UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from ________to_______
Commission file number 0-22904
PARKERVISION, INC.
(Name of small business issuer as specified in its charter)
Florida 59-2971472
(State or other jurisdiction of I.R.S. Employer ID No.
incorporation or organization)
8493 Baymeadows Way
Jacksonville, Florida 32256
(904) 737-1367
(Address of principal executive offices)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ].
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ].
APPLICABLE ONLY TO CORPORATE ISSUERS
As of October 31, 1996, 10,023,104 shares of the Issuer's Common Stock, $.01 par
value, were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The accompanying unaudited financial statements of ParkerVision, Inc. (the
"Company") have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and Rule 10-01 of Regulation S-X. All adjustments which, in the opinion
of management, are necessary for a fair presentation of the financial condition
and results of operations have been included. Operating results for the three
and nine month periods ended September 30, 1996 are not necessarily indicative
of the results that may be expected fo the year ending December 31, 1996.
These interim consolidated financial statements should be read in conjunction
with the Company's latest Annual Report on Form 10-KSB for the year ended
December 31, 1995.
2
<PAGE>
PARKERVISION, INC.
BALANCE SHEET
September 30,
1996 December 31,
ASSETS (unaudited) 1995
- ------ ------------- ------------
CURRENT ASSETS:
Cash and cash equivalents $ 3,656,126 $ 1,291,527
Short-term investments 4,969,456 5,080,308
Accounts receivable, net of
allowance for doubtful
accounts of $28,920 and $17,350
at September 30, 1996 and
December 31, 1995, respectively 1,464,618 451,274
Interest and other receivables 143,898 394,889
Inventories, net 2,028,342 2,274,764
Prepaid expenses 269,490 131,044
Deferred income taxes 6,662 6,662
---------- ----------
Total current assets 12,538,592 9,630,468
---------- ----------
LONG-TERM INVESTMENTS 4,986,460 0
---------- ----------
PROPERTY AND EQUIPMENT, net 1,434,257 1,093,269
---------- ----------
OTHER ASSETS, net 628,404 231,239
---------- ----------
Total assets $19,587,713 $10,954,976
========== ==========
The accompanying notes are an integral part of these balance sheets.
3
<PAGE>
PARKERVISION, INC.
BALANCE SHEETS
September 30,
LIABILITIES AND SHAREHOLDERS' 1996 December 31,
EQUITY (unaudited) 1995
- ----------------------------- ------------- ------------
CURRENT LIABILITIES:
Accounts payable $ 1,241,960 $ 462,466
Accrued expenses:
Salaries and wages 119,686 113,112
Professional fees and other 106,421 62,333
Interest payable to related parties 0 8,110
Deferred revenue 9,113 87,954
Current portion of long-term
subordinated debentures 0 216,018
---------- ----------
Total current liabilities 1,477,180 949,993
---------- ----------
LONG-TERM SUBORDINATED DEBENTURES 0 3,028,237
---------- ----------
DEFERRED INCOME TAXES 6,662 6,662
---------- ----------
COMMITMENTS AND CONTINGENCIES
(Notes 4 and 5)
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value,
1,000,000 shares authorized,
none issued or outstanding 0 0
Comon stock, $.01 par value,
20,000,000 shares authorized,
10,023,104 and 8,800,541 shares
issued and outstanding at
September 30, 1996 and December
31, 1995, respectively 100,231 88,005
Warrants outstanding 1,152,360 360
Additional paid-in capital 25,375,594 14,556,754
Accumulated deficit (8,524,314) (7,675,035)
---------- ----------
Total shareholders' equity 18,103,871 6,970,084
---------- ----------
Total liabilities and
shareholders' equity $19,587,713 $10,954,976
========== ==========
The accompanying notes are an integral part of these balance sheets.
4
<PAGE>
PARKERVISION, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
-------------------------------- --------------------------------
1996 1995 1996 1995
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Revenues, net $2,433,652 $1,616,328 $7,215,313 $ 2,939,332
Cost of goods sold 1,489,727 954,072 4,579,306 1,790,929
--------- --------- --------- ----------
Gross margin 943,925 662,256 2,636,007 1,148,403
Marketing and selling expenses 528,549 479,673 1,623,181 1,477,057
General and administrative expenses 383,575 385,106 1,058,609 1,037,862
Research and development expenses 369,463 283,335 1,035,033 835,336
Nonrecoverable start-up and
excess capacity costs 0 95,006 91,350 406,675
Interest expense to related parties 0 89,217 75,547 267,651
Interest income (185,554) (88,036) (427,994) (291,233)
Other expense, net 0 78,241 10,810 110,633
--------- --------- ---------- ----------
Net loss $ (152,108) $ (660,286) $ (830,529) $(2,695,578)
========= ========= ========== ==========
Net loss per common and
common equivalent share $ (0.02) $ (0.08) $ (0.09) $ (0.31)
========= ========= ========== ==========
The accompanying notes are an integral part of these statements.
</TABLE>
5
<PAGE>
PARKERVISION, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Common Stock
------------------------- Additional Total
Par Warrants Paid-In Accumulated Shareholders'
Shares Value outstanding Capital Deficit Equity
---------- ---------- ----------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1995 8,800,541 $ 88,005 $ 360 $14,556,754 $ (7,675,035) $ 6,970,084
Issuance of common stock
upon exercise of employee
stock options 18,138 182 0 29,134 0 29,316
Issuance of common stock
on April 12, 1996, net of
cash offering costs
of $602,500 800,000 8,000 640,000 6,749,500 0 7,397,500
Issuance of common stock for
conversion of $3,244,250
subordinated debentures
payable on April 12, 1996 324,425 3,244 0 3,241,006 0 3,244,250
Issuance of common stock for
cash on April 22, 1996 80,000 800 0 799,200 0 800,000
Issuance of warrants on
July 16, 1996 for financial
consulting services 512,000 512,000
Unrealized loss on investments
available for sale 0 0 0 0 (18,750) (18,750)
Net loss for the period ended
September 30, 1996 0 0 0 0 (830,529) (830,529)
---------- -------- --------- ---------- ----------- ---------
BALANCE,
September 30, 1996
(unaudited) 10,023,104 $ 100,231 $1,152,360 $25,375,594 $ (8,524,314) $18,103,871
========== ======== ========= ========== =========== ==========
The accompanying notes are an integral part of these statements.
</TABLE>
6
<PAGE>
PARKERVISION, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
--------------------------------- --------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net loss $(152,108) $ (660,286) $ (830,529) $(2,695,578)
Adjustments to reconcile net loss to net cash provided
by (used for) operating activities:
Depreciation and amortization 130,419 116,522 395,508 333,645
Amortization of discounts on investments (37,069) (32,164) (107,193) (85,183)
Provision for obsolete inventories 60,000 78,240 230,451 108,174
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable, net 754,861 (555,485) (1,013,344) (1,020,729)
Decrease (increase) in interest and other
receivables 31,070 (52,538) 250,991 116,628
(Increase) decrease in inventories, net (256,937) (552,506) 15,971 (542,709)
(Increase) decrease in prepaid expenses (8,122) 24,704 (38,046) (12,611)
Increase in other assets (4,003) 0 (27,852) (111,465)
Increase in accounts payable and accrued
expenses 362,191 746,178 830,151 778,754
Increase (decrease) in interest payable 0 89,217 (8,110) 89,217
Increase (decrease) in deferred revenue 6,605 40,349 (78,841) 45,554
--------- ---------- ---------- ----------
Total adjustments 1,039,015 (97,483) 449,686 (300,725)
--------- ---------- ---------- ----------
Net cash provided by (used for) operating
activities 886,907 (757,769) ( 380,843) (2,996,303)
--------- --------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments 0 (4,890,945) (6,925,123) (8,825,107)
Proceeds from maturity of investments 2,137,958 1,500,000 2,137,958 9,447,000
Purchase of property and equipment (534,828) (186,798) (694,209) (444,652)
--------- --------- ---------- ----------
Net cash provided by (used for) investing
activities 1,603,130 (3,577,743) (5,481,374) 177,241
--------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 476 32,093 8,226,816 87,724
--------- ---------- ---------- ----------
Net cash provided by financing activities 476 32,093 8,226,816 87,724
--------- ---------- ---------- ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 2,490,513 (4,303,419) 2,364,599 (2,731,338)
CASH AND CASH EQUIVALENTS, beginning of period 1,165,613 6,121,066 1,291,527 4,548,985
--------- ---------- --------- ----------
CASH AND CASH EQUIVALENTS, end of period $3,656,126 $ 1,817,647 $ 3,656,126 $ 1,817,647
========= ========== ========== ==========
The accompanying notes are an integral part of these statements.
