Minnesota
7373
41-1967918
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
Avron L. Gordon, Esq.
Brett D. Anderson, Esq. Alec C. Sherod, Esq. Briggs and Morgan, P.A. 2200 IDS Center 80 South Eighth Street Minneapolis, Minnesota 55402 (612) 977-8400 (phone) (612) 977-8650 (fax) |
William M. Mower, Esq.
Alan M. Gilbert, Esq. Maslon Edelman Borman & Brand, LLP 90 South 7th Street, Suite 3300 Minneapolis, Minnesota 55402 (612) 672-8200 (phone) (612) 672-8397 (fax) |
Proposed Maximum | Proposed Maximum | |||||||||||
Title of Each Class of | Dollar Amount | Offering Price | Aggregate | Amount of | ||||||||
Securities to be Registered | to be Registered | Per Unit | Offering Price(1) | Registration Fee | ||||||||
Common Stock, $0.01 par value per share
|
$25,875,000 | $5.00 | $25,875,000 | $2,768.63 | ||||||||
(1) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended. |
The information in this prospectus is not
complete and may be changed. We may not sell these securities
until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer
to buy these securities in any state where the offer or sale is
not permitted.
|
Underwriting | Proceeds to | |||||||||||
Discounts and | Wireless Ronin | |||||||||||
Price to Public | Commissions | Technologies | ||||||||||
Per Share
|
$ | $ | $ | |||||||||
Total
|
$ | $ | $ |
1
2
retail (including Sealy Corporation and Best Buy);
hospitality (including Foxwoods Resort Casino);
specialized services (including St. Marys Duluth
Clinic Health System); and
public spaces (including Las Vegas Convention and Visitors
Authority and Minneapolis Convention Center).
Table of Contents
Patent-Pending Wireless Delivery System
By
utilizing wireless technology, our dynamic digital signage
system can be securely implemented and operated in a variety of
different venues, resulting in lower installation costs.
Centralized Content Management Software
Our
enterprise software controls and manages a digital signage
network from one centralized location. Delivery of required
content is assured and recorded, making our customers
marketing programs easier to implement.
Custom Solutions
In many instances, our
customers require customized software solutions. Our sales team
and software engineers tailor solutions that meet our
customers needs.
Turn-Key Operation
In addition to our
RoninCast software, we provide the necessary hardware,
accessories, deployment/installation support and service to
ensure our customers have all the necessary components for a
successful digital signage solution.
Table of Contents
3
4
5
Common stock offered by us
4,500,000 shares
Common stock outstanding prior to this offering
866,035 shares
Common stock to be outstanding after this offering
7,199,329 shares, including 1,824,961 shares that will
be issued at the closing of this offering upon conversion of
certain of our convertible debentures and notes and
8,333 shares to be issued to the Spirit Lake Tribe in lieu
of the September 30 cash interest payment due on their
convertible debenture.
Use of proceeds
At an assumed initial public offering price of $4.50 per
share, we expect the net proceeds to us from this offering will
be approximately $17.0 million, or approximately
$19.7 million if the underwriter exercises its
over-allotment option in full. We expect to use the net proceeds
from this offering as follows:
approximately $7.6 million to repay
outstanding debt and accrued interest; and
the remainder for working capital and general
corporate purposes. See Use of Proceeds for more
information.
Risk factors
You should read the Risk Factors section of this
prospectus beginning on page 6 for a discussion of factors
to consider carefully before deciding to invest in shares of our
common stock.
Proposed Nasdaq Capital Market symbol
RNIN
gives effect to a one-for-six reverse stock split of our common
stock completed in April 2006;
gives effect to the two-for-three reverse stock split of our
common stock completed in August 2006;
assumes no exercise of the underwriters over-allotment
option or underwriters warrant; and
assumes 1,824,961 shares of common stock will be issued at
the closing of this offering upon conversion of an aggregate
principal amount of $5,029,973 of our convertible debentures and
notes (assuming an initial public offering price of
$4.50 per share).
2,160,748 shares of common stock issuable upon exercise of
outstanding warrants;
450,000 shares of common stock issuable upon exercise of a
warrant to be issued to the underwriter of this offering at a
per share exercise price of 120% of the initial public offering
price; and
1,510,000 shares of common stock reserved for future
issuance pursuant to options under our equity incentive plan and
non-employee director stock option plan, of which 493,333 have
been issued subject to shareholder approval.
Table of Contents
Table of Contents
Unaudited
Years Ended December 31,
Six Months Ended June 30,
2005
2004
2006
2005
$
710,216
$
1,073,990
$
934,226
$
384,104
939,906
1,029,072
433,933
230,343
2,889,230
2,168,457
2,520,745
1,345,095
881,515
687,398
430,540
471,544
789,490
528,433
1,707,302
383,900
(4,789,925
)
(3,339,370
)
(4,158,294
)
(2,046,778
)
$
(7.18
)
$
(6.87
)
$
(5.27
)
$
(3.40
)
666,712
486,170
789,320
602,263
As of June 30, 2006
December 31,
December 31,
Actual
As
2005
2004
(unaudited)
Adjusted(2)
Pro Forma(2)
$
768,187
$
364,924
$
658,596
$
2,151,727
$
11,638,062
1,313,171
701,598
1,828,714
3,686,814
12,354,143
7,250,478
3,999,622
9,082,269
9,187,704
1,427,612
1,668,161
1,397,563
1,627,401
1,627,401
105,687
8,918,639
5,397,185
10,709,670
10,815,105
1,533,299
$
(7,605,468
)
$
(4,695,587
)
$
(8,880,956
)
$
(7,128,291
)
$
10,820,844
(1)
Includes $390,247 in inventory write downs for the year ended
December 31, 2005 and $0 in inventory write-downs for the
year ended December 31, 2004.
(2)
The balance sheet data above sets forth summary financial data
as of June 30, 2006, December 31, 2005 and
December 31, 2004, on an actual basis, and as of
June 30, 2006:
adjusted for the issuance of $2,974,031 principal amount of
12% convertible bridge notes, 8,333 shares of common
stock issued to the Spirit Lake Tribe in lieu of cash interest
payable under its convertible debenture; and
as further adjusted on a pro forma basis to give effect to:
the sale by us of 4,500,000 shares of common stock at an
assumed initial public offering price of $4.50 per share in
this offering and the receipt of the estimated proceeds from
this offering, after deducting underwriting discounts and
commissions and estimated offering expenses payable by us, of
$17,038,000;
the conversion of an aggregate of $5,029,973 principal amount of
debentures and notes upon the completion of this offering into
1,824,961 shares of common stock; and
payment of certain outstanding indebtedness and accrued interest
totaling $7,551,665.
Table of Contents
Our operations and business are subject to the risks of an early stage company with limited revenue and a history of operating losses. The report of our independent registered public accounting firm included in this prospectus contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. We have incurred losses since inception, and we have had only nominal revenue. We cannot assure you that we will become or remain profitable. |
Our success depends on our RoninCast system achieving and maintaining widespread acceptance in our targeted markets. If our products contain errors or defects, our business reputation may be harmed. |
| our ability to demonstrate RoninCasts economic and other benefits; | |
| our customers becoming comfortable with using RoninCast; and | |
| the reliability of the software and hardware comprising RoninCast and our other products. |
6
Our prospective customers often take a long time to evaluate our products, with this lengthy and variable sales cycle making it difficult to predict our operating results. |
| reduced need to upgrade existing visual marketing systems; | |
| introduction of products by our competitors; | |
| lower prices offered by our competitors; and | |
| changes in budgets and purchasing priorities. |
While we anticipate that, based on our current expense levels, the net proceeds from this offering will be adequate to fund our operations through 2007, we may continue to require significant capital in the future. |
We depend on third party manufacturers, suppliers and service providers. |
7
Reductions in hardware costs could adversely affect our revenues. |
There are risks related to our need to obtain, and reliance upon, strategic partners and resellers. |
| we may not be able to adequately train our partners and resellers to sell and service our products; | |
| they may emphasize competitors products or decline to carry our products; and | |
| channel conflict may arise between other third parties and/or our internal sales staff. |
Our industry is characterized by frequent technological changes, and if we are unable to adapt our products and develop new products to keep up with these rapid changes, we may not be able to obtain or maintain market share. |
Our future success depends on key personnel and our ability to attract and retain additional personnel. |
8
Our ability to succeed depends on our ability to protect our intellectual property, and if any third parties make unauthorized use of our intellectual property, or if our intellectual property rights are successfully challenged, our competitive position and business could suffer. |
Our industry is characterized by frequent intellectual property litigation, and we could face claims of infringement by others in our industry. Such claims are costly and add uncertainty to our business strategy. |
| pay substantial damages; | |
| cease the manufacture, use or sale of infringing products; | |
| discontinue the use of certain technology; or | |
| obtain a license under the intellectual property rights of the third party claiming infringement, which license may not be available on reasonable terms, or at all. |
9
If we are unable to successfully implement security measures protecting our customers intellectual property and other information, our business may be adversely affected. |
We could have liability arising out of our previous sales of unregistered securities. |
We compete with other companies that have more resources, which may put us at a competitive disadvantage. |
10
As a result of becoming a public company, we must implement additional finance and accounting systems, procedures and controls in order to satisfy such requirements, which will increase our costs and divert managements time and attention. |
Our management has broad discretion over the use of proceeds from this offering and may apply the proceeds in ways that do not improve our operating results or increase the value of your investment. |
11
If we fail to comply with requirements for continued listing after this offering, our common stock could be delisted from The Nasdaq Capital Market, which could hinder your ability to obtain timely quotations on the price of our common stock, or dispose of our common stock in the secondary market. |
We cannot assure you that a market will develop for our common stock or what the market price of our common stock will be. The market price of our stock may be subject to wide fluctuations because our stock has not been publicly traded before this offering. |
| price and volume fluctuations in the overall stock market from time to time; | |
| significant volatility in the market price and trading volume of companies in our industry; | |
| actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of financial market analysts; | |
| investor perceptions of our industry, in general, and our company, in particular; | |
| the operating and stock performance of comparable companies; | |
| general economic conditions and trends; | |
| major catastrophic events; | |
| loss of external funding sources; | |
| sales of large blocks of our stock or sales by insiders; or | |
| departures of key personnel. |
12
If you purchase shares of common stock sold in this offering, you will experience significant and immediate dilution. |
Our directors, executive officers and the Spirit Lake Tribe together may exercise significant control over our company. |
Our articles of incorporation, bylaws and Minnesota law may discourage takeovers and business combinations that our shareholders might consider in their best interests. |
We do not anticipate paying cash dividends on our shares of common stock in the foreseeable future. |
A substantial number of shares will be eligible for future sale by our current investors and the sale of those shares could adversely affect our stock price. |
13
14
| our estimates of future expenses, revenue and profitability; | |
| trends affecting our financial condition and results of operations; | |
| our ability to obtain customer orders; | |
| the availability and terms of additional capital; | |
| our ability to develop new products; | |
| our dependence on key suppliers, manufacturers and strategic partners; | |
| industry trends and the competitive environment; | |
| the impact of losing one or more senior executive or failing to attract additional key personnel; and | |
| other factors referenced in this prospectus, including those set forth under the caption Risk Factors. |
15
16
| adjusted for the issuance of $2,974,031 principal amount of 12% convertible bridge notes, 8,333 shares of common stock issued to the Spirit Lake Tribe in lieu of cash interest payable under its convertible debenture; and | |
| further adjusted on a pro forma basis to give effect to: |
| the sale by us of 4,500,000 shares of common stock at an assumed initial public offering price of $4.50 per share in this offering and the receipt of the estimated proceeds from this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, of $17,038,000; | |
| the conversion of an aggregate of $5,029,973 principal amount of debentures and notes upon the completion of this offering into 1,824,961 shares of common stock; and | |
| the repayment of indebtedness, including principal and accrued interest, totaling $7,551,665. |
June 30, 2006 | |||||||||||||
June 30, 2006 | Pro Forma As | ||||||||||||
Actual | As Adjusted | Adjusted | |||||||||||
Current portion of notes payable(1)
|
$ | 2,852,259 | $ | 3,166,725 | $ | 0 | (2) | ||||||
Current portion of notes payable-related parties(1)
|
4,036,990 | 4,036,990 | |||||||||||
Current portion of capital lease obligation
|
44,701 | 44,701 | 44,701 | ||||||||||
6,933,950 | 7,248,416 | 44,701 | |||||||||||
Notes payable, net of current portion
|
824,414 | 824,414 | 0 | (2) | |||||||||
Notes payable, net of current portion-related parties
|
697,300 | 697,300 | |||||||||||
Capital lease obligations, net of current portion
|
105,687 | 105,687 | 105,687 | ||||||||||
Shareholders equity:
|
|||||||||||||
Undesignated preferred stock; authorized 16,666,666 shares;
no shares issued and outstanding
|
0 | 0 | 0 | ||||||||||
Common stock, $0.01 par value; authorized
50,000,000 shares; issued and outstanding
846,035 shares
|
8,460 | 8,743 | 71,993 | (3) | |||||||||
Additional paid-in capital
|
13,914,854 | 15,848,313 | 41,391,493 | ||||||||||
Accumulated deficit
|
(22,804,270 | ) | (22,985,347 | ) | (30,642,642 | ) | |||||||
Total shareholders equity
|
(8,880,956 | ) | (7,128,291 | ) | 10,820,844 | ||||||||
Total capitalization
|
$ | (7,253,555 | ) | $ | (5,500,890 | ) | $ | 10,926,531 | |||||
(1) | Includes debt discount resulting from a reduction in the face value of the notes by the value of equity compensation associated with the notes. Actual debt discount for the current portion of notes payable and current portion of notes payable-related parties was $1,156,736 and $178,804, respectively. As adjusted to reflect the financings after June 30, 2006, such amounts were $2,950,177 and $178,804 respectively. |
(2) | In addition to our 12% convertible bridge notes issued in March, July and August 2006 and the convertible debenture issued to the Spirit Lake Tribe, we have issued an aggregate of $2,029,973 |
17
principal amount of convertible notes, convertible at the option of the holders thereof into shares of our common stock. Except for the notes issued in March, July and August 2006, all of these convertible debentures and notes will be automatically converted into shares of our common stock simultaneously with the closing of this offering. The $3,000,000 convertible debenture we issued to the Spirit Lake Tribe is convertible into 30% of our issued and outstanding shares of common stock determined on a fully diluted basis, without giving effect to shares issued and issuable in this offering including shares issuable upon exercise of the warrant to the underwriter of this offering or upon conversion of $5,749,031 principal amount of 12% convertible bridge notes and warrants issued in March, July and August 2006. |
With respect to the remaining $2,029,973 principal amount of convertible notes, such conversion will be effected at a per share amount equal to the lower of: (i) $9.00 or (ii) 80% of the price per share in this offering. If a closing of this offering has not occurred on or before November 30, 2006, the convertible securities will be convertible into shares of our common stock in accordance with their current terms. Accrued interest will be payable to the holders in cash (unless converted into shares of common stock at the option of the holder) at the closing of this offering, or on November 30, 2006, if a closing of our public offering has not occurred on or before that date. Outstanding principal payment obligations on the convertible securities which, by their present terms, have matured or will mature prior to November 30, 2006, have, with the exception of $200,000 principal amount of notes which were exchanged for the August 2006 12% convertible bridge notes, been extended to November 30, 2006, subject to the mandatory and optional conversion features described above. In addition, holders of the convertible securities will be entitled to have the shares issuable upon conversion of their convertible securities (the Registerable Securities) included in a registration statement which must be filed by us within 60 days following the closing of this offering. The Registerable Securities are subject to a 180-day (12 months in the case Registerable Securities held by our directors and officers) lock-up effective upon the closing of this offering. |
(3) | Assumes no exercise of: (i) warrants to purchase up to an aggregate of 1,010,942 shares of our common stock granted to directors, executive officers, key associates, holders of convertible securities and other investors, (ii) options to purchase 493,333 shares of our common stock issued to certain of our directors and executive officers subject to shareholder approval, (iii) warrants to purchase 1,149,806 shares of our common stock held by the purchasers of the 12% convertible bridge notes we issued in March, July and August 2006, or (iv) warrants issued to the underwriter of this offering to purchase up to an aggregate of 450,000 shares of our common stock. |
18
Assumed initial public offering price per share
|
$ | 4.50 | ||||||
Net tangible book value per share at June 30, 2006
|
$ | (11.03 | ) | |||||
Pro forma increase in net tangible book value per share as of
June 30, 2006, 2005
|
1.94 | |||||||
Pro forma increase in tangible book value attributable to
conversion of convertible notes and convertible debentures
|
6.79 | |||||||
Increase in pro forma net tangible book value per share
attributable to new investors
|
3.80 | |||||||
Pro forma as adjusted net tangible book value per share after
this offering
|
1.50 | |||||||
Dilution per share to new investors
|
$ | 3.00 | ||||||
Shares Purchased | Total Consideration | ||||||||||||||||||||
Average Price Per | |||||||||||||||||||||
Number | Percent | Amount | Percent | Share | |||||||||||||||||
Existing investors(1)
|
2,699,329 | 37 | % | $ | 22,637,320 | 53 | % | $ | 8.39 | ||||||||||||
New investors
|
4,500,000 | 63 | % | 20,250,000 | 47 | % | $ | 4.50 | |||||||||||||
Total
|
7,199,329 | 100 | % | $ | 42,887,320 | 100 | % | $ | 5.99 | ||||||||||||
(1) | Includes holders of $5,029,973 of convertible debentures and notes that will convert into 1,824,961 share of common stock upon the closing of this offering. |
19
Unaudited | |||||||||||||||||
Years Ended December 31, | Six Months Ended June 30, | ||||||||||||||||
2005 | 2004 | 2006 | 2005 | ||||||||||||||
Statement of Operations Data
|
|||||||||||||||||
Sales
|
$ | 710,216 | $ | 1,073,990 | $ | 934,226 | $ | 384,104 | |||||||||
Cost of revenue(1)
|
939,906 | 1,029,072 | 433,933 | 230,343 | |||||||||||||
Selling, general and administrative
|
2,889,230 | 2,168,457 | 2,520,745 | 1,345,095 | |||||||||||||
Research and development expenses
|
881,515 | 687,398 | 430,540 | 471,544 | |||||||||||||
Other expenses
|
789,490 | 528,433 | 1,707,302 | 383,900 | |||||||||||||
Net loss
|
(4,789,925 | ) | (3,339,370 | ) | (4,158,294 | ) | (2,046,778 | ) | |||||||||
Loss per common share
|
$ | (7.18 | ) | $ | (6.87 | ) | $ | (5.27 | ) | $ | (3.40 | ) | |||||
Weighted average basic and diluted shares outstanding
|
666,712 | 486,170 | 789,320 | 602,263 | |||||||||||||
As of June 30, 2006 | |||||||||||||||||||||
December 31, | December 31, | Actual | As | ||||||||||||||||||
2005 | 2004 | (unaudited) | Adjusted(2) | Pro Forma(2) | |||||||||||||||||
Balance Sheet Data
|
|||||||||||||||||||||
Current assets
|
$ | 768,187 | $ | 364,924 | $ | 658,596 | $ | 2,151,727 | $ | 11,638,062 | |||||||||||
Total assets
|
1,313,171 | 701,598 | 1,828,714 | 3,686,814 | 12,354,143 | ||||||||||||||||
Current liabilities
|
7,250,478 | 3,999,622 | 9,082,269 | 9,187,704 | 1,427,612 | ||||||||||||||||
Non-current liabilities
|
1,668,161 | 1,397,563 | 1,627,401 | 1,627,401 | 105,687 | ||||||||||||||||
Total liabilities
|
8,918,639 | 5,397,185 | 10,709,670 | 10,815,105 | 1,533,299 | ||||||||||||||||
Shareholders equity (deficit)
|
$ | (7,605,468 | ) | $ | (4,695,587 | ) | $ | (8,880,956 | ) | $ | (7,128,291 | ) | $ | 10,820,844 | |||||||
(1) | Includes $390,247 in inventory write downs for the year ended December 31, 2005 and $0 in inventory write-downs for the year ended December 31, 2004. |
(2) | The balance sheet data above sets forth summary financial data as of June 30, 2006, December 31, 2005 and December 31, 2004, on an actual basis, and as of June 30, 2006: |
| adjusted for the issuance of $2,974,031 principal amount of 12% convertible bridge notes, 8,333 shares of common stock issued to the Spirit Lake Tribe in lieu of cash interest payable under its convertible debenture; | |
| as further adjusted on a pro forma basis to give effect to: |
| the sale by us of 4,500,000 shares of common stock at an assumed initial public offering price of $4.50 per share in this offering and the receipt of the estimated proceeds from this offering, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, of $17,038,000; | |
| the conversion of an aggregate of $5,029,973 principal amount of debentures and notes upon the completion of this offering into 1,824,961 shares of common stock; and | |
| payment of outstanding indebtedness and accrued interest totaling $7,551,665. |
20
21
Revenue Recognition |
| technology license and royalties; | |
| product and software license sales; | |
| content development services; | |
| training and implementation; and | |
| maintenance and support contracts. |
22
Basic and Diluted Loss per Common Share |
Deferred Income Taxes |
Accounting for Stock-Based Compensation |
23
Six months | ||||||||||||||
Year ended | Year ended | ended | ||||||||||||
December 31, | December 31, | June 30, | ||||||||||||
2005 | 2004 | 2005 | ||||||||||||
(unaudited) | ||||||||||||||
Net loss:
|
||||||||||||||
As reported
|
$ | (4,789,925 | ) | $ | (3,339,370 | ) | $ | (2,046,778 | ) | |||||
Add: Employee compensation expense included in net loss
|
| | | |||||||||||
Deduct: Total stock-based employee compensation expense
determined under fair value based method for all awards
|
(13,880 | ) | (2,239 | ) | (1,577 | ) | ||||||||
Pro forma
|
$ | (4,803,805 | ) | $ | (3,341,609 | ) | $ | (2,048,355 | ) | |||||
Basic and diluted loss per common share:
|
||||||||||||||
As reported
|
$ | (7.18 | ) | $ | (6.87 | ) | $ | (3.40 | ) | |||||
Pro forma
|
$ | (7.21 | ) | $ | (6.87 | ) | $ | (3.40 | ) | |||||
2005 Grants | 2004 Grants | 2006 Grants | ||||||||||
Expected volatility factors
|
n/a | n/a | 61.7 | % | ||||||||
Approximate risk free interest rates
|
5.0 | % | 5.0 | % | 5.0 | % | ||||||
Expected lives
|
5 Years | 5 Years | 5 Years |
24
Results of Operations |
Six Months Ended | |||||||||||||
June 30 | |||||||||||||
Increase | |||||||||||||
2006 | 2005 | (Decrease) | |||||||||||
Sales
|
$ | 934,226 | $ | 384,104 | $ | 550,122 | |||||||
Cost of Sales
|
433,933 | 230,343 | 203,590 | ||||||||||
Gross Profit
|
500,293 | 153,761 | 346,532 | ||||||||||
Sales and marketing expenses
|
778,817 | 557,457 | 221,360 | ||||||||||
Research and development expenses
|
430,540 | 471,544 | (41,004 | ) | |||||||||
General and administrative expenses
|
1,741,928 | 787,638 | 954,290 | ||||||||||
Operating expenses
|
2,951,285 | 1,816,639 | 1,134,646 | ||||||||||
Operating loss
|
(2,450,992 | ) | (1,662,878 | ) | (788,114 | ) | |||||||
Other income (expenses):
|
|||||||||||||
Interest expense
|
(1,714,349 | ) | (383,077 | ) | 1,331,272 | ||||||||
Interest income
|
6,488 | 1,091 | (5,397 | ) | |||||||||
Sundry
|
559 | (1,914 | ) | (2,473 | ) | ||||||||
(1,707,302 | ) | (383,900 | ) | 1,323,402 | |||||||||
Net loss
|
$ | (4,158,294 | ) | $ | (2,046,778 | ) | $ | (2,111,516 | ) | ||||
25
December 31 | |||||||||||||
Increase | |||||||||||||
2005 | 2004 | (Decrease) | |||||||||||
Sales
|
$ | 710,216 | $ | 1,073,990 | $ | (363,774 | ) | ||||||
Cost of Sales
|
939,906 | 1,029,072 | (89,166 | ) | |||||||||
Gross Profit
|
(229,690 | ) | 44,918 | (274,608 | ) | ||||||||
Sales and marketing expenses
|
1,198,629 | 594,085 | 604,544 | ||||||||||
Research and development expenses
|
881,515 | 687,398 | 194,117 | ||||||||||
General administrative expenses
|
1,690,601 | 1,574,372 | 116,229 | ||||||||||
Operating expenses
|
3,770,745 | 2,855,855 | 914,890 | ||||||||||
Operating loss
|
(4,000,435 | ) | (2,810,937 | ) | (1,189,498 | ) | |||||||
Other income (expenses):
|
|||||||||||||
Interest expense
|
(804,665 | ) | (525,546 | ) | 279,119 | ||||||||
Interest Income
|
1,375 | 1,425 | (50 | ) | |||||||||
Sundry
|
13,800 | (4,312 | ) | (18,112 | ) | ||||||||
(789,490 | ) | (528,433 | ) | (261,057 | ) | ||||||||
Net loss
|
$ | (4,789,925 | ) | $ | (3,339,370 | ) | $ | (1,450,555 | ) | ||||
Sales |
26
Cost of Sales |
Operating Expenses |
Interest Expense |
Liquidity |
27
Operating Activities |
Financing Activities |
28
29
30
| Compliance and effectiveness issues with traditional point-of -purchase (POP) signage. Our review of the current market indicates that most retailers go through a tedious process to produce traditional static POP and in-store signage. They create artwork, send such artwork to a printing company, go through a proof and approval process and then ship the artwork to each store. One industry source estimates that less than 50% of all static in-store signage programs are completely implemented once they are delivered to stores. We believe our signage solution can enable prompt and effective implementation of retailer signage programs, thus significantly improving compliance. | |
| Growing awareness that digital signage is more effective. It is estimated that 70% of brand buying decisions are made while in the retail store. Some sources report that digital signage receives up to 10 times the eye contact of static signage and, depending upon the market, may significantly increase sales for new products that are digitally advertised. A study by Arbitron, Inc. found that 29% of the consumers who have seen video in a store say they bought a product they were not planning on buying after seeing the product featured on the in-store video display. We believe that our dynamic digital signage solutions provide a valuable alternative to advertisers currently using static signage. | |
| Changes in the advertising landscape. With the introduction of personal video recorders (PVRs) and satellite radio, we believe retailers, manufacturers and advertising firms are struggling with ways to present their marketing message effectively. A recent article in Infomercial Media states that |
31
PVRs (TiVo, for example) will be in over 30% of US homes within the next five years. Although viewers are watching 20-30% more television, they are using PVR technology to bypass as much as 70% of the commercials. In addition, satellite radio continues to grow in popularity with limited and/or commercial free programming. We believe the use of digital signage will continue to grow as advertisers seek alternatives to traditional media. | ||
| Decreasing hardware costs associated with digital signage. The high cost of monitors has been an obstacle of digital signage implementation for a number of years. The price of digital display panels has been falling due to increases in component supplies and manufacturing capacity. As a result, we believe that hardware costs are likely to continue to decrease, resulting in continued growth in this market. We employ digital displays from a variety of manufacturers. This independence allows us to give our customers the hardware their system requires while taking advantage of improvements in hardware technology, pricing reductions and availability. We partner with several key hardware vendors, including NEC, Richardson Electronics (Pixelink), LG, Hewlett Packard and Dell. |
Features and benefits of the RoninCast system includes: |
| Effective Conveyance of Message. POP studies have shown digital signs to be an effective means of attracting the attention of customers and improving message recall. We believe that the display of complex graphics and videos creates a more appealing store environment. | |
| Centrally Controlled. RoninCast empowers the end-user to distribute content from one central location. As a result, real-time marketing decisions can be managed in-house ensuring retailers communication with customers is executed system-wide at the right time and the right place. Our content management software recognizes the receipt of new content, displays the content, and reports back to the central location(s) that the media player is working properly. | |
| Wireless Delivery. RoninCast can distribute content within an installation wirelessly. RoninCast is compatible with current wireless networking technology and does not require additional capacity within an existing network. RoninCast uses Wireless Local Area Network (WLAN) or wireless data connections to establish connectivity. By installing or using an existing onsite WLAN, RoninCast can be incorporated throughout the venue without any environmental network cabling. We also offer our mobile communications solution for off-site signage where WLAN is not in use or practical. | |
| Network Control. Each remote media player is uniquely identified and distinguished from other units as well as between multiple locations. RoninCast gives the end-user the ability to view the media players status to determine if the player is functioning properly and whether the correct content is playing. A list of all units on the system is displayed allowing the end-user to view single units or clusters of units. The system also allows the end-user to receive information regarding the health of the network before issues occur. In addition, display monitors can be turned on or off remotely. |
32
| Ease and Speed of Message Delivery. Changing market developments or events can be quickly incorporated into our system. The end-user may create entire content distributions on a daily, weekly or monthly basis. Furthermore, the system allows the end-user to interject quick daily updates to feature new or overstocked items, and then automatically return to the previous content schedule. | |
| Scalability/ Mobility. By utilizing a wireless network, the RoninCast system provides the ability to easily move signage or scale-up to incorporate additional digital signage. Displays can be moved to or from any location under a wireless network. Customers are able to accommodate adds/moves/changes within their environment without rewiring network connections. And when the customer wants to add additional digital signage, only electrical power needs to be supplied at the new location. | |
| Data Collection. Through interactive touch screen technology, RoninCast software can capture user data and information. This information can provide feedback to both the customer and the marketer. The ability to track customer interaction and data mine user profiles, in a non-obtrusive manner, can provide customers feedback that would otherwise be difficult to gather. | |
| Integrated Applications. RoninCast can integrate digital signage with other applications and databases. RoninCast is able to use a database feed to change the content or marketing message, making it possible for our customers to deliver targeted messages. Data feeds can be available either internally within a business or externally through the Internet. For example, our customers can specify variable criteria or conditions which RoninCast will analyze, delivering marketing content relevant to the changing environment. | |
| Compliance/ Consistency. RoninCast addresses compliance and consistency issues associated with print media and alternative forms of visual marketing. Compliance measures the frequency of having the marketing message synchronized primarily with product availability and price. Compliance issues cause inconsistencies in pricing, product image and availability, and store polices. RoninCast addresses compliance by allowing message updates and flexible control of a single location or multiple locations network-wide. RoninCast allows our customers to display messages, pricing, images, and other information on websites that are identical to those displayed at retail locations. |
33
| Best Buy Best Buy is testing and evaluating RoninCast software at their headquarters in Richfield, Minnesota. We have also installed a test installation at a store location in San Diego, California. | |
| Canterbury Park We have installed RoninCast throughout the Canterbury Park gaming facility. In addition, Canterbury installed digital signage twenty-five miles away at the Minneapolis/ St. Paul |
34
International airport utilizing RoninCast with mobile communications. Both in-house and off-site digital signage is controlled from one central location. | ||
| Coca-Cola The Midwest region fountain division provides RoninCast displays as a means of extending their contracts with various customers, including restaurants, theatres, C-stores and supermarkets. Coca-Cola also uses its marketing co-op program with customers as a brand awareness/reward tool. | |
| GetServd.com GetServd.com is a full service digital advertising firm located in Calgary, Alberta, that runs the RoninCast ® digital signage network for many of North Americas leading paint suppliers, including industry pace setters Hirshfields in the Midwest and Miller Paint in the Northwest. GetServd.com creates custom signage networks for their customers to promote their various vendors, create related sales opportunities and reduce perceived wait time for their customers. | |
| Foxwoods Resort Casino Foxwoods is the largest casino in the world, with 340,000 square feet of gaming space in a complex that covers 4.7 million square feet. More than 40,000 guests visit Foxwoods each day. Foxwoods purchased RoninCast ® to control, administer and maintain marketing content on its property from its marketing headquarters in Norwich, Connecticut. | |
| Las Vegas Convention and Visitors Authority By using our solution for wayfinding (touch screen technology), advertising and event scheduling, this digital signage installation exemplifies how digital signage can enhance an environment while providing advanced technology to control, administer and maintain marketing content from one centralized location. | |
| Mystic Lake Casino and Resort We have installed RoninCast displays for several applications, including offsite advertising at the Mall of America, Wall of Winners, promotion of casino winners, general kiosks and upcoming casino events. | |
| Showtickets.com Showtickets uses the RoninCast to control content in Las Vegas to promote ticket sales for shows and events throughout Las Vegas. An example of our scalability, Showtickets has continued to increase their digital signage presence over the past three years. | |
| University of Akron The University uses RoninCast as an information system for students and faculty. Starting with a small installation footprint, the University continues to grow their digital signage network with recurring orders for expansion. | |
| Wynn Las Vegas Content developed exclusively by Wynn for its proprietary outdoor display is previewed, edited and approved using our system. |
35
36
Key Components |
User-Friendly Network Control |
Diverse Content Choices |
Intelligent Content Distribution |
37
Distributed Management |
Enterprise-Level Compatibility |
Flexible Network Design |
Security |
38
Specialized Products |
39
40
41
Name | Age | Position | ||||
Jeffrey C. Mack
|
53 | Chairman, President, Chief Executive Officer and Director | ||||
Christopher F. Ebbert
|
40 | Executive Vice President and Chief Technology Officer | ||||
John A. Witham
|
54 | Executive Vice President and Chief Financial Officer | ||||
Stephen E. Jacobs
|
58 | Executive Vice President and Secretary | ||||
Scott W. Koller
|
44 | Senior Vice President, Sales and Marketing | ||||
Henry B. May
|
51 | Senior Vice President, Operations | ||||
Dr. William F. Schnell
|
50 | Director | ||||
Carl B. Walking Eagle Sr.
|
64 | Director | ||||
Gregory T. Barnum
|
51 | Director | ||||
Thomas J. Moudry
|
45 | Director | ||||
Brett A. Shockley
|
46 | Director |
42
43
44
45
46
47
48
(1)
Represents the number of shares of common stock underlying
warrants granted.
