As filed with the Securities and Exchange Commission on December 24, 2002
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PAR TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its charter)
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Delaware 16-1434688
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
(315) 738-0600
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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John W. Sammon, Jr.
Chairman of the Board, President and Director
PAR Technology Corporation
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
(315) 738-0600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies of all communications, including all communications sent to the agent for
service, should be sent to:
KATHY A. FIELDS, ESQ.
TIMOTHY C. MAGUIRE, ESQ.
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, Massachusetts 02110
Telephone: (617) 248-7000
Facsimile: (617) 248-7100
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of Shares Amount to be Offering Price Per Aggregate Offering Registration
Registered Registered Share(FN1) Price(FN1) Fee(FN2)
---------- ---------- ---------- ---------- --------
Common Stock,
$0.02 par value
per share (FN2) 508,019 $ 7.03 $ 3,571,373.57 $ 328.57
(FN1)Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended.
(FN2)Pursuant to Rule 457(c) under the Securities Act of 1933, as amended, the
registration fee has been calculated based upon the average of the high and
low prices per share of the common stock of PAR Technology Corporation on
the New York Stock Exchange on December 19, 2002.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
SUBJECT TO COMPLETION, DATED DECEMBER 24, 2002
[OBJECT OMITTED]
PROSPECTUS
PAR Technology Corporation
508,019 Shares
Common Stock
The selling stockholders identified in this prospectus are offering for
sale up to 508,019 shares of our common stock. We will not receive any proceeds
from the sale of these shares by the selling stockholders.
The selling stockholders acquired the offered shares directly from PAR
Technology Corporation and a stockholder of the Company in a private placement
that closed on December 3, 2002. The selling stockholders, or their pledgees,
donees, transferees or other successors-in-interest, may offer the shares from
time to time through public or private transactions at prevailing market prices,
at prices related to prevailing market prices or at privately negotiated prices.
Our common stock is traded on the New York Stock Exchange under the symbol
"PTC." On December 24, 2002, the closing sale price of our common stock on the
New York Stock Exchange was $6.85 per share.
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Investing in our common stock involves risk.
See "Risk Factors" beginning on page __.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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The date of this prospectus is December 24, 2002.
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of the common stock.
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TABLE OF CONTENTS
Page
----
PAR Technology Corporation............................................. 1
Risk Factors........................................................... 2
Special Note Regarding Forward Looking Statements...................... 7
Use of Proceeds........................................................ 8
Selling Stockholders................................................... 8
Plan of Distribution................................................... 9
Legal Matters.......................................................... 12
Experts................................................................ 12
Incorporation of Certain Information by Reference...................... 12
Available Information.................................................. 13
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The terms "we," "our," and "us" refer to PAR Technology Corporation and its
wholly-owned subsidiaries, unless the context suggests otherwise.
PAR TECHNOLOGY CORPORATION
We are a leading provider of professional services and enterprise business
intelligence applications. We develop, market and support hardware and software
products that improve the ability of business professionals to make timely,
fact-based decisions. We are the world's largest supplier of Point-of-Sale
systems to the quick service restaurant market with over 30,000 systems
installed in 95 countries spanning the globe.
We are also a leading government contractor, providing computer-based
system design and engineering services to the Department of Defense and other
United States federal government agencies. Through our government-sponsored
research and development, we have created significant technologies with
commercial uses.
Our common stock is traded on the New York Stock Exchange under the symbol
"PTC." Our corporate headquarters offices are located at PAR Technology Park,
8383 Seneca Turnpike, New Hartford, New York 13413-4991; telephone number (315)
738-0600.
1
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks may also impair our business
operations. In evaluating our business and before you decide to buy our common
stock, you should carefully consider the following risks, in addition to the
other information contained in this prospectus and the other documents
incorporated by reference into this prospectus. If any of the following risks
actually occur, our business, financial condition or results of operations could
be materially adversely affected. In such case, the trading price of our common
stock could decline and you could lose all or part of your investment.
We have a small concentration of customers that accounts for a majority of our
net revenues in each period.