</TABLE>
7
<PAGE>
PARKERVISION, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ACCOUNTING POLICIES
There have been no changes in accounting policies from those stated in the
Annual Report on Form 10-KSB for the year ended December 31, 1995.
Cash and Cash Equivalents. Cash and cash equivalents include overnight
repurchase agreements totaling $3,358,000 and $1,093,000 at September 30,
1996 and December 31, 1995, respectively.
Reclassifications. Certain reclassifications have been made to the 1995
statements to conform to the 1996 presentation.
2. LOSS PER SHARE
Loss per share is determined based on the weighted average number of common
shares and common share equivalents outstanding during each period. Common
share equivalents are excluded from the determination of the weighted
average number of shares outstanding to the extent they are anti-dilutive.
The weighted average number of common shares and common share equivalents
outstanding for the three month periods ended September 30, 1996 and 1995
is 10,022,967 and 8,773,141, respectively. The weighted average number of
common shares and common share equivalents outstanding for the nine month
periods ended September 30, 1996 and 1995 is 9,679,633 and 8,760,010,
respectively.
3. INVENTORIES:
Inventories consist of the following:
September 30, 1996 December 31, 1995
------------------ -----------------
Purchased materials $1,381,274 $1,751,527
Work in process 406,660 484,873
Finished goods 596,303 370,364
--------- ---------
2,384,237 2,606,764
Less allowance for
inventory obsolescence (355,895) (332,000)
--------- ---------
$2,028,342 $2,274,764
========= =========
8
<PAGE>
4. SIGNIFICANT CUSTOMERS
For the three months ended September 30, 1996, two customers accounted for
approximately 18% and 19% of total revenues, respectively. For the three
months ended September 30, 1995, Vtel Corporation accounted for
approximately 22% of total revenues.
For the nine month period ended September 30, 1996, Vtel Corporation and
one other customer accounted for approximately 37% and 19% of total
revenues, respectively. For the nine months ended September 30, 1995, Vtel
Corporation and one other customer accounted for 12% and 10% of total
revenues, respectively.
5. STOCK AND WARRANT ISSUANCE
On April 12, 1996, the Company completed an offering of 800,000 shares of
its common stock to overseas investors in a transaction pursuant to
Regulation S of the Securities Act of 1933, as amended (the "Offering").
The shares, which constituted approximately 8.3% of the Company's
outstanding common stock on an after-issued basis, were sold at a price of
$10.00 per share. After deducting cash issuance and offering costs of
$602,500, the Company received net proceeds therefrom of $7,397,500.
The Company engaged an outside financial consultant in connection with the
Offering, and as compensation for his services, on April 12, 1996, the
Company granted the consultant and his designee warrants to purchase an
aggregate of 250,000 shares of common stock of the Company at an exercise
price of $10.00 per share. The warrants are exercisable for a period of
five years form the date of consummation of the offering. The warrants have
an estimated fair value of $2.56 per share, or $640,000.
Also in connection with the Offering, certain related parties agreed to
convert an aggregate of $3,244,250 of subordinated debentures of the
Company at a value of $10.00 per share for an aggregate of 324,425 shares
of common stock. In accordance with the conversion agreement, these shares
may not be sold, assigned, pledged or otherwise transferred publicly or
privately to a third party for a period of six months after the date of
conversion.
On April 22, 1996, the Company completed an offering of an aggregate of
80,000 shares of its common stock to two investors in a private placement
transaction pursuant to Section 4(2) of the Securities Act of 1933, as
amended. These shares, which constituted approximately 0.8% of the
Company's outstanding common stock on an after-issued basis, were sold at a
price of $10.00 per share and the Company received net proceeds therefrom
of $800,000.
On July 16, 1996, the Company retained Whale Securities Co., L.P. to serve
as a financial consultant and advisor for a period of five years. As
compensation for these services, the Company issued warrants to Whale
Securities Co., L.P. and its designee for the purchase of 200,000 shares of
the Company's common stock at an exercise price of $10.00 per share. The
warrants are exercisable for a period of five years from the date of
issuance and their estimated fair value of $2.56 per share or $512,000 is
being amortized to expense over the term of the consulting agreement.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations for Each of the Three and Nine Month Periods Ended
September 30, 1996 and 1995
9
<PAGE>
Revenues
Revenues for the three months ended September 30, 1996 were $2,433,652, as
compared to $1,616,328 for the three months ended September 30, 1995. This
increase of $817,324 is primarily a result of an increase in the average selling
price per system.
The Company sold 351 systems during the three month period ended September 30,
1996, as compared to 360 systems for the three month period ended September 30,
1995. The average selling price per system for the three months ended September
30, 1996 and 1995, was approximately $6,900 and $4,500, respectively. This
increase of approximately $2,400 per system is primarily due to a change in the
mix of products sold. During the three month period ended September 30, 1996,
approximately 17% of the systems sold were higher priced three-chip camera
systems whereas all of the systems sold during the three month period ended
September 30, 1995 represented single-chip camera systems. The three-chip system
generates approximately $8,500 more revenue per system than the Company's System
II single-chip products.
Revenues for the nine months ended September 30, 1996 were $7,215,313, as
compared to $2,939,332 for the nine months ended September 30, 1995. This
increase of $4,375,981 is a result of a 641 unit increase in the number of
systems sold and a $1,100 increase in the average selling price per system from
the nine month period ended September 30, 1995 to the corresponding period in
1996. The increase in system sales is due to increasing market awareness of the
CameraMan products, introduction of the three-chip camera systems, and increased
sales as a result of the Company's co-marketing and co-development agreement
with Vtel Corporation. The increase in average selling price per system is a
result of three-chip camera sales, which represent approximately 9% of systems
sold during 1996.
Gross Margin
For the three month periods ended September 30, 1996 and 1995, gross margins as
a percentage of sales were 38.8% and 41.0%, respectively. This decrease is
primarily due to the mix of products sold during the third quarter of 1996.
Approximately 17% of the systems sold during the quarter were three-chip camera
systems. Due to the higher cost of the camera incorporated into the base unit,
which is purchased from a third-party supplier, the Company earns lower margins
as a percentage of selling price on its three-chip product line than on its
single-chip products.
For the nine month periods ended September 30, 1996 and 1995, gross margins as a
percentage of sales were 36.5% and 39.1%, respectively. This decrease is
primarily due to the mix of products sold. During the nine months ended
September 30, 1996, approximately 28% of the base units purchased by VTEL were
general pan/tilt units without corresponding application-specific upgrade
packages. The Company earns higher margins on the sale of upgrade packages than
on the base unit itself. In addition, approximately 9% of the systems sold
during the nine month period ended September 30, 1996 were three-chip camera
systems.
10
<PAGE>
Marketing and Selling Expenses
Marketing and selling expenses were $528,549 for the three month period ended
September 30, 1996, as compared to $479,673 for the same period in 1995. This
increase of $48,876 is primarily due to an increase in personnel and travel
costs resulting from the addition of sales and marketing personnel to support
the Company's ongoing marketing and selling activities, partially offset by a
decrease in advertising costs resulting from the completion in 1995 of the
Company's large-scale media campaign targeted at the distance education and
videoconferencing markets.
For the nine month periods ended September 30, 1996 and 1995, marketing and
selling expenses were $1,623,181 and $1,477,057, respectively. The increase of
$146,124 is primarily due to an increase in personnel and travel costs,
partially offset by a decrease in advertising costs.
General and Administrative Expenses
For the three month periods ended September 30, 1996 and 1995, general and
administrative expenses were $383,575 and $385,106, respectively. This decrease
of $1,531 is primarily due to a decrease in officers' salaries resulting from a
voluntary salary reduction by two of the Company's officers during 1996, offset
by an increase in professional fees.