(2)
Represents sales commissions paid to Mr. Koller.
Individual Grants
Percent of Total
Exercise
Number of Securities
Options Granted
or Base
Underlying Options
to Employees in
Price
Name
Granted(#)(1)
Fiscal Year
($/share)
Expiration Date
18,333
6.67
%
6.75
9/2/2010
21,667
7.88
%
13.50
(2)
3/31/2011
6,667
2.99
%
2.25
1/26/2010
6,944
3.11
9.00
12/30/2010
3,889
1.41
%
2.25
1/26/2010
27,778
10.11
%
0.09
1/26/2010
1,864
0.68
%
9.00
4/22/2010
13,889
5.05
%
6.75
9/3/2010
13,889
5.05
%
6.75
9/3/2010
15,000
5.46
%
13.50
(2)
3/31/2011
5,556
2.02
%
6.75
8/4/2010
2,778
1.01
%
11.25
10/10/2010
Table of Contents
(1)
Each of the warrants granted in 2005 have a term of five years
and, except for the warrant grants to Mr. Mack and
Mr. Ebbert to purchase 21,667 shares and
15,000 shares respectively which vested on March 31,
2006, are immediately exercisable.
(2)
These warrants were subsequently repriced to $9.00 per
share as described under Certain Relationships and Related
Party Transactions Warrant Repricing below.
Number of Securities
Value of Unexercised
Underlying Unexercised
In-The-Money
Options at
Options at
Fiscal Year-End(#)(1)
Fiscal Year-End($)(2)
Name
Exercisable
Unexercisable
Exercisable
Unexercisable
53,689
21,667
$
159,099
16,167
0
$
46,699
77,061
15,000
$
294,995
11,573
0
(1)
Represents shares of common stock issuable upon exercise of
outstanding warrants.
(2)
There was no public trading market for our common stock as of
December 31, 2005. Accordingly, the value of the
unexercised
in-the
-money warrants
listed above have been calculated on the basis of the assumed
initial public offering price of $4.50 per share, less the
applicable exercise price per share, multiplied by the number of
shares underlying the warrants.
Table of Contents
Table of Contents
10,000 shares
40,000 shares
10,000 shares
40,000 shares
40,000 shares
40,000 shares
40,000 shares
10,000 shares
Table of Contents
49
50
51
Warrant | ||||
Name | Shares | |||
Jeffrey C. Mack
|
21,667 | |||
Stephen E. Jacobs
|
23,333 | |||
Christopher F. Ebbert
|
15,000 | |||
Marshall Group
|
4,444 | |||
Barry W. Butzow
|
16,667 | |||
Michael Frank
|
22,222 |
52
53
| each person who is known by us to own beneficially more than 5% of our common stock; | |
| each current director; | |
| each of our executive officers; and | |
| all directors and executive officers as a group. |
Beneficial Ownership | Beneficial Ownership | |||||||||||||||
Prior to Offering | After Offering(1) | |||||||||||||||
Name and Address of Beneficial Owner | Shares | Percent | Shares | Percent | ||||||||||||
Directors and Executive Officers
|
||||||||||||||||
Jeffrey C. Mack
|
53,689 | (2) | 5.8 | % | 53,689 | * | % | |||||||||
Michael J. Hopkins
|
33,944 | (3) | 3.9 | % | 33,944 | * | % | |||||||||
Christopher F. Ebbert
|
121,052 | (4) | 12.8 | % | 121,052 | 1.7 | % | |||||||||
John A. Witham
|
22,222 | (5) | 2.5 | % | 22,222 | * | % | |||||||||
Stephen E. Jacobs
|
133,933 | (6) | 13.5 | % | 133,933 | 1.8 | % | |||||||||
Scott W. Koller
|
11,574 | (7) | 1.3 | % | 11,574 | * | % | |||||||||
Henry B. May
|
| | | | ||||||||||||
Dr. William F. Schnell
|
74,769 | (8) | 8.3 | % | 74,769 | 1.0 | % | |||||||||
Carl B. Walking Eagle Sr.
|
1,305,525 | (9) | 61.4 | % | 1,305,525 | 18.1 | % | |||||||||
Gregory T. Barnum
|
| (10) | | | | |||||||||||
Thomas J. Moudry
|
| (10) | | | | |||||||||||
Brett A. Shockley
|
| (10) | | | | |||||||||||
5% Beneficial Owners
|
||||||||||||||||
Spirit Lake Tribe
|
1,305,525 | (11) | 61.4 | % | 1,305,525 | 18.1 | % | |||||||||
Barry W. Butzow
|
467,850 | (12) | 36.6 | % | 467,850 | 6.3 | % | |||||||||
Jack Norqual
|
311,428 | (13) | 27.7 | % | 311,428 | 4.3 | % | |||||||||
Galtere International
|
104,245 | (14) | 11.0 | % | 104,245 | 1.4 | % | |||||||||
R.A. Stinski
|
197,957 | (15) | 19.3 | % | 197,957 | 2.7 | % | |||||||||
Jill Jensen-Behr
|
72,729 | (16) | 8.1 | % | 72,729 | 1.0 | % | |||||||||
Steve Meyer
|
66,806 | (17) | 7.3 | % | 66,806 | * | % |
54
Beneficial Ownership
Beneficial Ownership
Prior to Offering
After Offering(1)
Name and Address of Beneficial Owner
Shares
Percent
Shares
Percent
163,148
(18)
16.0
%
163,148
2.3
%
64,352
(19)
7.2
%
64,352
*
%
group (11 persons)
1,756,708
(20)(21)
71.0
%
1,756,708
23.4
%
* | Less than 1% |
(1) | Shares beneficially owned reflect a one-for-six reverse stock split of our common stock effected in April 2006 and a two-for-three reverse stock split effected in August 2006. |
(2) | Represents shares issuable upon exercise of warrants. Excludes 55,555 shares issuable upon exercise of options granted subject to shareholder approval. |
(3) | Includes 16,167 shares issuable upon exercise of warrants. |
(4) | Includes 6,213 shares issuable upon conversion of convertible notes and 77,061 shares issuable upon exercise of warrants. |
(5) | Represents shares issuable upon exercise of warrants. Excludes 22,222 shares issuable upon exercise of options granted subject to shareholder approval. |
(6) | Includes 18,519 shares issuable upon conversion of convertible notes and 109,859 shares issuable upon exercise of warrants. |
(7) | Represents shares issuable upon exercise of warrants. |
(8) | Includes 2,083 shares issuable upon exercise of warrants and 64,352 shares beneficially owned by SHAG LLC, which includes 11,111 shares issuable upon exercise of warrants and 19,907 shares issuable upon conversion of convertible notes. Dr. Schnell is an owner of SHAG LLC and may be deemed to beneficially own the shares held by SHAG LLC. Dr. Schnell disclaims beneficial ownership of the shares held by SHAG LLC except to the extent of his pecuniary interest in such shares. Excludes 13,333 shares issuable upon exercise of options granted subject to shareholder approval. |
(9) | Includes 44,444 shares owned by Spirit Lake Tribe and 1,261,081 shares issuable upon conversion of the convertible debenture owned by Spirit Lake Tribe. Carl B. Walking Eagle Sr. is the Vice Chairman of the Spirit Lake Tribal Council and may be deemed to beneficially own the shares held by Spirit Lake Tribe. Mr. Walking Eagle disclaims beneficial ownership of the shares owned by Spirit Lake Tribe except to the extent of his pecuniary interest in such shares. Excludes 13,333 shares issuable upon exercise of options granted subject to shareholder approval. |
(10) | Excludes 13,333 shares issuable upon exercise of options granted subject to shareholder approval. |
(11) | Includes 1,261,081 shares issuable upon conversion of a convertible debenture. |
(12) | Includes 203,083 shares issuable upon conversion of convertible notes and 208,767 shares issuable upon exercise of warrants. Excludes 3,333 shares issuable upon exercise of options granted subject to shareholder approval. |
(13) | Includes 133,970 shares issuable upon conversion of convertible notes and 124,236 shares issuable upon exercise of warrants. |
(14) | Includes 55,634 shares issuable upon conversion of convertible notes and 29,167 shares issuable upon exercise of warrants. |
(15) | Includes 66,093 shares issuable upon conversion of convertible notes and 92,698 shares issuable upon exercise of warrants. |
(16) | Includes 29,029 shares issuable upon exercise of warrants. |
(17) | Includes 23,148 shares issuable upon conversion of convertible notes and 31,157 shares issuable upon exercise of warrants. |
55
(18) | Includes 92,593 shares issuable upon conversion of convertible notes and 59,444 shares issuable upon exercise of warrants. |
(19) | Includes 19,907 shares issuable upon conversion of a promissory note and 11,111 shares issuable upon exercise of warrants. |
(20) | Includes 1,305,720 shares issuable upon conversion of convertible debentures and notes and 303,766 shares issuable upon exercise of warrants beneficially owned by our executive officers and directors. |
(21) | Includes 1,380,294 shares beneficially owned by entities related to two of our directors. These directors may be deemed to beneficially own the shares held by such entities, which include 1,280,988 shares issuable upon conversion of convertible debentures and notes and 13,194 shares issuable upon exercise of warrants. |
56
| have the right to receive ratably any dividends from funds legally available therefor, when, as and if declared by our board of directors; | |
| are entitled to share ratably in all of our assets available for distribution to holders of our common stock upon liquidation, dissolution or winding up of the affairs of our company; and | |
| are entitled to one vote per share on all matters which shareholders may vote on at all meetings of shareholders. |
Bridge Notes |
57
Spirit Lake Tribe Debenture |
| the total outstanding shares of common stock; | |
| all shares of common stock issuable upon conversion or exercise in full of all outstanding options, warrants or other convertible securities or other rights of any nature to acquire shares of common stock or securities convertible into shares of common stock; and | |
| all shares of common stock that can be acquired pursuant to warrants or options issued to employees pursuant to existing employment contracts. |
Other Convertible Notes |
58
59
60
| 1% of the number of shares of common stock then outstanding, or | |
| the average weekly trading volume of our common stock during the four calendar weeks preceding the date of filing of a notice on Form 144 with respect to the sale. |
| offer, sell, offer to sell, contract to sell or otherwise dispose of any shares of our common stock or any of our securities which are substantially similar to the common stock, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or any such substantially similar securities, or | |
| enter into any swap, option, future, forward or other agreement that transfers, in whole or in part, the economic consequence of ownership of common stock or any securities substantially similar to the common stock, |
61
62
Payable by Us | ||||||||
No exercise | Full Exercise | |||||||
Per share
|
$ | |||||||
Total
|
$ |
63
64
65
F-1
Table of Contents
F-3
F-4
F-5
F-6
F-9
F-10
F-2
/s/ Virchow, Krause & Company, LLP |
F-3
F-4
F-5
F-6
F-7
F-8
F-9
Table of Contents
Six Months Ended
Year Ended
Year Ended
December 31,
December 31,
June 30,
June 30,
2005
2004
2006
2005
(Unaudited)
(Unaudited)
$
576,566
$
847,859
$
568,082
$
320,413
66,572
83,918
301,546
37,916
67,078
142,213
64,598
25,775
710,216
1,073,990
934,226
384,104
517,503
892,217
396,471
221,111
338
32,156
136,855
37,462
8,894
390,247
939,906
1,029,072
433,933
230,343
(229,690
)
44,918
500,293
153,761
1,198,629
594,085
778,817
557,457
881,515
687,398
430,540
471,544
1,690,601
1,574,372
1,741,928
787,638
3,770,745
2,855,855
2,951,285
1,816,639
(4,000,435
)
(2,810,937
)
(2,450,992
)
(1,662,878
)
(804,665
)
(525,546
)
(1,714,349
)
(383,077
)
1,375
1,425
6,488
1,091
13,800
(4,312
)
559
(1,914
)
(789,490
)
(528,433
)
(1,707,302
)
(383,900
)
$
(4,789,925
)
$
(3,339,370
)
$
(4,158,294
)
$
(2,046,778
)
$
(7.18
)
$
(6.87
)
$
(5.27
)
$
(3.40
)
666,712
486,170
789,320
602,263
Table of Contents
Common Stock
Additional
Total
Paid-In
Accumulated
Shareholders
Shares
Par Value
Capital
Deficit
Deficit
503,067
$
5,031
$
8,889,260
$
(10,516,681
)
$
(1,622,390
)
68,593
686
122,804
123,490
11,111
111
19,889
20,000
10,769
10,769
6,054
6,054
45,303
45,303
50,557
50,557
888
9
9,991
10,000
(3,339,370
)
(3,339,370
)
583,659
$
5,837
$
9,154,627
$
(13,856,051
)
$
(4,695,587
)
Table of Contents
Common Stock
Additional
Total
Paid-In
Accumulated
Shareholders
Shares
Par Value
Capital
Deficit
Deficit
583,659
$
5,837
$
9,154,627
$
(13,856,051
)
$
(4,695,587
)
113,884
1,139
1,023,861
1,025,000
9,998
100
89,900
90,000
22,222
222
99,778
100,000
33,332
333
72,799
73,132
19,443
194
174,806
175,000
833
8
1,492
1,500
666
7
5,993
6,000
65,925
65,925
33,954
33,954
115,628
115,628
28,479
28,479
12,465
12,465
48,409
48,409
25,782
25,782
78,770
78,770
(4,789,925
)
(4,789,925
)
784,037
$
7,840
$
11,032,668
$
(18,645,976
)
$
(7,605,468
)
Table of Contents
Common Stock
Additional
Total
Paid-In
Accumulated
Shareholders
Shares
Par Value
Capital
Deficit
Deficit
784,037
$
7,840
$
11,032,668
$
(18,645,976
)
$
(7,605,468
)
16,666
167
149,833
150,000
45,332
453
202,192
202,645
268,872
268,872
39,499
39,499
18,697
18,697
923,428
923,428
261,910
261,910
186,638
186,638
749,991
749,991
81,126
81,126
(4,158,294
)
(4,158,294
)
846,035
$
8,460
$
13,914,854
$
(22,804,270
)
$
(8,880,956
)
Table of Contents
Six Months Ended
Year Ended
Year Ended
December 31,
December 31,
June 30,
June 30,
2005
2004
2006
2005
(Unaudited)
(Unaudited)
$
(4,789,925
)
$
(3,339,370
)
$
(4,158,294
)
$
(2,046,778
)
151,830
50,060
310,959
80,217
7,355
4,595
2,500
21,000
2,500
390,247
63,647
177,974
538,509
35,331
37,617
33,070
428,107
33,954
175,000
150,000
7,500
1,500
115,628
39,499
39,415
78,770
56,611
5,546
448,548
81,126
(191,332
)
(5,368
)
71,985
(138,303
)
(52,289
)
(75,062
)
102,898
(59,971
)
787
(26,504
)
(10,564
)
399
(3,485
)
(9,140
)
(2,495
)
(7,210
)
154,000
(6,524
)
471,803
15,306
6,593
1,080,833
(519,042
)
(2,825
)
460,683
571,554
256,751
98,262
(3,384,874
)
(1,487,271
)
(1,769,210
)
(1,942,657
)
(272,114
)
(257,634
)
(157,447
)
(182,285
)
(272,114
)
(257,634
)
(157,447
)
(182,285
)
400,000
450,000
2,775,000
(150,000
)
(100,000
)
(525,202
)
(100,000
)
(233,367
)
200,000
400,000
59,837
1,634,740
93,319
3,000,000
113,750
2,000,000
(1,023,069
)
(372,653
)
(503,342
)
(579,718
)
1,215,000
1,025,000
3,691,931
1,825,837
2,006,408
2,255,119
34,943
80,932
79,751
130,177
99,644
18,712
134,587
99,644
$
134,587
$
99,644
$
214,338
$
229,821
Table of Contents
Nature of Business and Operations |
Overview |
Summary of Significant Accounting Policies |
1. | Revenue Recognition |
| Technology license and royalties | |
| Product and software license sales | |
| Content development services | |
| Training and implementation | |
| Maintenance and support contracts |
F-10
1. | Revenue Recognition (Continued) |
Software and technology license sales |
Product sales |
Professional service revenue |
Maintenance and support revenue |
F-11
2. | Cash and Cash Equivalents |
3. | Accounts Receivable |
4. | Inventories |
5. | Depreciation and Amortization |
Property and equipment
|
|||||
Equipment
|
3-5 years | ||||
Demonstration equipment
|
3-5 years | ||||
Furniture and fixtures
|
7 years | ||||
Purchased software
|
3 years | ||||
Leased equipment
|
3 years | ||||
Leasehold improvements
|
5 years | ||||
Intangible assets
|
|||||
Deferred financing costs
|
1-5 years |
F-12
5. | Depreciation and Amortization (Continued) |
6. | Advertising Costs |
7. | Software Development Costs |
8. | Basic and Diluted Loss per Common Share |
9. | Deferred Income Taxes |
10. | Accounting for Stock-Based Compensation |
F-13
10. | Accounting for Stock-Based Compensation (Continued) |
F-14
10.
Accounting for Stock-Based
Compensation (Continued)
Year Ended
Year Ended
Six Months
December 31,
December 31,
Ended
2005
2004
June 30, 2005
(Unaudited)
$
(4,789,925
)
$
(3,339,370
)
$
(2,046,778
)
(13,880
)
(2,239
)
(1,577
)
$
(4,803,805
)
$
(3,341,609
)
$
(2,048,355
)
$
(7.18
)
$
(6.87
)
$
(3.40
)
$
(7.21
)
$
(6.87
)
$
(3.40
)
2005 Grants | 2004 Grants | 2006 Grants | ||||||||||
Expected volatility factors
|
n/a | n/a | 61.7 | % | ||||||||
Approximate risk free interest rates
|
5.0 | % | 5.0 | % | 5.0 | % | ||||||
Expected lives
|
5 Years | 5 Years | 5 Years |
F-15
11. | Fair Value of Financial Instruments |
12. | Unaudited Interim Results |
13. | Use of Estimates |
14. | Recent Accounting Pronouncements |
F-16
14. | Recent Accounting Pronouncements (Continued) |
15. | Going Concern |
F-17
December 31, | December 31, | June 30, | ||||||||||
2005 | 2004 | 2006 | ||||||||||
(Unaudited) | ||||||||||||
Finished goods
|
$ | 143,483 | $ | 41,295 | $ | 65,414 | ||||||
Product components and supplies
|
248,020 | 48,878 | 219,168 | |||||||||
Software licenses
|
| 121,055 | | |||||||||
$ | 391,503 | $ | 211,228 | $ | 284,582 | |||||||
F-18
December 31,
December 31,
June 30,
2005
2004
2006
(Unaudited)
$
139,953
$
42,277
$
167,758
59,738
14,278
94,987
24,598
10,271
24,598
66,573
51,288
70,246
180,756
180,756
231,581
100,430
53,085
144,845
572,048
351,955
734,015
(187,827
)
(49,526
)
(271,387
)
$
384,221
$
302,429
$
462,628
December 31,
December 31,
June 30,
2005
2004
2006
(Unaudited)
$
143,172
$
20,139
$
454,037
233,367
17,591
14,106
20,086
$
160,763
$
34,245
$
707,490
Deferred financing costs |
F-19
Prepaid offering costs |
December 31, | December 31, | June 30, | ||||||||||
2005 | 2004 | 2006 | ||||||||||
(Unaudited) | ||||||||||||
Lines of credit bank
|
$ | 750,000 | $ | 300,000 | $ | 750,000 | ||||||
Short term note payable shareholder
|
94,599 | | 107,500 | |||||||||
Bridge notes payable
|
| | 1,618,264 | |||||||||
Short term note payable bank
|
| 150,000 | | |||||||||
$ | 844,599 | $ | 450,000 | $ | 2,475,764 | |||||||
Lines of credit bank |
Short-term note payable shareholder |
F-20
Bridge notes payable |
Short-term note payable bank |
Short-term notes payable related parties |
F-21
Short-term borrowings related parties |
F-22
December 31,
December 31,
June 30,
2005
2004
2006
(Unaudited)
$
500,000
$
500,000
$
500,000
236,659
569,866
332,236
5,185
45,177
18,531
5,782
23,207
$
1,087,426
$
1,080,833
$
568,384
December 31, | December 31, | June 30, | ||||||||||
2005 | 2004 | 2006 | ||||||||||
(Unaudited) | ||||||||||||
Interest
|
$ | 380,798 | $ | 365,874 | $ | 631,377 | ||||||
Compensation
|
102,380 | 102,672 | 121,239 | |||||||||
Deferred gain on sale leaseback
|
50,455 | 76,780 | 43,985 | |||||||||
Sales tax and other
|
11,071 | 5,718 | 5,003 | |||||||||
$ | 544,704 | $ | 551,044 | $ | 801,604 | |||||||
F-23
December 31,
December 31,
2005
2004
June 30, 2006
(Unaudited)
$
1,438,923
$
1,543,325
$
1,436,650
221,273
587,019
161,671
384,525
168,750
218,383
232,193
96,563
151,386
150,387
2,373,477
2,450,480
1,967,091
(1,402,616
)
(1,702,917
)
(1,036,990
)
$
970,861
$
747,563
$
930,101
Convertible bridge notes payable |
F-24
Non-convertible notes payable |
Note payable to customer |
Note payable to supplier |
Capital Lease Obligations |
F-25
December 31,
December 31,
June 30,
2005
2004
2006
(Unaudited)
$
180,756
$
180,756
$
231,581
(92,874
)
(32,622
)
(129,969
)
$
87,882
$
148,134
$
101,612
Year Ending December 31, | Amount | |||
2006
|
$ | 63,143 | ||
2007
|
48,319 | |||
Total payments
|
111,462 | |||
Less: portion representing interest
|
(14,899 | ) | ||
Principal portion
|
96,563 | |||
Less: current portion
|
(52,006 | ) | ||
Long-term portion
|
$ | 44,557 | ||
Year Ending December 31, | Amount | |||
2006
|
$ | 1,402,616 | ||
2007
|
148,334 | |||
2008
|
9,027 | |||
2009
|
768,500 | |||
2010
|
45,000 | |||
Total
|
$ | 2,373,477 | ||
F-26
December 31,
December 31,
2005
2004
June 30, 2006
(Unaudited)
$
3,000,000
$
$
3,000,000
683,550
683,550
683,550
13,750
13,750
13,750
3,697,300
697,300
3,697,300
(3,000,000
)
(47,300
)
(3,000,000
)
$
697,300
$
650,000
$
697,300
Convertible debenture payable |
Convertible bridge notes payable |
F-27
Non-convertible notes payable |
F-28
Year Ending December 31,
Amount
$
3,000,000
100,000
563,750
33,550
$
3,697,300
Operating Leases |
Year Ending December 31, | Amount | |||
2006
|
$ | 70,458 | ||
2007
|
72,611 | |||
2008
|
74,727 | |||
2009
|
65,095 | |||
Total
|
$ | 282,891 | ||
F-29
December 31, 2005
December 31, 2004
Weighted
Weighted
Common
Average
Common
Average
Stock
Exercise
Stock
Exercise
Warrants
Price
Warrants
Price
412,446
$
9.57
131,765
$
10.59
183,637
8.45
287,228
8.96
(28,483
)
3.38
(6,547
)
8.83
567,600
$
9.25
412,446
$
9.57
2005 | 2004 | |||||||
Expected life
|
3-5 Years | 5 Years | ||||||
Dividend yield
|
0 | % | 0 | % | ||||
Expected volatility
|
61.718 | % | 61.718 | % | ||||
Risk-free interest rate
|
5.0 | % | 5.0 | % |
F-30
December 31, 2005
December 31, 2004
Weighted
Weighted
Common
Average
Common
Average
Stock
Exercise
Stock
Exercise
Warrants
Price
Warrants
Price
137,522
$
3.08
34,444
$
0.87
191,815
8.63
103,078
3.82
329,337
$
6.31
137,522
$
3.08
Warrants Outstanding | ||||||||||||||||||||
Warrants Exercisable | ||||||||||||||||||||
Weighted- | ||||||||||||||||||||
Average | Weighted- | Weighted- | ||||||||||||||||||
Remaining | Average | Average | ||||||||||||||||||
Number | Contractual | Exercise | Number | Exercise | ||||||||||||||||
Range of Exercise Prices | Outstanding | Life | Price | Exercisable | Price | |||||||||||||||
$ 0.09-$ 2.16
|
47,222 | 2.57 Years | $ | 0.13 | 47,222 | $ | 0.13 | |||||||||||||
$ 2.25-$ 6.66
|
67,411 | 3.74 Years | 2.25 | 67,411 | 2.25 | |||||||||||||||
$ 6.75-$ 8.91
|
119,445 | 4.12 Years | 6.75 | 119,445 | 6.75 | |||||||||||||||
$ 9.00-$11.25
|
42,481 | 4.95 Years | 9.24 | 42,481 | 9.24 | |||||||||||||||
$13.50-$22.50
|
52,778 | 5.16 Years | 13.69 | 1,111 | 22.50 | |||||||||||||||
329,337 | 4.09 Years | $ | 6.31 | 277,670 | $ | 4.98 | ||||||||||||||
F-31
2005
2004
$
1,000
$
(29,000
)
(17,000
)
14,000
17,000
6,203,000
4,265,000
6,189,000
4,265,000
(6,189,000
)
(4,265,000
)
$
$
F-32
Year Ended December 31,
2005
2004
$
(1,617,000
)
$
(1,135,000
)
(307,000
)
(216,000
)
1,924,000
1,351,000
$
$
Year Ended | ||||||||
December 31, | ||||||||
2005 | 2004 | |||||||
Federal statutory rate
|
(34.0 | )% | (34.0 | )% | ||||
State taxes
|
(6.5 | ) | (6.5 | ) | ||||
Other
|
0.3 | 0.0 | ||||||
Change in valuation allowance
|
40.2 | 40.5 | ||||||
| % | | % | |||||
F-33
Six Months Ended
Year Ended
Year Ended
December 31,
December 31,
June 30,
June 30,
2005
2004
2006
2005
(Unaudited)
(Unaudited)
$
424,329
$
77,569
$
243,317
$
208,129
$
73,132
$
$
202,645
$
123,490
99,879
45,303
268,873
33,954
60,874
10,769
942,125
27,156
28,479
25,782
20,000
15,000
43,500
15,000
33,550
328,275
168,750
112,423
7,500
90,000
482,193
10,000
12,047
5,910
4,966
749,991
F-34
Amount | ||||
Cash proceeds
|
$ | 2,050,000 | ||
Conversion of short-term notes payable to related parties (note
G)
|
600,000 | |||
Conversion of long-term convertible bridge notes payable (note J)
|
200,000 | |||
Accrued interest
|
69,031 | |||
Accounts payable
|
55,000 | |||
Total
|
$ | 2,974,031 | ||
F-35
F-36
II-1
II-2
II-3
II-4
II-5
II-6
Item 24.