A small number of customers has historically accounted for a majority of
our net revenues in any given fiscal period. For the nine months ended September
30, 2002, aggregate sales to our top two restaurant segment customers,
McDonald's and Yum!Brands, amounted to 31%, and 22% respectively, of net
revenues. For the nine months ended September 30, 2001, sales to these two
customers accounted for 31% and 23%, respectively, of net revenues. No customer
is obligated to make any minimum level of future purchases from us or to provide
us with binding forecasts of product purchases for any future period. In
addition, major customers may elect to delay or otherwise change the timing of
orders in a manner that could adversely effect quarterly and annual results of
operations. There can be no assurance that our current customers will continue
to place orders with us, or that we will be able to obtain orders from new
customers. The loss of, or reduced sales to, any one or more of our major
customers could materially and adversely affect our business, operating results
and financial condition.
We experience fluctuations in quarterly operating results.
We have experienced and we expect to continue to experience quarterly
fluctuations in our net revenues and net income. Due to the dynamics associated
with the year-end capital budget planning of many of our restaurant management
systems customers and the preference of some restaurant customers to install new
systems between the busy summer and Christmas seasons, we have historically
recorded higher volume of restaurant systems sales and overall net income during
the second half of the year. Major restaurant customers may, however, elect to
delay purchases of our products. If for any reason our sales are below seasonal
norms during our fourth fiscal quarter, our annual operating results could be
adversely affected. Our quarterly operating results may also vary as a result of
factors such as the timing or cancellation of customer orders, especially from
major customers; delays in order placement on the part of major customers in
anticipation of the introduction of our new products; price reductions by us or
by our competitors; the market acceptance of newly-introduced products;
significant fluctuation in the pricing of components of our products; and
introductions of new or enhanced products from our competitors. Because a high
percentage of our costs, including personnel and facilities costs, are
relatively fixed, variations in the timing of orders and shipments can cause
significant variations in quarterly financial results.
We may be unable to continue to produce new products that keep pace with rapid
technological developments and changing market conditions.
The products we sell are subject to rapid and continual technological
change. The products that are available from our competitors have increasingly
offered a wider range of features and capabilities. We believe that in order to
compete effectively we must provide compatible systems incorporating new
technologies at competitive prices. There can be no assurance that we will be
able to continue funding research and development at levels sufficient to
enhance our current product offerings or will be able to develop and introduce
on a timely basis new products that keep pace with technological developments
2
and emerging industry standards and address the evolving needs of customers.
There can also be no assurance that we will not experience difficulties that
will result in delaying or preventing the successful development, introduction
and marketing of new products in our existing markets or that our new products
and product enhancements will adequately meet the requirements of the
marketplace or achieve any significant degree of market acceptance. Likewise,
there can be no assurance as to the acceptance of our products in new markets,
nor can there be any assurance as to the success of our penetration of these
markets, or to the revenue or profit margins with respect to these products. Our
inability, for any reason, to develop and introduce new products and product
enhancements in a timely manner in response to changing market conditions or
customer requirements could materially adversely affect our business, operating
results and financial condition. In the event that there is no longer a market
for the our software products, we could be required to record a charge against
capitalized software costs, which amount to $1,753,000 at September 30, 2002.
We depend on government contracts for part of our revenue.
For the nine months ended September 30, 2002 and 2001, we derived 27% of
our net revenues from contracts for the provision of technical products and
services to United States government agencies and defense contractors. The
government contracting business is subject to various risks. In particular,
contracts with United States government agencies typically provide that such
contracts are terminable for the convenience of the government. If the
government terminated a contract on this basis, we would be entitled to receive
payment for our allowable costs and, in general, a proportionate share of our
fee or profit for work actually performed. Our business with United States
government agencies is also subject to other risks unique to the defense
industry, such as reduction, modification or delays of contracts or
subcontracts, as the requirements, budgets, policies or regulations of those
agencies change. We may perform work prior to formal authorization, or the
contract prices may be adjusted for increased work scope or change orders.