For the nine month periods ended September 30, 1996 and 1995, general and
administrative expenses were $1,058,609 and $1,037,862, respectively. This
increase of $20,747 is primarily due to an increase in professional fees, offset
by a decrease in officers' salaries.
Research and Development Expenses
The Company's research and development expenses were $369,463 and $283,335 for
the three month periods ended September 30, 1996 and 1995, respectively. This
increase of $86,128 is primarily a result of increased personnel and related
development costs incurred in order to continue to refine the Company's existing
CameraMan systems, develop the Company's future CameraMan Studio product, and
conduct research in complimentary wireless technologies.
For the nine month periods ended September 30, 1996 and 1995, research and
development expenses were $1,035,033 and $835,336, respectively. This increase
of $199,697 is primarily due to an increase in personnel and related development
costs.
11
<PAGE>
Nonrecoverable Start-up and Excess Capacity Costs
For the three month periods ended September 30, 1996 and 1995, nonrecoverable
start-up and excess capacity costs were $0 and $95,006, respectively. For the
nine month periods ended September 30, 1996 and 1995, nonrecoverable start-up
and excess capacity costs were $91,350 and $406,675, respectively. These costs
represent labor and overhead costs incurred by the Company in excess of those
directly or indirectly attributable to system production. The decreases for the
periods are due to expanded usage of capacity as production volumes increased,
as well as lower overhead costs during 1996 as a result of a decrease in the
rental cost for the Company's manufacturing facilities.
Interest Expense
Interest expense represents interest on subordinated debentures payable to
related parties. Interest expense was $0 and $89,217 for the three month periods
ended September 30, 1996 and 1995, respectively, and $75,547 and $267,651 for
the nine month periods ended September 30, 1996 and 1995, respectively. The
decreases in interest expense for the periods are a result of the conversion of
the subordinated debentures to common stock during the second quarter of 1996.
Interest Income
Interest income was $185,554 and $88,036 for the three month periods ended
September 30, 1996 and 1995, respectively, and $427,994 and $291,233 for the
nine month periods ended September 30, 1996 and 1995, respectively. Interest
income primarily represents interest earned on the investment in U.S. government
securities of a substantial portion of the proceeds from the Company's initial
public offering and its subsequent non-registered offerings in 1996. The
increases in interest income for the periods are due to the investment of the
proceeds from the Company's Regulation S and private placement transactions
during the second quarter of 1996, offset somewhat by the Company's use of
proceeds from maturing investments to fund operations during 1995 and 1996.
Backlog
As of September 30, 1996, the Company had a backlog of approximately $382,000,
as compared to a backlog as of September 30, 1995 of approximately $356,000.
Backlog consists of orders received which generally have a specified delivery
schedule within three months of receipt.
12
<PAGE>
Liquidity and Capital Resources
At September 30, 1996, the Company had working capital of $11,061,412, an
increase of $2,380,937 from $8,680,475 at December 31, 1995. This increase in
working capital is primarily due to the increase in cash and accounts receivable
resulting from the maturity of certain investments during the third quarter of
1996 along with the Company's increased sales volume during 1996.
The Company generated cash from operating activities of $886,907 for the three
month period ended September 30, 1996 and used cash for operating activities of
$757,769 for the three month period ended September 30, 1995. For the nine month
periods ended September 30, 1996 and 1995, the Company used cash for operating
activities of $380,843 and $2,996,303, respectively. The decreases in cash used
for operating activities are due primarily to the increased sales volume during
1996.
The Company generated cash from investing activities of $1,603,130 for the three
month period ended September 30, 1996 due to the maturity of certain investments
in U.S. government securities. The Company used cash for investing activities of
$3,577,743 for the three months ended September 30, 1995 primarily due to the
reinvestment of a substantial portion of the proceeds from the Company's initial
public offering. For the nine month period ended September 30, 1996, the Company
used cash for investing activities of $5,481,374 primarily due to the investment
of a substantial portion of the proceeds from the Company's Regulation S and
private placement offerings during 1996. For the nine month period ended
September 30, 1995, the Company generated cash from investing activities of
$177,241 primarily due to the proceeds from maturing investments, offset
somewhat by the reinvestment of a substantial portion of those proceeds.
The Company generated cash from financing activities of $476 and $32,093 for the
three month periods ended September 30, 1996 and 1995, respectively, as a result
of the issuance of common stock upon exercise of employee stock options. The
Company generated cash from financing activities of $8,226,816 and $87,724 for
the nine month periods ended September 30, 1996 and 1995, respectively. The cash
generated from financing activities in 1996 is primarily attributable to the
issuance of common stock in connection with the Company's Regulation S offering
and other private placement transactions during 1996. The cash generated from
financing activities in 1995 represents proceeds from the issuance of common
stock upon exercise of employee stock options.
The Company's principal source of liquidity at September 30, 1996 consisted of
$8,625,582 in cash and short-term investments resulting from its initial public
offering and subsequent Regulation S and private placement offerings. Until the
Company generates sufficient revenues from system sales, it will be required to
continue to utilize this source of liquidity to cover the continuing expense of
product development, marketing and general administration. The Company believes
its source of liquidity will provide sufficient resources to meet its cash
requirements for the next twelve months as well as on a longer-term basis.
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 3. Legal Proceedings
Not applicable.
ITEM 2. Changes in Securities
Not applicable.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not applicable.
ITEM 5. Other Information
Not applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------------------
4.1 Warrant for Whale Securities Co.
4.2 Warrant for Frog Hollow Partners
10.1 Consulting Agreement, as amended
27.1 Financial data schedule
(b) No reports on Form 8-K were filed during the quarter
ende September 30, 1996.
14
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ParkerVision, Inc.
Registrant
November 13, 1996 By: /s/ Jeffrey Parker
---------------------------------------
Jeffrey Parker
Chairman, President and Chief Executive
Officer
November 13, 1996 By: /s/ Cynthia Poehlman
---------------------------------------
Cynthia Poehlman
Chief Accounting Officer
15
<PAGE>
Exhibit Index
Exhibit Number Description
- -------------- -------------------------------
4.1 Warrant for Whale Securities Co.
4.2 Warrant for Frog Hollow Partners
10.1 Consulting Agreement, as amended
27.1 Financial data schedule
16
<PAGE>
THE REGISTERED HOLDER OF THIS WARRANT, BY ITS ACCEPTANCE HEREOF,
AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS WARRANT EXCEPT
AS HEREIN PROVIDED.
VOID AFTER 5:00 P.M. EASTERN TIME, JULY 16, 2001.
WARRANT
For the Purchase of
100,000 Shares of Common Stock
of
PARKERVISION, INC.
1. Warrant.
THIS CERTIFIES THAT, in consideration of $10.00 and other good
and valuable consideration, duly paid by or on behalf of WHALE SECURITIES CO.,
L.P. ("Holder"), as registered owner of this Warrant, to ParkerVision, Inc.
("Company"), Holder is entitled, at any time or from time to time at or after
July 16, 1996 ("Commencement Date"), and at or before 5:00 p.m., Eastern Time,
July 16, 2001 ("Expiration Date"), but not thereafter, to subscribe for,
purchase and receive, in whole or in part, up to one hundred thousand (100,000)
shares of Common Stock of the Company, $.01 par value ("Common Stock"). If the
Expiration Date is a day on which banking institutions are authorized by law to
close, then this Warrant may be exercised on the next succeeding day which is
not such a day in accordance with the terms herein. During the period ending on
the Expiration Date, the Company agrees not to take any action that would
terminate the Warrant. This Warrant is initially exercisable at $10 per share of
Common Stock purchased; provided, however, that upon the occurrence of any of
the events specified in Section 6 hereof, the rights granted by this Warrant,
including the exercise price and the number of shares of Common Stock to be
received upon such exercise, shall be adjusted as therein specified. The term
"Exercise Price" shall mean the initial exercise price or the adjusted exercise
price, depending on the context, of a share of Common Stock. The term
"Securities" shall mean the shares of Common Stock issuable upon exercise of
this Warrant.
2. Exercise.
2.1 Exercise Form. In order to exercise this Warrant, the exercise
form attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price for the
Securities being purchased. If the subscription rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Warrant shall become and be void without further force or effect, and all
rights represented hereby shall cease and expire.