Indemnification of Directors and Officers
Item 25.
Other Expenses of Issuance and Distribution
$
2,769
3,088
30,000
*
*
*
*
*
*
*
$
*
*
To be filed by amendment.
Table of Contents
Item 26.
Recent Sales of Unregistered Securities
Table of Contents
Table of Contents
Item 27.
Exhibits.
Exhibit
Number
Description
1
Form of Underwriting Agreement by and between the Registrant and
Feltl and Company (including form of warrant).*
3
.1
Articles of Incorporation, as amended of the Registrant.
3
.2
Bylaws, as amended of the Registrant.
4
.1
See exhibits 3.1 and 3.2.
4
.2
Specimen form of common stock certificate of the Registrant.
4
.3
Form of Current Warrant to Purchase Common Stock of the
Registrant.
4
.4
Form of Previous Warrant to Purchase Common Stock of the
Registrant.
4
.5
Form of Convertible Debenture Note issued to lenders, including
related parties (including the extension thereto).
4
.6
Convertible Debenture Note issued to Steve Meyer in the amount
of $100,000 dated March 12, 2004.
4
.7
Promissory Note issued to SHAG LLC in the amount of $100,000
dated November 11, 2005.
4
.8
Promissory Note issued to Jack Norqual in the amount of $300,000
dated December 27, 2005.
4
.9
Promissory Note issued to Barry Butzow in the amount of $300,000
dated December 27, 2005.
4
.10
Form of Note Conversion Agreement by and between the
Registrant and certain lenders (including the addendum thereto).
4
.11
Note Conversion Agreement by and between the Registrant and
Galtere International Master Fund L.P., dated March 3, 2006.
4
.12
Note Conversion Agreement by and between the Registrant and
SHAG LLC, dated March 9, 2006.
4
.13
Letter regarding Note Extension by Barry Butzow dated
June 27, 2006.
4
.14
Letter regarding Note Extension by Jack Norqual dated
June 27, 2006.
5
Opinion of Briggs and Morgan, Professional Association.*
10
.1
Wireless Ronin Technologies, Inc. 2006 Equity Incentive Plan.
Table of Contents
Exhibit
Number
Description
10
.2
Wireless Ronin Technologies, Inc. 2006 Non-Employee Director
Stock Option Plan.
10
.3
Form of Loan and Subscription Agreement by and between the
Registrant and each purchaser of 12% Convertible Bridge
Notes.
10
.4
Form of the Registrants 12% Convertible Bridge Notes.
10
.5
Form of Warrant to Purchase Shares of Common Stock issued by the
Registrant to purchasers of 12% Convertible Bridge Notes.
10
.6
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Jeffrey C. Mack.
10
.7
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Christopher F. Ebbert.
10
.8
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Stephen E. Jacobs.
10
.9
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Scott W. Koller.
10
.10
Employment Agreement, dated as of April 1, 2006, between
the Registrant and John A. Witham.
10
.11
Strategic Partnership Agreement, dated May 28, 2004,
between the Registrant and The Marshall Special Assets Group,
Inc., as amended.
10
.12
Factoring Agreement, dated May 23, 2005, by and between the
Registrant and Barry W. Butzow and Stephen E. Jacobs.
10
.13
Lease, dated November 15, 2004, between the Registrant and
The Brastad/Lyman Partnership.
10
.14
Convertible Debenture Purchase Agreement between the Registrant
and the Spirit Lake Tribe dated January 5, 2005.
10
.15
10% Convertible Debenture in principal amount of $3,000,000
dated September 7, 2005.
10
.16
Amended and Restated Convertible Debenture Purchase Agreement
between the Registrant and the Spirit Lake Tribe dated
September 7, 2005.
10
.17
Amendment No. 1 to Amended and Restated Convertible
Debenture Purchase Agreement between the Registrant and the
Spirit Lake dated February 27, 2006.
10
.18
Guaranty by and between Stephen E. Jacobs and Winmark
Corporation dated December 8, 2004.
10
.19
Commercial Guaranty by and between the Registrant, as Borrower,
Signature Bank, as Lender and Michael J. Hopkins, as Guarantor
dated January 12, 2006.
10
.20
Commercial Guaranty by and between the Registrant, as Borrower,
Signature Bank, as Lender and Barry Butzow, as Guarantor dated
November 10, 2005.
10
.21
Commercial Guaranty by and between the Registrant, as Borrower,
Signature Bank, as Lender and Barry Butzow, as Guarantor dated
November 2, 2004.
10
.22
Lease by and between Dennis P. Dirlam and the Registrant dated
April 18, 2006.
10
.23
Sale and Purchase Agreement, dated July 11, 2006, between
Sealy Corporation and the Registrant.
10
.24
Amendment No. 2 to Amended and Restated Convertible
Debenture Agreement and Debenture between the Registrant and
Spirit Lake Tribe dated July 18, 2006.
10
.25
Note Amendment Agreement by and between the Registrant and
Galtere International Master Fund L.P. dated July 21, 2006.
10
.26
Form of Note Amendment Agreement by and between the Registrant
and certain lenders dated July 27, 2006.
10
.27
Form of option agreement granted under the 2006 Equity Incentive
Plan.
10
.28
Employment Agreement, dated as of June 19, 2006, between
the Registrant and Henry B. May.
21
Subsidiaries of the Registrant.
23
.1
Consent of Virchow, Krause & Company, LLP.
23
.2
Consent of Briggs and Morgan, Professional Association (included
in Exhibit 5).*
24
Power of Attorney (included on signature page).
*
To be filed by amendment.
Table of Contents
Item 28.
Undertakings
Table of Contents
II-7
II-8
WIRELESS RONIN TECHNOLOGIES, INC.
By:
/s/ Jeffrey C. Mack
Jeffrey C. Mack
President and Chief Executive Officer
Signature
Title
Date
/s/
Jeffrey C. Mack
Chairman of the Board of Directors, President and Chief
Executive Officer (Principal Executive Officer and Director)
August 29, 2006
/s/
John A. Witham
Executive Vice President and Chief Financial Officer (Principal
Financial and Accounting Officer)
August 29, 2006
/s/
Dr. William F.
Schnell
Director
August 29, 2006
/s/
Carl B. Walking Eagle
Sr.
Director
August 29, 2006
/s/
Gregory T. Barnum
Director
August 29, 2006
Table of Contents
Signature
Title
Date
/s/
Thomas J. Moudry
Director
August 29, 2006
/s/
Brett A. Shockley
Director
August 29, 2006
Table of Contents
Exhibit
Number
Description
1
Form of Underwriting Agreement by and between the Registrant and
Feltl and Company (including form of warrant).*
3
.1
Articles of Incorporation, as amended of the Registrant.
3
.2
Bylaws, as amended of the Registrant.
4
.1
See exhibits 3.1 and 3.2.
4
.2
Specimen form of common stock certificate of the Registrant.
4
.3
Form of Current Warrant to Purchase Common Stock of the
Registrant.
4
.4
Form of Previous Warrant to Purchase Common Stock of the
Registrant.
4
.5
Form of Convertible Debenture Note issued to lenders, including
related parties (including the extension thereto).
4
.6
Convertible Debenture Note issued to Steve Meyer in the amount
of $100,000 dated March 12, 2004.
4
.7
Promissory Note issued to SHAG LLC in the amount of $100,000
dated November 11, 2005.
4
.8
Promissory Note issued to Jack Norqual in the amount of $300,000
dated December 27, 2005.
4
.9
Promissory Note issued to Barry Butzow in the amount of $300,000
dated December 27, 2005.
4
.10
Form of Note Conversion Agreement by and between the
Registrant and certain lenders (including the addendum thereto).
4
.11
Note Conversion Agreement by and between the Registrant and
Galtere International Master Fund L.P., dated March 3, 2006.
4
.12
Note Conversion Agreement by and between the Registrant and
SHAG LLC, dated March 9, 2006.
4
.13
Letter regarding Note Extension by Barry Butzow dated
June 27, 2006.
4
.14
Letter regarding Note Extension by Jack Norqual dated
June 27, 2006.
5
Opinion of Briggs and Morgan, Professional Association.*
10
.1
Wireless Ronin Technologies, Inc. 2006 Equity Incentive Plan.
10
.2
Wireless Ronin Technologies, Inc. 2006 Non-Employee Director
Stock Option Plan.
10
.3
Form of Loan and Subscription Agreement by and between the
Registrant and each purchaser of 12% Convertible Bridge
Notes.
10
.4
Form of the Registrants 12% Convertible Bridge Notes.
10
.5
Form of Warrant to Purchase Shares of Common Stock issued by the
Registrant to purchasers of 12% Convertible Bridge Notes.
10
.6
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Jeffrey C. Mack.
10
.7
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Christopher F. Ebbert.
10
.8
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Stephen E. Jacobs.
10
.9
Employment Agreement, dated as of April 1, 2006, between
the Registrant and Scott W. Koller.
10
.10
Employment Agreement, dated as of April 1, 2006, between
the Registrant and John A. Witham.
10
.11
Strategic Partnership Agreement, dated May 28, 2004,
between the Registrant and The Marshall Special Assets Group,
Inc., as amended.
10
.12
Factoring Agreement, dated May 23, 2005, by and between the
Registrant and Barry W. Butzow and Stephen E. Jacobs.
10
.13
Lease, dated November 15, 2004, between the Registrant and
The Brastad/Lyman Partnership.
10
.14
Convertible Debenture Purchase Agreement between the Registrant
and the Spirit Lake Tribe dated January 5, 2005.
10
.15
10% Convertible Debenture in principal amount of $3,000,000
dated September 7, 2005.
Table of Contents
Exhibit
Number
Description
10
.16
Amended and Restated Convertible Debenture Purchase Agreement
between the Registrant and the Spirit Lake Tribe dated
September 7, 2005.
10
.17
Amendment No. 1 to Amended and Restated Convertible
Debenture Purchase Agreement between the Registrant and the
Spirit Lake dated February 27, 2006.
10
.18
Guaranty by and between Stephen E. Jacobs and Winmark
Corporation dated December 8, 2004.
10
.19
Commercial Guaranty by and between the Registrant, as Borrower,
Signature Bank, as Lender and Michael J. Hopkins, as Guarantor
dated January 12, 2006.
10
.20
Commercial Guaranty by and between the Registrant, as Borrower,
Signature Bank, as Lender and Barry Butzow, as Guarantor dated
November 10, 2005.
10
.21
Commercial Guaranty by and between the Registrant, as Borrower,
Signature Bank, as Lender and Barry Butzow, as Guarantor dated
November 2, 2004.
10
.22
Lease by and between Dennis P. Dirlam and the Registrant dated
April 18, 2006.
10
.23
Sale and Purchase Agreement, dated July 11, 2006, between
Sealy Corporation and the Registrant.
10
.24
Amendment No. 2 to Amended and Restated Convertible
Debenture Agreement and Debenture between the Registrant and
Spirit Lake Tribe dated July 18, 2006.
10
.25
Note Amendment Agreement by and between the Registrant and
Galtere International Master Fund L.P. dated July 21, 2006.
10
.26
Form of Note Amendment Agreement by and between the Registrant
and certain lenders dated July 27, 2006.
10
.27
Form of option agreement granted under the 2006 Equity Incentive
Plan.
10
.28
Employment Agreement, dated as of June 19, 2006, between
the Registrant and Henry B. May.
21
Subsidiaries of the Registrant.
23
.1
Consent of Virchow, Krause & Company, LLP.
23
.2
Consent of Briggs and Morgan, Professional Association (included
in Exhibit 5).*
24
Power of Attorney (included on signature page).
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/s/ Joseph P. Noack
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-4-
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WIRELESS RONIN TECHNOLOGIES, INC. | |||
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/s/ Stephen E. Jacobs
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Secretary |
-6-
| Recommending the appointment of independent auditors. | ||
| Consulting with the independent auditors on the plan of the audit. | ||
| Reviewing, in consultation with the independent auditors, their report of audit or proposed report of audit and the accompanying management letter. | ||
| Consulting with the independent auditors on the adequacy of internal controls. |
| Strategically, considers how the achievement of the overall goals and objectives of the corporation can be aided through adoption of an appropriate compensation philosophy and effective compensation program elements. | ||
| Administratively, reviews salary progression, bonus allocations, stock awards and the awards of supplemental benefits and perquisites for key executes against the compensation objectives of the company, given its overall performance. | ||
| Approves the compensation arrangements for the corporations senior management; also reviews and approves the adoption of any compensation plans in which officers and directors are eligible to participate. |
| Searches for and screens candidates for Board vacancies. The committee considers broader issues of composition and organization of the Board, including committee assignments and individual Board membership. | ||
| Evaluates the Board itself and its members and reviews the companys management succession planning. |
| Stays informed on a timely basis about the companys financial status. | ||
| Evaluates the financial information it receives and develops conclusions as to any plan of action needed. | ||
| Advises corporate management and the full board in financial matters. In some cases, the Finance Committee has the authority to act for the full Board between meetings, but generally it is not empowered to act on its own. |
| Reviews and approves corporate pension policy, formal pension plans and amendments. | ||
| Reviews actuarial recommendations and makes recommendations regarding the corporations contribution to the pension plans. | ||
| Selects asset managers and provides guidance on the specific investment philosophy to be applied to the ongoing management of the funds. | ||
| Monitors the performance of the corporate pension funds. |
| Monitors government actions with respect to pension governance and reporting requirements. |
| Ensures the proper future direction of the corporation by defining the basic corporate and business unit long-term strategic goals vital to the mission of creating shareholder value for the company. | ||
| Develops strategic plans as to how the company will achieve these objectives. | ||
| Monitors the progress of the company in achieving its long-term strategic goals. |
| Assures that the levels and forms of the executive long-term incentive compensation programs are adequate to motivate key management to achieve the corporate long-term strategic goals. | ||
| Involved in the design and approval of the executive long-term incentive compensation programs. | ||
| Administers the timing and determination of the size of grants; also interprets plan provisions with regard to setting performance goals and executing plan award agreements with individuals. |
| Reviews and approves all major allocations of corporate resources. | ||
| Evaluates the financial implications of all merger, acquisition and divestiture activities. |
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/s/ John P. Behr
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| Amend and restate Section 2.9 to read in its entirety as follows: |
| Amend and restate Section 3.2 to read in its entirety as follows: |
NUMBER | SHARES |
This Certifies that | is the owner of |
Chief Executive Officer
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Chief Financial Officer
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TEN COM
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as tenants in common | |||||||||||
TEN ENT
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as tenants by the entireties | UNIF GIFT MIN ACT | Custodian | |||||||||
JT TEN
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as joint tenants with right of |
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survivorship and not as tenants | under Uniform Gifts to Minors | |||||||||||
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under Uniform Transfers to Minors | ||||||||||||
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NOTICE
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THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. | ||||
SIGNATURE(S) GUARANTEED: | ||||
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THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. |
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Holder: | Wireless Ronin ® Technologies, Inc. | |||||||
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Wireless Ronin Technologies | [Name] | |||||
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Wireless Ronin Technologies | [Name] | |||||
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Its:
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[Date] | [Date] |
(i) | Any breach or default in the payment or performance of this Note; or | ||
(ii) | Any breach or default under the terms of any other note, obligation, mortgage, deed of trust, security agreement, mortgage, assignment, guaranty, other agreement, security instrument or document or other writing heretofore, herewith or hereafter existing to which the Borrower or any endorser, guarantor or surety of this Note of any other person or entity providing security for this Note or for any guaranty of this Note is a party; or | ||
(iii) | The insolvency, death, dissolution, liquidation, merger or consolidation of any such Borrower, endorser, guarantor, surety or other person or entity; or | ||
(iv) | Any appointment of a receiver, trustee or similar officer of any property of any such Borrower, endorser, guarantor, surety or other person or entity; or | ||
(v) | Any assignment for the benefit of creditors or any such Borrower, endorser, guarantor, surety or other person or entity; or | ||
(vi) | Any commencement of any proceeding under any bankruptcy, insolvency, receivership, dissolution, liquidation or similar law by or against any such Borrower, endorser, guarantor, surety or other person or entity; or | ||
(vii) | The sale, lease or other disposition (whether in one or more transactions) to one or more persons or entities of all or a substantial part of the assets of Borrower or any such endorser, guarantor, surety or other person or entity; or | ||
(viii) | Borrower or any such endorser, guarantor, surety or other person or entity takes any action to go out of business, or to revoke or terminate any agreement, liability or security in favor of the holder of this Note; or | ||
(ix) | The entry of any judgment or other order for the payment of money in the amount of $5,000.00 or more against Borrower or any such endorser, guarantor, surety or other person or entity; or | ||
(x) | The issuance or levy of any writ, warrant, attachment, garnishment, execution or other process against any property of Borrower or any such endorser, guarantor, surety or other person or entity; or | ||
(xi) | The attachment of any tax lien to any property of Borrower or any such endorser, guarantor, surety or other person or entity; or | ||
(xii) | Any statement, representation or warranty made by Borrower or any such endorser, guarantor, surety or other person or entity (or any representative of Borrower or any such endorser, guarantor, surety or other person or entity) to the holder of this Note at any time shall be incorrect or misleading in any material respect when made; or | ||
(xiii) | There is a material adverse change in the condition (financial or otherwise), business or property of Borrower or any such endorser, guarantor, surety or other person or entity; or |
2
(xiv) | The holder of this Note shall in good faith believe that the prospect of due and punctual payment or performance of this Note or the due and punctual payment or performance of any other note, obligation, mortgage, deed of trust, assignment, guaranty, or other agreement heretofore, herewith or hereafter given to or acquired by the holder of this Note in connection with this Note is impaired. |
3
Wireless Ronin Technologies, Inc.
|
Steve Meyer | |||||
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Lender | |||||
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/s/ Jeffrey Mack
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/s/ Steve Meyer | |||||
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Chief Executive Officer
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3/12/04
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3/13/04 | |||||
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4
Date: November 11 th , 2005 | Eden Prairie, Minnesota |
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Wireless Ronin® Technologies Inc. | |||
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/s/ Jeffrey C. Mack | |||
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President and CEO |
Date: December 27, 2005 | Eden Prairie, Minnesota |
(1) | $100,000 on December 27, 2005; | ||
(2) | $50,000 on January 6, 2006; | ||
(3) | $50,000 on January 31, 2006; | ||
(4) | $50,000 on February 7, 2006, and | ||
(5) | $50,000 on February 21, 2006. |
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Wireless Ronin® Technologies Inc. | |||
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/s/ Jeffrey C. Mack | |||
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President and CEO |
Date: December 27, 2005 | Eden Prairie, Minnesota |
(1) | $100,000 on December 27, 2005; | ||
(2) | $50,000 on January 6, 2006; | ||
(3) | $50,000 on January 31, 2006; | ||
(4) | $50,000 on February 7, 2006; and | ||
(5) | $50,000 on February 21, 2006. |
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Wireless Ronin® Technologies Inc. | |||
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/s/ Jeffrey C. Mack | |||
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President and CEO |
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WIRELESS RONIN TECHNOLOGIES, INC. | ||||
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By | |||
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||||
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Jeffrey C. Mack | |||
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President and Chief Executive Officer | |||
14700 Martin Drive | ||||
Eden Prairie, MN 55344 | ||||
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LENDER: | ||||
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Name of Lender | ||||
Signature | ||||
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Address: | ||||
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5
Date of Note |
Principal Balance as of
12/31/05 |
Accrued Interest as of
12/31/05 |
||
WIRELESS RONIN TECHNOLOGIES, INC. | ||||
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By | |||
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Jeffrey C. Mack | |||
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LENDER: | ||||
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Name of Lender | ||||
Signature | ||||
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Address: | ||||
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4
5
WIRELESS RONIN TECHNOLOGIES, INC. | ||||
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||||
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By | /s/ Jeffrey C. Mack | ||
|
||||
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Jeffrey C. Mack | |||
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President and Chief Executive Officer | |||
14700 Martin Drive | ||||
Eden Prairie, MN 55344 | ||||
|
||||
Galtere International Master Fund L.P. | ||||
|
||||
By /s/ Susan Haugerud | ||||
|
||||
Susan Haugerud | ||||
President Galtere International Ltd., General Partner | ||||
|
||||
Address: | ||||
|
||||
7 E 20 th St., 11-R | ||||
New York, NY 10001 |
6
Original
Principal
Accrued
Principal
Balance
Interest
Extension
Date of Note
Amount
as of 1/31/06
as of 1/31/06
Due Date
$
350,000.00
$
300,422.80
$
11,775.52
May 14, 2006
2
3
4
WIRELESS RONIN TECHNOLOGIES, INC. | |||||||
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|||||||
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By |
/s/ Jeffrey C. Mack
|
|||||
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Jeffrey C. Mack | ||||||
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President and Chief Executive Officer | ||||||
14700 Martin Drive | |||||||
Eden Prairie, MN 55344 | |||||||
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SHAG LLC | |||||||
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By | /s/ Hal B. Heyer | |||||
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Partner | |||||||
Signature and Title | |||||||
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Address: | |||||||
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2708 Branch Street | |||||||
Duluth, MN 55812 |
5
Accrued Interest and
Principal
Penalty as of
Date of Note
Amount
February 11, 2006
$
100,000.00
$
7,500.00
|
Very truly yours, | |||
|
||||
|
/s/ Barry Butzow | |||
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Very truly yours, | |||
|
||||
|
/s/ Jack Norqual | |||
|
|
1. | Purpose of the Plan |
2. | Definitions |
(a) | Affiliate shall mean an entity (whether or not incorporated), controlling, controlled by or under common control with the Company. | ||
(b) | Award shall mean an Option, SAR, Restricted Stock or Restricted Stock Units, Stock Bonus, Cash Bonus, Performance Awards, Warrant, Dividend Equivalent or other equity-based award granted pursuant to the terms of the Plan. | ||
(c) | Award Agreement shall mean an agreement, in such form and including such terms as the Committee in its sole discretion shall determine, evidencing an Award. | ||
(d) | Beneficiary shall mean upon the employees death, the employees successors, heirs, executors and administrators, as the case may be. | ||
(e) | Board of Directors or Board shall mean the Board of Directors of Wireless Ronin Technologies, Inc. | ||
(f) | Cash Bonus shall mean an award of a bonus payable in cash pursuant to Section 11 hereof. | ||
(g) | Cause shall mean: (i) the Participants conviction of any crime (whether or not involving the Company) constituting a felony in the jurisdiction involved; (ii) conduct of the Participant related to the Participants employment for which either criminal or civil penalties against the Participant or the Company may be sought; (iii) a violation of law, rule, or regulation, act of embezzlement, fraud, |
dishonesty, breach of fiduciary duty resulting in loss, damage or injury to the Company; (iv) material violation of the Companys policies, including, but not limited to those relating to sexual harassment, the disclosure or misuse of confidential information, or those set forth in Company manuals or statements of policy; (v) serious neglect or misconduct in the performance of the Participants duties for the Company or willful or repeated failure or refusal to perform such duties. | |||
(h) | Change in Control shall mean the occurrence of any one of the following events: |
(1) | An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a Person) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (1) the then outstanding shares of common stock of the Company (the Outstanding Company Common Stock) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); excluding, however, the following: (i) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company, or (iv) any acquisition pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this Section 2(h); or | ||
(2) | A change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (such Board shall be hereinafter referred to as the Incumbent Board) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this Section 2(h), that any individual who becomes a member of the Board subsequent to the Effective Date, whose election, or nomination for election by the Companys shareholders, was approved by a vote of at least a majority of those individuals who were members of the Board and who were also members of the Incumbent Board (or became such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; but, provided, further, that any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or | ||
(3) | Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company |
2
(Corporate Transaction); excluding, however, such a Corporate Transaction pursuant to which (i) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporation Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (other than the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 50% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership existed prior to the Corporate Transaction, and (iii) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or | |||
(4) | The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. |
(i) | Code shall mean the Internal Revenue Code of 1986, as amended. | ||
(j) | Committee shall mean the Compensation Committee of the Board of Directors; provided , however , that the Committee shall at all times consist of two or more persons, all of whom are non-employee directors within the meaning of Rule 16b-3 under the Exchange Act and outside directors within the meaning of Section 162(m) of the Code. Each member of the Committee shall be an independent director as determined in the Nasdaq Marketplace Rules or the rules or regulations of any exchange on which Company Stock is traded, or any other applicable law or regulation. | ||
(k) | Company shall mean Wireless Ronin Technologies, Inc. or any successor thereto. References to the Company also shall include the Companys Affiliates unless the context clearly indicates otherwise. | ||
(l) | Company Stock or Stock shall mean the common stock of the Company. |
3
(m) | Disability shall mean the existence of a physical or mental condition that qualifies for a benefit under the long-term disability plan sponsored by the Company which applies to the Participant. The existence of a Disability shall be determined by the Committee. | ||
(n) | Dividend Equivalents means any right granted under Section 13. | ||
(o) | Eligible Person shall mean any employee, officer, non-employee director or an individual consultant or independent contractor providing services to the Company whom the Committee determines to be an Eligible Person. | ||
(p) | Exchange Act shall mean the Securities Exchange Act of 1934, as amended from time to time. | ||
(q) | Fair Market Value shall mean, with respect to a share of Company Stock on an applicable date: |
(1) | If the principal market for the Company Stock (the Market) is a national securities exchange or the NASDAQ Stock Market, the closing sale price or, if no reported sales take place on the applicable date, the average of the high bid and low asked price of Company Stock as reported for such Market on such date or, if no such quotation is made on such date, on the next preceding day on which there were quotations, provided that such quotations shall have been made within the ten (10) business or trading days preceding the applicable date; or | ||
(2) | In the event that paragraph (1) above does not apply, the Fair Market Value of a share of Company Stock on any day shall be determined in good faith by the Committee in a manner consistently applied. |
(r) | Immediate Family Members shall mean a Participants spouse, child(ren) and grandchild(ren). | ||
(s) | Incentive Stock Option shall mean an Option that is an incentive stock option within the meaning of Section 422 of the Code and that is identified as an Incentive Stock Option in the agreement by which it is evidenced. | ||
(t) | Non-Qualified Stock Option shall mean an Option that is not an Incentive Stock Option within the meaning of Section 422 of the Code. | ||
(u) | Option shall mean an Incentive Stock Option or a Non-Qualified Stock Option that is granted by the Committee pursuant to Section 6 hereof. | ||
(v) | Participant shall mean an Eligible Person who receives or is designated to be granted one or more Awards under the Plan. | ||
(w) | Performance Award shall mean a right granted to an Eligible Person pursuant to Section 12 of the Plan to receive a payment from the Company, in the form of |
4
stock, cash or a combination of both, upon the achievement of established employment, service, performance or other goals (each a Performance Measure). A Performance Award shall be evidenced by an agreement, the Performance Award Agreement, executed by the Participant and the Committee. | |||
(x) | Performance Measures shall mean any one or more of the following performance measures or criteria, either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Subsidiary, either individually, alternatively or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years results or to a designated comparison group, in each case as specified by the Committee in the Award within the time period prescribed by Section 162(m) of the Code and related regulations: (i) revenue; (ii) cash flow; (iii) earnings per share; (iv) income before taxes, or earnings before interest, taxes, depreciation and amortization; (v) return on equity; (vi) total shareholder return; (vii) share price performance; (viii) return on capital; (ix) return on assets or net assets; (x) income or net income; (xi) operating income or net operating income; (xii) operating profit or net operating profit; (xiii) operating margin or profit margin; (xiv) return on operating revenue; (xv) return on invested capital; (xvi) market segment share; (xvii) product release schedules; (xviii) new product innovation; (xix) product cost reduction through advanced technology; (xx) brand recognition/acceptance; (xxi) product ship or sales targets; (xxii) customer segmentation or satisfaction; (xxiii) customer account profitability; or (xxiv) economic value added (or equivalent metric). | ||
(y) | Person shall mean a person, as such term is used in Sections 13(d) and 14(d) of the Exchange Act. | ||
(z) | Plan shall mean this Wireless Ronin Technologies, Inc. 2006 Incentive Plan, as it may be amended from time to time. | ||
(aa) | Restricted Stock shall mean an award of Company Stock, the grant, issuance, retention and/or vesting of which is subject to such restrictions, conditions and terms as are provided in an Award Agreement. | ||
(bb) | Restricted Stock Award shall mean an award of Stock granted to an Eligible Person pursuant to Section 9 of the Plan that is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of such Section 9. | ||
(cc) | Restricted Stock Unit shall mean any award of the right to receive Restricted Stock or a cash payment equal to the fair market value of such Company Stock upon the occurrence of some future event, such as the termination of employment, under the terms set forth in an Award Agreement. |
5
(dd) | SAR or Stock Appreciation Right shall mean the right to receive in whole or in part in cash or whole shares of common stock, the Fair Market Value of a share of Company Stock, which right is granted pursuant to Section 7 hereof and subject to the terms and conditions contained therein. | ||
(ee) | Securities Act shall mean the Securities Act of 1933, as amended from time to time. | ||
(ff) | Stock Bonus shall mean a grant of a bonus payable in shares of Company Stock pursuant to Section 10 hereof. | ||
(gg) | Subsidiary shall mean a company (whether a Company, partnership, joint venture or other form of entity) in which the Company, or a company in which the Company owns a majority of the shares of capital stock directly or indirectly, owns an equity interest of fifty percent (50%) or more, and shall have the same meaning as the term Subsidiary Company as defined in Section 424(f) of the Code. | ||
(hh) | Vesting Date shall mean the date established by the Committee on which a Participant has the ability to acquire all or a portion of a grant of a Stock Option or other Award, or the date upon which the restriction on a Restricted Stock or Restricted Stock Units grant shall lapse. | ||
(ii) | Warrant shall mean any right granted under Section 8 of the Plan. |
3. | Stock Subject to the Plan |
(a) | Plan Limit . |
(1) | To the extent that any Options, together with any related rights granted under the Plan, terminate, expire or are cancelled without having exercised the shares covered by such Options, such shares shall again be available for grant under the Plan; | ||
(2) | To the extent that any Warrants, together with any related rights granted under the Plan, terminate, expire or are cancelled without having exercised the shares covered by such Warrants, such shares shall again be available for grant under the Plan; |
6
(i) | To the extent any shares of Restricted Stock or Restricted Stock Units or any shares of Company Stock granted as a Stock Bonus are forfeited or cancelled for any reason, such shares shall again be available for grant under the Plan; or | ||
(ii) | To the extent any shares are issued upon the exercise of an Award by the surrender or tender of Previously Acquired Shares, surrendered or tendered shares shall be available for grant under the Plan. |
(b) | Individual Limit . |
4. | Administration of the Plan |
(a) | The Plan shall be administered by the Committee. Subject to the express provisions and limitations set forth in the Plan, the Committee shall be authorized and empowered to do all things necessary or desirable, in its sole discretion, in connection with the administration of the Plan, including, without limitation, the following: |
(1) | to prescribe, amend and rescind rules and regulations relating to the Plan and to define terms not otherwise defined herein; | ||
(2) | to determine which persons are Participants, to which of such Participants, if any, Awards shall be granted hereunder and the timing of any such Awards; | ||
(3) | to grant Awards to Participants and determine the terms and conditions thereof, including the number of shares subject to Awards and the exercise or purchase price of such shares and the circumstances under which Awards become exercisable or vested or are forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction of performance criteria, the occurrence of certain events, or other factors; |
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(4) | to establish or verify the extent of satisfaction of any Performance Measures or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Award; | ||
(5) | to prescribe and amend the terms of agreements or other documents evidencing Awards made under the Plan (which need not be identical); | ||
(6) | to determine whether, and the extent to which, adjustments are required pursuant to Section 15; | ||
(7) | to interpret and construe the Plan, any rules and regulations under the Plan and the terms and conditions of any Award granted hereunder, and to make exceptions to any such provisions in good faith and for the benefit of the Company; | ||
(8) | without amending the Plan, to grant Awards to Eligible Persons who are foreign nationals performing services for the Company outside of the United States, if any on such terms and conditions different from those specified in the Plan as may in the judgment of the Committee be necessary to foster and promote achievement of the purposes of the Plan and, in furtherance of such purposes, the Committee may adopt, ratify or make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its subsidiaries operates or has employees; and | ||
(9) | to make all other determinations deemed necessary or advisable for the administration of the Plan. |
(b) | The Committees determinations under the Plan may, but need not, be uniform and may be made on a Participant-by-Participant basis (whether or not two or more Participants are similarly situated). | ||
(c) | All decisions, determinations and interpretations by the Committee regarding the Plan shall be final and binding on all Participants. The Committee shall consider such factors as it deems relevant to making such decisions, determinations and interpretations including, without limitation, the recommendations or advice of any director, officer or employee of the Company and such attorneys, consultants and accountants as it may select. | ||
(d) | The Committee may, without amendment to the Plan, (i) accelerate the date on which any Option, SAR, Performance Award, Warrant or Stock Bonus granted under the Plan becomes exercisable, or otherwise adjust any of the terms of an |
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Award (except that no such adjustment shall, without the consent of a Participant, reduce the Participants rights under any previously granted and outstanding Award unless the Committee determines that such adjustment is necessary or appropriate to prevent such Award from constituting applicable employee remuneration within the meaning of Section 162(m) of the Code), (ii) subject to Section 9(a), waive any condition of an Award, or otherwise adjust any of the terms of such Award; provided, however, that (A) other than in connection with a change in the Companys capitalization as described in Section 15, the exercise price of any Option, SAR or other form of Award may not be reduced without approval of the Companys shareholders; and (B) the amount payable to a covered employee with respect to a qualified performance-based Award may not be adjusted upwards and the Committee may not waive or alter Performance Measures associated with an Award in a manner that would violate Section 162(m) of the Code; or (iii) as to any Award not intended to constitute performance-based compensation under Section 162(m) of the Code, at any time prior to the end of a performance period, the Committee may revise the Performance Measures and the computation of payment if unforeseen events occur which have a substantial effect on the performance of the Company, any subsidiary, division, Affiliate or joint venture of the Company and which, in the judgment of the Committee, make the application of the Performance Measures unfair to the Company or a Participant unless a revision is made. Notwithstanding the forgoing provisions of this Section 4(d), neither the Committee nor the Board may, except for adjustments pursuant to Section 15, or as a result of a Change in Control, materially amend a Restricted Stock or Restricted Stock Unit Award, including an acceleration or waiver of a restriction thereof. | |||
(e) | The Committee may determine whether an authorized leave of absence, change in status, or absence in military or government service, shall constitute termination of employment, subject to applicable law. | ||
(f) | No member of the Committee shall be liable for any action, omission, or determination relating to the Plan, and the Company shall indemnify and hold harmless each member of the Committee and each other director or employee of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been delegated against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Committee) arising out of any action, omission or determination relating to the Plan, unless, in either case, such action, omission or determination was taken or made by such member, director or employee in bad faith and without reasonable belief that it was in the best interests of the Company. |
5. | Eligible Persons |
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6. | Options |
(a) | Identification of Options . |
(b) | Exercise Price . |
(c) | Term and Exercise of Options . |
(1) | Except as provided in the Plan or in an Award Agreement, each Option shall remain exercisable until the expiration of ten (10) years from the date such Option was granted; provided , however , that each Stock Option shall be subject to earlier termination, expiration or cancellation as otherwise provided in the Plan. | ||