Additionally, the Defense Contract Audit Agency regularly audits our accounting
records and other documentation relevant to government contracts. Although such
audits have been completed through our fiscal year 2000 and have not resulted in
any material adjustments, future audits of open fiscal years could result in
adjustments to contracts and fees. Finally, many of our competitors are, or are
subsidiaries of, companies such as Lockheed-Martin, Raytheon, Northrop-Grumman
(which includes Litton-PRC-TASC), BAE, Boeing and SAIC. These companies are
larger and have substantially greater financial resources than we do. We also
compete with smaller companies that target particular segments of the government
market. These companies may be better positioned to obtain contracts through
competitive proposals.
We depend on suppliers for key components in our restaurant business.
The inability to obtain sufficient components or subassemblies as required,
or to develop alternative sources of supply if and as required in the future,
could result in delays or reductions in product shipments that could materially
and adversely affect our operating results and damage customer relationships. We
assemble our products from standard components such as integrated circuits, and
fabricated parts such as printed circuit boards, metal parts and castings, most
of which are manufactured to our specifications. We depend on outside suppliers
for the continued availability of our required components and parts. Although
most items are generally available from a number of different suppliers, we
purchase certain components from only one supplier. Items purchased from only
one supplier include certain printers, base castings and electronic components.
If this supplier should cease to supply an item, we believe that new sources
could be found to provide the components. However, the added cost and
manufacturing delays could negatively affect our business. There can be no
assurance that delays in delivery due to supply shortages will not occur in the
future.
We face extensive competition in the markets in which we operate.
There are currently five major suppliers who offer restaurant management
systems similar to ours. Some of these competitors are larger than we are and
3
have access to substantially greater financial and other resources than we do,
and consequently may be able to obtain more favorable terms than we can for
components and subassemblies incorporated into their restaurant technology
products. The rapid rate of technological change in the restaurant market makes
it likely that we will face competition from new products designed by companies
not currently competing with us. Such products may have features not currently
available on our restaurant products. We believe that our competitive ability
depends on our total solution offering, our product development and systems
integration capability, our direct sales force and our customer service
organization. There is no assurance that we will be able to compete effectively
in the restaurant technology market in the future.
Our government contracting business competes with a large number of
companies of various sizes for government contracts. Our government contracting
business has been focused on niche offerings, primarily signal and image
processing and engineering services. There are no assurances that we will
continue to win government contracts as a prime contractor or subcontractor.
Additionally, there are no assurances that the United States government agencies
will continue to seek providers of services in the areas in which we have
expertise.
Much of our revenue is generated through our relationship with the restaurant
industry, which is a cyclical market.
For the nine months ended September 30, 2002 and 2001, 73% of our net
revenues are related to the restaurant industry, particularly the Quick Service
Restaurant (QSR) industry. Our restaurant technology product sales are dependent
in large part on the health of this industry, which in turn is dependent on the
domestic and international economy, as well as factors such as consumer buying
preferences and weather conditions. There can be no assurance that profitability
and growth will improve. The QSR market is affected by a variety of factors,
including war, global and regional instability, natural disasters and general
economic conditions. Adverse developments in the restaurant industry could
materially affect our restaurant systems business, operating results and
financial condition.
A downturn in general economic conditions would have a negative effect on our
revenue and operating results.
We are sensitive to general downward swings in the overall economy and
particularly in the QSR industry. Although we believe we can assist the quick
service sector of the restaurant industry in a competitive environment, demand
for our products and services could be disproportionately affected by
instability or downturns in the restaurant market which may cause clients to
exit the industry or delay, cancel or reduce planned expenditures for our
products.
Current geopolitical instability and the continuing threat of domestic and
international terrorist attacks may adversely impact our revenues.
International tensions, exacerbated by the possibility of war in the Middle
East, contribute to an uncertain political and economic climate, both in the
United States and globally, which may affect our ability to generate revenue on
a predictable basis. In addition, recent terrorist attacks internationally have
contributed to continued international tensions and uncertainty, while continued
terrorist threats in the United States have fueled economic uncertainty. In the
event of future acts of violence, we cannot predict the effect on our business
and on the demand for our products. As we sell products both in the United
States and internationally, the threat of future terrorist attacks may adversely
affect our business. In addition, we cannot determine how a war between the
United States and a foreign nation would influence our revenues. The potential
for depressed economic conditions and a loss of sales in connection with a war
would likely materially adversely affect our business, results of operations and
financial condition.