<PAGE>
2.2 Legend. Each certificate for Securities purchased under this
Warrant shall bear a legend as follows, unless such Securities have been
registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act") or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act,
or pursuant to an exemption from registration under the Act
and applicable state law."
3. Transfer.
3.1 General Restrictions. The registered Holder of this Warrant, by its
acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
immediately transfer this Warrant on the books of the Company and shall execute
and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of
shares of Common Stock purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Warrant and the
Securities underlying this Warrant shall not be transferred unless and until (i)
the Company has received the opinion of counsel for the Holder that such
securities may be sold pursuant to an exemption from registration under the Act,
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Securities has been filed by the Company and declared effective
by the Securities and Exchange Commission and compliance with applicable state
law.
4. New Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in
Section 3 hereof, this Warrant may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Warrant for cancellation, together with the duly executed exercise or
assignment form and funds (or conversion equivalent) sufficient to pay any
Exercise Price and/or transfer tax, the Company shall cause to be delivered to
the Holder without charge a new Warrant of like tenor to this Warrant in the
name of the Holder evidencing the right of the Holder to purchase the aggregate
number of shares of Common Stock and Warrants purchasable hereunder as to which
this Warrant has not been exercised or assigned.
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4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of reasonably satisfactory indemnification, the Company shall execute and
deliver a new Warrant of like tenor and date. Any such new Warrant executed and
delivered as a result of such loss, theft, mutilation or destruction shall
constitute a substitute contractual obligation on the part of the Company.
5. Registration Rights.
5.1 "Piggy-Back" Registration.
5.1.1 Grant of Right. The Holders of this Warrant shall have
the right for a period of seven years from the Commencement Date to include all
or any part of this Warrant and the shares of Common Stock underlying this
Warrant (collectively, the "Registrable Securities") as part of any registration
of securities filed by the Company (other than in connection with a transaction
contemplated by Rule 145(a) promulgated under the Act or pursuant to Form S-8 or
any equivalent form); provided, however, that if, in the written opinion of the
Company's managing underwriter or underwriters, if any, for such offering (the
"Underwriter"), the inclusion of the Registrable Securities, when added to the
securities being registered by the Company or the selling stockholder(s), will
exceed the maximum amount of the Company's securities which can be marketed (i)
at a price reasonably related to their then current market value, or (ii)
without materially and adversely affecting the entire offering, the Company
shall nevertheless register all or any portion of the Registrable Securities
required to be so registered but such Registrable Securities shall not be sold
by the Holders until 90 days after the registration statement for such offering
has become effective; and provided further that, if any securities are
registered for sale on behalf of other stockholders in such offering and such
stockholders have not agreed to defer such sale until the expiration of such 90
day period, the number of securities to be sold by all stockholders in such
public offering during such 90 day period shall be apportioned pro rata among
all such selling stockholders, including all holders of the Registrable
Securities, according to the total amount of securities of the Company proposed
to be sold by said selling stockholders, including all holders of the
Registrable Securities.
5.1.2 Terms. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, but the Holders shall pay
any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed registration, the
Company shall furnish the then Holders of outstanding Registrable Securities
with not less than thirty days written notice prior to the proposed date of
filing of such registration statement. Such notice to the Holders shall continue
to be given for each registration statement filed by the Company until such time
as all of the Registrable Securities have been sold by the Holder. The holders
of the Registrable Securities shall exercise the "piggy-back" rights provided
for herein by giving written notice, within twenty days of the receipt of the
Company's notice of its intention to file a registration statement. The Company
shall cause any registration statement filed pursuant to the above "piggyback"
rights to remain effective for at least nine months from the date that the
Holders of the Registrable Securities are first given the opportunity to sell
all of such securities; provided, however, that if such registration statement
is on Form S-3, the Company shall use its reasonable efforts (but shall not be
required) to cause such registration statement to remain effective until such
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time as all the Registrable Securities have been sold or are otherwise free for
sale under an exemption under the Act. Nothing contained in this Warrant shall
be construed as requiring any Holder to exercise this Warrant or any part
thereof prior to the initial filing of any registration statement or the
effectiveness thereof.
5.2 General Terms.
5.2.1 Indemnification.
(a) The Company shall indemnify the Holder(s) of
the Registrable Securities to be sold pursuant to any registration statement
hereunder and any underwriter or person deemed to be an underwriter under the
Act and each person, if any, who controls such Holders or underwriter or persons
deemed to be underwriters within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
against all loss, claim, damage, expense or liability (including all reasonable
attorneys' fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from such
registration statement. The Holder(s) of the Registrable Securities to be sold
pursuant to such registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, against all loss, claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which they may become subject under the Act, the
Exchange Act or otherwise, arising from information furnished by or on behalf of
such Holders, in writing, for specific inclusion in such registration statement.
(b) If any action is brought against a party hereto,
("Indemnified Party") in respect of which indemnity may be sought against the
other party ("Indemnifying Party"), such Indemnified Party shall promptly notify
Indemnifying Party in writing of the institution of such action and Indemnifying
Party shall assume the defense of such action, including the employment and fees
of counsel reasonably satisfactory to the Indemnified Party. Such Indemnified
Party shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the employment of such counsel shall have been
authorized in writing by Indemnifying Party in connection with the defense of
such action, or (ii) Indemnifying Party shall not have employed counsel to
defend such action, or (iii) such Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it which may
result in a conflict between the Indemnified Party and Indemnifying Party (in
which case Indemnifying Party shall not have the right to direct the defense of
such action on behalf of the Indemnified Party), in any of which events, the
reasonable fees and expenses of not more than one additional firm of attorneys
designated in writing by the Indemnified Party shall be borne by Indemnifying
Party. Notwithstanding anything to the contrary contained herein, if Indemnified
Party shall assume the defense of such action as provided above, Indemnifying
Party shall not be liable for any settlement of any such action effected without
its written consent.
(c) If the indemnification or reimbursement provided
for hereunder is finally judicially determined by a court of competent
jurisdiction to be unavailable to an Indemnified Party (other than as a
consequence of a final judicial determination of willful misconduct, bad faith
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<PAGE>
or gross negligence of such Indemnified Party), then Indemnifying Party agrees,
in lieu of indemnifying such Indemnified Party, to contribute to the amount paid
or payable by such Indemnified Party (i) in such proportion as is appropriate to
reflect the relative benefits received, or sought to be received, by
Indemnifying Party on the one hand and by such Indemnified Party on the other or
(ii) if (but only if) the allocation provided in clause (i) of this sentence is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in such clause (i) but also the
relative fault of Indemnifying Party and of such Indemnified Party; provided,
however, that in no event shall the aggregate amount contributed by a Holder
exceed the profit, if any, earned by such Holder as a result of the exercise by
him of the Warrants and the sale by him of the underlying shares of Common
Stock.
(d) The rights accorded to Indemnified Parties hereunder
shall be in addition to any rights that any Indemnified Party may have at common
law, by separate agreement or otherwise.
5.2.2 Exercise of Warrants. Nothing contained in this Warrant
shall be construed as requiring the Holder(s) to exercise their Warrants prior
to or after the initial filing of any registration statement or the
effectiveness thereof.
5.2.3 Documents Delivered to Holders. The Company shall
furnish to each Holder participating in any of the foregoing offerings and to
each Underwriter of any such offering, if any, a signed counterpart, addressed
to such Holder or Underwriter, of (i) an opinion of counsel to the Company,
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting agreement related thereto), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and to the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement and permit each Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as any such Holder shall reasonably request.
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<PAGE>
6. Adjustments.
6.1 Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of shares of Common Stock underlying this Warrant
shall be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Stock Dividends - Recapitalization, Reclassification,
Split-Ups. If, after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend on the Common Stock payable in shares of Common Stock or by a
split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares
of Common Stock issuable on exercise of this Warrant shall be increased in
proportion to such increase in outstanding shares.
6.1.2 Aggregation of Shares. If after the date hereof, and
subject to the provisions of Section 6.2, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, upon the effective date
thereof, the number of shares of Common Stock issuable on exercise of this
Warrant shall be decreased in proportion to such decrease in outstanding shares.