(2) | Each Option shall be exercisable in whole or in part; provided , however , that no partial exercise of an Option shall be for an aggregate exercise price of less than $1,000 unless such partial exercise represents the entire unexercised portion of the Option or the entire portion of the Option that is then exercisable. The partial exercise of an Option shall not cause the expiration, termination or cancellation of the remaining portion thereof. Upon the partial exercise of an Option, the Award Agreement evidencing such Option shall be returned to the Participant exercising such Option together with the delivery of the certificates described in Section 6(c)(4) hereof. | ||
(3) | An Option shall be exercised by delivering notice to the Companys principal office, to the attention of its Secretary, no less than five business days in advance of the effective date of the proposed exercise, and by paying the Company the full purchase price of the shares to be acquired upon exercise of the Option in the manner provided in Section 14(j). Such notice shall be accompanied by the Award Agreement or Agreements evidencing the Option shall specify the number of shares of Company Stock with respect to which the Option is being exercised and the effective |
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date of the proposed exercise and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise, in which case such Award Agreement or Agreements shall be returned to him. | |||
(4) | Certificates for shares of Company Stock purchased upon the exercise of an Option shall be issued in the name of the Participant or his or her Beneficiary (or permitted transferee), as the case may be, and delivered to the Participant or his or her Beneficiary (or permitted transferee), as the case may be, as soon as practicable following the effective date on which the Option is exercised. | ||
(5) | The Committee may at its sole discretion on a case by case basis, in any applicable agreement evidencing an Option (other than, to the extent inconsistent with the requirements of Section 422 of the Code, an Incentive Stock Option), permit a Participant to transfer all or some of the Options to (A) the Participants Immediate Family Members, or (B) a trust or trusts for the exclusive benefit of such Immediate Family Members. Following any such transfer, any transferred Options shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer. |
(d) | Limitations on Grant of Incentive Stock Options . |
(1) | To the extent that the aggregate Fair Market Value (determined as of the time the option is granted) of any stock with respect to which Incentive Stock Options granted under the Plan and all other plans of the Company (and any plans of any Subsidiary Company or Parent Company of the Company within the meaning of Section 424 of the Code) are first exercisable by any employee during any calendar year shall exceed the maximum limit, if any, imposed from time to time under Section 422 of the Code, such Options in excess of such limit shall be treated as Non-Qualified Stock Options. In such an event, the determination of which Options shall remain Incentive Stock Options and which shall be treated as Non-Qualified Stock Options shall be based on the order in which such Options were granted. All other terms and provisions of such Options that are deemed to be Non-Qualified Stock Options shall remain unchanged. | ||
(2) | No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any of its Subsidiary Companies (within the meaning of Section 424 of the Code), unless (A) the exercise price of such Incentive Stock Option is at least one hundred ten percent (110%) of the Fair Market Value of a share of Company Stock at the time such Incentive Stock Option is granted and (B) such Incentive Stock Option is not |
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exercisable after the expiration of five years from the date such Incentive Stock Option is granted. |
7. | Stock Appreciation Rights (SARs) |
(a) | Exercise Price . |
(b) | Benefit Upon Exercise . |
(1) | The exercise of a SAR with respect to any number of shares of Company Stock shall entitle a Participant to a payment, for each such share, equal to the excess of (A) the Fair Market Value of a share of Company Stock on the exercise date over (B) the exercise price of the SAR. Payment may be made in whole or in part in cash, whole shares of the Companys common stock, or a combination of cash and stock. | ||
(2) | All payments under this Section 7(b) shall be made as soon as practicable, but in no event later than five business days, after the effective date of the exercise of the SAR. |
(c) | Term and Exercise of SARs . |
(1) | Each SAR shall be exercisable on such date or dates, during such period and for such number of shares of Company Stock as shall be determined by the Committee and set forth in the agreement evidencing such SAR; provided , however , that no SAR shall be exercisable after the expiration of ten (10) years from the date such SAR was granted; and, provided , further , that each SAR shall be subject to earlier termination, expiration or cancellation as provided in the Plan. | ||
(2) | Each SAR, may be exercised in whole or in part; provided , however , that no partial exercise of a SAR shall be for an aggregate exercise price of less than $1,000. The partial exercise of a SAR shall not cause the expiration, termination or cancellation of the remaining portion thereof. Upon the partial exercise of a SAR, the Award Agreement evidencing such SAR, marked with such notations as the Committee may deem appropriate to evidence such partial exercise, shall be returned to the Participant exercising such SAR, together with the payment described in Section 7(b)(1) or 7(b)(2) hereof. |
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(3) | A SAR shall be exercised by delivering notice to the Companys principal office, to the attention of its Secretary, no less than five business days in advance of the effective date of the proposed exercise. Such notice shall be accompanied by the applicable Award Agreement evidencing the SAR, shall specify the number of shares of Company Stock with respect to which the SAR is being exercised and the effective date of the proposed exercise, and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise, in which case the Award Agreement evidencing the SAR shall be returned to him. | ||
(4) | Except as otherwise provided in an applicable Award Agreement, during the lifetime of a Participant, each SAR granted to a Participant shall be exercisable only by the Participant and no SAR shall be assignable or transferable otherwise than by will or by the laws of descent and distribution. The Committee may, in any applicable Award Agreement evidencing a SAR, permit a Participant to transfer all or some of the SAR to (A) the Participants Immediate Family Members, or (B) a trust or trusts for the exclusive benefit of such Immediate Family Members. Following any such transfer, any transferred SARs shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer. |
8. | Warrants |
(a) | Identification of Warrants . |
(b) | Exercise Price . |
(c) | Term and Exercise of Warrants . |
(1) | Except as provided in the Plan or in an Award Agreement, each Warrant shall remain exercisable until the expiration of ten (10) years from the date |
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such Warrant was granted; provided , however , that each Warrant shall be subject to earlier termination, expiration or cancellation as otherwise provided in the Plan. | |||
(2) | Each Warrant shall be exercisable in whole or in part; provided , however , that no partial exercise of a Warrant shall be for an aggregate exercise price of less than $1,000 unless such partial exercise represents the entire unexercised portion of the Warrant or the entire portion of the Warrant that is then exercisable. The partial exercise of a Warrant shall not cause the expiration, termination or cancellation of the remaining portion thereof. Upon the partial exercise of a Warrant, the Award Agreement evidencing such Warrant shall be returned to the Participant exercising such Warrant together with the delivery of the certificates described in Section 6(c)(4) hereof. | ||
(3) | A Warrant shall be exercised by delivering notice to the Companys principal office, to the attention of its Secretary, no less than five business days in advance of the effective date of the proposed exercise, and by paying the Company the full purchase price of the shares to be acquired upon exercise of the Warrant in the manner provided in Section 14(j). Such notice shall be accompanied by the Award Agreement or Agreements evidencing the Warrant and shall specify the number of shares of Company Stock with respect to which the Warrant is being exercised and the effective date of the proposed exercise and shall be signed by the Participant. The Participant may withdraw such notice at any time prior to the close of business on the business day immediately preceding the effective date of the proposed exercise, in which case such Award Agreement or Agreements shall be returned to him. | ||
(4) | Certificates for shares of Company Stock purchased upon the exercise of a Warrant shall be issued in the name of the Participant or his or her Beneficiary (or permitted transferee), as the case may be, and delivered to the Participant or his or her Beneficiary (or permitted transferee), as the case may be, as soon as practicable following the effective date on which the Warrant is exercised. | ||
(5) | The Committee may at its sole discretion on a case-by-case basis, in any applicable agreement evidencing a Warrant, permit a Participant to transfer all or some of the Warrants to (A) the Participants Immediate Family Members, or (B) a trust or trusts for the exclusive benefit of such Immediate Family Members. Following any such transfer, any transferred Warrants shall continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer. |
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9. | Restricted Stock or Restricted Stock Units |
(a) | Issue Date and Vesting Date; Minimum Restriction Period . |
(b) | Conditions to Vesting . |
(c) | Restrictions on Transfer Prior to Vesting . |
(d) | Certificates . |
(1) | Except as otherwise provided in this Section 9 hereof, reasonably promptly after the date identified in the Award Agreement for issuance of certificated shares of Restricted Stock, the Company shall cause to be |
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issued a stock certificate, registered in the name of the Participant to whom such shares were granted, evidencing such shares; provided , that the Company shall not cause to be issued such a stock certificate unless it has received a stock power duly endorsed in blank with respect to such shares. Each such stock certificate shall bear the following legend: |
The transferability of this certificate and the shares of stock represented hereby are subject to the restrictions, terms and conditions (including forfeiture provisions and restrictions against transfer) contained in the Wireless Ronin Technologies, Inc. 2006 Equity Incentive Plan and an Award Agreement entered into between the registered owner of such shares and Wireless Ronin Technologies, Inc. A copy of the Plan and Award Agreement is on file in the office of the Secretary of Wireless Ronin Technologies, Inc., 14700 Martin Drive, Eden Prairie, MN 55344. |
Such legend shall not be removed from the certificate evidencing such shares until such shares vest pursuant to the terms of the Award Agreement. |
(2) | Each certificate issued pursuant to Section 9(d)(1) hereof, together with the stock powers relating to the shares of Restricted Stock evidenced by such certificate, shall be deposited by the Company with a custodian designated by the Company (which custodian may be the Company). The Company shall cause such custodian to issue to the Participant a receipt evidencing the certificates held by it which are registered in the name of the Participant. |
(e) | Consequences Upon Vesting . |
(f) | Failure to Vest . |
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(g) | Voting Rights and Dividends . |
10. | Stock Bonuses |
11. | Cash Bonuses |
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12. | Performance Awards |
(a) | Performance Awards . |
(b) | Performance Measures . |
(c) | Award Criteria . |
(d) | Payment . |
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(e) | Other Terms and Conditions . |
(f) | Performance Award Agreements . |
13. | Dividend Equivalents and Other Equity-Based Awards |
14. | Other Provisions Applicable to Awards. |
(a) | Change in Control . |
(1) | Acceleration of vesting. |
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(i) | Any Options, Stock Appreciation Rights and Warrants outstanding as of the date of such Change in Control, and which are not then exercisable and vested, shall become fully exercisable and vested. | ||
(ii) | The restrictions and deferral limitations applicable to any Restricted Stock or Restricted Stock Units shall lapse, and such Restricted Stock or Restricted Stock Units shall become free of all restrictions and become fully vested. | ||
(iii) | All Performance Awards shall be considered to be earned and payable in full, and any deferral or other restriction shall lapse and such Performance Awards shall be settled in cash or shares, as determined by the Committee, as promptly as is practicable. | ||
(iv) | All restrictions on other Awards shall lapse and such Awards shall become free of all restrictions and become fully vested. |
(2) | Cash Payment for Options. |
(i) | some or all Participants holding outstanding Awards will receive, with respect to some or all of the shares of Company Stock subject to such Awards, as of the effective date of any such Change in Control of the Company, cash in an amount equal to the excess of the Fair Market Value of such shares immediately prior to the effective date of such Change in Control of the Company over the exercise price per share of such Awards; and | ||
(ii) | with respect to any granted and outstanding Award, the Fair Market Value of the shares of Company Stock underlying such Award is less than or equal to the exercise price per share of such Award as of the effective date of the applicable Change in Control and the Award, therefore, shall terminate as of the effective date of the applicable Change in Control. |
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(3) | Limitation on Change in Control Payments. |
(b) | Suspension or Cancellation for Cause . |
(c) | Right of Recapture . |
(d) | Forfeiture for Financial Reporting Misconduct . |
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(e) | Consideration of Awards . |
(f) | Awards May Be Granted Separately or Together . |
(g) | No Limit on Other Compensation Arrangements . |
(h) | No Right to Employment, etc. |
(i) | No Fractional Shares . |
(j) | Forms of Payment Under Awards . |
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(k) | Limits on Transfer of Awards . |
(l) | Term of Awards . |
15. | Adjustment Upon Changes in Company Stock |
(a) | Adjustments . |
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(b) | Outstanding Restricted Stock . |
16. | Rights as a Shareholder |
17. | No Special Employment Rights; No Right to Award |
(a) | Nothing contained in the Plan or any Award shall confer upon any Participant any right with respect to the continuation of his or her employment by the Company or interfere in any way with the right of the Company, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or to increase or decrease the compensation of the Participant from the rate in existence at the time of the grant of an Award. | ||
(b) | No person shall have any claim or right to receive an Award hereunder. The Committees granting of an Award to a Participant at any time shall neither require the Committee to grant an Award to such Participant or any other Participant or other person at any time nor preclude the Committee from making subsequent grants to such Participant or any other Participant or other person. |
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18. | Securities Matters |
(a) | The Company shall be under no obligation to effect the registration pursuant to the Securities Act of any interests in the Plan or any shares of Company Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Company Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange or market on which shares of Company Stock are traded. The Committee may require, as a condition of the issuance and delivery of certificates evidencing shares of Company Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that such certificates bear such legends, as the Committee, in its sole discretion, deems necessary or desirable. | ||
(b) | The exercise of any Option granted hereunder shall be effective only at such time as counsel to the Company shall have determined that the issuance and delivery of shares of Company Stock pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange or market on which shares of Company Stock are traded. |
19. | Compliance with Rule 16b-3 |
20. | Tax Matters |
(a) | Withholding . To the extent required by applicable federal, state, local or foreign law, the Committee may and/or a Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to any issuance, exercise or vesting of an Award, or any disposition of shares of Company Stock. The Company shall not be required to issue shares or to recognize the disposition of such shares until such obligations are satisfied. To the extent permitted or required by the Committee, these obligations may or shall be satisfied by having the Company withhold a portion of the shares of stock that otherwise would be issued to a Participant under such Award or by tendering a Participants Previously Acquired Shares. |
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(b) | Required Consent to and Notification of Code Section 83(b) Election . No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made unless expressly permitted by the terms of the Award Agreement or by action of the Committee in writing prior to the making of such election. In any case in which a Participant is permitted to make such an election in connection with an Award, the Participant shall notify the Company of such election within ten (10) days of filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Code Section 83(b) or other applicable provision. | ||
(c) | Requirement of Notification Upon Disqualifying Disposition Under Code Section 421(b) . If any Participant shall make any disposition of shares of stock delivered pursuant to the exercise of an ISO under the circumstances described in Code Section 421(b) (i.e., a disqualifying disposition), such Participant shall notify the Company of such disposition within ten (10) days thereof. |
21. | Amendments |
(a) | Amendments to the Plan . |
(b) | Correction of Defects, Omissions and Inconsistencies . |
22. | No Obligation to Exercise |
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23. | Transfers Upon Death |
24. | Expenses and Receipts |
25. | Limitations Imposed By Section 162(m) |
(a) | With respect to Options, SARs, Warrants or Restricted Stock Units, the Committee may delay the payment in respect to such Options, SARs, Warrants or Restricted Stock Units until a date that is within 30 days after the earlier to occur of (i) the date that compensation paid to the Participant no longer is subject to the deduction limitation under Section 162(m) of the Code and (ii) the occurrence of a Change in Control. In the event that a Participant exercises an Option, Warrants or SAR at a time when the Participant is a covered employee, and the Committee determines to delay the payment in respect of such any Stock Award, the Committee shall credit cash or, in the case of an amount payable in Company Stock, the Fair Market Value of the Company Stock, payable to the Participant to a book-entry account established in the Participants name in the financial records of the Company. The Participant shall have no rights in respect of such account and the amount credited thereto shall not be transferable by the Participant other than by will or laws of descent and distribution. The Committee may credit additional amounts to such account as it may determine in its sole discretion. Any account created hereunder shall represent only an unfunded unsecured promise by the Company to pay the amount credited thereto to the Participant in the future. | ||
(b) | With respect to Restricted Stock or Restricted Stock Units and Stock Bonuses, the Committee may require the Participant to surrender to the Committee any certificates with respect to Restricted Stock and Stock Bonuses in order to cancel the Awards of such Restricted Stock or Restricted Stock Units and Stock Bonuses (and any related Cash Bonuses). In exchange for such cancellation, the Committee shall credit to a book-entry account established in the Participants |
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name in the financial records of the Company a cash amount equal to the Fair Market Value of the shares of Company Stock subject to such awards. The amount credited to such account shall be paid to the Participant within 30 days after the earlier to occur of (i) the date that compensation paid to the Participant no longer is subject to the deduction limitation under Section 162(m) of the Code and (ii) the occurrence of a Change in Control. The Participant shall have no rights in respect of such account and the amount credited thereto shall not be transferable by the Participant other than by will or laws of descent and distribution. The Committee may credit additional amounts to such account as it may determine in its sole discretion. Any account created hereunder shall represent only an unfunded unsecured promise by the Company to pay the amount credited thereto to the Participant in the future. |
26. | Compliance with Section 409A of the Code |
27. | Failure to Comply |
28. | Effective Date of Plan |
29. | Term of the Plan |
30. | Severability of Provisions |
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31. | Applicable Law |
32. | No Trust or Fund Created |
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1 | (Note: You are subject to backup withholding if (i) you fail to furnish your Social Security number or taxpayer identification number herein; (ii) the Internal Revenue Service notifies the Company that you furnished an incorrect Social Security number or taxpayer identification number; (iii) you are notified that you are subject to backup withholding; or (iv) you fail to certify that you are not subject to backup withholding or you fail to certify your Social Security number or taxpayer identification number.) |
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7. | Investor Qualifications |
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(i) | The Investor hereby certifies that he or she is an accredited Investor because the Investor has an individual net worth, or joint net worth with his or her spouse, exceeding $1,000,000. For purposes of this Agreement, individual net worth means the excess of total assets valued at fair market value, including home and personal property, over total liabilities. | ||
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(ii) | The Investor hereby certifies that he or she is an accredited Investor because the Investor has an individual income (exclusive of any income attributable to his or her spouse) of more than $200,000 in each of the two most recent years or joint income with his or her spouse of more than $300,000 in each of those years and that the Investor reasonably expects to reach the same income level in the current year. | ||
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(iii) | The Investor certifies that he or she is an accredited Investor because he or she is a director or executive officer of the Company. |
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(i) | The Investor hereby certifies that all of the beneficial equity owners of the Investor qualify as accredited individual Investors under items (a)(1) or (a)(2) above. (Investors attempting to qualify |
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under this item must complete the Certificate of Signatory to this Agreement and each equity owner must complete a separate copy of this Agreement). ( Note: the Investor cannot qualify for this category of accredited Investor if the Investor is an irrevocable trust .) | |||
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(ii) | The Investor is a bank or savings and loan association as defined in Sections 3(a)(2) and 3(a)(5)(A), respectively, of the Securities Act acting either in its individual or fiduciary capacity. | ||
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(iii) | The Investor is an insurance company as defined in Section 2(13) of the Securities Act. | ||
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(iv) | The Investor is an investment company registered under the Investment Company Act of 1940 or a business development company as defined therein, in Section 2(a)(48). | ||
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(v) | The Investor is a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. | ||
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(vi) | The Investor is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 and one or more of the following is true (check one or more, as applicable): |
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(A) | the investment decision is made by a plan fiduciary, as defined therein, in Section 3(21), which is either a bank, savings and loan association, insurance company, or registered investment adviser; or | ||
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(B) | the employee benefit plan has total assets in excess of $5,000,000; or | ||
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(C) | the plan is a self-directed plan with investment decisions made solely by persons who are accredited Investors as defined therein. |
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(vii) | The Investor is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. | ||
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(viii) | The Investor has total assets in excess of $5,000,000, was not formed for the specific purpose of acquiring the Securities and is one or more of the following (check one or more, as applicable): |
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(A) | an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended; or |
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(B) | a corporation; or | ||
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(C) | a Massachusetts or similar business trust; or | ||
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(D) | a partnership. |
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(ix) | The Investor is a trust with total assets exceeding $5,000,000 which was not formed for the specific purpose of acquiring the Securities and whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the investment in the Securities. |
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Individual Ownership | |
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Community Property | |
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Joint Tenant with Right of Survivorship (both parties must sign). Briefly describe
relationship between the parties (e.g., married):
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Tenants in Common (both parties must sign). Briefly describe relationship between the
parties (e.g., married):
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Qualified Retirement Account (i.e. IRA) (See note * below) | |
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Community Property | |
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Partnership | |
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Corporation | |
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Trust or Estate (Describe and enclose evidence of authorization): | |
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Other (Describe): |
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a. | Are you, or is a member of your immediate family 1 or any of your affiliates, as applicable, affiliated or associated, directly or indirectly, with a Member 2 of the NASD or with a Person Associated with a Member 3 of the NASD? 4 | |
Yes No | ||
If the answer is Yes, please identify below such Member of the NASD or Person Associated with a Member of the NASD and provide the name, address, and telephone number of the Member or Members and a detailed description of the association or affiliation. |
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Answer: | |||
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b. | State whether you own, directly or indirectly, stock or other securities of any NASD Member. If so, name the NASD Member and describe the securities. | |
Yes No | ||
If the answer is Yes, please identify below such Member of the NASD or Person Associated with a Member of the NASD and provide the name, address, and telephone number of the Member or Members and a detailed description of the securities owned. |
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Answer: | |||
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c. | State whether you have made any outstanding loans to any NASD member. If so, name the NASD member and give a brief description of the loan, including the face value of any debt securities of the NASD member held by you and the date on which they were acquired. | |
Yes No | ||
If the answer is Yes, please identify below such Member of the NASD or Person Associated with a Member of the NASD and provide the name, address, and telephone number of the Member or Members and a detailed description of the loan. |
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Answer: | |||
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13
d. | Do you have any oral or written agreements with any NASD Member or associated persons of such NASD Member concerning the disposition of securities of the Company? | |
Yes No | ||
If the answer is Yes, please identify below such Member of the NASD or Person Associated with a Member of the NASD and provide the name, address, and telephone number of the Member or Members and a detailed description of the agreement. |
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Answer: | |||
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e. | Have you, or has a member of your immediate family or any of your affiliates, as applicable, provided any consulting or other services to the Company? | |
Yes No | ||
If the answer is Yes, please provide a detailed description of the services provided. |
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Answer: | |||
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Dated:
, 2006
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(Print Name of Investor) | |
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(Signature of Respondent or Authorized Person) |
1 | A member of Investors immediate family includes a spouse, father, mother, father-in-law, mother-in-law, or any brother, sister, brother-in-law, sister-in-law or children, and any relative which the Investor supports. | |
2 | The term Member of the NASD means either any broker or dealer admitted to membership in the NASD, any officer or partner of such a member or the executive representative (or the substitute of such representative) of such member to the NASD. | |
3 | The term person associated with a member of the NASD means every sole proprietor, partner, officer, director or branch manager of any member, or any natural person occupying a similar status or performing similar functions, or any natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by such member (for example, any employee), whether or not such person is registered or exempt from registration with the NASD pursuant to its by-laws. The term also includes a natural person who is registered or has applied for registration under the rules of the NASD. | |
4 | The term affiliate includes a company which controls, is controlled by or is under common control with a member of the NASD. A company will be presumed to control a member of the NASD if the company beneficially owns 10% or more of the outstanding voting securities of a member of the NASD which is a corporation, or beneficially owns a partnership interest in 10% or more of the distributable profits or losses of a member of the NASD which is a partnership. A member of the NASD will be |
14
presumed to control a company if the member of the NASD and the persons associated with the member of the NASD beneficially own 10% or more of the outstanding voting securities of a company which is a corporation, or beneficially own a partnership interest in 10% or more of the distributable profits or losses of a company which is a partnership. A company will be presumed to be under common control with a member of the NASD if (i) the same natural person or company controls both a member of the NASD and a company by beneficially owning 10% or more of the outstanding voting securities of a member of the NASD or a company which is a corporation, or by beneficially owning a partnership interest in 10% or more of the distributable profits or losses of a member of the NASD or a company which is a partnership or (ii) a person having the power to direct or cause the direction of the management or policies of a member of the NASD or a company also has the power to direct or cause the direction of the management or policies of the other entity in question. |
15
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Loan Amount
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$ | |||
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Number of Warrant Shares:
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Loan Amount
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Number of Warrant Shares:
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ENTITY INVESTOR(S): | ||||
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Name of Entity (Typed or Printed) | ||||
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By:
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Its:
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Name of Signatory (Typed or Printed) | ||||
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Address to Which Correspondence | ||||
Should be Directed: | ||||
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City, State and Zip Code | ||||
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Entitys Tax Identification or Social Security No. | ||||
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Telephone Number |
17
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(Signature) |
18
WIRELESS RONIN TECHNOLOGIES, INC. | ||||
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Date:
, 2006
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By: | |||
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Signature | |||
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Name (Typed or Printed) | ||||
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Title (Typed or Printed) |
19
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$ | Minneapolis, Minnesota | |
Note No. 2006N-___ | March 10, 2006 |
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WIRELESS RONIN TECHNOLOGIES, INC. | ||||||
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By: | |||||
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John A. Witham | |||||
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Chief Financial Officer |
NOTICE OF CONVERSION OF PROMISSORY NOTE
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To be Completed and Signed by | |
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the Registered Holder to Convert | |
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Promissory Note |
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(Print Name) | |||||||
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Please insert social security | ||||||||
or other identifying number | ||||||||
of registered Holder of Note: | ||||||||
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Address: | |||||||
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Dated:
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Signature* |
* | The signature on the Notice of Conversion of Promissory Note must exactly correspond to the name as written upon the face of the Note in every particular without alteration or any change whatsoever. When signing on behalf of a corporation, partnership, trust of other entity, please indicate your position(s) and title(s) with such entity. If the Note is registered in the name of more than one Holder, all Holders must sign. |
March 10, 2006 | Warrant No. 2006W-___ |
WIRELESS RONIN TECHNOLOGIES, INC. | ||||||
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By | |||||
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|
Chief Financial Officer |
NOTICE OF EXERCISE OF WARRANT
|
To Be Executed by the Registered Holder in Order to Exercise the Warrant |
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||||||
Please insert social security or other identifying number of registered Holder of certificate: | Address: | |||||
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Dated:
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||||||
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Signature* |
* | The signature on the Notice of Exercise of Warrant must correspond to the name as written upon the face of the Warrant in every particular without alteration or enlargement or any change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, PLEASE indicate your position(s) and title(s) with such entity. If the Warrant is registered in the name of more than one Holder, all Holders must sign. |
Dated:
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Address: | |||||
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| The Company desires to continue to employ Executive as its Chief Executive Officer, and Executive desires to accept such employment. |
| This Agreement provides, among other things, for base compensation for Executive, a term of employment and severance payments in the event Executive is terminated without Cause or by reason of a Change of Control of the Company. |
2
3
(a) | Any conviction or nolo contendere plea by Executive to a felony, gross misdemeanor or misdemeanor involving moral turpitude, or any public conduct by Executive that has or can reasonably be expected to have a detrimental effect on the Company and the image of its management; | ||
(b) | Any act of material misconduct, willful and gross negligence, or breach of duty with respect to the Company, including, but not limited to, embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the Company, or willful breach of fiduciary duty to the Company which results in a material loss, damage, or injury to the Company; | ||
(c) | Any material breach of any material provision of this Agreement or of the Companys announced or written rules, codes or polices; provided, however, that such breach shall not constitute Cause if Executive cures or remedies such breach within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such breach is part of a pattern of chronic breaches of the same, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such breach is not deemed curable. | ||
(d) | Any act of insubordination by Executive; provided, however, an act of insubordination by Executive shall not constitute Cause if Executive cures or remedies such insubordination within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such insubordination is a part of a pattern of chronic insubordination, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such insubordination is deemed not curable. | ||
(e) | Any unauthorized disclosure of any Company trade secret or confidential information, or conduct constituting unfair competition with respect to the Company, including inducing a party to breach a contract with the Company; or | ||
(f) | A willful violation of federal or state securities laws. |
4
(a) | the Company or any of its subsidiaries reduces Executives Base Salary or base rate of annual compensation, or otherwise changes benefits provided to Executive under compensation and benefit plans, arrangements, policies and procedures to be as a whole materially less favorable to Executive, other than reductions in Base Salary permitted under Section 4.01; | ||
(b) | without Executives express written consent, the Company or any of its subsidiaries significantly reduces Executives job authority and responsibility, as the Companys Chief Executive Officer; | ||
(c) | without Executives express written consent, the Company or any of its subsidiaries requires Executive to change the location of Executives job or office, to a location more than fifty (50) miles from the location of Executives job or office immediately prior to such required change; | ||
(d) | a successor company fails or refuses to assume the Companys obligations under this Agreement; or | ||
(e) | the Company or any successor company breaches any of the material provisions of this Agreement; |
5
(a) | if (i) there has been a Change of Control of the Company (as defined in Section 7.02), and (ii) Executive is an active and full-time employee at the time of the Change of Control, and (iii) within twelve (12) months following the date of the Change of Control, Executives employment is involuntarily terminated for any reason (including Good Reason (as definition Section 6.04)), other than for Cause or death or disability; or | ||
(b) | if Executives employment is terminated by the Company without Cause, or by Executive for Good Reason. |
(a) | an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act) of 50% or more of either: (1) the then outstanding Stock; or (2) the combined voting power of the Companys outstanding voting securities immediately after the merger or acquisition entitled to vote generally in the election of directors; provided, however, that the following acquisition shall not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any acquisition by any corporation with respect to which, following such acquisition, more than 50% of the Stock or combined voting power of Stock and other voting securities of the Company is beneficially owned by substantially all of the individuals and entities who were beneficial owners of Stock |
6
and other voting securities of the Company immediately prior to the acquisition in substantially similar proportions immediately before and after such acquisition; or |
