date of formation: _________________
Social Security or Taxpayer Identification No. _________________________________
Send all correspondence to (check one): __ Residence Address __ Business Address
-18-
Current ownership of securities of the Corporation:
_______________ shares of common stock, par value $.01 per share (the
"Common Stock") options to purchase ____________________ shares of Common
Stock.
The names of the persons/individuals with investment and selling decision making
authority over the Common Stock acquired in the Offering is
_______________________________________.
B. STATUS AS ACCREDITED INVESTOR
I. The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable):(1)
____ (1) a bank as defined in Section 3(a)(2) of the Act, or 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; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Corporation Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; a Small Business
Investment Corporation licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions for the benefit of
its employees, if such plan has total assets in excess of $5,000,000; an
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with the investment decisions made solely by persons that
are accredited investors;
____ (2) a private business development company as defined in Section
202(a)(22) of the Investment Adviser Act of 1940;
____ (3) an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
Securities offered, with total assets in excess of $5,000,000;
____ (4) a natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of such person's purchase of the
Securities exceeds $1,000,000;
____ (5) a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
____ (6) a trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D; and
____ (7) an entity in which all of the equity owners are accredited
investors (as defined above).
----------
(1) As used in this Questionnaire, the term "net worth" means the excess
of total assets over total liabilities. In computing net worth for the purpose
of subsection (4), the principal residence of the investor must be valued at
cost, including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depiction,
contributions to an XXX or XXXXX retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
-19-
II. The undersigned is not an "accredited investor" as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities, and
each of the following statements is true and correct:
_________ (initial)
(a) the Investor is not a U.S. Person (as such term is defined in Rule
902(k) of the Securities Act), was physically outside of the United
States at the time the offer to purchase the Shares was received by
the Investor and does not currently reside in the United States; and
(b) the Investor understands and acknowledges that (a) the Shares have
not been and will not be at the time of issuance registered under
the Securities Act, and may not be offered or sold in the United
States or to, or for the account or benefit of, any U.S. person,
unless such Shares are registered under the Securities Act or such
offer or sale is made pursuant to an exemption from the registration
requirements of the Securities Act and (b) the Shares are being
offered and sold to the Investor pursuant to the terms of Regulation
S under the Securities Act, which permit securities to be sold to
non-U.S. persons in transactions consummated outside of the United
States, subject to certain conditions.
C. REPRESENTATIONS
The undersigned hereby represents and warrants to the Corporation as
follows:
1. Any purchase of the Securities would be solely for the account of the
undersigned and not for the account of any other person or with a view to
any resale, fractionalization, division, or distribution thereof.
2. The information contained herein is complete and accurate and may be
relied upon by the Corporation, and the undersigned will notify the
Corporation immediately of any material change in any of such information
occurring prior to the closing, if any, with respect to the purchase of
Securities by the undersigned or any co-purchaser.
3. There are no suits, pending litigation, or claims against the undersigned
that could materially affect the net worth of the undersigned as reported
in this Questionnaire.
4. The undersigned acknowledges that there may occasionally be times when the
Corporation determines that it must suspend the use of the Prospectus
forming a part of the Registration Statement (as such terms are defined in
the Stock and Warrant Purchase Agreement to which this Questionnaire is
attached), as set forth in Section 7.2(c) of the Stock and Warrant
Purchase Agreement. The undersigned is aware that, in such event, the
Securities will not be subject to ready liquidation, and that any
Securities purchased by the undersigned would have to be held during such
suspension. The overall commitment of the undersigned to investments which
are not readily marketable is not excessive in view of the undersigned's
net worth and financial circumstances, and any purchase of the Securities
will not cause such commitment to become excessive. The undersigned is
able to bear the economic risk of an investment in the Securities.
5. The undersigned has carefully considered the potential risks relating to
the Corporation and a purchase of the Securities, and fully understands
that the Securities are speculative investments which involve a high
degree of risk of loss of the undersigned's entire investment. Among
others, the undersigned has carefully considered each of the risks
identified in the Annual Report on Form 10-K for the year ended December
31, 2004 and the Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005.
[Signature Page Follows]
-20-
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire this
____ day of February, 2006, and declares under oath that it is truthful and
correct.