6.1.3 Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Warrant is
adjusted, as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying such Exercise Price immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
6.1.4 Replacement of Securities upon Reorganization, etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 6.1.1 hereof or which solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter (until the
expiration of the right of exercise of this Warrant) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a Holder of the number of shares of Common Stock
of the Company obtainable upon exercise of this Warrant immediately prior to
such event; and if any reclassification also results in a change in shares of
Common Stock covered by Sections 6.1.1 or 6.1.2, then such adjustment shall be
made pursuant to Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The
provisions of this Section 6.1.4 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
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6.1.5 Changes in Form of Warrant. This form of Warrant need
not be changed because of any change pursuant to this Section, and Warrants
issued after such change may state the same Exercise Price and the same number
of shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
6.2 Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of this Warrant, nor shall it be required to issue scrip or
pay cash in lieu of any fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
7. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Warrant, such number of shares of Common Stock
or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed
and/or quoted.
8. Certain Notice Requirements.
8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the
Company shall give written notice of such event at least fifteen days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
conversion or exchange of securities or subscription rights, or entitled to vote
on such proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer books, as
the case may be.
8.2 Events Requiring Notice. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
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dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a merger or reorganization in which the Company is not the
surviving party, or (iv) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change in Exercise Price. The Company shall, promptly
after an event requiring a change in the Exercise Price pursuant to Section 6
hereof, send notice to the Holders of such event and change ("Price Notice").
The Price Notice shall describe the event causing the change and the method of
calculating same and shall be certified as being true and accurate by the
Company's President and Chief Financial Officer.
8.4 Transmittal of Notices. All notices, requests, consents and other
communications under this Warrant shall be in writing and shall be deemed to
have been duly made on the date of delivery if delivered personally or sent by
overnight courier, with acknowledgment of receipt by the party to which notice
is given, or on the fifth day after mailing if mailed to the party to whom
notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of this Warrant, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, to its principal executive
office.
9. Miscellaneous.
9.1 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.
9.2 Entire Agreement. This Warrant (together with the other agreements
and documents being delivered pursuant to or in connection with this Warrant)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
9.3 Binding Effect. This Warrant shall inure solely to the benefit of
and shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
9.4 Governing Law; Submission to Jurisdiction. This Warrant shall be
governed by and construed and enforced in accordance with the law of the State
of New York, without giving effect to conflict of laws. The Company and the
Holder hereby agree that any action, proceeding or claim arising out of, or
relating in any way to this Warrant shall be brought and enforced in the courts
of the State of New York or of the United States of America for the Southern
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive.
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The Company and the Holder hereby waive any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any process
or summons to be served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim. Each of the Company and the Holder
agrees that the prevailing party(ies) in any such action shall be entitled to
recover from the other party(ies) all of its reasonable attorneys' fees and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
9.5 Waiver, Etc. The failure of the Company or the Holder to at any
time enforce any of the provisions of this Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Warrant or any provision hereof or the right of the Company or
any Holder to thereafter enforce each and every provision of this Warrant. No
waiver of any breach, non-compliance or non-fulfillment of any of the provisions
of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer as of the 16th day of July, 1996.
PARKERVISION, INC.
By: _____________________________________
Name: Jeffrey Parker
Title: President
REGISTERED HOLDER INFORMATION:
WHALE SECURITIES CO., L.P.
650 Fifth Avenue
New York, New York 10019
ID # 13-3409415
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Form to be used to exercise Warrant:
- -----------------------------------
Date:_________________, ____
The undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase ____ shares of Common Stock of ParkerVision, Inc.
and hereby makes payment of $____________ (at the rate of $_________ per share
of Common Stock) in payment of the Exercise Price pursuant thereto. Please issue
the Common Stock as to which this Warrant is exercised in accordance with the
instructions given below.
------------------------------
Signature
- ------------------------------
Signature Guaranteed
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name ________________________________________________________
(Print in Block Letters)
Address ________________________________________________________
<PAGE>
Form to be used to assign Warrant:
- ---------------------------------
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer
of the within Warrant):
FOR VALUE RECEIVED,____________________________________ does
hereby sell, assign and transfer unto_______________________ the right to
purchase _______________________ shares of Common Stock of ParkerVision, Inc.
("Company") evidenced by the within Warrant and does hereby authorize the
Company to transfer such right on the books of the Company.
Dated:___________________, _____
------------------------------
Signature
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever.
<PAGE>
THE REGISTERED HOLDER OF THIS WARRANT, BY ITS ACCEPTANCE HEREOF,
AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS WARRANT EXCEPT
AS HEREIN PROVIDED.
VOID AFTER 5:00 P.M. EASTERN TIME, JULY 16, 2001.
WARRANT
For the Purchase of
100,000 Shares of Common Stock
of
PARKERVISION, INC.
1. Warrant.
THIS CERTIFIES THAT, in consideration of $10.00 and other good
and valuable consideration, duly paid by or on behalf of FROG HOLLOW PARTNERS
("Holder"), as registered owner of this Warrant, to ParkerVision, Inc.
("Company"), Holder is entitled, at any time or from time to time at or after
July 16, 1996 ("Commencement Date"), and at or before 5:00 p.m., Eastern Time,
July 16, 2001 ("Expiration Date"), but not thereafter, to subscribe for,
purchase and receive, in whole or in part, up to one hundred thousand (100,000)
shares of Common Stock of the Company, $.01 par value ("Common Stock"). If the
Expiration Date is a day on which banking institutions are authorized by law to
close, then this Warrant may be exercised on the next succeeding day which is
not such a day in accordance with the terms herein. During the period ending on
the Expiration Date, the Company agrees not to take any action that would
terminate the Warrant. This Warrant is initially exercisable at $10 per share of
Common Stock purchased; provided, however, that upon the occurrence of any of
the events specified in Section 6 hereof, the rights granted by this Warrant,
including the exercise price and the number of shares of Common Stock to be
received upon such exercise, shall be adjusted as therein specified. The term
"Exercise Price" shall mean the initial exercise price or the adjusted exercise
price, depending on the context, of a share of Common Stock. The term
"Securities" shall mean the shares of Common Stock issuable upon exercise of
this Warrant.
2. Exercise.
2.1 Exercise Form. In order to exercise this Warrant, the exercise
form attached hereto must be duly executed and completed and delivered to the
Company, together with this Warrant and payment of the Exercise Price for the
Securities being purchased. If the subscription rights represented hereby shall
<PAGE>
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Warrant shall become and be void without further force or effect, and all
rights represented hereby shall cease and expire.
2.2 Legend. Each certificate for Securities purchased under this
Warrant shall bear a legend as follows, unless such Securities have been
registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act") or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act,
or pursuant to an exemption from registration under the Act
and applicable state law."
3. Transfer.
3.1 General Restrictions. The registered Holder of this Warrant, by its
acceptance hereof, agrees that it will not sell, transfer or assign or
hypothecate this Warrant to anyone except upon compliance with, or pursuant to
exemptions from, applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with this Warrant and payment of
all transfer taxes, if any, payable in connection therewith. The Company shall
immediately transfer this Warrant on the books of the Company and shall execute
and deliver a new Warrant or Warrants of like tenor to the appropriate
assignee(s) expressly evidencing the right to purchase the aggregate number of
shares of Common Stock purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.
3.2 Restrictions Imposed by the Securities Act. This Warrant and the
Securities underlying this Warrant shall not be transferred unless and until (i)
the Company has received the opinion of counsel for the Holder that such
securities may be sold pursuant to an exemption from registration under the Act,
and applicable state law, the availability of which is established to the
reasonable satisfaction of the Company, or (ii) a registration statement
relating to such Securities has been filed by the Company and declared effective
by the Securities and Exchange Commission and compliance with applicable state
law.
4. New Warrants to be Issued.
4.1 Partial Exercise or Transfer. Subject to the restrictions in
Section 3 hereof, this Warrant may be exercised or assigned in whole or in part.