(b) | individuals who, as of the date of this Agreement, constitute the Board (the Incumbent Board), cease to constitute a majority of the Board. Individuals nominated or whose nominations are approved by the Incumbent Board and subsequently elected shall be deemed for this purpose to be members of the Incumbent Board; or | ||
(c) | approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation, dissolution, sale or statutory exchange of Stock which changes the beneficial ownership of Stock and other voting securities so that after the corporate change the immediately previous owners of 50% of Stock and other voting securities do not own 50% of the Companys Stock and other voting securities either legally or beneficially; or | ||
(d) | the sale, transfer or other disposition of all substantially all of the Companys assets; or | ||
(e) | a merger of the Company with another entity after which the pre-merger shareholders of the Company own less than 50% of the stock of the surviving corporation. |
7
8
(a) | Unless otherwise agreed by the Company and Executive, all determinations required to be made under this Section 7.08, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by an accounting firm that does not have a material relationship with either of the parties that is selected by mutual agreement (the Accounting Firm). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15 days of the receipt of the Accounting Firms determination. Absent manifest error, any determination by the Accounting Firm shall be binding upon the Company and the Executive. | ||
(b) | The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on, the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall: |
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 7.08, the Company shall |
9
control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the Executive to sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company pays such claim and directs the Executive to sue for a refund, the Company shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Companys control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. |
(c) | If, after the receipt by the Executive of a Gross-Up Payment or payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. | ||
(d) | Notwithstanding any other provision of this Section 7.08, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding and payment. |
10
11
12
13
14
(a) | In any arbitration proceeding, each party shall pay the fees and expenses of its or his own legal counsel. | ||
(b) | The arbitrator, in his or her discretion, shall award legal fees and expenses and costs of the arbitration, including the arbitrators fee, to a party who substantially prevails in its claims in such proceeding. | ||
(c) | Notwithstanding this Section 10.06, in the event of alleged noncompliance or violation, as the case may be, of Sections 8 or 9 of this Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive and/or such other legal and equitable remedies as may be appropriate. |
15
WIRELESS RONIN TECHNOLOGY, INC. | ||||||
|
||||||
|
By |
/s/ John A. Witham
|
||||
|
||||||
EXECUTIVE | ||||||
|
||||||
|
By |
/s/ Jeffrey C. Mack
|
16
| The Company desires to continue to employ Executive as its Executive Vice President and Chief Technology Officer, and Executive desires to accept such employment. |
| This Agreement provides, among other things, for base compensation for Executive, a term of employment and severance payments in the event Executive is terminated without Cause or by reason of a Change of Control of the Company. |
2
3
(a) | Any conviction or nolo contendere plea by Executive to a felony, gross misdemeanor or misdemeanor involving moral turpitude, or any public conduct by Executive that has or can reasonably be expected to have a detrimental effect on the Company and the image of its management; | ||
(b) | Any act of material misconduct, willful and gross negligence, or breach of duty with respect to the Company, including, but not limited to, embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the Company, or willful breach of fiduciary duty to the Company which results in a material loss, damage, or injury to the Company; | ||
(c) | Any material breach of any material provision of this Agreement or of the Companys announced or written rules, codes or polices; provided, however, that such breach shall not constitute Cause if Executive cures or remedies such breach within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such breach is part of a pattern of chronic breaches of the same, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such breach is not deemed curable. | ||
(d) | Any act of insubordination by Executive; provided, however, an act of insubordination by Executive shall not constitute Cause if Executive cures or remedies such insubordination within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such insubordination is a part of a pattern of chronic insubordination, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such insubordination is deemed not curable. | ||
(e) | Any unauthorized disclosure of any Company trade secret or confidential information, or conduct constituting unfair competition with respect to the Company, including inducing a party to breach a contract with the Company; or | ||
(f) | A willful violation of federal or state securities laws. |
4
(a) | the Company or any of its subsidiaries reduces Executives Base Salary or base rate of annual compensation, or otherwise changes benefits provided to Executive under compensation and benefit plans, arrangements, policies and procedures to be as a whole, materially less favorable to Executive, other than reductions in Base Salary permitted under Section 4.01; | ||
(b) | without Executives express written consent, the Company or any of its subsidiaries significantly reduces Executives job authority and responsibility; | ||
(c) | without Executives express written consent, the Company or any of its subsidiaries requires Executive to change the location of Executives job or office, to a location more than fifty (50) miles from the location of Executives job or office immediately prior such required change; | ||
(d) | a successor company fails or refuses to assume the Companys obligations under this Agreement; or | ||
(e) | the Company or any successor company breaches any of the material provisions of this Agreement; |
5
(a) | if (i) there has been a Change of Control of the Company (as defined in Section 7.02), and (ii) Executive is an active and full-time employee at the time of the Change of Control, and (iii) within twelve (12) months following the date of the Change of Control, Executives employment is involuntarily terminated for any reason (including Good Reason (as definition Section 6.04)), other than for Cause or death or disability; or | ||
(b) | if Executives employment is terminated by the Company without Cause, or by Executive for Good Reason. |
(a) | an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act) of 50% or more of either: (1) the then outstanding Stock; or (2) the combined voting power of the Companys outstanding voting securities immediately after the merger or acquisition entitled to vote generally in the election of directors; provided, however, that the following acquisition shall not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any acquisition by any corporation with respect to which, following such acquisition, more than 50% of the Stock or combined voting power of Stock and other voting securities of the Company is beneficially owned by substantially all of the individuals and entities who were beneficial owners of Stock |
6
and other voting securities of the Company immediately prior to the acquisition in substantially similar proportions immediately before and after such acquisition; or |
(b) | individuals who, as of the date of this Agreement, constitute the Board (the Incumbent Board), cease to constitute a majority of the Board. Individuals nominated or whose nominations are approved by the Incumbent Board and subsequently elected shall be deemed for this purpose to be members of the Incumbent Board; or | ||
(c) | approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation, dissolution, sale or statutory exchange of Stock which changes the beneficial ownership of Stock and other voting securities so that after the corporate change the immediately previous owners of 50% of Stock and other voting securities do not own 50% of the Companys Stock and other voting securities either legally or beneficially; or | ||
(d) | the sale, transfer or other disposition of all substantially all of the Companys assets; or | ||
(e) | a merger of the Company with another entity after which the pre-merger shareholders of the Company own less than 50% of the stock of the surviving corporation. |
7
8
(a) | Unless otherwise agreed by the Company and Executive, all determinations required to be made under this Section 7.08, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by an accounting firm that does not have a material relationship with either of the parties that is selected by mutual agreement (the Accounting Firm). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15 days of the receipt of the Accounting Firms determination. Absent manifest error, any determination by the Accounting Firm shall be binding upon the Company and the Executive. | ||
(b) | The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on, the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall: |
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 7.08, the Company shall |
9
control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the Executive to sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company pays such claim and directs the Executive to sue for a refund, the Company shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Companys control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. |
(c) | If, after the receipt by the Executive of a Gross-Up Payment or payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. | ||
(d) | Notwithstanding any other provision of this Section 7.08, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding and payment. |
10
11
12
13
14
(a) | In any arbitration proceeding, each party shall pay the fees and expenses of its or his own legal counsel. | ||
(b) | The arbitrator, in his or her discretion, shall award legal fees and expenses and costs of the arbitration, including the arbitrators fee, to a party who substantially prevails in its claims in such proceeding. | ||
(c) | Notwithstanding this Section 10.06, in the event of alleged noncompliance or violation, as the case may be, of Sections 8 or 9 of this Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive and/or such other legal and equitable remedies as may be appropriate. |
15
WIRELESS RONIN TECHNOLOGY, INC. | ||||||
|
||||||
|
By |
/s/ Jeffrey C. Mack
|
||||
|
Chief Executive Officer | |||||
|
||||||
EXECUTIVE | ||||||
|
||||||
|
By |
/s/ Christopher F. Ebbert
|
16
| The Company desires to continue to employ Executive as its Executive Vice President and Secretary, and Executive desires to accept such employment. |
| This Agreement provides, among other things, for base compensation for Executive, a term of employment and severance payments in the event Executive is terminated without Cause or by reason of a Change of Control of the Company. |
2
3
(a) | Any conviction or nolo contendere plea by Executive to a felony, gross misdemeanor or misdemeanor involving moral turpitude, or any public conduct by Executive that has or can reasonably be expected to have a detrimental effect on the Company and the image of its management; | ||
(b) | Any act of material misconduct, willful and gross negligence, or breach of duty with respect to the Company, including, but not limited to, embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the Company, or willful breach of fiduciary duty to the Company which results in a material loss, damage, or injury to the Company; | ||
(c) | Any material breach of any material provision of this Agreement or of the Companys announced or written rules, codes or polices; provided, however, that such breach shall not constitute Cause if Executive cures or remedies such breach within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such breach is part of a pattern of chronic breaches of the same, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such breach is not deemed curable. | ||
(d) | Any act of insubordination by Executive; provided, however, an act of insubordination by Executive shall not constitute Cause if Executive cures or remedies such insubordination within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such insubordination is a part of a pattern of chronic insubordination, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such insubordination is deemed not curable. | ||
(e) | Any unauthorized disclosure of any Company trade secret or confidential information, or conduct constituting unfair competition with respect to the Company, including inducing a party to breach a contract with the Company; or | ||
(f) | A willful violation of federal or state securities laws. |
4
(a) | the Company or any of its subsidiaries reduces Executives Base Salary or base rate of annual compensation, or otherwise changes benefits provided to Executive under compensation and benefit plans, arrangements, policies and procedures to be as a whole materially less favorable to Executive, other than reductions in Base Salary permitted under Section 4.01; | ||
(b) | without Executives express written consent, the Company or any of its subsidiaries significantly reduces Executives job authority and responsibility; | ||
(c) | without Executives express written consent, the Company or any of its subsidiaries requires Executive to change the location of Executives job or office, to a location more than fifty (50) miles from the location of Executives job or office immediately prior to such required change; | ||
(d) | a successor company fails or refuses to assume the Companys obligations under this Agreement; or | ||
(e) | the Company or any successor company breaches any of the material provisions of this Agreement. |
5
(a) | if (i) there has been a Change of Control of the Company (as defined in Section 7.02), and (ii) Executive is an active and full-time employee at the time of the Change of Control, and (iii) within twelve (12) months following the date of the Change of Control, Executives employment is involuntarily terminated for any reason (including Good Reason (as definition Section 6.04)), other than for Cause or death or disability; or | ||
(b) | if Executives employment is terminated by the Company without Cause, or by Executive for Good Reason. |
(a) | an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act) of 50% or more of either: (1) the then outstanding Stock; or (2) the combined voting power of the Companys outstanding voting securities immediately after the merger or acquisition entitled to vote generally in the election of directors; provided, however, that the following acquisition shall not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any acquisition by any corporation with respect to which, following such acquisition, more than 50% of the Stock or combined voting power of Stock and other voting securities of the Company is beneficially owned by substantially all of the individuals and entities who were beneficial owners of Stock and other voting securities of the Company immediately prior to the acquisition in substantially similar proportions immediately before and after such acquisition; or | ||
(b) | individuals who, as of the date of this Agreement, constitute the Board (the Incumbent Board), cease to constitute a majority of the Board. Individuals nominated or whose nominations are approved by the Incumbent Board and |
6
subsequently elected shall be deemed for this purpose to be members of the Incumbent Board; or |
(c) | approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation, dissolution, sale or statutory exchange of Stock which changes the beneficial ownership of Stock and other voting securities so that after the corporate change the immediately previous owners of 50% of Stock and other voting securities do not own 50% of the Companys Stock and other voting securities either legally or beneficially; or | ||
(d) | the sale, transfer or other disposition of all substantially all of the Companys assets; or | ||
(e) | a merger of the Company with another entity after which the pre-merger shareholders of the Company own less than 50% of the stock of the surviving corporation. |
7
(a) | Unless otherwise agreed by the Company and Executive, all determinations required to be made under this Section 7.08, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by an accounting firm that does not have a material relationship with either of the parties that is selected by mutual agreement (the Accounting Firm). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely |
8
by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15 days of the receipt of the Accounting Firms determination. Absent manifest error, any determination by the Accounting Firm shall be binding upon the Company and the Executive. |
(b) | The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on, the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall: |
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 7.08, the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the Executive to sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company pays such claim and directs the Executive to sue for a refund, the Company shall indemnify and hold |
9
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Companys control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. |
(c) | If, after the receipt by the Executive of a Gross-Up Payment or payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. | ||
(d) | Notwithstanding any other provision of this Section 7.08, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding and payment. |
10
11
12
13
(a) | In any arbitration proceeding, each party shall pay the fees and expenses of its or his own legal counsel. | ||
(b) | The arbitrator, in his or her discretion, shall award legal fees and expenses and costs of the arbitration, including the arbitrators fee, to a party who substantially prevails in its claims in such proceeding. |
14
(c) | Notwithstanding this Section 10.06, in the event of alleged noncompliance or violation, as the case may be, of Sections 8 or 9 of this Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive and/or such other legal and equitable remedies as may be appropriate. |
WIRELESS RONIN TECHNOLOGY, INC. | ||||||
|
||||||
|
By |
/s/ Jeffrey C. Mack
|
||||
|
Chief Executive Officer | |||||
|
||||||
EXECUTIVE | ||||||
|
||||||
|
By | /s/ Stephen E. Jacobs | ||||
|
||||||
|
Stephen E. Jacobs |
15
| The Company desires to continue to employ Executive as its Senior Vice President Sales and Marketing, and Executive desires to accept such employment. |
| This Agreement provides, among other things, for base compensation for Executive, a term of employment and severance payments in the event Executive is terminated without Cause or by reason of a Change of Control of the Company. |
2
3
(a) | Any conviction or nolo contendere plea by Executive to a felony, gross misdemeanor or misdemeanor involving moral turpitude, or any public conduct by Executive that has or can reasonably be expected to have a detrimental effect on the Company and the image of its management; | ||
(b) | Any act of material misconduct, willful and gross negligence, or breach of duty with respect to the Company, including, but not limited to, embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the Company, or willful breach of fiduciary duty to the Company which results in a material loss, damage, or injury to the Company; | ||
(c) | Any material breach of any material provision of this Agreement or of the Companys announced or written rules, codes or polices; provided, however, that such breach shall not constitute Cause if Executive cures or remedies such breach within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such breach is part of a pattern of chronic breaches of the same, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such breach is not deemed curable. | ||
(d) | Any act of insubordination by Executive; provided, however, an act of insubordination by Executive shall not constitute Cause if Executive cures or remedies such insubordination within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such insubordination is a part of a pattern of chronic insubordination, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such insubordination is deemed not curable. | ||
(e) | Any unauthorized disclosure of any Company trade secret or confidential information, or conduct constituting unfair competition with respect to the Company, including inducing a party to breach a contract with the Company; or | ||
(f) | A willful violation of federal or state securities laws. |
4
(a) | the Company or any of its subsidiaries reduces Executives Base Salary or base rate of annual compensation, or otherwise changes benefits provided to Executive under compensation and benefit plans, arrangements, policies and procedures to be as a whole materially less favorable to Executive, other than reductions in Base Salary permitted under Section 4.01; | ||
(b) | without Executives express written consent, the Company or any of its subsidiaries significantly reduces Executives job authority and responsibility; | ||
(c) | without Executives express written consent, the Company or any of its subsidiaries requires Executive to change the location of Executives job or office, to a location more than fifty (50) miles from the location of Executives job or office immediately prior to such required change; | ||
(d) | a successor company fails or refuses to assume the Companys obligations under this Agreement; or | ||
(e) | the Company or any successor company breaches any of the material provisions of this Agreement; |
5
(a) | if (i) there has been a Change of Control of the Company (as defined in Section 7.02), and (ii) Executive is an active and full-time employee at the time of the Change of Control, and (iii) within twelve (12) months following the date of the Change of Control, Executives employment is involuntarily terminated for any reason (including Good Reason (as definition Section 6.04)), other than for Cause or death or disability; or | ||
(b) | if Executives employment is terminated by the Company without Cause, or by Executive for Good Reason. |
(a) | an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act) of 50% or more of either: (1) the then outstanding Stock; or (2) the combined voting power of the Companys outstanding voting securities immediately after the merger or acquisition entitled to vote generally in the election of directors; provided, however, that the following acquisition shall not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any acquisition by any corporation with respect to which, following such acquisition, more than 50% of the Stock or combined voting power of Stock and other voting securities of the Company is beneficially owned by substantially all of the individuals and entities who were beneficial owners of Stock |
6
and other voting securities of the Company immediately prior to the acquisition in substantially similar proportions immediately before and after such acquisition; or |
(b) | individuals who, as of the date of this Agreement, constitute the Board (the Incumbent Board), cease to constitute a majority of the Board. Individuals nominated or whose nominations are approved by the Incumbent Board and subsequently elected shall be deemed for this purpose to be members of the Incumbent Board; or | ||
(c) | approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation, dissolution, sale or statutory exchange of Stock which changes the beneficial ownership of Stock and other voting securities so that after the corporate change the immediately previous owners of 50% of Stock and other voting securities do not own 50% of the Companys Stock and other voting securities either legally or beneficially; or | ||
(d) | the sale, transfer or other disposition of all substantially all of the Companys assets; or | ||
(e) | a merger of the Company with another entity after which the pre-merger shareholders of the Company own less than 50% of the stock of the surviving corporation. |
7
(a) | Unless otherwise agreed by the Company and Executive, all determinations required to be made under this Section 7.08, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by an accounting firm that does not have a material relationship with either of the parties that is selected by mutual agreement (the Accounting Firm). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15 days of the receipt of the Accounting Firms determination. Absent manifest error, any determination by the Accounting Firm shall be binding upon the Company and the Executive. | ||
(b) | The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim |
8
and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on, the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall: |
9
(c) | If, after the receipt by the Executive of a Gross-Up Payment or payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. | ||
(d) | Notwithstanding any other provision of this Section 7.08, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding and payment. |
10
11
12
13
(a) | In any arbitration proceeding, each party shall pay the fees and expenses of its or his own legal counsel. | ||
(b) | The arbitrator, in his or her discretion, shall award legal fees and expenses and costs of the arbitration, including the arbitrators fee, to a party who substantially prevails in its claims in such proceeding. | ||
(c) | Notwithstanding this Section 10.06, in the event of alleged noncompliance or violation, as the case may be, of Sections 8 or 9 of this Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive and/or such other legal and equitable remedies as may be appropriate. |
14
WIRELESS RONIN TECHNOLOGY, INC. | ||||
|
||||
|
By |
/s/ Jeffrey C. Mack
|
||
|
President and Chief Executive Officer | |||
|
||||
EXECUTIVE | ||||
|
||||
|
By |
/s/ Scott W. Koller
|
15
Executive will receive commissions
on sales of Products achieved by
Executive (together with support
from other Company personnel) at
the rate of 3.5% of qualified
revenues. Qualified revenues
are sales of Products generated by
Executive that meet target gross
margins as determined by CEO or
CFO. Products are digital
signage systems including systems
sold with and without
communications; fees for service
and maintenance; content creation
and revisions.
Executive shall also receive a
commission equal to 1% of
qualified revenues achieved by
other Company personnel,
contractors or licensees, and
collected by the Company.
The Company will advise Executive
of target gross margins for
Products. The Company may
proportionately reduce the
commission percentages due
Executive under this Agreement on
sales of Products that do not meet
target gross margins.
Any return in the first three
months after installation will be
subtracted from the next
commission check.
Territory
|
North America. | |
|
||
Compensation Ceiling
|
Total compensation paid to Executive, including Executives Base Salary and commissions payable in any calendar year pursuant to this Commission Plan, shall not exceed $500,000 (Compensation Ceiling). If the Company or Executive project that commissions paid and Base salary to be paid to Executive for the remainder of any calendar year will equal the Compensation Ceiling, the Company may discontinue commission payments and continue to pay Executives remaining Base Salary in regular installments through the end of a calendar year. | |
|
||
Timing of Payment
|
Commissions payments as determined will be paid by the 15 th of the month following installation and collection of amounts invoiced. | |
|
||
Commissions Paid Following Termination
of Employment
|
Commissions on sales made and invoiced to a customer prior to termination of Executives employment, which are collected by the Company within the 12-month period following termination of employment, shall be paid to employee within 30 days following collection. |
2
| The Company desires to continue to employ Executive as its Chief Financial Officer, and Executive desires to accept such employment. |
| This Agreement provides, among other things, for base compensation for Executive, a term of employment and severance payments in the event Executive is terminated without Cause or by reason of a Change of Control of the Company. |
2
3
4
(a) | Any conviction or nolo contendere plea by Executive to a felony, gross misdemeanor or misdemeanor involving moral turpitude, or any public conduct by Executive that has or can reasonably be expected to have a detrimental effect on the Company and the image of its management; | ||
(b) | Any act of material misconduct, willful and gross negligence, or breach of duty with respect to the Company, including, but not limited to, embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the Company, or willful breach of fiduciary duty to the Company which results in a material loss, damage, or injury to the Company; | ||
(c) | Any material breach of any material provision of this Agreement or of the Companys announced or written rules, codes or polices; provided, however, that such breach shall not constitute Cause if Executive cures or remedies such breach within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such breach is part of a pattern of chronic breaches of the same, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such breach is not deemed curable. | ||
(d) | Any act of insubordination by Executive; provided, however, an act of insubordination by Executive shall not constitute Cause if Executive cures or remedies such insubordination within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such insubordination is a part of a pattern of chronic insubordination, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such insubordination is deemed not curable. |
5
(e) | Any unauthorized disclosure of any Company trade secret or confidential information, or conduct constituting unfair competition with respect to the Company, including inducing a party to breach a contract with the Company; or | ||
(f) | A willful violation of federal or state securities laws. |
(a) | the Company or any of its subsidiaries reduces Executives Base Salary or base rate of annual compensation, or otherwise changes benefits provided to Executive under compensation and benefit plans, arrangements, policies and procedures to be as a whole materially less favorable to Executive, other than reductions in Base Salary permitted under Section 4.01; | ||
(b) | without Executives express written consent, the Company or any of its subsidiaries significantly reduces Executives job authority and responsibility; |
6
(c) | without Executives express written consent, the Company or any of its subsidiaries requires Executive to change the location of Executives job or office, to a location more than fifty (50) miles from the location of Executives job or office immediately prior to such required change; | ||
(d) | a successor company fails or refuses to assume the Companys obligations under this Agreement; or | ||
(e) | the Company or any successor company breaches any of the material provisions of this Agreement; |
7
(a) | an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act) of 50% or more of either: (1) the then outstanding Stock; or (2) the combined voting power of the Companys outstanding voting securities immediately after the merger or acquisition entitled to vote generally in the election of directors; provided, however, that the following acquisition shall not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any acquisition by any corporation with respect to which, following such acquisition, more than 50% of the Stock or combined voting power of Stock and other voting securities of the Company is beneficially owned by substantially all of the individuals and entities who were beneficial owners of Stock and other voting securities of the Company immediately prior to the acquisition in substantially similar proportions immediately before and after such acquisition; or | ||
(b) | individuals who, as of the date of this Agreement, constitute the Board (the Incumbent Board), cease to constitute a majority of the Board. Individuals nominated or whose nominations are approved by the Incumbent Board and subsequently elected shall be deemed for this purpose to be members of the Incumbent Board; or | ||
(c) | approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation, dissolution, sale or statutory exchange of Stock which changes the beneficial ownership of Stock and other voting securities so that after the corporate change the immediately previous owners of 50% of Stock and other voting securities do not own 50% of the Companys Stock and other voting securities either legally or beneficially; or | ||
(d) | the sale, transfer or other disposition of all substantially all of the Companys assets; or | ||
(e) | a merger of the Company with another entity after which the pre-merger shareholders of the Company own less than 50% of the stock of the surviving corporation. |
8
9
(a) | Unless otherwise agreed by the Company and Executive, all determinations required to be made under this Section 7.08, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by an accounting firm that does not have a material relationship with either of the parties that is selected by mutual agreement (the Accounting Firm). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15 days of the receipt of the Accounting Firms determination. Absent manifest error, any determination by the Accounting Firm shall be binding upon the Company and the Executive. |
10
(b) | The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on, the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall: |
11
(c) | If, after the receipt by the Executive of a Gross-Up Payment or payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. | ||
(d) | Notwithstanding any other provision of this Section 7.08, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding and payment. |
12
13
14
15
(a) | In any arbitration proceeding, each party shall pay the fees and expenses of its or his own legal counsel. | ||
(b) | The arbitrator, in his or her discretion, shall award legal fees and expenses and costs of the arbitration, including the arbitrators fee, to a party who substantially prevails in its claims in such proceeding. |
16
(c) | Notwithstanding this Section 10.06, in the event of alleged noncompliance or violation, as the case may be, of Sections 8 or 9 of this Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive and/or such other legal and equitable remedies as may be appropriate. |
WIRELESS RONIN TECHNOLOGY, INC. | ||||||
|
||||||
|
By |
/s/ Jeffrey C. Mack
|
||||
|
President and Chief Executive Officer | |||||
|
||||||
EXECUTIVE | ||||||
|
||||||
|
By |
/s/ John A. Witham
|
17
Wireless Ronin® Technologies, Inc. | The Marshall Special Assets Group, Inc. | |||||||||
|
||||||||||
By
|
/s/ Steve Jacobs | By | /s/ Scott H. Anderson | |||||||
|
|
|
||||||||
|
||||||||||
Its
|
CFO | Its | President | |||||||
|
|
|
I. | Capitalized Terms . All capitalized words used herein shall have the same meaning ascribed to them in the Strategic Partnership Agreement unless said words are otherwise defined in this First Amendment. | ||
II. | Amendment of Strategic Partnership Agreement . The Strategic Partnership Agreement is hereby amended as follows: | ||
Section 1.1 of the Strategic Partnership Agreement is hereby amended in its entirety to provide: |
III. | Miscellaneous . |
Wireless Ronin® Technologies, Inc. | The Marshall Special Assets Group, Inc. | |||||||
|
||||||||
/s/ Jeffrey Mack | /s/ Scott Anderson | |||||||
|
Jeffrey Mack | Scott Anderson | ||||||
|
President | President |
2
3
4
5
6
(a) | an identification of the WRT Products ordered; | ||
(b) | the quantity of WRT Products ordered; | ||
(c) | requested delivery dates; | ||
(d) | shipping instructions; and | ||
(e) | if applicable, any relevant export control information or documentation to enable WRT or WRE to comply with applicable U.S. export control laws. |
7
8
(a) | Notwithstanding Paragraph 5.1 hereof, this Agreement may be terminated as follows: |
(i) | Failure by either Party to comply with any material terms or conditions under this Agreement shall entitle the other Party to give the Party a default notice requiring it to cure such default. If the Party in default has not cured such default within sixty (60) days after the receipt of written notice of default, the notifying Party shall be entitled, in addition to any other rights it may have under this Agreement or otherwise under law, to terminate this Agreement by giving notice to take effect immediately. | ||
(ii) | By MG at any time with sixty (60) days prior written notice to WRT. | ||
(iii) | By either Party upon the breach of the Non-Disclosure Agreement and failure to cure such breach within sixty (60) days. | ||
(iv) | By MG with thirty (30) days prior written notice to WRT if the Source Materials are released to MG pursuant to Section 6.6. |
(b) | In the event of termination or expiration of this Agreement for any reason, the Parties shall have the following rights and obligations: |
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(i) | All orders accepted prior to the termination or expiration of this Agreement shall be completed. | ||
(ii) | All amounts then or thereafter due or payable under this Agreement shall be paid by the Parties. | ||
(iii) | Both Parties duty of confidentiality under this Agreement shall survive such termination or expiration. | ||
(iv) | If the Source Materials have been released to MG pursuant to Section 6.6, then MG shall retain its right and license to use such Source Materials and the WRT trademarks as provided in Sections 6.1-6.3, in order to make, have made, sell, use, import, distribute, maintain and support the WRT Products, RoninCast Systems or the RoninCast Technology whether installed prior to or after the effective date of termination of this Agreement. | ||
(v) | Unless otherwise agreed by WRT and MG, WRT shall continue to support each End-Users use of the WRT Products so long as such End-User desires to obtain such support. | ||
(vi) | If this Agreement is terminated by MG pursuant to Section 5.2(a)(i), (iii) or (iv) prior to the payment becoming due and payable under Section 3.2, then WRT shall refund to MG the $300,000 previously paid by MG pursuant to Section 3.1 within 10 days of the date of termination. |
(c) | Sections 3.4, 4.1-4.12, 5.2(b), 6.4-6.6, 7, 8, 9, 10, 11 and 12 shall survive any termination or expiration of this Agreement. |
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(a) | the WRT Products shall strictly conform and perform in accordance with the applicable manufacturers specifications and shall be free from defects in materials and workmanship; | ||
(b) | the WRT Products shall be free and clear of any lien or encumbrance, be safe and effective for their intended use, and be new; | ||
(c) | WRT has sufficient right to grant the rights and licenses it grants hereunder, and the use of the WRT Products, the RoninCast System, the RoninCast Technology and the WRT Intellectual Property Rights (including the RoninCast trademarks licensed under Section 6.1) do not infringe upon, violate, misappropriate or breach any Intellectual Property Rights of any third party; | ||
(d) | WRT is not a party to any agreement which would prevent WRT from performing its obligations under this Agreement or from granting any of the rights and licenses contemplated in this Agreement, and WRT |
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covenants that, during the term of this Agreement, WRT will not enter into such an agreement; | |||
(e) | each RoninCast System will perform in accordance with the representations of WRT and any of its agents or officers and the applicable Specifications; and | ||
(f) | WRT has all authority and rights necessary in order to ensure compliance by WRE with the terms of this Agreement, including, without limitation, WREs obligation to supply WRT Products hereunder. |
(a) | The products must be used in the manner prescribed in the related data sheet and applicable application notes. | ||
(b) | The warranty shall commence on the date of shipment by WRT. |
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If to Marshall: | Scott Anderson | ||
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President & COO | |||
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The Marshall Group, Inc. | |||
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Suite 3000 | |||
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150 South Fifth Street | |||
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Minneapolis, Minnesota 55402 | |||
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Fax No. (612) 376-1412 | |||
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With a Copy To: | John S. Jagiela, Esq. | ||
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The Marshall Group, Inc. | |||
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Suite 3000 | |||
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150 South Fifth Street | |||
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Minneapolis, Minnesota 55402 | |||
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Fax No. (612) 376-1412 | |||
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If to Wireless Ronin: | Mr. Jeffrey Mack | ||
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President & CEO | |||
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Wireless Ronin Technologies | |||
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Suite 301 | |||
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510 First Avenue North | |||
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Minneapolis, Minnesota 55403 | |||
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With a Copy To: | Thor Christensen, Esq. | ||
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Vice President Corporate Counsel | |||
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Wireless Ronin Technologies | |||
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Suite 301 | |||
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510 First Avenue North | |||
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Minneapolis, Minnesota 55403 |
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Wireless Ronin Technologies, Inc.