4
International sales account for a portion of our revenues.
For the nine months ended September 30, 2002, our net revenues from sales
outside the United States were $10,460,000, accounting for approximately 10.3%
of our net revenues. For the nine months ended September 30, 2001, sales outside
the United States were $11,663,000, accounting for approximately 14.1% of our
net revenues. We anticipate that international sales will continue to account
for a significant portion of sales. We intend to continue to expand our
operations outside the United States and to enter additional international
markets, which will require significant management attention and financial
resources. Our operating results are subject to the risks inherent in
international sales, including, but not limited to, regulatory requirements,
political and economic changes and disruptions, geopolitical disputes and war,
transportation delays, difficulties in staffing and managing foreign sales
operations, and potentially adverse tax consequences. In addition, fluctuations
in exchange rates may render our products less competitive relative to local
product offerings, or could result in foreign exchange losses, depending upon
the currency in which we sell our products. There can be no assurance that these
factors will not have a material adverse effect on our future international
sales and, consequently, on our operating results.
We depend on proprietary technology.
Our success and ability to compete is dependent in part upon our ability to
protect our proprietary technology. We rely on a combination of patent,
copyright and trade-secret laws and non-disclosure agreements to protect our
proprietary technology. We generally enter into confidentiality or license
agreements with our employees, distributors, customers and potential customers
and limit access to and distribution of our software, documents and other
proprietary information. There can be no assurance that the steps we take to
protect our proprietary rights will be adequate to prevent misappropriation of
our technology or that our competitors will not independently develop
technologies that are substantially equivalent or superior to our technology. In
addition, the laws of some foreign countries do not protect our proprietary
rights to the same extent as do the laws of the United States. We are also
subject to the risk of adverse claims and litigation alleging infringement of
the proprietary rights of other parties. Additionally, we periodically review
recent patents that have been issued to third parties. As a result of such
reviews, we have from time to time, identified and investigated the validity and
scope of issued patents for technologies similar to, or related to, our
technologies. Although we believe that we do not infringe the valid patents of
others, there can be no assurance that third parties will not assert
infringement claims in the future with respect to our current or future products
or that any such claim will not require us to enter into license arrangements or
result in protracted and costly litigation, regardless of the merits of such
claims. No assurance can be given that any necessary licenses will be available
or that, if available, such licenses can be obtained on commercially reasonable
terms. The failure to obtain such royalty or licensing agreements on a timely
basis would have a material adverse effect upon our business, results of
operations and financial condition.
We rely and depend on recruiting and retaining our key personnel.
Our future success and potential growth depend in part on our ability to
retain our key management and technical and sales personnel and to recruit,
train and retain sufficient numbers of other highly-qualified managerial,
technical and sales personnel on a continuing basis. There can be no assurance
that we will be able to retain our key management, technical, and sales
personnel or that we will be able to attract and retain sufficient numbers of
other highly qualified managerial, technical, and sales personnel. An inability
to retain or attract such personnel could materially adversely affect our
business, operating results, and financial condition. In addition, our ability
to manage potential growth successfully will require us to attract additional
experienced managerial, technical, and sales personnel and to continue to
improve our operational, management, and financial systems and controls.
5
The existing officers and directors have a predominant ownership position.
Our existing officers, directors, and related parties currently control
approximately 57.9% of the outstanding common stock. As a result, they will be
able to exert significant influence on our activities. Dr. John W. Sammon, Jr.,
Chairman of the Board of Directors and President of the Company, and members of
his immediate family control approximately 52% of our outstanding common stock.
Because Dr. Sammon is currently the largest stockholder, he has significant
influence with respect to the election of directors and approval or disapproval
of fundamental corporate decisions, including any potential change in control.
We may be found in violation of environmental regulations.
We are subject to a variety of federal, state and local governmental
regulations relating to the use, storage, discharge, and disposal of toxic,
volatile or otherwise hazardous chemicals used in the manufacturing process. Any
failure by us to control the use of, or adequately restrict the discharge of,
hazardous substances, or otherwise comply with environmental regulations, could
subject us to significant future liabilities. In addition, although we believe
that our past operations conformed with the applicable environmental laws and
regulations in effect at that time, there can be no assurance that we have not
in the past violated applicable laws or regulations, which violations could
result in remediation or other liabilities.