In the event of the exercise or assignment hereof in part only, upon surrender
of this Warrant for cancellation, together with the duly executed exercise or
assignment form and funds (or conversion equivalent) sufficient to pay any
Exercise Price and/or transfer tax, the Company shall cause to be delivered to
the Holder without charge a new Warrant of like tenor to this Warrant in the
name of the Holder evidencing the right of the Holder to purchase the aggregate
number of shares of Common Stock and Warrants purchasable hereunder as to which
this Warrant has not been exercised or assigned.
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4.2 Lost Certificate. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
and of reasonably satisfactory indemnification, the Company shall execute and
deliver a new Warrant of like tenor and date. Any such new Warrant executed and
delivered as a result of such loss, theft, mutilation or destruction shall
constitute a substitute contractual obligation on the part of the Company.
5. Registration Rights.
5.1 "Piggy-Back" Registration.
5.1.1 Grant of Right. The Holders of this Warrant shall have
the right for a period of seven years from the Commencement Date to include all
or any part of this Warrant and the shares of Common Stock underlying this
Warrant (collectively, the "Registrable Securities") as part of any registration
of securities filed by the Company (other than in connection with a transaction
contemplated by Rule 145(a) promulgated under the Act or pursuant to Form S-8 or
any equivalent form); provided, however, that if, in the written opinion of the
Company's managing underwriter or underwriters, if any, for such offering (the
"Underwriter"), the inclusion of the Registrable Securities, when added to the
securities being registered by the Company or the selling stockholder(s), will
exceed the maximum amount of the Company's securities which can be marketed (i)
at a price reasonably related to their then current market value, or (ii)
without materially and adversely affecting the entire offering, the Company
shall nevertheless register all or any portion of the Registrable Securities
required to be so registered but such Registrable Securities shall not be sold
by the Holders until 90 days after the registration statement for such offering
has become effective; and provided further that, if any securities are
registered for sale on behalf of other stockholders in such offering and such
stockholders have not agreed to defer such sale until the expiration of such 90
day period, the number of securities to be sold by all stockholders in such
public offering during such 90 day period shall be apportioned pro rata among
all such selling stockholders, including all holders of the Registrable
Securities, according to the total amount of securities of the Company proposed
to be sold by said selling stockholders, including all holders of the
Registrable Securities.
5.1.2 Terms. The Company shall bear all fees and expenses
attendant to registering the Registrable Securities, but the Holders shall pay
any and all underwriting commissions and the expenses of any legal counsel
selected by the Holders to represent them in connection with the sale of the
Registrable Securities. In the event of such a proposed registration, the
Company shall furnish the then Holders of outstanding Registrable Securities
with not less than thirty days written notice prior to the proposed date of
filing of such registration statement. Such notice to the Holders shall continue
to be given for each registration statement filed by the Company until such time
as all of the Registrable Securities have been sold by the Holder. The holders
of the Registrable Securities shall exercise the "piggy-back" rights provided
for herein by giving written notice, within twenty days of the receipt of the
Company's notice of its intention to file a registration statement. The Company
shall cause any registration statement filed pursuant to the above "piggyback"
rights to remain effective for at least nine months from the date that the
Holders of the Registrable Securities are first given the opportunity to sell
all of such securities; provided, however, that if such registration statement
is on Form S-3, the Company shall use its reasonable efforts (but shall not be
required) to cause such registration
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statement to remain effective until such time as all the Registrable Securities
have been sold or are otherwise free for sale under an exemption under the Act.
Nothing contained in this Warrant shall be construed as requiring any Holder to
exercise this Warrant or any part thereof prior to the initial filing of any
registration statement or the effectiveness thereof.
5.2 General Terms.
5.2.1 Indemnification.
(a) The Company shall indemnify the Holder(s) of
the Registrable Securities to be sold pursuant to any registration statement
hereunder and any underwriter or person deemed to be an underwriter under the
Act and each person, if any, who controls such Holders or underwriter or persons
deemed to be underwriters within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
against all loss, claim, damage, expense or liability (including all reasonable
attorneys' fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from such
registration statement. The Holder(s) of the Registrable Securities to be sold
pursuant to such registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, against all loss, claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which they may become subject under the Act, the
Exchange Act or otherwise, arising from information furnished by or on behalf of
such Holders, in writing, for specific inclusion in such registration statement.
(b) If any action is brought against a party hereto,
("Indemnified Party") in respect of which indemnity may be sought against the
other party ("Indemnifying Party"), such Indemnified Party shall promptly notify
Indemnifying Party in writing of the institution of such action and Indemnifying
Party shall assume the defense of such action, including the employment and fees
of counsel reasonably satisfactory to the Indemnified Party. Such Indemnified
Party shall have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the employment of such counsel shall have been
authorized in writing by Indemnifying Party in connection with the defense of
such action, or (ii) Indemnifying Party shall not have employed counsel to
defend such action, or (iii) such Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to it which may
result in a conflict between the Indemnified Party and Indemnifying Party (in
which case Indemnifying Party shall not have the right to direct the defense of
such action on behalf of the Indemnified Party), in any of which events, the
reasonable fees and expenses of not more than one additional firm of attorneys
designated in writing by the Indemnified Party shall be borne by Indemnifying
Party. Notwithstanding anything to the contrary contained herein, if Indemnified
Party shall assume the defense of such action as provided above, Indemnifying
Party shall not be liable for any settlement of any such action effected without
its written consent.
(c) If the indemnification or reimbursement provided
for hereunder is finally judicially determined by a court of competent
jurisdiction to be unavailable to an Indemnified Party (other than as a
consequence of a final judicial determination of willful misconduct, bad faith
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<PAGE>
or gross negligence of such Indemnified Party), then Indemnifying Party agrees,
in lieu of indemnifying such Indemnified Party, to contribute to the amount paid
or payable by such Indemnified Party (i) in such proportion as is appropriate to
reflect the relative benefits received, or sought to be received, by
Indemnifying Party on the one hand and by such Indemnified Party on the other or
(ii) if (but only if) the allocation provided in clause (i) of this sentence is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in such clause (i) but also the
relative fault of Indemnifying Party and of such Indemnified Party; provided,
however, that in no event shall the aggregate amount contributed by a Holder
exceed the profit, if any, earned by such Holder as a result of the exercise by
him of the Warrants and the sale by him of the underlying shares of Common
Stock.
(d) The rights accorded to Indemnified Parties
hereunder shall be in addition to any rights that any Indemnified Party may have
at common law, by separate agreement or otherwise.
5.2.2 Exercise of Warrants. Nothing contained in this Warrant
shall be construed as requiring the Holder(s) to exercise their Warrants prior
to or after the initial filing of any registration statement or the
effectiveness thereof.
5.2.3 Documents Delivered to Holders. The Company shall
furnish to each Holder participating in any of the foregoing offerings and to
each Underwriter of any such offering, if any, a signed counterpart, addressed
to such Holder or Underwriter, of (i) an opinion of counsel to the Company,
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting agreement related thereto), and (ii) a
"cold comfort" letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to each Holder
participating in the offering requesting the correspondence and memoranda
described below and to the managing underwriter copies of all correspondence
between the Commission and the Company, its counsel or auditors and all
memoranda relating to discussions with the Commission or its staff with respect
to the registration statement and permit each Holder and underwriter to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the NASD. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as any such Holder shall reasonably request.
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<PAGE>
6. Adjustments.
6.1 Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of shares of Common Stock underlying this Warrant
shall be subject to adjustment from time to time as hereinafter set forth:
6.1.1 Stock Dividends - Recapitalization, Reclassification,
Split-Ups. If, after the date hereof, and subject to the provisions of Section
6.2 below, the number of outstanding shares of Common Stock is increased by a
stock dividend on the Common Stock payable in shares of Common Stock or by a
split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares
of Common Stock issuable on exercise of this Warrant shall be increased in
proportion to such increase in outstanding shares.
6.1.2 Aggregation of Shares. If after the date hereof, and
subject to the provisions of Section 6.2, the number of outstanding shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event, then, upon the effective date
thereof, the number of shares of Common Stock issuable on exercise of this
Warrant shall be decreased in proportion to such decrease in outstanding shares.
6.1.3 Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Warrant is
adjusted, as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying such Exercise Price immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of this Warrant immediately
prior to such adjustment, and (y) the denominator of which shall be the number
of shares of Common Stock so purchasable immediately thereafter.