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The Marshall Special Assets Group, Inc. | |||||
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/s/ Jeffrey Mack
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/s/ Scott H. Anderson | |||||
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President |
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Wireless Ronin Technologies, Inc. | ||||
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/s/ Jeffrey Mack | |||
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14700 Martin Drive | |
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Eden Prairie, MN 55344 | |
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/s/ Barry Butzow
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Barry Butzow
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Stephen E. Jacobs
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(a) | Total Condemnation of Leased Premises . If the whole of the leased premises shall be acquired or condemned by eminent domain for any public or quasi-public use or purpose, then the term of this Lease shall cease and terminate as of the date possession shall be taken in such proceeding and all rentals shall be paid up to that date and Tenant shall have no claim against Landlord nor the condemning authority for the value of any unexpired term of this Lease. | ||
(b) | Partial Condemnation . If any part of the leased premises shall be acquired or condemned as aforesaid, and in the event that such partial taking or condemnation shall render the leased premises substantially unsuitable for the business of the Tenant in the reasonable opinion of Landlord, then the teen of this Lease shall cease and terminate as of the date possession shall be taken in such proceeding. Tenant shall have no claim against Landlord nor the condemning authority for the value of any unexpired term of this Lease and rent shall be adjusted to the date of such termination. In the event of a partial taking or condemnation which is not extensive enough to render the premises unsuitable for the business of the Tenant in the reasonable opinion of the Tenant and Landlord, then Landlord shall promptly restore the leased premises so as to constitute the remaining premises a complete architectural unit, and this Lease shall continue in full force and effect with a proportionate abatement of rent based on the portion of the leased premises taken. The rent shall also abate during restoration as to the portion of the leased premises rendered untenantable. | ||
(c) | Landlords Damages . In the event of any condemnation or taking as aforesaid, whether whole or partial, the Tenant, except as set forth in paragraph (d) below shall not be entitled to any part of the award paid for such condemnation and Landlord is to receive the full amount of such award, the Tenant hereby expressly waiving any right or claim to any part thereof. | ||
(d) | Tenants Damages . Although all damages in the event of any condemnation are to belong to the Landlord whether such damages are awarded as compensation for diminution in value of the leasehold or to the fee of the leased premises, Tenant shall have the right to claim and recover from the condemning authority, but not |
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from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenants own right on account of any cost or loss to which Tenant might be put in removing and relocating Tenants inventory, merchandise, equipment and personal property. |
(a) | Partial or Total Destruction . In case the leased premises shall be partially or totally destroyed by fire or other casualty insurable under full standard fire and extended coverage insurance so as to become partially or totally untenantable, the same, unless Landlord shall elect not to rebuild, shall be repaired as speedily as possible at the cost of Landlord and unless such destruction was wholly or partially caused by the negligence or breach of the terms of this Lease by Tenant, its employees, licensees, agents, subtenants or contractors, a portion of the rent based upon the amount of the leased premises rendered untenantable shall be abated until so repaired. If the destruction or damage was wholly or partially caused by negligence or breach of the terms of this Lease by Tenant as aforesaid and if Landlord shall elect to rebuild, the rent payable for the period beginning with the date of the damage and ending with the date of completion of all reconstruction and all repairs shall not be abated and the Tenant shall remain liable for the same unless insurance proceeds are sufficient for such rental loss proceeds to cover the amount of rent during such period. Landlord shall not be responsible for restoring or repairing leasehold improvements of the Tenant or any other property of the Tenant. | ||
(b) | Fire Insurance Provision . |
(1) | Tenant shall not carry any stock of goods or do anything in or about the leased premises which will in any way impair or invalidate the obligation of any policy of insurance on or in reference to the leased premises or the building in which the leased premises are situated. Tenant agrees to pay upon demand, as additional rent, any premiums for insurance that may be charged during the term of this Lease on the amount of insurance to be cat-tied by Landlord on said leased premises or the building located thereon resulting from the business cat-tied on in the leased premises by Tenant, whether or not the Landlord has consented to same. | ||
(2) | Landlord hereby waives and releases all claims, liabilities and causes of action against Tenant and its employee: for loss or damage to, or destruction of, the leased premises or buildings and other improvements situated on the property resulting from fire, explosion or the other perils included in standard extended coverage insurance, whether caused by the negligence of any of said persons or otherwise provided its insurers also waive their rights of subrogation. Likewise, Tenant hereby waives and releases all claims, liabilities and causes of action against Landlord and its employees or other tenants in the building for loss or damage to, or destruction of, any of the improvements, fixtures, equipment, supplies, merchandise and other property, whether that of Tenant or of others in, |
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upon or about the leased premises or the buildings or improvements of which the leased premises are a part resulting from any casualty, including but not limited those resulting from fire, explosion or the other perils included in standard extended coverage insurance for property, whether caused by the negligence of any of said persons or otherwise. If an additional waiver of subrogation premium is charged because of Landlord or Tenant, Tenant shall be required to pay the same to keep these waivers in force. |
(3) | Landlord will keep in force a standard form of Fire and Extended Coverage Insurance with replacement cost endorsement, which policy will contain one years loss of rental provisions in the event of damage or destruction of the building and including public liability insurance of the Landlord with respect to the leased premises with limits of $1,000,000 for injury or death to any one person, $1,500,000 for injury or death to more than one person, and $500,000 with respect to damage to property. The Tenant shall pay 100% of the annual cost of such insurance premiums as additional rent to the extent that such annual cost for such premiums exceeds $850.00 for any given year or proportion thereof for any partial year. The Landlord shall furnish the Tenant with a copy of the actual premiums and the Tenant shall pay such additional rent to the Landlord within ten (10) days after receipt of such information from the Landlord. Tenant shall have sole responsibility to insure its leasehold improvements, trade fixtures, fixtures, furnishings, inventory, personal property and equipment. Tenant shall have the right to obtain competitive bids for said insurance, as long as provider has an AA+ credit rating or higher. |
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(a) | Right to Re-Enter . In the event of any failure of Tenant to pay any rental within five (5) days after the same shall be due, or any failure to perform any other of the terms, conditions or covenants of this Lease to be observed or performed by Tenant for more than thirty (30) days after written notice of such other default shall have been given to Tenant, (or in the event such other default cannot reasonably be cured within thirty (30) days and Tenant commences to cure and diligently pursue a course of action to so cure and continue towards completion then for a reasonable period of time not to exceed 90 days) or if Tenant or an agent of Tenant shall substantially falsify any report required to be furnished to Landlord pursuant to the terms of this Lease, or if Tenant or any guarantor of this Lease shall become bankrupt or insolvent, or file any debtor proceedings or take or have against Tenant or any guarantor of this Lease in any court pursuant to any statute either of the United States or of any state a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of Tenants or any such guarantors property, or if Tenant or any such guarantor makes an assignment for the benefit of creditors, or petitions for or enters into an arrangement, or if tenant shall abandon said premises or any part thereof, or vacate all or any pail of the leased premises, or fail to operate its business in the leased premises (except during any time when the leased premises may be untenantable by reason of fire or other casualty), or suffer this Lease to be taken under any writ of execution, then Landlord, besides other rights or remedies it may have (including the continuing right to immediately terminate this Lease), shall have the immediate right of re-entry and may remove all persons and property from the leased premises in accordance with applicable law and such property may be removed and stored in a public warehouse or elsewhere at the cost of, and for the account of Tenant, all after the written notice specified herein, if any, and then without further service of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby. | ||
(b) | Right to Relet . Should Landlord elect to re-enter, as herein provided, or should it take possession, it may either terminate this Lease or it may from time to time, without terminating this Lease, make such reasonable alterations and repairs as may be necessary in order to relet the premises, and relet said premises or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as Landlord in its reasonable discretion may deem advisable, upon each such reletting all rentals received by the Landlord from such reletting shall be applied first to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord; second, to the payment of any costs and expenses of such reletting, including brokerage fees and attorneys fees and of costs of such alterations and repairs; third, to the payment of rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. If such rentals received from such re-letting during any month be less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. |
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Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of said Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, Landlord may at any time hereafter elect to terminate this Lease for such previous breach. Whether or not Landlord at any time has elected to terminate this Lease for any breach, in addition to any other remedies it may have, it may recover from Tenant all damages it may incur by reason of such breach, including the cost of recovering the leased premises, reasonable attorneys fees, and also including the present value (discounted at a rate equal to 4% in excess of the prime rate, or reference rate then in effect at Wells Fargo Bank of Minnesota, N.A. but not less than 12% per annum) at the time of such termination or default of the amount of rent (including additional rent) and charges equivalent to rent reserved in this Lease for the remainder of tile stated team all of which amounts shall be immediately due and payable by Tenant hereunder and such obligations and Landlords right to accelerate such rents shall survive any termination of the Lease. |
(c) | Landlords Rights to Cure Tenants Default . Landlord may, at its option, instead of exercising any other rights or remedies available to it in this Lease or otherwise by law, statute or equity, spend such money as is reasonably necessary to cure any default of Tenant herein following Tenants failure to cure any such default or following Tenants failure to commence curing non monetary defaults within 10 days of written notice from Landlord to Tenant and the amount so spent, and costs incurred, including attorneys fees in curing such default, shall be paid by Tenant, as additional rent, upon demand. | ||
(d) | Legal and Other Expenses . In case suit shall be brought for recovery of possession of the leased premises, for the recovery of rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of Tenant or Landlord to be kept or performed, and a breach shall be established, or a party shall successfully defend against an alleged breach, the party so breaching or unsuccessfully defending against an alleged breach shall pay to the party establishing the breach or successfully defending against an alleged breach, all expenses incurred therefor, including a reasonable attorneys fee and costs and any court having jurisdiction over the matter shall fix and order payment of same. The parties hereto waive any right to a trial by a jury to the maximum extent waivable. | ||
(e) | Cumulative Remedies . No remedy herein or elsewhere in this Lease or otherwise by law, statute or equity, conferred upon or reserved to Landlord or Tenant shall be exclusive of any other remedy, but shall be cumulative, and may be exercised from time to time and as often as the occasion may arise. |
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(a) | Entire Agreement . This Lease and the Exhibits attached hereto and forming a part hereof, set forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the leased premises and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them. | ||
(b) | Partial Invalidity . If any term, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by law. |
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(a) | any breach of any representations or warranties, and | ||
(b) | any loss, damage, expense or cost arising out of or incurred by the other party which is the result of a breach of, misstatement of or misrepresentation of the above covenants, representations and warranties, and |
(a) | It is agreed by and between the parties hereto that all the agreements herein contained upon the part of Tenant, whether technically covenants or conditions, shall be deemed conditions for the purpose hereof, conferring upon Landlord, in the event of breach of any of said agreements, the right to terminate this Lease. | ||
(b) | Tenant shall at Landlords request execute such documents and instruments, including but not limited to an assignment of rents that may be required, from time to time, by Landlords mortgagee(s) provided that such documents and instruments are in form and content reasonably satisfactory to Tenant. | ||
(c) | In case there is more than one Landlord the obligation of Landlord executing this Lease shall be joint and several. The words Landlord and Tenant as used herein shall include the plural as well as the singular. The covenants and |
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agreements contained herein shall be binding upon and be enforceable by the parties hereto and their respective heirs, executors, administrators, successors and assigns, subject to the restrictions herein imposed on assignment by Tenant. |
(d) | Time is of the essence of this Lease and of each and every covenant, condition and provision herein contained. Tenant hereby waives any rights of redemption or reinstatement of this Lease (whether at law or in equity) in the event of an expiration or sooner termination of this Lease. This Lease has been a negotiated lease and neither party shall be deemed the drafter of this lease and in construing and determining the intent of the parties or interpreting any language herein there shall not be a determination that any term or condition or any language shall be construed for or against any party merely because of such parties possible status as a drafter of all or any portion of this Lease. | ||
(e) | The paragraph headings of this Lease are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or intent of this agreement or any provision thereof or in any way affect this agreement. | ||
(f) | Should the demised premises contain accessways to the roof, sprinkler equipment, electrical equipment or any other such mechanical equipment whether contained in a separate room or not, Landlord reserves the right of free access to same through Tenants premises for his agents and representatives at reasonable business hours. | ||
(g) | This Lease may be executed in counterparts and when so executed shall constitute one agreement binding on all parties hereto, notwithstanding that they are not signatory to the original or same counterpart. |
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LANDLORD: | |||||
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BRASTAD/LYMAN PARTNERSHIP | |||||
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||||||
/s/ Harold C. Lyman
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/s/ Neil A. Brastad | |||||
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/s/ Daniel K. Brastad | |||||
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TENANT: | ||||||
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WIRELESS RONIN TECHNOLOGIES, INC | ||||||
A Minnesota corporation | ||||||
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By: |
/s/ Steve Jacobs
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Its: | CFO | ||||
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Very truly yours,
WIRELESS RONIN® TECHNOLOGIES, INC. |
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By: | /s/ Jeffrey C. Mack | |||
Jeffrey C. Mack | ||||
President & CEO | ||||
By: | /s/ Stephen E. Jacobs | |||
Stephen E. Jacobs | ||||
Executive Vice President & CFO | ||||
By:
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/s/ Valentino White Sr.
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Print Name: |
Valentino White Sr.
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Its: |
Chairman
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$3,000,000 |
September 7, 2005
Eden Prairie, Minnesota |
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(i) | Definitions |
(A) | Conversion Dollar Amount . The Conversion Dollar Amount shall be the amount of par value dollars measured by the original principal amount of the Convertible Debenture that the Holder elects to convert into fully paid and nonassessable shares of Common Stock of the Company. | ||
(B) | Percentage of the Par Value of Convertible Debenture Converted . The Percentage of the Par Value of Convertible Debenture Converted shall be equal to the percentage resulting from dividing the Conversion Dollar Amount by the original principal amount of the Convertible Debenture. | ||
(C) | Maximum Percentage of Outstanding Shares That Can Be Acquired . The Maximum Percentage of Outstanding Shares That Can Be Acquired is 30%. | ||
(D) | Conversion Ratio . The Conversion Ratio shall be equal to Percentage of the Par Value of Convertible Debenture Converted times the Maximum Percentage of Outstanding Shares That Can Be Acquired. | ||
(E) | Fully Diluted Outstanding Shares of Common Stock of the Company . The Fully Diluted Outstanding Shares of Common Stock of the Company shall be the aggregate as of the date of conversion of (i) the total Outstanding Shares of Common Stock, (ii) all shares of Common Stock of the Company issuable upon conversion or exercise in full of all outstanding options, warrants or other convertible securities or other rights of any nature to acquire shares of Common Stock or securities convertible into shares of Common Stock and (iii) all shares of Common Stock that can be acquired as per the terms of warrants and options that are issued to employees pursuant to existing employment contracts (to the extent such shares were not included in (ii)). | ||
(F) | Fully Diluted Outstanding Shares of Common Stock of the Company After Conversion . The Fully Diluted |
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Outstanding Shares of Common Stock of the Company After Conversion shall be determined as of the date of conversion by dividing the Fully Diluted Outstanding Shares of Common Stock of the Company by (1-Conversion Ratio). | |||
(G) | Outstanding Shares of Common Stock . The Outstanding Shares of Common Stock shall include all issued and outstanding shares of Common Stock of the Company. |
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4. | Limitations Upon Capital Reorganization of Common Stock, Consolidation or Merger . |
(i) | Right to Receive Additional Shares |
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Dated: September 7, 2005 | WIRELESS RONIN® TECHNOLOGIES, INC. | |||||
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By: |
/s/ Jeffrey Mack
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Chief Executive Officer |
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$2,000,000 |
January 5, 2005
Eden Prairie, Minnesota |
1. | Prepayment Payor Option . |
2. | Prepayment Convertible Debenture Holder Option . |
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3. | Conversion Rights . |
(i) | Definitions |
(A) | Conversion Dollar Amount . The Conversion Dollar Amount shall be the amount of par value dollars measured by the original principal amount of the Convertible Debenture that the Holder elects to convert into fully paid and nonassessable shares of Common Stock of the Company. | ||
(B) | Percentage of the Par Value of Convertible Debenture Converted . The Percentage of the Par Value of Convertible Debenture Converted shall be equal to the percentage resulting from dividing the Conversion Dollar Amount by the original principal amount of the Convertible Debenture. |
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(C) | Maximum Percentage of Outstanding Shares That Can Be Acquired . The Maximum Percentage of Outstanding Shares That Can Be Acquired is 20%. | ||
(D) | Conversion Ratio . The Conversion Ratio shall be equal to Percentage of the Par Value of Convertible Debenture Converted times the Maximum Percentage of Outstanding Shares That Can Be Acquired. | ||
(E) | Fully Diluted Outstanding Shares of Common Stock of the Company . The Fully Diluted Outstanding Shares of Common Stock of the Company shall be the aggregate as of the date of conversion of (i) the total Outstanding Shares of Common Stock, (ii) all shares of Common Stock of the Company issuable upon conversion or exercise in full of all outstanding options, warrants or other convertible securities or other rights of any nature to acquire shares of Common Stock or securities convertible into shares of Common Stock and (iii) all shares of Common Stock that can be acquired as per the terms of warrants and options that are issued to employees pursuant to existing employment contracts (to the extent such shares were not included in (ii)). | ||
(F) | Fully Diluted Outstanding Shares of Common Stock of the Company After Conversion . The Fully Diluted Outstanding Shares of Common Stock of the Company After Conversion shall be determined as of the date of conversion by dividing the Fully Diluted Outstanding Shares of Common Stock of the Company by (1-Conversion Ratio). | ||
(G) | Outstanding Shares of Common Stock . The Outstanding Shares of Common Stock shall include all issued and outstanding shares of Common Stock of the Company. |
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4. | Limitations Upon Capital Reorganization of Common Stock, Consolidation or Merger . |
(i) | Right to Receive Additional Shares |
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5. | Reporting Obligations of the Payor . |
6. | Costs of Collection . |
7. | Insolvency or Bankruptcy . |
8. | Waiver of Presentment . |
9. | Method and Application of Payments . |
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10. | Applicable Law . |
11. | Assignment . |
Dated: January 5, 2005
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WIRELESS RONIN® | |||||
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TECHNOLOGIES, INC. | |||||
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By: |
/s/ Jeffrey Mack
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Chief Executive Officer |
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(a) | if to the Holder of the Debenture: |
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To: | Honorable Myra Pearson | ||
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Chairman | |||
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Spirit Lake Sioux Tribe | |||
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Spirit Lake Tribal Council Office | |||
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P.O. Box 359 | |||
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Main Street | |||
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Fort Totten, ND 58335 | |||
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With Copy To: | Larry B. Leventhal, Esq. | ||
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Larry Leventhal & Associates | |||
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319 Ramsey Street | |||
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St. Paul, MN 55402 |
(b) | if to the Company: |
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To: | Mr. Jeffrey Mack | ||
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President & CEO | |||
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Wireless Ronin® Technologies, Inc. | |||
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14700 Martin Drive | |||
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Eden Prairie, Minnesota 55344 |
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With Copy To: | Thor Christensen, Esq. | ||
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Vice President Corporate Counsel | |||
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Wireless Ronin® Technologies, Inc. | |||
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14700 Martin Drive | |||
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Eden Prairie, Minnesota 55344 |
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Very truly yours, | ||||||||
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||||||||
WIRELESS RONIN® TECHNOLOGIES, INC. | ||||||||
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By: |
/s/ Jeffrey C. Mack
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President & CEO | |||||||
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By: | /s/ Stephen E. Jacobs | ||||||
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Stephen E. Jacobs | |||||||
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Executive Vice President & CFO | |||||||
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The foregoing Agreement is hereby accepted as | ||||||||
of the date first above written. | ||||||||
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SPIRIT LAKE SIOUX TRIBE | ||||||||
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By:
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/s/ Myra Pearson | |||||||
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||||||||
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Print Name: Myra Pearson | |||||||
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Its: Tribal Chairman |
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4. | Registration Rights . Section 5.23 is hereby amended to read as follows: |
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Very truly yours, | ||||||
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||||||
WIRELESS RONIN® TECHNOLOGIES, INC. | ||||||
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||||||
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By: /s/ Jeffrey C. Mack
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|||||
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President and CEO | |||||
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By: /s/ Stephen E. Jacobs
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Executive Vice President | |||||
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The foregoing Agreement is hereby accepted as | ||||||
of the date first above written. | ||||||
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SPIRIT LAKE SIOUX TRIBE | ||||||
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By:
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/s/ Myra Pearson | |||||
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Myra Pearson, | |||||
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Chairperson |
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Sign:
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/s/ Stephen E. Jacobs
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Sign: |
/s/ John L. Morgan
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Date:
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12/8/04 | Date:12/08/04 | ||||||||
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Stephen E. Jacobs | John L. Morgan | ||||||||
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Wireless Ronin Technologies, Inc. | Winmark Corporation |
4200 Dahlberg Drive, Suite
100, Minneapolis, MN 55422-4837
Phone (763) 520-8500 Fax (763) 520-8410 WWW.WINMARKCORPORATION.COM
Call / Coll | Officer | |||||||||||||
Principal | Loan Date | Maturity | Loan No | 4A / 100 | Account | TMF | Initials | |||||||
References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or item. | ||||||||||||||
Any item above containing *** has been omitted due to text length limitations. |
Borrower:
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Wireless Ronin Technologies, Inc.
14700 Martin Dr. Eden Prairie, MN 55344 |
Lender: |
Signature Bank
9800 Bren Road East Ste 200 Minnetonka, MN 55343 |
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Guarantor:
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Michael J. Hopkins
19549 Jersey Avenue Lakeville, MN 55044 |
Loan No: 200161603 | (Continued) | Page 2 |
Loan No: 200161603 | (Continued) | Page 3 |
Loan No: 200161603 | (Continued) | Page 4 |
Loan No: 200161603 | (Continued) | Page 5 |
Loan No: 200161603 | (Continued) | Page 6 |
Loan No: 200161603 | (Continued) | Page 7 |
Call / Coll | Officer | |||||||||||||
Principal | Loan Date | Maturity | Loan No | 4A / 100 | Account | TMF | Initials | |||||||
References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or item. | ||||||||||||||
Any item above containing *** has been omitted due to text length limitations. |
Borrower:
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Wireless Ronin Technologies, Inc.
14700 Martin Dr. Eden Prairie, MN 55344 |
Lender: |
Signature Bank
9800 Bren Road East Ste 200 Minnetonka, MN 55343 |
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Guarantor:
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Barry Butzow
9714 Brassie Circle Lakeville, MN 55347 |
Loan No: 200161602 | (Continued) | Page 2 |
Loan No: 200161602 | (Continued) | Page 3 |
Loan No: 200161602 | (Continued) | Page 4 |
Loan No: 200161602 | (Continued) | Page 5 |
Loan No: 200161602 | (Continued) | Page 6 |
Loan No: 200161602 | (Continued) | Page 7 |
Loan No: 200161602 | (Continued) | Page 8 |
GUARANTOR: | ||||
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X
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/s/ Barry Butzow | |||
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Barry Butzow |
Call / Coll | Officer | |||||||||||||
Principal | Loan Date | Maturity | Loan No | 4A / 100 | Account | TMF | Initials | |||||||
References in the shaded area are for Lenders use only and do not limit the applicability of this document to any particular loan or item. | ||||||||||||||
Any item above containing *** has been omitted due to text length limitations. |
Borrower:
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Wireless Ronin Technologies, Inc.