Print Name
By:
------------------------------------
Signature
Title:
---------------------------------
(required for any purchaser that
is a corporation, partnership,
trust or other entity)
-21-
[Company Letterhead]
_________, 200_
Re: ParkerVision, Inc.; Registration Statement on Form S-3
Dear Selling Shareholder:
Enclosed please find five (5) copies of a prospectus dated ______________,
200[__] (the "Prospectus") for your use in reselling your shares of common
stock, $.01 par value (the "Shares"), of ParkerVision, Inc. (the "Company"),
under the Company's Registration Statement on Form S-3 (Registration No. 333- )
(the "Registration Statement"), which has been declared effective by the
Securities and Exchange Commission. As a selling shareholder under the
Registration Statement, you have an obligation to deliver a copy of the
Prospectus to each purchaser of your Shares, either directly or through the
broker-dealer who executes the sale of your Shares.
The Company is obligated to notify you in the event that it suspends
trading under the Registration Statement in accordance with the terms of the
Stock and Warrant Purchase Agreement between the Company and you. During the
period that the Registration Statement remains effective and trading thereunder
has not been suspended, you will be permitted to sell your Shares which are
included in the Prospectus under the Registration Statement. Upon a sale of any
Shares under the Registration Statement, you or your broker will be required to
deliver to the Transfer Agent, American Stock Transfer & Trust Company (1) your
restricted stock certificate(s) representing the Shares, (2) instructions for
transfer of the Shares sold, and (3) a representation letter from your broker,
or from you if you are selling in a privately negotiated transaction, or from
such other appropriate party, in the form of Exhibit A attached hereto (the
"Representation Letter"). The Representation Letter confirms that the Shares
have been sold pursuant to the Registration Statement and in a manner described
under the caption "Plan of Distribution" in the Prospectus and that such sale
was made in accordance with all applicable securities laws, including the
prospectus delivery requirements.
Please note that you are under no obligation to sell your Shares during
the registration period. However, if you do decide to sell, you must comply with
the requirements described in this letter or otherwise applicable to such sale.
Your failure to do so may result in liability under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended. Please remember
that all sales of your Shares must be carried out in the manner set forth under
the caption "Plan of Distribution" in the Prospectus if you sell under the
Registration Statement. The Company may require an opinion of counsel reasonably
satisfactory to the Company if you choose another method of sale. You should
consult with your own legal advisor(s) on an ongoing basis to ensure your
compliance with the relevant securities laws and regulations.
In order to maintain the accuracy of the Prospectus, you must notify the
undersigned upon the sale, gift, or other transfer of any Shares by you,
including the number of Shares being transferred, and in the event of any other
change in the information regarding you which is contained in the Prospectus.
For example, you must notify the undersigned if you enter into any arrangement
with a broker-dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a
broker-dealer. Depending on the circumstances, such transactions may require the
filing of a supplement to the prospectus in order to update the information set
forth under the caption "Plan of Distribution" in the Prospectus.
Should you need any additional copies of the Prospectus, or if you have
any questions concerning the foregoing, please write to me at ParkerVision,
Inc., 0000 Xxxxxxxxxx Xxx, Xxxxxxxxxxxx, XX 00000. Thank you.
Sincerely,
-22-
Exhibit A
CERTIFICATE OF SUBSEQUENT SALE
[Name of Transfer Agent]
[Address of Transfer Agent]
RE: Sale of Shares of Common Stock of ParkerVision, Inc. (the
"Company") pursuant to the Company's Prospectus dated
_____________, 200[__] (the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Shareholders in the
Prospectus, that the undersigned has sold the shares pursuant to the Prospectus
and in a manner described under the caption "Plan of Distribution" in the
Prospectus and that such sale complies with all securities laws applicable to
the undersigned, including, without limitation, the Prospectus delivery
requirements of the Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner):
Record Holder (e.g., if held in name of nominee): ______________________________
Restricted Stock Certificate No.(s): ___________________________________________
Number of Shares Sold: _________________________________________________________
Date of Sale: __________________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Very truly yours,
Dated: _________________________ By: ____________________________________
Print Name: ____________________________
Title: _________________________________
cc: ParkerVision, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
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