6.1.4 Replacement of Securities upon Reorganization, etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 6.1.1 hereof or which solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of this Warrant shall have the right thereafter (until the
expiration of the right of exercise of this Warrant) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a Holder of the number of shares of Common Stock
of the Company obtainable upon exercise of this Warrant immediately prior to
such event; and if any reclassification also results in a change in shares of
Common Stock covered by Sections 6.1.1 or 6.1.2, then such adjustment shall be
made pursuant to Sections 6.1.1, 6.1.2, 6.1.3 and this Section 6.1.4. The
provisions of this Section 6.1.4 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
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6.1.5 Changes in Form of Warrant. This form of Warrant need
not be changed because of any change pursuant to this Section, and Warrants
issued after such change may state the same Exercise Price and the same number
of shares of Common Stock and Warrants as are stated in the Warrants initially
issued pursuant to this Agreement. The acceptance by any Holder of the issuance
of new Warrants reflecting a required or permissive change shall not be deemed
to waive any rights to a prior adjustment or the computation thereof.
6.2 Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of this Warrant, nor shall it be required to issue scrip or
pay cash in lieu of any fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
7. Reservation and Listing. The Company shall at all times reserve and keep
available out of its authorized shares of Common Stock, solely for the purpose
of issuance upon exercise of this Warrant, such number of shares of Common Stock
or other securities, properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of the Warrants
and payment of the Exercise Price therefor, all shares of Common Stock and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Warrants shall be outstanding, the Company shall use its best
efforts to cause all shares of Common Stock issuable upon exercise of the
Warrants to be listed (subject to official notice of issuance) on all securities
exchanges (or, if applicable on Nasdaq) on which the Common Stock is then listed
and/or quoted.
8. Certain Notice Requirements.
8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the events
described in Section 8.2 shall occur, then, in one or more of said events, the
Company shall give written notice of such event at least fifteen days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the stockholders entitled to such dividend, distribution,
conversion or exchange of securities or subscription rights, or entitled to vote
on such proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer books, as
the case may be.
8.2 Events Requiring Notice. The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
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dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a merger or reorganization in which the Company is not the
surviving party, or (iv) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed.
8.3 Notice of Change in Exercise Price. The Company shall, promptly
after an event requiring a change in the Exercise Price pursuant to Section 6
hereof, send notice to the Holders of such event and change ("Price Notice").
The Price Notice shall describe the event causing the change and the method of
calculating same and shall be certified as being true and accurate by the
Company's President and Chief Financial Officer.
8.4 Transmittal of Notices. All notices, requests, consents and other
communications under this Warrant shall be in writing and shall be deemed to
have been duly made on the date of delivery if delivered personally or sent by
overnight courier, with acknowledgment of receipt by the party to which notice
is given, or on the fifth day after mailing if mailed to the party to whom
notice is to be given, by registered or certified mail, return receipt
requested, postage prepaid and properly addressed as follows: (i) if to the
registered Holder of this Warrant, to the address of such Holder as shown on the
books of the Company, or (ii) if to the Company, to its principal executive
office.
9. Miscellaneous.
9.1 Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Warrant.
9.2 Entire Agreement. This Warrant (together with the other agreements
and documents being delivered pursuant to or in connection with this Warrant)
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements and understandings of
the parties, oral and written, with respect to the subject matter hereof.
9.3 Binding Effect. This Warrant shall inure solely to the benefit of
and shall be binding upon, the Holder and the Company and their respective
successors, legal representatives and assigns, and no other person shall have or
be construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Warrant or any provisions herein contained.
9.4 Governing Law; Submission to Jurisdiction. This Warrant shall be
governed by and construed and enforced in accordance with the law of the State
of New York, without giving effect to conflict of laws. The Company and the
Holder hereby agree that any action, proceeding or claim arising out of, or
relating in any way to this Warrant shall be brought and enforced in the courts
of the State of New York or of the United States of America for the Southern
District of New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company and the Holder hereby waive any
8
<PAGE>
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum. Any process or summons to be served upon the Company may be
served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to it at the address set forth in
Section 8 hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the Company in any action, proceeding or claim. Each of
the Company and the Holder agrees that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
9.5 Waiver, Etc. The failure of the Company or the Holder to at any
time enforce any of the provisions of this Warrant shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Warrant or any provision hereof or the right of the Company or
any Holder to thereafter enforce each and every provision of this Warrant. No
waiver of any breach, non-compliance or non-fulfillment of any of the provisions
of this Warrant shall be effective unless set forth in a written instrument
executed by the party or parties against whom or which enforcement of such
waiver is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any other or
subsequent breach, non-compliance or non-fulfillment.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer as of the 16th day of July, 1996.
PARKERVISION, INC.
By: ____________________________
Name: Jeffrey Parker
Title: President
REGISTERED HOLDER INFORMATION:
FROG HOLLOW PARTNERS
Attn: James D. Whitten, General Partner
2801 Ocean Drive
Vero Beach, FL 32963
ID # ###-##-####
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Form to be used to exercise Warrant:
- -----------------------------------
Date:_________________, ____
The undersigned hereby elects irrevocably to exercise the
within Warrant and to purchase ____ shares of Common Stock of ParkerVision, Inc.
and hereby makes payment of $____________ (at the rate of $_________ per share
of Common Stock) in payment of the Exercise Price pursuant thereto. Please issue
the Common Stock as to which this Warrant is exercised in accordance with the
instructions given below.
------------------------------
Signature
- ------------------------------
Signature Guaranteed
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank, other than a savings bank, or by a trust company or by a firm having
membership on a registered national securities exchange.
INSTRUCTIONS FOR REGISTRATION OF SECURITIES
Name ________________________________________________________
(Print in Block Letters)
Address ________________________________________________________
<PAGE>
Form to be used to assign Warrant:
- ---------------------------------
ASSIGNMENT
(To be executed by the registered Holder to effect a transfer
of the within Warrant):
FOR VALUE RECEIVED,____________________________________ does
hereby sell, assign and transfer unto_______________________ the right to
purchase _______________________ shares of Common Stock of ParkerVision, Inc.
("Company") evidenced by the within Warrant and does hereby authorize the
Company to transfer such right on the books of the Company.
Dated:___________________, _____
------------------------------
Signature
NOTICE: The signature to this form must correspond with the
name as written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever.
<PAGE>
CONSULTING AGREEMENT
July 16, 1996
ParkerVision, Inc.
8493 Baymeadows Way
Jacksonville, FL 32256
Attention: Mr. Jeffrey Parker, President
Dear Mr. Parker:
This will confirm the arrangements, terms and conditions
pursuant to which Whale Securities Co., L.P. (the "Consultant"), has been
retained to serve as a financial consultant and advisor to ParkerVision, Inc., a
Florida corporation (the "Company"), on a non-exclusive basis for a period of
three (3) years commencing on July 16, 1996; provided however that the Company
may terminate this Agreement at any time upon written notice to Consultant,
which termination shall not in any way affect the "Warrant" referred to in
paragraph 2, below. The undersigned hereby agrees to the following terms and
conditions:
1. Duties of Consultant.
(a) Advice Concerning Financing and Merger and Acquisition
Proposals. Consultant shall, at the request of the Company, upon reasonable
notice, assist the Company in developing, studying and evaluating financing and
merger and acquisition proposals based upon documentary information provided to
the Consultant by the Company.
(b) Wall Street Liaison. Consultant shall, when appropriate,
arrange meetings between representatives of the Company and individuals and
financial institutions in the investment community, such as security analysts,
portfolio managers and market makers.
The services described in this Section 1 shall be rendered by
Consultant without any direct supervision by the Company and at such time and
place and in such manner (whether by conference, telephone, letter or otherwise)
as Consultant may determine.
2. Compensation. As compensation for Consultant's services
hereunder, the Company shall issue to Consultant and/or its designees a warrant
(the "Warrant") to purchase 200,000 shares of Common Stock of the Company at an
exercise price of $10 per share. The Warrant shall expire on July 16, 2001. The
Warrant and the shares issuable upon the exercise thereof will contain piggyback
registration rights and otherwise be in form reasonably satisfactory to
Consultant, the Company and their respective counsel. By its signature hereto,
Consultant is hereby authorizing and instructing the Company to issue the
Warrants in the following names and denominations:
Holder No. of Shares
------ -------------
Whale Securities Co., L.P. 100,000
Frog Hollow Partners 100,000
3. Available Time. Consultant shall make available such time
as it, in its discretion, shall deem appropriate for the performance of its
obligations under this agreement.