14700 Martin Dr. Eden Prairie, MN 55344 |
Lender: |
Signature Bank
9800 Bren Road East Ste 200 Minnetonka, MN 55343 |
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Guarantor:
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Barry Butzow
9714 Brassie Circle Eden Prairie, MN 55347 |
Loan No: 200161601 | (Continued) | Page 2 |
Loan No: 200161601 | (Continued) | Page 3 |
Loan No: 200161601 | (Continued) | Page 4 |
Loan No: 200161601 | (Continued) | Page 5 |
Loan No: 200161601 | (Continued) | Page 6 |
Loan No: 200161601 | (Continued) | Page 7 |
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X
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/s/ Barry Butzow | |||
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Barry Butzow |
1. | For and in consideration of the rents, additional rents, terms, provisions and covenants herein contained, Landlord hereby lets, leases and demises to Tenant the Demised Premises for a term commencing on the earlier of (i) the 19 th day of April, 2006 or (ii) the date on which Tenant opens the Demised Premises for business (the Commencement Date) and expiring the 30 th day of September, 2007 (the Expiration Date), unless sooner terminated as hereinafter provided. After lease expires, Tenant shall be able to extend the lease from month to month, cancelable by either party with thirty days written notice, and have a right of first refusal on any similar vacant warehouse space. |
2. | Tenant shall to pay to Landlord base rent for the Demised Premises (Base Rent), exclusive of any other charge provided for in this Lease to be paid by Tenant, as set forth below. Base Rent shall be payable in equal monthly installments, in advance, commencing on the first full month of the term of this Lease, and continuing on the first |
day of each subsequent month during the term hereof. In the event the term hereof commences on a day other than the first day of a month, Base Rent payable during such first month shall be adjusted on a pro rata basis and shall be paid contemporaneously with the execution of this lease. Base Rent shall be paid without setoff, deduction, demand or counterclaim of any nature whatsoever, in advance on the first day of each and every calendar month during the term hereof. |
Monthly GROSS | ||||
Dates
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Rent | |||
4/19/06 to 4/30/06
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$ | 540.00 | ||
05/01/06 to 09/30/07
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$ | 1,350.00 |
All Rent and other sums payable hereunder by Tenant which are not paid when due shall bear interest from the date due to the date paid at a rate of three and one half percent (3.5%) per annum in excess of the Prime Rate published in the Wall Street Journal , as the same changes from time to time (the Default Rate). |
1. | The covenants of Tenant to pay the Base Rent and the Additional Rent are each independent of any other covenant, condition, provision or agreement contained in this Lease. All rents are payable to Landlord at: |
(or such other address indicated in writing by Landlord). |
1. | Landlord shall provide mains and conduits to supply water, gas, electricity and sanitary sewage to the Property. If Landlord elects to furnish any of the foregoing utility services or other services furnished or caused to be furnished to Tenant, then the rate charged by Landlord shall not exceed the rate Tenant would be required to pay to a utility company or service company furnishing any of the foregoing utilities or services. All amounts payable by Tenant to Landlord hereunder shall be deemed Additional Rent in accordance with Article 3. |
1. | Tenant shall, at all times throughout the term of this Lease, including renewals and extensions, and at its sole expense, keep and maintain the Demised Premises in a clean, safe, sanitary and first class condition and in compliance with all applicable laws, codes, ordinances, rules and regulations. Tenants obligations hereunder shall include but not be limited to the maintenance, repair and replacement, if necessary, of heating and air conditioning fixtures, equipment, and systems (the HVAC Equipment), all lighting and plumbing fixtures and equipment, fixtures, motors and machinery, all interior walls, partitions, doors and windows, including the regular painting thereof, all exterior entrances to the Demised Premises, windows, doors and loading docks and dock equipment and the replacement of all broken glass. When used in this provision, the term repairs shall include replacements or renewals when necessary, and all such repairs made by the Tenant shall be equal in quality and class to the original work. Without limiting the generality of the foregoing, Tenant shall obtain and maintain at all times during the term of this Lease a maintenance contract with a responsible, licensed HVAC contractor, on terms reasonably acceptable to Landlord, for the regular maintenance of all HVAC Equipment within or exclusively serving the Demised Premises, and shall be responsible for the performance of all maintenance to be performed thereunder. Tenant shall keep accurate and complete records of the performance of all scheduled maintenance under such contract and shall provide copies thereof to Landlord from time to time upon request by Landlord. The Tenant shall keep and maintain all portions of the Demised Premises and the sidewalk and areas adjoining the same in a clean and orderly condition, free of accumulation of dirt, rubbish, snow and ice. | |
If Tenant fails, refuses or neglects to maintain or repair the Demised Premises as required in this Lease, after notice shall have been given Tenant in accordance with Article 33 of this Lease, Landlord may make such repairs without liability to Tenant for any loss or damage that may accrue to Tenants merchandise, fixtures or other property or to Tenants business by reason thereof, and upon completion thereof, Tenant shall pay to Landlord all costs plus 15% for overhead incurred by Landlord in making such repairs upon presentation to Tenant of bill therefor; provided, however, that no notice shall be required in the event of any hazardous or emergency condition. | ||
Landlord shall repair, at its expense (subject to inclusion in Operating Expenses pursuant to Section 3), the structural portions of the Building; provided, however, where structural repairs are required to be made by reason of the acts of Tenant, the costs thereof shall be borne by Tenant and payable by Tenant to Landlord upon demand. | ||
Except as otherwise provided herein, the Landlord shall be responsible for all outside maintenance of the Demised Premises, including grounds and parking areas. All such maintenance which is the responsibility of the Landlord shall be provided as reasonably necessary to the comfortable use and occupancy of Demised Premises during business hours, except Saturdays, Sundays and holidays, upon the condition that the Landlord shall not be liable for damages for failure to do so due to causes beyond its control. |
7. | Any sign, lettering, picture, notice or advertisement installed on or in any part of the Property and visible from the exterior of the Building, or visible from the exterior of the Demised Premises, shall be subject to Landlords prior approval and shall be installed at Tenants expense. In the event of a violation of the foregoing by Tenant, Landlord may remove the same without any liability and may charge the expense incurred by such removal to Tenant. |
8. | Except as hereinafter provided, Tenant shall not make any alteration, additions, or improvements in or to the Demised Premises or add, disturb or in any way change any plumbing or wiring therein without the prior written consent of the Landlord. In the event alterations are required by any governmental agency by reason of the use and occupancy of the Demised Premises by Tenant, Tenant shall make such alterations at its own cost and expense after first obtaining Landlords approval of plans and specifications therefor and furnishing such indemnification as Landlord may reasonably require against liens, costs, damages and expenses arising out of such alterations. Alterations or additions by Tenant must be made in compliance with all laws, ordinances and governmental regulations affecting the Property and Tenant shall warrant to Landlord that all such alterations, additions, or improvements shall be in strict compliance with all relevant laws, ordinances, governmental regulations, permits and insurance requirements. Construction of such alterations or additions shall commence only upon Tenant obtaining and exhibiting to Landlord the requisite approvals, licenses and permits and indemnification against liens. All alterations, installations, physical additions or improvements to the Demised Premises made by Tenant shall at once become the property of Landlord and shall be surrendered to Landlord upon the termination of this Lease; provided, however, this clause shall not apply to movable equipment or furniture owned by Tenant, which may be removed by Tenant at the end of the term of this Lease if Tenant is not then in default. Tenant shall be responsible for all costs related to improvements or modifications to the Demised Premises required or necessary to comply with The Americans With Disabilities Act of 1990 (ADA), or similar statutes or law. |
9. | Except as hereinafter provided, Landlord shall deliver possession of the Demised Premises to Tenant in the condition required by this Lease on or before the Commencement Date, but delivery of possession prior to or later than such Commencement Date shall not affect the expiration date of this Lease. Landlord shall not be liable in any respect for any failure to deliver possession of the Demised Premises to Tenant on or before the Commencement Date. The rentals herein reserved shall commence on the date when possession of the Demised Premises is delivered by Landlord to Tenant. Any occupancy by Tenant prior to the beginning of the term shall in all respects be the same as that of a Tenant under this Lease. Landlord shall have no responsibility or liability for loss or damage to fixtures, facilities or equipment installed or left on the Demised Premises. |
10. | Tenant contemporaneously with the execution of this Lease, has deposited with Landlord the sum of One Thousand Three Hundred Fifty and no/100 Dollars ($1,350.00), receipt of which is acknowledged hereby by Landlord, which deposit is to be held by Landlord, without liability for interest, as a security and damage deposit for the faithful payment and performance by Tenant of all of its obligations hereunder, during the term hereof and any extension hereof. Landlord may co-mingle such deposit with Landlords own funds and to use such security deposit for such purpose as Landlord may determine. In the event of the failure of Tenant to keep and perform any of the terms, covenants and conditions of this Lease to be kept and performed by Tenant during the term hereof and any extension hereof, and without limiting any other remedy available to Landlord, then Landlord either with or without terminating this Lease, may (but shall not be required to) apply such portion of said deposit as may be necessary to compensate or repay Landlord for all losses or damages sustained or to be sustained by Landlord due to such breach on the part of Tenant, including, but not limited to overdue and unpaid rent, any other sum payable by Tenant to Landlord pursuant to the provisions of this Lease, damages or deficiencies in any reletting of the Demised Premises, and reasonable attorneys fees incurred by Landlord. Should the entire deposit or any portion thereof, be appropriated and applied by Landlord, in accordance with the provisions of this paragraph, Tenant upon written demand by Landlord, shall remit forthwith to Landlord a sufficient amount of cash to restore said security deposit to the original sum deposited, and Tenants failure to do so within five (5) days after receipt of such demand shall constitute a breach of this Lease. Said security deposit shall be returned to Tenant, less any amounts retained by Landlord pursuant to the provisions of this paragraph, at the end of the term of this Lease or any renewal thereof, or upon the earlier termination of this Lease. Tenant shall have no right to anticipate return of said deposit by withholding any amount required to be paid pursuant to the provisions of this Lease or otherwise. | |
In the event Landlord shall sell the Property, or shall otherwise convey or dispose of its interest in this Lease, Landlord may assign said security deposit or any balance thereof to Landlords assignee, whereupon Landlord shall be released from all liability for the return or repayment of such security deposit and Tenant shall look solely to the said assignee for the return and repayment of said security deposit. Said security deposit shall not be assigned or encumbered by Tenant without the written consent of Landlord, and any assignment or encumbrance without such consent shall not bind Landlord. In the event of any rightful and permitted assignment of this Lease by Tenant, said security deposit shall be deemed to be held by Landlord as a deposit made by the assignee, and Landlord shall have no further liability with respect to the return of said security deposit to the Tenant. |
11. | The Demised Premises shall be used and occupied by Tenant solely for the purposes of warehouse storage of materials so long as such use is in compliance with all applicable laws, ordinances and governmental regulations affecting the Building and Demised Premises. The Demised Premises shall not be used in such manner that, in accordance with any requirement of law or of any public authority, Landlord shall be obligated, as a |
result of the purpose or manner of said use, to make any addition or alteration to or in the Building. The Demised Premises shall not be used in any manner which will increase the rates required to be paid for public liability or for fire and extended coverage insurance covering the Demised Premises. Tenant shall occupy the Demised Premises, conduct its business and control its agents, employees, invitees and visitors in such a way as is lawful and reputable, and will not permit or create any nuisance, noise, odor, or otherwise interfere with, annoy or disturb any other tenant in the Building in its normal business operations or Landlord in its management of the Building. Tenants use of the Demised Premises shall conform to all the Landlords rules and regulations relating to the use of the Demised Premises. Outside storage on the Demised Premises of any type of equipment, property or materials owned or used by Tenant or its customers or suppliers shall not be permitted. |
1. | The Tenant agrees to permit the Landlord and the authorized representatives of the Landlord to enter the Demised Premises at all times during usual business hours for the purpose of inspecting the same and making any necessary repairs to the Demised Premises and performing any work therein that may be necessary to comply with any laws, ordinances, rules, regulations or requirements of any public authority or of the Board of Fire Underwriters or any similar body or that the Landlord may deem necessary to prevent waste or deterioration in connection with the Demised Premises. Nothing herein shall imply any duty upon the part of the Landlord to do any such work which, under any provision of this Lease, the Tenant may be required to perform and the performance thereof by the Landlord shall not constitute a waiver of the Tenants default in failing to perform the same. The Landlord may, during the progress of any work in the Demised Premises, keep and store upon the Demised Premises all necessary materials, tools and equipment. The Landlord shall not in any event be liable for inconvenience, annoyance, disturbance, loss of business, or other damage of the Tenant by reason of making repairs or the performance of any work in the Demised Premises, or on account of bringing materials, supplies and equipment into or through the Demised Premises during the course thereof and the obligations of the Tenant under this Lease shall not thereby be affected in any manner whatsoever. | |
Landlord reserves the right to enter upon the Demised Premises at any time in the event of an emergency and at reasonable hours to exhibit the Demised Premises to prospective purchasers or others; and to exhibit the Demised Premises to prospective Tenants and to the display For Lease or similar signs on windows or doors in the Demised Premises during the last 180 days of the term of this Lease, all without hindrance or molestation by Tenant. |
1. | In the event of any eminent domain or condemnation proceeding or private sale in lieu thereof in respect to the Building during the term hereof, the following provisions shall apply: |
a. | If the whole of the Building shall be acquired or condemned by eminent domain for any public or quasi-public use or purpose, then the term of this Lease shall cease and terminate as of the date possession shall be taken in such proceeding and all rentals shall be paid up to that date. | ||
b. | If any part constituting less than the whole of the Building shall be acquired or condemned as aforesaid, and in the event that such partial taking or condemnation shall materially affect the Demised Premises so as to render the Demised Premises unsuitable for the business of the Tenant, in the reasonable opinion of Landlord, then the term of this Lease shall cease and terminate as of the date possession shall be taken by the condemning authority and rent shall be paid to the date of such termination. | ||
In the event of a partial taking or condemnation of the Building which shall not materially affect the Demised Premises so as to render the Demised Premises unsuitable for the business of the Tenant, in the reasonable opinion of the Landlord, this Lease shall continue in full force and effect but with a proportionate reduction of the Base Rent and Additional Rent based on the portion of the Building taken. Landlord reserves the right, at its option, to restore the Building and the Demised Premises to substantially the same condition as they were prior to such condemnation. In such event, Landlord shall give written notice to Tenant, within thirty (30) days following the date possession shall be taken by the condemning authority, of Landlords intention to restore. Upon Landlords notice of election to restore, Landlord shall commence restoration and shall restore the Building and the Demised Premises with reasonable promptness, subject to delays beyond Landlords control and delays in the receipt of condemnation or sale proceeds by Landlord; and Tenant shall have no right to terminate this Lease except as herein provided. Upon completion of such restoration, the rent shall be re-adjusted based upon the portion, if any, of the Building restored. | |||
c. | In the event of any condemnation or taking as aforesaid, whether whole or partial, the Tenant shall not be entitled to any part of the award paid for such condemnation and Landlord is to receive the full amount of such award, the Tenant hereby expressly waiving any right to claim to any part thereof. | ||
d. | Although all damages in the event of any condemnation shall belong to the Landlord whether such damages are awarded as compensation for diminution in value of the leasehold or to the fee of the Demised Premises, Tenant shall have the right to claim and recover from the condemning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenants own right on account of any and all damage to Tenants business by reason of the condemnation and for or on account of any cost or loss to which Tenant might be put in removing Tenants merchandise, furniture, fixtures, leasehold improvements and equipment. However, Tenant shall have no claim against Landlord and shall make no claim with the condemning authority |
for the loss of its leasehold estate, any unexpired term or loss of any possible renewal or extension of said lease or loss of any possible value of said Lease. |
1. | In the event of any damage or destruction to the Demised Premises by fire or other cause during the term hereof, the following provisions shall apply: |
a. | If the Building is damaged by fire or any other cause to such extent that the cost of restoration, as reasonably estimated by Landlord, will equal or exceed thirty percent (30%) of the replacement value of the Building (exclusive of foundations) just prior to the occurrence of the damage, then Landlord may, no later than the sixtieth (60th) day following the damage, give Tenant written notice of Landlords election to terminate this Lease. | ||
b. | If the cost of restoration as estimated by Landlord will equal or exceed fifty percent (50%) of said replacement value of the Building and if the Demised Premises are not suitable as a result of said damage for the purposes for which they are demised hereunder, in the reasonable opinion of Landlord and Tenant, then Tenant may, no later than the sixtieth (60th) day following the damage, give Landlord a written notice of election to terminate this Lease. | ||
c. | If the cost of restoration as estimated by Landlord shall amount to less than thirty percent (30%) of said replacement value of the Building, or if, despite the cost, Landlord does not elect to terminate this Lease, Landlord shall restore the Building and the Demised Premises with reasonable promptness, subject to delays beyond Landlords control and delays in the receipt of insurance proceeds by Landlord; and Landlord shall not be responsible for restoring or repairing leasehold improvements of the Tenant. | ||
d. | In the event either of the elections to terminate is properly exercised, this Lease shall be deemed to terminate on the date of the receipt of the notice of election and all rents shall be paid up to that date. Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease. | ||
e. | In any case where damage to the Building shall materially affect the Demised Premises so as to render them unsuitable in whole or in part for the purposes for which they are demised hereunder, then, unless such destruction was wholly or partially caused by the negligence or breach of the terms of this Lease by Tenant, its employees, agents or representatives, a portion of the rent based upon the extent to which the Demised Premises are rendered unsuitable shall be abated until repaired or restored. If the destruction or damage was wholly or partially caused by negligence or breach of the terms of this Lease by Tenant as aforesaid |
and if Landlord shall elect to rebuild, the rent shall not abate and the Tenant shall remain liable for the same. |
1 | a. | Landlord shall at all times during the term of this Lease, at its expense (except that such expense shall be included in the calculation of Additional Rent under Section 3 hereof), maintain a policy or policies of insurance issued by an insurance company licensed to do business in the State of Minnesota insuring the Building using the standard Minnesota Special Cause of Loss Form or equivalent for the full replacement value, provided that Landlord shall not be obligated to insure any furniture, equipment, machinery, goods or supplies which Tenant may bring upon the Demised Premises or any tenant improvements which Tenant or Landlord may construct or install on the Demised Premises, prior to or after the date of this Lease. Landlord may at its option also elect to carry rent loss insurance or other types of insurance commonly carried by owners of similar properties in the Minneapolis-St. Paul Metropolitan Area, and the Tenants pro rata share of the cost thereof shall constitute Additional Rent. |
b. | Tenant shall not carry any stock of goods or do anything in or about the Demised Premises which will in any way impair or invalidate the obligation of the insurer under any policy of insurance required by this Lease. | ||
c. | Provided Landlords insurance carrier consents, Landlord hereby waives and releases all claims, liability and causes of action against Tenant and its agents, servants and employees for loss or damage to, or destruction of, the Demised Premises or any portion thereof, including the buildings and other improvements situated thereon, resulting from fire, explosion and other perils, to the extent such loss or damage is covered by standard extended coverage insurance, whether caused by the negligence of any of said persons or otherwise. Likewise, Tenant hereby waives and releases all claims, liabilities and causes of action against Landlord and its agents, servants and employees for loss or damage to, or destruction of, any of the improvements, fixtures, equipment, supplies, merchandise and other property, whether that of Tenant or of others in, upon or about the Demised Premises resulting from fire, explosion or the other perils included in standard extended coverage insurance, whether caused by the negligence of any of said persons or otherwise. The waiver by Tenant contained in this Section 14.2 shall remain in force whether or not the Tenants insurer shall consent thereto. | ||
d. | In the event that the use of the Demised Premises by Tenant increases the premium rate for insurance carried by Landlord on the improvements of which the Demised Premises are a part, Tenant shall pay Landlord, upon demand, the amount of such premium increase. If Tenant installs any electrical equipment that overloads the power lines to the Building or its wiring, Tenant shall, at its own expense, make whatever changes are necessary to comply with the requirements |
of the insurance underwriter, insurance rating bureau and governmental authorities having jurisdiction. |
e. | Tenant shall during the term of this Lease, obtain and maintain in full force and effect at its sole cost and expense a policy or policies of insurance insuring all of its personal property located within the Demised Premises from time to time, as well as all tenant improvements made thereto, against loss or damage by fire, explosion or other such hazards and contingencies for the full replacement value thereof. Such policy or policies shall provide that thirty (30) days written notice must be given to Landlord prior to cancellation or modification thereof. Tenant shall furnish evidence satisfactory to Landlord at the time this Lease is executed and thereafter from time to time upon request by Landlord that such coverage is in full force and effect. |
1. | Tenant shall during the term hereof, keep in full force and effect at its expense a policy or policies of public liability insurance with respect to the Demised Premises and the business of Tenant in amounts not less than $1,000,000 per occurrence, $2,000,000 aggregate using current ISO General Liability forms or equivalent naming the Landlord as an additional insured. Such policy or policies shall provide that thirty (30) days written notice must be given to Landlord prior to cancellation or modification thereof. Tenant shall furnish evidence satisfactory to Landlord at the time this Lease is executed and thereafter upon request by Landlord that such coverage is in full force and effect. |
17 | a. | In the event of any failure of Tenant to pay any Base Rent, Additional Rent or other amounts due hereunder within five (5) days after the same shall be due, or any failure to perform any other of the terms, conditions or covenants of this Lease to be observed or performed by Tenant with all reasonable diligence, but in any event for more than thirty (30) days after written notice of such failure shall have been given to Tenant, or if Tenant or an agent of Tenant shall falsify any report required to be furnished to Landlord pursuant to the terms of this Lease, or if Tenant or any guarantor of this Lease shall become bankrupt or insolvent, or file any debtor proceedings, or any person shall file against Tenant or any guarantor of this Lease in any court pursuant to any statute either of the United States or of any state a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of Tenants or any such guarantors property, or if Tenant or any such guarantor makes an assignment for the benefit of creditors, or petitions for or enters into any similar arrangement, or if any guarantor of this Lease shall be in default in the performance of any covenant, duty or obligation under any guaranty or other agreement entered into with or in favor of Landlord and such default shall remain uncured for a period of thirty (30) days or more after notice of such default, or if Tenant shall abandon or vacate the Demised Premises or suffer this Lease to be taken under any writ of execution (any one or more of the foregoing shall |
constitute an Event of Default), then in any such event Tenant shall be in default hereunder, and Landlord, in addition to any other rights and remedies it may have, shall have the immediate right of re-entry and may remove all persons and property from the Demised Premises and such property may be removed and stored in a public warehouse or elsewhere at the sole cost of, and for the account of Tenant, all without service of notice or resort to legal process and without being guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby. |
b. | Upon the occurrence of an Event of Default, Landlord shall have the right (in addition to any other rights or remedies) to either terminate this Lease or, from time to time, without terminating this Lease, to terminate Tenants right of possession of the Demised Premises. If Landlord terminates Tenants right of possession only, Landlord may, but shall in no event be obligated to, make such alterations and repairs as may be necessary in order to relet the Demised Premises, and relet the Demised Premises or any part thereof upon such term or terms (which may be for a term extending beyond the term of this lease) and at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable. Upon any such reletting all rentals received by the Landlord from such reletting shall be applied first to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord; second, to the payment of any costs and expenses of such reletting, including brokerage fees and attorneys fees and costs of such alterations and repairs; third, to the payment of the rent due and unpaid payment of future rent as the same may become due and payable hereunder. If such rentals received from any such reletting during any month are less than that to be paid during that month by Tenant hereunder, Tenant, upon demand, shall pay any such deficiency to Landlord. No such re-entry or taking possession of the Demised Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention is given to Tenant. Notwithstanding any such reletting without termination, Landlord may at any time after such re-entry and reletting elect to terminate this Lease, and in addition to any other remedies it may have, it may recover from any Tenant all damages it may incur by reason of such breach, including the cost of recovering the Demised Premises, reasonable attorneys fees, and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease for the remainder of the stated term over the then reasonable rental value of the Demised Premises for the remainder of the stated term, all of which amounts shall be immediately due and payable from Tenant to Landlord. | ||
c. | Landlord may, at its option, in addition to any other rights or remedies available to it in this Lease or otherwise by law, statute or equity, spend such money as is necessary to cure any default of Tenant herein and the amount so spent, and costs incurred, including attorneys fees in curing such default, shall be paid by Tenant, as additional rent, upon demand. |
d. | In the event suit shall be brought for recovery of possession of the Demised Premises, for the recovery of rent or any other amount due under the provisions of this Lease, or in connection with any Event of Default, and an Event of Default shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including attorneys fees, together with interest on all such expenses at the Default Rate from the date of such breach. | |
e. | Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of the Demised Premises, by reason of any Event of Default hereunder, or otherwise. Tenant also waives any demand for possession of the Demised Premises, and any demand for payment of rent and any notice of intent to re-enter the Demised Premises, or of intent to terminate this Lease, other than the notices above provided in this Article, and waives any and every other notice or demand prescribed by any applicable statutes or laws. | |
f. | No remedy herein or elsewhere in this Lease or otherwise by law, statute or equity, conferred upon or reserved to Landlord shall be exclusive of any other remedy, but shall be cumulative, and may be exercised from time to time and as often as the occasion may arise. |
18. | Except to the extent any liability for damage or loss is caused by the gross negligence of Landlord, its agents or employees, Tenant shall hold harmless Landlord, its shareholders, directors, officers, agents and employees, from any liability for damages to any person or property in or upon the Demised Premises and the Demised Premises, including the person and the property of Tenant and its employees and all persons in the Building at its or their invitation or sufferance, and from all damages resulting from Tenants failure to perform the covenants or other provisions of this Lease. All property kept, maintained or stored on the Demised Premises shall be so kept, maintained or stored at the sole risk of Tenant. Tenant agrees to pay all sums of money in respect of any labor, service, materials, supplies or equipment furnished or alleged to have been furnished to Tenant in or about the Demised Premises, and not furnished on order of Landlord, which may be secured by any mechanics materialmens or other lien provided that Tenant may contest such lien, upon providing Landlord adequate security against such lien. If any such lien is reduced to final judgment and if such judgment or process thereon is not stayed, or if stayed and said stay expires, then Tenant shall immediately pay and discharge said judgment. Landlord shall have the right to post and maintain on the Demised Premises, notices of non-responsibility under the laws of the State of Minnesota. |
19. | Landlord shall not be liable for damage to any property of Tenant or of others located on the Demised Premises, nor for the loss of or damage to any property of Tenant or of |
others by theft or otherwise. Without limiting the foregoing, Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, any injury or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, rain or snow or leaks from any part of the Demised Premises or from the pipes, appliances, or plumbing works or from the roof, street or subsurface or from any other place or by dampness or by any such damage caused by other Tenants or persons in the Demised Premises, occupants of adjacent property, of the buildings, or the public or caused by operations in construction of any private, public or quasi-public work. Landlord shall not be liable for any latent defect in the Demised Premises. All property of Tenant kept or stored on the Demised Premises shall be so kept or stored at the risk of Tenant only and Tenant shall hold Landlord harmless from any claims arising out of damage to or loss of the same, including subrogation claims by Tenants insurance carrier. |
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a. | This Lease shall be subordinated to any mortgages that may now exist or that may hereafter be placed upon the Demised Premises and to any and all advances made thereunder, and to all interest and other charges relating to the indebtedness evidenced by such mortgages, and to all renewals, replacements and extensions thereof. In the event of execution by Landlord after the date of this Lease of any such mortgage, renewal, replacement or extension, Tenant agrees to execute a subordination agreement and/or any other documents relating to this Section 19 with the holder thereof, which agreement shall provide, among other things, that: |
b. | Such holder shall not disturb the possession and other rights of Tenant under this Lease so long as Tenant is not in default hereunder, | ||
c. | In the event of acquisition of title to the Demised Premises by such holder, such holder shall accept the Tenant as Tenant of the Demised Premises under the terms and conditions of this Lease and shall perform all the obligations of Landlord hereunder, and | ||
d. | The Tenant shall recognize such holder as Landlord hereunder. | ||
e. | Tenant shall, upon receipt of a request from Landlord therefor, execute and deliver to Landlord or to any proposed holder of a mortgage or trust deed or to any proposed purchaser of the Demised Premises, a certificate in recordable form, certifying that this Lease is in full force and effect, and that there are no offsets against rent nor defenses to Tenants performance under this Lease, or setting forth any such offsets or defenses claimed by Tenant as the case may be. Tenant shall execute and deliver any such subordination agreement or other such documents within ten (10) days of written request therefor. The failure of Tenant to do so within such time frame shall constitute an immediate default hereunder without the need for Landlord to provide any notice and/or opportunity to cure as |
set forth in Section 16 hereof. Tenant hereby irrevocably appoints Landlord its attorney in fact to execute any such subordination agreement or other such document in the name of Tenant upon the failure of Tenant to perform its obligations under this Section 19 as required hereunder. |
21. | Tenant agrees to use and occupy the Demised Premises throughout the entire term hereof for the purpose or purposes herein specified and for no other purposes, in the manner and to substantially the extent now intended, and not to transfer or assign this Lease or sublet said Demised Premises, or any part thereof, whether by voluntary act, operation of law, or otherwise, without obtaining the prior written consent of Landlord in each instance. Tenant shall seek such consent of Landlord by a written request therefor, setting forth such information as Landlord may deem necessary. Consent by Landlord to any assignment of this Lease or to any subletting of the Demised Premises shall be at Landlords sole discretion and shall not be a waiver of Landlords rights under this Article as to any subsequent assignment or subletting. Landlords rights to assign this Lease are and shall remain unqualified. No such assignment or subleasing shall relieve the Tenant from any of Tenants obligations in this Lease contained, nor shall any assignment or sublease or other transfer of this Lease be effective unless the assignee, subtenant or transferee shall at the time of such assignment, sublease or transfer, assume in writing for the benefit of Landlord, its successors and assigns, all of the terms, covenants and conditions of this Lease thereafter to be performed by Tenant and shall agree in writing to be bound thereby. Should Tenant sublease in accordance with the terms of this Lease, any increase in rental received by Tenant over the per square foot rental rate which is being paid by Tenant shall be forwarded to and retained by Landlord, which increase shall be in addition to the Base Rent and Additional Rent due Landlord under this Lease. |
22. | In the event of a sale or assignment of Landlords interest in the Demised Premises or in the Building in which the Demised Premises are located, or this Lease, or if the Demised Premises come into custody or possession of a mortgagee or any other party whether because of a mortgage foreclosure, or otherwise, Tenant shall attorn to such assignee or other party and recognize such party as Landlord hereunder; provided, however, Tenants peaceable possession will not be disturbed so long as Tenant faithfully performs its obligations under this Lease. Tenant shall execute, on demand, any attornment agreement required by any such party to be executed, containing such provisions as such party may require. |
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a. | In the event of the sale of the Building, Landlord shall be and hereby is relieved of all of the covenants and obligations created hereby accruing from and after the date of sale, and such sale shall result automatically in the purchaser assuming and agreeing to carry out all the covenants and obligations of Landlord herein. |
b. | The Tenant agrees at any time and from time to time upon not less than ten (10) days prior written request by the Landlord to execute, acknowledge and deliver to the Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (as modified and stating the modifications, if any) and the dates to which the base rent and other charges have been paid in advance, if any, it being intended that any such statement delivered pursuant to this paragraph may be relied upon by any prospective purchaser of the fee or mortgagee or assignee of any mortgage upon the fee of the Demised Premises. |
24. | The terms, covenants and conditions hereof shall be binding upon and inure to the successors and permitted assigns of the parties hereto. |
25. | Notwithstanding anything contained in Article 7, 28 or elsewhere in this Lease, if Landlord requests then Tenant will promptly remove at the sole cost and expense of Tenant all fixtures, equipment and alterations made by Tenant, at the time Tenant vacates the Demised Premises, and Tenant will promptly restore said Demised Premises to the condition that existed immediately prior to said fixtures, equipment and alterations having been made, all at the sole cost and expense of Tenant. |