Our stock price may fluctuate.
The price of our common stock historically has experienced significant
volatility due to fluctuations in revenues and earnings, other factors relating
to our operations and the market's changing expectations for our growth. The
limited number of shares available for sale and purchase in the open market,
overall equity market conditions and the conditions relating to the market for
technology stocks generally, and other factors unrelated to our operations have
also historically influenced our stock price. Such fluctuations are expected to
continue. In addition, stock markets have experienced extreme price volatility
in recent years. This volatility has had a substantial effect on the market
prices of securities issued by many technology companies, often for reasons
unrelated to the operating performance of the specific companies. The recent
downward trend in the stock market may continue to adversely effect the price of
our common stock.
We may not be an attractive target for acquisition proposals.
Certain provisions of our Certificate of Incorporation, as amended, and
By-Laws could discourage potential acquisition proposals and could delay or
prevent a change in control. Such provisions could diminish the opportunities
for a stockholder to participate in tender offers, including tender offers at a
price above the then-current market value of our common stock. Such provisions
may also inhibit fluctuations in the market price of our common stock that could
result from takeover attempts. In addition, the Board of Directors, without
further stockholder approval, may issue preferred stock that could have the
effect of delaying, deterring or preventing a change in control. An issuance of
preferred stock could also adversely affect the voting power of the holders of
common stock, including the loss of voting control to others. We have no present
plans to issue any preferred stock. Accounting irregularities may affect our
business and share price.
Accounting irregularities may contribute to public skepticism of business
practices, in general, and create downward pressure on our stock price. In the
wake of recent accounting scandals, the market is uniquely susceptible to
reports of accounting irregularities despite the recent enactment of additional
federal statutes and regulations. Although we consistently employ sound business
and accounting practices, we cannot predict whether we will be required to
present a restatement in the future, nor can we guarantee that we will not fall
under scrutiny or experience the effects of the volatile market.
6
Changes in accounting principles and securities laws and regulations may
adversely effect our financial results and increase our costs.
We prepare our financial statements in conformity with accounting
principles generally accepted in the United States. These accounting principles
are subject to interpretation by the Financial Accounting Standards Board, the
American Institute of Certified Public Accountants, the Securities and Exchange
Commission and various bodies formed to interpret and create appropriate
accounting policies. A change in these policies or interpretations could have a
significant effect on our reported financial results, and could affect the
reporting of transactions completed before the announcement of a change. In
addition, the Sarbanes-Oxley Act of 2002 which was enacted in July 2002,
requires changes in some of our corporate governance practices, and complying
with the rules and regulations promulgated under this Act will likely increase
our costs. We are presently evaluating and monitoring regulatory developments
and cannot estimate the timing or magnitude of additional costs we may incur as
a result.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements that are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Investors are cautioned that all forward-looking statements involve risks
and uncertainties, including without limitation, further delays in new product
introduction, risks in technology development and commercialization, risks in
product development and market acceptance of and demand for our products, risks
of downturns in economic conditions generally, and in the quick service sector
of the restaurant market specifically, risks of intellectual property rights
associated with competition and competitive pricing pressures, risks associated
with foreign sales and high customer concentration, and other risks detailed in
our filings with the Securities and Exchange Commission. See "Risk Factors."
7
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of our common stock
by the selling stockholders. See "Selling Stockholders" and "Plan of
Distribution." The principal purpose of this offering is to effect an orderly
disposition of the shares of our common stock being offered and sold from time
to time by the selling stockholders.
SELLING STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the
names of the selling stockholders, the number of shares that the selling
stockholders own as of such date, the number of shares owned by the selling
stockholders that may be offered for sale from time to time by this prospectus,
and the number of shares to be held by the selling stockholders assuming the
sale of all of the shares offered hereby. There can be no assurance that the
selling stockholders will sell all or any of the shares registered hereunder as
the stockholders may sell all or part of their shares pursuant to this
prospectus.