<PAGE>
4. Relationship. Nothing herein shall constitute Consultant
as an employee or agent of the Company, except to such extent as might hereafter
be agreed upon for a particular purpose. Except as might hereafter be expressly
agreed, Consultant shall not have the authority to obligate or commit the
Company in any manner whatsoever.
5. Indemnity. The Company agrees to indemnify and hold
Consultant and each of its partners, employees and agents and each of the
officers, directors, shareholders, employees and agents of Consultant's general
partner harmless from and against any and all losses, claims, damages,
liabilities, costs and expenses, including, without limitation, reasonable
attorney's fees and disbursements, to which Consultant or any such parties may
become subject, arising in any manner out of or in connection with Consultant's
rendering of services under this Agreement, except for any losses, claims,
damages, liabilities, costs or expenses resulting from any act of Consultant
involving its gross negligence or intentional misconduct.
6. Waiver of Special Anti-Dilution Rights. Reference is made
to the Warrant Agreement, dated as of November 30, 1993, between the Company and
Consultant pursuant to which the Company issued to the Consultant warrants to
purchase 360,000 shares of the Company's common stock. The Company represents
and warrants to Consultant that, prior to April 10, 1996 (on which date the
Company agreed to consummate a transaction under Regulation S under the
Securities Act of 1933), there were no adjustments to the exercise price of such
warrants under paragraph 8 of the Warrant Agreement. In further consideration of
the issuance to the Consultant of the Warrants hereunder, the Consultant hereby
agrees that paragraph 8 of the Warrant Agreement shall be deleted and replaced
by the following:
"8. Adjustments.
8.1 Adjustments to Exercise Price and Number of Securities.
The Exercise Price and the number of shares of Common Stock underlying the
Warrants shall be subject to adjustment from time to time as hereinafter set
forth:
8.1.1 Stock Dividends - Recapitalization, Reclassifica-
tion, Split-Ups. If, after the date hereof, and subject to the provisions of
Section 8.2 below, the number of outstanding shares of Common Stock is increased
by a stock dividend on the Common Stock payable in shares of Common Stock or by
a split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares
of Common Stock issuable on exercise of the Warrants shall be increased in
proportion to such increase in outstanding shares.
8.1.2 Aggregation of Shares. If after the date hereof,
and subject to the provisions of Section 8.2, the number of outstanding shares
of Common Stock is decreased by a consolidation, combination or reclassification
of shares of Common Stock or other similar event, then, upon the effective date
thereof, the number of shares of Common Stock issuable on exercise of the
Warrants shall be decreased in proportion to such decrease in outstanding
shares.
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8.1.3 Adjustments in Exercise Price. Whenever the
number of shares of Common Stock purchasable upon the exercise of the Warrants
is adjusted, as provided in this Section 8.1, the Exercise Price shall be
adjusted (to the nearest cent) by multiplying such Exercise Price immediately
prior to such adjustment by a fraction (x) the numerator of which shall be the
number of shares of Common Stock purchasable upon the exercise of the Warrants
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.
8.1.4 Replacement of Securities upon Reorganization,
etc. In case of any reclassification or reorganization of the outstanding shares
of Common Stock other than a change covered by Section 8.1.1 hereof or which
solely affects the par value of such shares of Common Stock, or in the case of
any merger or consolidation of the Company with or into another corporation
(other than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the property of the Company as an
entirety or substantially as an entirety in connection with which the Company is
dissolved, the Holder of the Warrants shall have the right thereafter (until the
expiration of the right of exercise of the Warrants) to receive upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by a Holder of the number of shares of Common Stock
of the Company obtainable upon exercise of the Warrants immediately prior to
such event; and if any reclassification also results in a change in shares of
Common Stock covered by Sections 8.1.1 or 8.1.2, then such adjustment shall be
made pursuant to Sections 8.1.1, 8.1.2, 8.1.3 and this Section 8.1.4. The
provisions of this Section 8.1.4 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
8.1.5 Changes in Form of Warrant. The form of Warrant
Certificate need not be changed because of any change pursuant to this Section,
and Warrant Certificate issued after such change may state the same Exercise
Price and the same number of shares of Common Stock and Warrant Certificate as
are stated in the Warrant Certificate initially issued pursuant to this
Agreement. The acceptance by any Holder of the issuance of new Warrant
Certificates reflecting a required or permissive change shall not be deemed to
waive any rights to a prior adjustment or the computation thereof.
8.2 Elimination of Fractional Interests. The Company shall
not be required to issue certificates representing fractions of shares of Common
Stock upon the exercise of the Warrants, nor shall it be required to issue scrip
or pay cash in lieu of any fractional interests, it being the intent of the
parties that all fractional interests shall be eliminated by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights."
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Upon the execution of this Agreement, the Warrant Agreement
shall be deemed amended as set forth above and shall continue in full force and
effect as so amended. Each of Consultant and Dickinson & Co. agree that such
amendment shall be retroactive to the date of execution of the Warrant Agreement
and that, based upon the Company's representation and warranty contained in the
first paragraph of this Section 6, the "Exercise Price" under the Warrant
Agreement is currently $8.25. Each of Consultant and Dickinson & Co. represent
that it has full right and authority to effect the foregoing amendment.
7. Assignment and Termination. This Agreement shall not
be assignable by any party; provided that the Consultant may transfer or assign
the Warrants as specified therein.
8. Governing Law. This Agreement shall be deemed to be
a contract made under the laws of the State of New York and for all purposes
shall be construed in accordance with the laws of said State.
9. Counterparts. This Agreement may be signed in counter-
parts which, together, shall constitute one and the same Agreement.
If the foregoing reflects your understanding, please execute
the enclosed copy of this letter and return it to Consultant, whereupon this
letter shall become a binding agreement between the Company and Consultant.
Very truly yours,
WHALE SECURITIES CO., L.P.
By: Whale Securities Corp.,
General Partner
By: ___________________________
Name: William G. Walters
Title: Chairman
AGREED AND ACCEPTED:
PARKERVISION, INC.
By: _____________________________
Name: Jeffrey Parker
Title: President
Paragraph 6 is accepted and agreed to:
DICKINSON & CO.
By: _____________________________
4
<PAGE>
PARKERVISION, INC.
8493 BAYMEADOWS WAY
JACKSONVILLE, FLORIDA 32256
As of September 30, 1996
Whale Securities Co., L.P.
650 Fifth Avenue
New York, New York 10019
Attention: Mr. William G. Walters
Gentlemen:
This will confirm that we have amended our Consulting
Agreement dated July 16, 1996 to provide for a five (5) year term as opposed to
the existing three (3) year term, without any increase in compensation payable
to you thereunder.
Please indicate your acceptance by signing in the space
provided below.
Sincerely,
PARKERVISION, INC.
By: ______________________________
Jeffrey Parker, President
ACCEPTED AND AGREED TO:
WHALE SECURITIES CO., L.P.
By: Whale Securities Corp.,
General Partner
By:______________________________
William G. Walters, Chairman
5
<PAGE>
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<LEGEND>
(Replace this text with the legend)
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
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<SECURITIES> 4,969,456
<RECEIVABLES> 1,493,538
<ALLOWANCES> 28,920
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<PP&E> 3,261,650
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<TOTAL-ASSETS> 19,587,713
<CURRENT-LIABILITIES> 1,477,180
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<COMMON> 100,231
0
0
<OTHER-SE> 18,003,640
<TOTAL-LIABILITY-AND-EQUITY> 19,587,713
<SALES> 7,215,313
<TOTAL-REVENUES> 7,215,313
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<OTHER-EXPENSES> 3,818,983
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<INTEREST-EXPENSE> 75,547
<INCOME-PRETAX> (830,529)
<INCOME-TAX> 0
<INCOME-CONTINUING> (830,529)
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<CHANGES> 0
<NET-INCOME> (830,529)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
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