26. | Landlord warrants that it has full right to execute and to perform this Lease and to grant the estate demised, and that Tenant, upon payment of the rents and other amounts due and the performance of all the terms, conditions, covenants and agreements on Tenants part to be observed and performed under this Lease, may peaceably and quietly enjoy the Demised Premises for the business uses permitted hereunder, subject, nevertheless, to the terms and conditions of this Lease. |
27. | Tenant shall not record this Lease or any memorandum hereof without the written consent of Landlord. However, upon the request of either party hereto, the other party shall join in the execution of a Memorandum lease for the purposes of recordation. Said Memorandum lease shall describe the parties, the Demised Premises and the term of the Lease and shall incorporate this Lease by reference, but shall not set forth the amount of the Base Rent, Additional Rent or other amounts due hereunder. This Article 26 shall not be construed to limit Landlords right to file this Lease under Article 21 of this Lease. |
28. | All monies due under this Lease from Tenant to Landlord shall be due on demand, unless otherwise specified and if not paid when due, shall result in the imposition of a service charge for such late payment in the amount of ten percent (10%) of the amount due. |
29. | On the Expiration Date or upon the termination hereof on a day other than the Expiration Date, Tenant shall peaceably surrender the Demised Premises broom-clean in good order, condition and repair, reasonable wear and tear only excepted. On or before the Expiration Date or upon termination of this Lease on a day other than the Expiration Date, Tenant shall, at its expense, remove all trade fixtures, personal property, equipment and signs, together with any fixtures, alterations or improvements required by Landlord to be removed pursuant to Section 24 hereof, from the Demised Premises and any property not removed shall be deemed to have been abandoned. Any damage caused in the removal of such items shall be repaired by Tenant and at its expense. All alterations, additions, improvements and fixtures (other than trade fixtures) which shall have been made or installed by Landlord or Tenant upon the Demised Premises and all floor covering so installed shall remain upon and be surrendered with the Demised Premises as a part thereof, without disturbance, molestation or injury, and without charge, at the expiration of termination of this Lease, except any such items identified under Section 24 hereof. If the Demised Premises are not surrendered on the Expiration Date or the date of termination, Tenant shall indemnify Landlord against loss or liability arising out of or relating to any claims resulting from such failure, including without limitation, any claims made by any succeeding Tenant founded on such delay. Tenant shall promptly surrender all keys for the Demised Premises to Landlord at the place then fixed for payment of rent and shall inform Landlord of combinations of any locks and safes on the Demised Premises. |
30. | In the event of a holding over by Tenant after expiration or termination of this Lease without the consent in writing of Landlord, Tenant shall be deemed a Tenant at sufferance and shall pay rent for such occupancy at the rate of twice the last-current aggregate Base Rent and Additional Rent, prorated for the entire holdover period, plus all attorneys fees and expenses incurred by Landlord in enforcing its rights hereunder, plus any other damages occasioned by such holding over. |
31. | In the event Tenant shall remove its fixtures, equipment or machinery or shall vacate the Demised Premises or any part thereof prior to the Expiration Date of this Lease, or shall discontinue or suspend the operation of its business conducted on the Demised Premises for a period of more than thirty (30) consecutive days (except during any time when the Demised Premises may be rendered untenantable by reason of fire or other casualty), then in any such event Tenant shall be deemed to have abandoned the Demised Premises and such abandonment shall constitute an Event of Default under the terms of this Lease. |
32. | Whenever provision is made under this Lease for Tenant securing the consent or approval by Landlord, such consent or approval shall only be valid if it is made in writing. |
33. | Any notice required or permitted under this Lease shall be deemed sufficiently given or secured if sent by registered or certified return receipt mail to Tenant at 14793 Martin Drive, Eden Prairie, Minnesota 55344, and to Landlord at the address then fixed for the payment of rent as provided in Article 4 of this Lease, and either party may by like written notice at any time designate a different address to which notices shall subsequently be sent. |
34. | Tenant shall observe and comply with such rules and regulations as Landlord may from time to time prescribe, on written notice to Tenant, for the safety, care, cleanliness and operation of the Building. |
35. | Except as otherwise provided herein, the Tenant covenants and agrees that if it shall at any time fail to pay any cost or expense required to be paid by Tenant hereunder, or fail to take out, pay for, maintain or deliver any of the insurance policies above required, or fail to make any other payment or perform any other act on its part to be made or performed as in this Lease provided, then the Landlord may, but shall not be obligated so to do, and without notice to or demand upon the Tenant and without waiving or releasing the Tenant from any obligations of the Tenant in this Lease contained, pay any such cost or expense, effect any such insurance coverage and pay premiums therefor, and may make any other payment or perform any other act on the part of the Tenant to be made and performed as in this Lease provided, in such manner and to such extent as the Landlord may deem desirable, and in exercising any such right, to also pay all necessary and incidental costs and expenses, employ counsel and incur and pay reasonable attorneys fees. All sums so paid by Landlord and all necessary and incidental costs and expenses in connection with the performance of any such act by the Landlord, together with interest thereon at the rate of ten percent (10%) per annum from the date of making of such expenditure, by Landlord, shall be deemed additional rent hereunder, and shall be payable to Landlord on demand. Tenant covenants to pay any such sum or sums with interest as aforesaid and the Landlord shall have the same rights and remedies in the event of the nonpayment thereof by Tenant as in the case of default by Tenant in the payment of the Base Rent payable under this Lease. |
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a. | Any of the following occurrence, conditions or acts by Landlord shall constitute a Landlord Default: (a) Landlords failure to make any payments of money due Tenant hereunder within ten (10) days after the receipt of written notice from Tenant that same is overdue; or (b) Landlords failure to perform any nonmonetary obligation of Landlord hereunder within thirty (30) days after receipt of written notice from Tenant to Landlord specifying such default and demanding that the same be cured; provided that, if such default cannot with due diligence be wholly cured within such thirty (30) days, Landlord shall have such longer period as may be reasonably necessary to cure the default, so long as Landlord proceeds promptly to commence the cure of same within such thirty (30) day period and diligently prosecutes the cure to complete. |
b. | Upon the occurrence of a Landlord Default, at Tenants option, in addition to any other remedies which it may have, and without its actions being deemed a cure of Landlords default, Tenant may (i) pay or perform such obligations and offset Tenants reasonable and actual cost of performance, plus interest at the Default Rate, against the Base Rent unless, by written notice to Tenant, Landlord contests whether a Landlord Default has occurred or is continuing, in which case such right of offset shall only be effective if final, non-appealable judgment against Landlord shall have been entered by a court of competent jurisdiction; or (ii) sue for damages. |
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a. | The Lease does not create the relationship of principal agent or of partnership or of joint venture or of any association between Landlord and Tenant, the sole relationship between the parties hereto being that of Landlord and Tenant. |
b. | No waiver of any default of Tenant hereunder shall be implied from any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver and that only for the time and to the extent therein stated. One or more waivers by Landlord shall not then be construed as a waiver of a subsequent breach of the same covenant, term or condition. The consent to or approval by Landlord of any act by Tenant requiring Landlords consent or approval shall not waive or render unnecessary Landlords consent to or approval of any subsequent similar act by Tenant shall be construed to be both a covenant and a condition. No action required or permitted to be taken by or on behalf of Landlord under the terms or provisions of this Lease shall be deemed to constitute an eviction or disturbance of Tenants possession of the Demised Premises. All preliminary negotiations are merged into and incorporated in this Lease. The laws of the State of Minnesota shall govern the validity, performance and enforcement of this Lease. |
c. | This Lease and the exhibits, if any, attached hereto and forming a part hereof, constitute the entire agreement between Landlord and Tenant affecting the Demised Premises and there are no other agreements, subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and executed in the same form and manner in which this Lease is executed. | ||
d. | If any agreement, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such agreement, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each agreement, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by law. | ||
e. | If any person or entity extending credit to Landlord in connection with the Building requires a change in this Lease which does not materially decrease, diminish or restrict any of Tenants rights hereunder, Tenant agrees, at the request of Landlord, to promptly execute and deliver to Landlord an amendment to this Lease incorporating such required changes; provided, however, that Tenant shall not be required to agree to any such changes which would change the financial obligations of Tenant hereunder, the location or size of the Demised Premises, the term of this Lease or which would otherwise materially decrease, diminish or restrict any of Tenants rights hereunder. | ||
f. | The submission of this Lease for examination does not constitute a reservation of or option for the Demised Premises, and this Agreement of Lease shall become effective as a Lease only upon execution and delivery thereof by Landlord and Tenant. |
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a. | The Demised Premises hereby leased shall be used by and/or at the sufferance of Tenant only for the purpose set forth in Article 11 above and for no other purposes. Tenant shall not use or permit the use of the Demised Premises in any manner that will tend to create waste or a nuisance, or will tend to unreasonably disturb other tenants in the Building or the Demised Premises. Tenant, its employees and all person visiting or doing business with Tenant in the Demised Premises shall be bound by and shall observe the reasonable rules and regulations made by Landlord relating to the Demised Premises, the Building or the Demised Premises of which notice in writing shall be given to the Tenant, and all such rules and regulations shall be deemed to be incorporated into and form a part of this Lease. |
b. | Tenant covenants through the Lease Term, at Tenants sole cost and expense, promptly to comply with all laws and ordinances and the orders, rules and regulations and requirements of all federal, state and municipal governments and appropriate departments, commission, boards, and officers thereof, and the orders, rules and regulations of the Board of Fire Underwriters where the Demised Premises are situated, or any other body now or hereafter as well as extraordinary, and whether or not the same require structural repairs or alterations, which may be applicable to the Demised Premises, or the use or manner of use of the Demised Premises. Tenant will likewise observe and comply with the requirements of all policies of public liability, fire and all other policies of insurance at any time in force with respect to the building and improvements on the Demised Premises and the equipment thereof. | ||
c. | In the event any Hazardous Material (hereinafter defined) is brought or caused to be brought into or onto the Demised Premises, the Building or the Demised Premises by Tenant, its agents, employees, contractors or invitees, Tenant shall handle any such material in compliance with all applicable federal, state and/or local regulations. For purposes of this Article, Hazardous Material means and includes any hazardous, toxic or dangerous waste, substance or material defined as such in (or for purposes of) the Comprehensive Environmental Response, Compensation, and Liability Act, any so-called Superfund or Superlien law, or any federal, state or local statute, law, ordinance, code, rule, regulation, order decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or materials, as now or at any time hereafter in effect (collectively, Environmental Laws). Tenant shall submit to Landlord on an annual basis copies of its approved hazardous materials communication plan, OSHA monitoring plan, and permits required by the Resource Recovery and Conservation Act of 1976, if Tenant is required to prepare, file or obtain any such plans or permits. Tenant will indemnify and hold harmless Landlord from any losses, liabilities, damages, costs or expenses (including reasonable attorneys fees) which Landlord may suffer or incur as a result of Tenants breach of this Article 37 or its introduction into or onto the Demised Premises, Building or Demised Premises of any Hazardous Material. This Article shall survive the expiration or sooner termination of this Lease. | ||
d. | Landlord represents and warrants to Tenant that, except as otherwise disclosed in any environmental assessment or report delivered by Landlord to Tenant, there are no Hazardous Materials located within the Demised Premises or otherwise on or about the Property which require removal or remediation under applicable Environmental Laws. Landlord agrees to indemnify and hold Tenant harmless from and against any and all claims or damages resulting from any violation or falsity of the representation set forth above or as a result of any leak, spill, discharge, emission or other release of Hazardous Materials on or about the Property caused by Landlord, its agents or employees from and after the date hereof. |
39. | Either partys failure to perform the terms and conditions of this Lease, in whole or in part, other than any term requiring the payment of money, shall not be deemed a breach or a default hereunder or give rise to any liability of such party to the other if such failure is attributable to any unforeseeable event beyond such partys reasonable control and not caused by the negligent acts or omissions or the willful misconduct of such party, including, without limitation, flood, drought, earthquake, storm, pestilence, lightning, and other natural catastrophes and acts of God; epidemic, war riot, civic disturbance or disobedience, and act of the public enemy; fire, accident, wreck, washout, and explosion; strike, lockout, labor dispute, and failure, threat of failure, or sabotage of such partys facilities; delay in transportation or car shortages, or inability to obtain necessary labor, materials, components, equipment, services, energy, or utilities through such partys usual and regular sources at usual and regular prices; and any law, regulation, order or injunction of a court or governmental authority, whether valid or invalid and including, without limitation, embargoes, priorities, requisitions, and allocations or restrictions of facilities, equipment or operations. In the event of the occurrence of such a force majeure event, the party unable to perform promptly shall notify the other party. |
40. | The Landlord shall have the rights to relocate Tenant to alternative space within the Building, upon not less than ninety (90) days written notice so long as such alternative space is substantially equivalent to the Demised Premises, in terms of size, configuration and access. Landlord and Tenant agree to cooperate in good faith in connection with any required tenant improvements in connection with such alternative space, which shall in any event be consistent with the level of finish of the initial tenant improvements provided by Landlord in connection with the Demised Premises, and in connection with Tenants move to the alternative Demised Premises. Landlord shall pay all reasonable costs associated with effecting such move, but shall not otherwise be liable to Tenant hereunder in connection with such relocation. |
41. | All improvements to the Demised Premises proposed to be constructed by either Landlord Tenant prior to the commencement date shall be constructed in accordance with the terms and provisions set forth on the plans and specifications attached hereto and incorporated herein as Exhibit C. |
42. | The captions are inserted only as a matter of convenience and for reference, and in no way define, limit or describe the scope of this Lease nor the intent or any provision thereof. |
43.
See also rider attached hereto and made a part hereof containing Exhibits B and C, which
Exhibits are attached hereto and made a part hereof.
Exhibit
Description
Demised Premises
Improvements
3. | Submission of this instrument to Tenant or proposed Tenant or its agents or attorneys for examination, review, consideration or signature does not constitute or imply an offer to lease, reservation of space, or option to lease, and this instrument shall have no binding legal effect until execution hereof by both Landlord/Owner and Tenant or its agents. |
4. | It is agreed and understood that Brian Netz, agent or broker with Welsh Companies, LLC is representing Dennis P. Dirlam, Landlord, and Dan Brastad, agent or broker with Welsh Companies, LLC, is representing Wireless Ronin, Inc., Tenant. Tenant indemnifies Landlord for any claim made by or commission payable to any other broker or agent in connection with Tenants leasing the Demised Premises. |
TENANT:
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LANDLORD: | |
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WIRELESS RONIN, INC.
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DENNIS P. DIRLAM | |
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By:
/s/ Steve Jacobs
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By: /s/ Dennis P. Dirlam | |
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Its: EVP
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Its: Owner | |
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Date: 4/18/06
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Date: 4/24/06 |
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WIRELESS RONIN TECHNOLOGIES, INC. | ||||||
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By: |
/s/ Jeffrey C. Mack
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Name: Jeffrey C. Mack | ||||||
Title: CEO/President | ||||||
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SEALY CORPORATION | ||||||
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By: |
/s/ Michael Q. Murray
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Name: Michael Q. Murray | ||||||
Title: Vice President Legal Counsel | ||||||
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Assistant Secretary |
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| SealyTouch with Communications |
| 32 NEC Touch Screen Monitor (NEC #NEC3210BK w/capacitive touch screen) | ||
| RoninCast EX Box (HP 7600 3GHZ) with wireless communications card | ||
| Speaker Unit and cabling | ||
| Sealy Stand with POP Display Bracket | ||
| Ethernet Hub and Linksys Access Point | ||
| VGX and USB Cabling |
| SealyTouch without Communications |
| 32 NEC Touch Screen Monitor (NEC #NEC3210BK w/capacitive touch screen) | ||
| RoninCast EX Box (HP 7600 3GHZ) | ||
| Speaker Unit and cabling | ||
| Sealy Stand with POP Display Bracket | ||
| VGX and USB Cabling |
Location Name
Install Date
Address
City
State
Zip
10-Apr-06
10012 West FM 1960 Bypass, Unit D
Humble
TX
77338
10-Apr-06
1340 Lake Woodlands Dr, Suite B
Woodlands
TX
77380
10-Apr-06
7105 FM 1960 West
Houston
TX
77069
10-Apr-06
5000 Westheimer #320
Houston
TX
77056
10-Apr-06
5815 Gulf Freeway
Houston
TX
77023
11-Apr-06
2121 Frontage Rd.
Waite Park
MN
56387
11-Apr-06
4125 Cleveland Ave,
Ft. Myers
FL
33901
11-Apr-06
600 South Gate Plaza,
Sarasota
FL
34329
11-Apr-06
298 Westshore Plaza,
Tampa
FL
33609
11-Apr-06
2201 E. Fowlr Ave,
Tampa
FL
33612
11-Apr-06
1800 9th Street N.,
Naples
FL
34102
12-Apr-06
3232 LAKE AVE. SUITE 330
Wilmette
IL
60091
12-Apr-06
830 E. GOLF RD.
Shaumburg
IL
60173
12-Apr-06
2 YORKTOWN MALL
Lombard
IL
60148
12-Apr-06
7801 Xerxes Ave. S.
Bloomington
MN
55431
12-Apr-06
404 S. Route 59, Suite 128
Naperville
IL
60540
12-Apr-06
1755 County Rd. D
Maplewood
MN
55109
13-Apr-06
5355 NW 86th St
Johnston
IA
50131
13-Apr-06
4750 Grande Market Drive
Appleton
WI
54913
13-Apr-06
18615 W. BLUEMOUND RD.
Brookfield
WI
53045
13-Apr-06
W229N1400 Westwood Drive
Waukesha
WI
53185
13-Apr-06
2404 W. Beltline Hwy
Madison
WI
53713
13-Apr-06
1536 E. Army Post Rd
Des Moines
IA
50320
1. | Six weeks prior to installation, Wireless Ronin Technologies, Inc must have complete site information. This includes the following information: |
a. | Retail chain name | ||
b. | Shipping Address (Street, City, State, Zip Code). | ||
c. | Store Phone Number | ||
d. | Site Contact Information. (Mattress Department Manager) | ||
e. | Site Contacts Business and/or Cell Phone Number to Aid in Receiving Shipment. |
2. | Prior to installation, Wireless Ronin Technologies, Inc requests that the following criteria and considerations have been fulfilled: |
a. | Placement of the unit has been determined prior to our arrival onsite. | ||
b. | Power requirements for the unit have been met. Power requirements are standard 110 volt dual plug 20-amp service at each location. | ||
c. | Network requirements have been met. (Depending on retail chain). Each DSL installation location will be required to have an operable DSL or Cable Modem line for network communication. |
3. | During Installation, Wireless Ronin Technologies, Inc requests the following while the SealyTouch Installer is on-site. |
a. | A clear area to assemble the SealyTouch unit away from high traffic areas, loud noises, or an environment otherwise considered unsafe for electronics. (Damp, wet, or areas affected by weather). | ||
b. | A two hour time period for installation without interruptions. (note: Most installations will take place in approximately 1 hour). |
4. | Upon completion of the installation, Wireless Ronin Technologies, Inc requests the retail location has an area to dispose of empty boxes, and packaging material. The technician will be responsible for removing trash from the store provided an area is available. |
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Very truly yours,
WIRELESS RONIN® TECHNOLOGIES, INC. |
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By: | /s/ Jeffrey C. Mack | |||
Jeffrey C. Mack | ||||
President and CEO | ||||
By: | /s/ John Witham | |||
John Witham | ||||
Executive Vice President and CFO | ||||
By:
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/s/ Carl Walking Eagle | |||
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Print Name:
Carl Walking Eagle
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Its:
Vice Chairman
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WIRELESS RONIN TECHNOLOGIES, INC. | ||||||
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By | /s/ Jeffrey C. Mack | ||||
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Jeffrey C. Mack | |||||
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President and Chief Executive Officer | |||||
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14700 Martin Drive | |||||
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Eden Prairie, MN 55344 | |||||
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Galtere International Master Fund L.P. | ||||||
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By | /s/ Susan Haugerud | |||||
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President, Galtere International Ltd. | ||||||
for Galtere International Master Fund | ||||||
Signature and Title |
WIRELESS RONIN TECHNOLOGIES, INC. | ||||||
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By | /s/ Jeffrey C. Mack | ||||
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Jeffrey C. Mack | |||||
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President and Chief Executive Officer | |||||
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14700 Martin Drive | |||||
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Eden Prairie, MN 55344 |
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LENDER | |||
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SHAG | |||
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Name of Lender | |||
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/s/ Hal B. Heyer | |||
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Signature | |||
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LENDER | |||
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C. F. Ebbert | |||
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Name of Lender | |||
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/s/ C. F. Ebbert | |||
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Signature | |||
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LENDER | |||
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Lorax Business Services, Inc. | |||
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Name of Lender | |||
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/s/ Mike Holmdahl, Chief Executive Officer | |||
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Signature |
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LENDER | |||
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Randall W. Barnes | |||
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Name of Lender | |||
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/s/ Randall W. Barnes | |||
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Signature | |||
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LENDER | |||
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Stephen E. Jacobs | |||
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Name of Lender | |||
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/s/ Stephen E. Jacobs | |||
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Signature | |||
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LENDER | |||
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Paul Crawford | |||
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Name of Lender | |||
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/s/ Paul Crawford | |||
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Signature | |||
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LENDER | |||
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Laura Spillane | |||
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Name of Lender | |||
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/s/ Laura Spillane | |||
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Signature | |||
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LENDER | |||
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Juanita Young | |||
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Name of Lender | |||
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/s/ Juanita Young | |||
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Signature | |||
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LENDER | |||
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Steve Meyer | |||
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Name of Lender | |||
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/s/ Steve Meyer | |||
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Signature |
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LENDER | |||
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Mark Behling | |||
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Name of Lender | |||
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/s/ Mark Behling | |||
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Signature | |||
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LENDER | |||
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Jack A. Norqual | |||
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Name of Lender | |||
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/s/ Jack A. Norqual | |||
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Signature | |||
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LENDER | |||
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C. Donald Dorsey | |||
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Name of Lender | |||
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/s/ C. Donald Dorsey | |||
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Signature | |||
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LENDER | |||
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Richard Enrico | |||
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Name of Lender | |||
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/s/ Richard Enrico | |||
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Signature | |||
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LENDER | |||
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Charles J. Maxwell, Jr. | |||
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Name of Lender | |||
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/s/ Charles J. Maxwell, Jr. | |||
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Signature | |||
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LENDER | |||
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Barry Butzow | |||
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Name of Lender | |||
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/s/ Barry Butzow | |||
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Signature |
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LENDER | ||||
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2 nd Wind | ||||
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Name of Lender | ||||
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/s/ Richard Enrico | ||||
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Signature | ||||
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LENDER | ||||
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Gerard J. Abbott | ||||
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Name of Lender | ||||
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/s/ Gerard J. Abbott | ||||
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Signature |
No. of shares subject to option: ______ | Option No.: ___ | |
Date of grant: ______ |
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WIRELESS RONIN TECHNOLOGIES, INC.
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By: | ||||
Its: | ||||
OPTIONEE
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| The Company desires to continue to employ Executive as its Senior Vice President of Operations, and Executive desires to accept such employment. | |
| This Agreement provides, among other things, for base compensation for Executive, a term of employment and severance payments in the event Executive is terminated without Cause or by reason of a Change of Control of the Company. | |
In consideration of the foregoing, the Company and Executive agree as follows: |
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(a) | Any conviction or nolo contendere plea by Executive to a felony, gross misdemeanor or misdemeanor involving moral turpitude, or any public conduct |
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by Executive that has or can reasonably be expected to have a detrimental effect on the Company and the image of its management; | |||
(b) | Any act of material misconduct, willful and gross negligence, or breach of duty with respect to the Company, including, but not limited to, embezzlement, fraud, dishonesty, nonpayment of an obligation owed to the Company, or willful breach of fiduciary duty to the Company which results in a material loss, damage, or injury to the Company; | ||
(c) | Any material breach of any material provision of this Agreement or of the Companys announced or written rules, codes or polices; provided, however, that such breach shall not constitute Cause if Executive cures or remedies such breach within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such breach is part of a pattern of chronic breaches of the same, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such breach is not deemed curable. | ||
(d) | Any act of insubordination by Executive; provided, however, an act of insubordination by Executive shall not constitute Cause if Executive cures or remedies such insubordination within thirty (30) days after written notice to Executive, without material harm or loss to the Company, unless such insubordination is a part of a pattern of chronic insubordination, which may be evidenced by reports or warning letters given by the Company to Executive, in which case such insubordination is deemed not curable. | ||
(e) | Any unauthorized disclosure of any Company trade secret or confidential information, or conduct constituting unfair competition with respect to the Company, including inducing a party to breach a contract with the Company; or | ||
(f) | A willful violation of federal or state securities laws. |
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(a) | the Company or any of its subsidiaries reduces Executives Base Salary or base rate of annual compensation, or otherwise changes benefits provided to Executive under compensation and benefit plans, arrangements, policies and procedures to be as a whole materially less favorable to Executive, other than reductions in Base Salary permitted under Section 4.01; | ||
(b) | without Executives express written consent, the Company or any of its subsidiaries significantly reduces Executives job authority and responsibility; | ||
(c) | without Executives express written consent, the Company or any of its subsidiaries requires Executive to change the location of Executives job or office, to a location more than fifty (50) miles from the location of Executives job or office immediately prior to such required change; | ||
(d) | a successor company fails or refuses to assume the Companys obligations under this Agreement; or | ||
(e) | the Company or any successor company breaches any of the material provisions of this Agreement. |
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(a) | if (i) there has been a Change of Control of the Company (as defined in Section 7.02), and (ii) Executive is an active and full-time employee at the time of the Change of Control, and (iii) within twelve (12) months following the date of the Change of Control, Executives employment is involuntarily terminated for any reason (including Good Reason (as definition Section 6.04)), other than for Cause or death or disability; or | ||
(b) | if Executives employment is terminated by the Company without Cause, or by Executive for Good Reason. |
(a) | an acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act) of 50% or more of either: (1) the then outstanding Stock; or (2) the combined voting power of the Companys outstanding voting securities immediately after the merger or acquisition entitled to vote generally in the election of directors; provided, however, that the following acquisition shall not constitute a Change of Control: (i) any acquisition directly from the Company; (ii) any acquisition by the Company or Subsidiary; (iii) any acquisition by the trustee or other fiduciary of any employee benefit plan or trust sponsored by the Company or a Subsidiary; or (iv) any acquisition by any corporation with respect to which, following such acquisition, more than 50% of the Stock or combined voting power of Stock and other voting securities of the Company is beneficially owned by substantially all of the individuals and entities who were beneficial owners of Stock and other voting securities of the Company immediately prior to the acquisition in substantially similar proportions immediately before and after such acquisition; or | ||
(b) | individuals who, as of the date of this Agreement, constitute the Board (the Incumbent Board), cease to constitute a majority of the Board. Individuals nominated or whose nominations are approved by the Incumbent Board and |
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subsequently elected shall be deemed for this purpose to be members of the Incumbent Board; or | |||
(c) | approval by the shareholders of the Company of a reorganization, merger, consolidation, liquidation, dissolution, sale or statutory exchange of Stock which changes the beneficial ownership of Stock and other voting securities so that after the corporate change the immediately previous owners of 50% of Stock and other voting securities do not own 50% of the Companys Stock and other voting securities either legally or beneficially; or | ||
(d) | the sale, transfer or other disposition of all substantially all of the Companys assets; or | ||
(e) | a merger of the Company with another entity after which the pre-merger shareholders of the Company own less than 50% of the stock of the surviving corporation. |
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(a) | Unless otherwise agreed by the Company and Executive, all determinations required to be made under this Section 7.08, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by an accounting firm that does not have a material relationship with either of the parties that is selected by mutual agreement (the Accounting Firm). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely |
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by the Company. Any Gross-Up Payment, as determined pursuant to this Section 7.08, shall be paid by the Company to the Executive within 15 days of the receipt of the Accounting Firms determination. Absent manifest error, any determination by the Accounting Firm shall be binding upon the Company and the Executive. | |||
(b) | The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten business days after the Executive is informed in writing of such claim. The Executive shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which the Executive gives such notice to the Company (or such shorter period ending on, the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that the Company desires to contest such claim, the Executive shall: |
provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 7.08, the Company shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either pay the tax claimed to the appropriate taxing authority on behalf of the Executive and direct the Executive to sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that, if the Company pays such claim and directs the Executive to sue for a refund, the Company shall indemnify and hold |
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the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such payment or with respect to any imputed income in connection with such payment; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Companys control of the contest shall be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. |
(c) | If, after the receipt by the Executive of a Gross-Up Payment or payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, the Executive becomes entitled to receive any refund with respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after payment by the Company of an amount on the Executives behalf pursuant to this Section 7.08, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then the amount of such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. | ||
(d) | Notwithstanding any other provision of this Section 7.08, the Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the Executive hereby consents to such withholding and payment. |
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(a) | In any arbitration proceeding, each party shall pay the fees and expenses of its or his own legal counsel. | ||
(b) | The arbitrator, in his or her discretion, shall award legal fees and expenses and costs of the arbitration, including the arbitrators fee, to a party who substantially prevails in its claims in such proceeding. |
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(c) | Notwithstanding this Section 10.06, in the event of alleged noncompliance or violation, as the case may be, of Sections 8 or 9 of this Agreement, the Company may alternatively apply to a court of competent jurisdiction for a temporary restraining order, injunctive and/or such other legal and equitable remedies as may be appropriate. |
WIRELESS RONIN TECHNOLOGIES, INC.
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By | /s/ Jeffrey C. Mack | |||
Jeffrey C. Mack | ||||
Chief Executive Officer | ||||
EXECUTIVE
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By | /s/ Henry B. May | |||
Henry B. May | ||||
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