Shares Beneficially Shares Shares Beneficially
------------------------- Pursuant To --------------------
Selling Stockholder Number (FN2) Percent This Prospectus Number Percent
------------------- ----------- ------- --------------- ------ -------
E *Capital Corporation (FN2) 426,449 5.11% 356,849 69,600 *
Edward W. Wedbush (FN2)(FN3) 98,670 1.18% 47,170 51,500 *
Gary S. Siperstein and Mynde S. 157,500 1.89% 53,000 104,500 1.25%
Siperstein(FN4)
Gary S. Siperstein(FN4)(FN5) 259,850 3.11% 0 259,850 3.11%
S. Harry Siperstein 40,000 * 22,000 18,000 *
Charles H. Tanner 32,000 * 25,000 7,000 *
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*Represents less than 1% of the outstanding shares.
(FN1)The number and percentage of shares beneficially owned is determined in
accordance with Rule 13d-3 of the Securities and Exchange Act of 1934, as
amended, and the information is not necessarily indicative of beneficial
ownership for any other purpose. Under Rule 13d-3, beneficial ownership
includes any shares as to which the individual has sole or shared voting
power or investment power and also any shares which the individual has the
right to acquire within 60 days of the date of this prospectus through the
exercise of any stock option or other right.
(FN2)E*Capital Corporation and Edward W. Wedbush have reported their holdings as
a group on a Report of Beneficial Ownership on Schedule 13G. E*Capital
Corporation is the parent company of Wedbush Morgan Securities, Inc. Mr.
Wedbush is the chairman of E*Capital Corporation and owns a majority of its
outstanding shares. Accordingly, Mr. Wedbush may be deemed the beneficial
owner of shares owned by E*Capital Corporation. However, Mr. Wedbush has
disclaimed beneficial ownership of the shares held by E*Capital
Corporation.
(FN3)Held by Edward W. Wedbush as trustee for the Wedbush Morgan Securities,
Inc. Employee Profit Sharing Retirement Plan.
(FN4)Excludes 1,650 shares held by Gary S. Siperstein as custodian for his minor
children or in charitable foundation controlled by his family, as to which
Gary S. Siperstein and Mynde S. Siperstein disclaim beneficial ownership.
(5) Shares held by clients of Eliot Rose Asset Management, LLC, an
investment advisory firm registered under section 203 of the Investment
Advisers Act of 1940 and of which Mr. Siperstein in the principal. As such,
Mr. Siperstein may be deemed to be the beneficial owner of these shares by
reason of his shared investment power. Mr. Siperstein disclaims beneficial
ownership of all of these shares.
-------------------------------------
On December 3, 2002, we sold an aggregate of 383,019 shares of our common
stock and J. Whitney Haney sold for his personal account 125,000 shares of our
common stock to the selling stockholders at $5.30 per share for an aggregate
consideration of $2,692,500.70 in a private placement. We are filing this
registration statement to register, and the selling stockholders are offering,
for public sale these 508,019 shares of our common stock currently held by the
selling stockholders.
8
The selling stockholders have represented to us that they acquired the
shares as principal for their own accounts, for investment and not with a view
to, or for resale in connection with, any distribution or public offering of the
shares in violation of the Securities Act of 1933, as amended. In recognition of
the fact, however, that the selling stockholders may want to be able to sell the
shares when, and if, they consider it appropriate, in connection with the stock
purchase agreements by and among the selling stockholders and us, we agreed to
file this registration statement with the Securities and Exchange Commission to
effect the registration of the resale of the 508,019 shares of common stock
under the Securities Act and to use our reasonable best efforts to keep this
registration statement effective until the earliest of (i) the date on which all
of the shares have been sold, (ii) the first date on which all of the then
remaining unsold shares are able to be sold within a 90-day period pursuant to
Rule 144 of the Securities Act, or (iii) December 3, 2004.
Except as noted above and based on representations by the selling
stockholders, to the best of our knowledge, no selling stockholder had a
material relationship with us or any of our affiliates within the three-year
period ending on the date of this prospectus.
PLAN OF DISTRIBUTION
The shares of our common stock covered by this prospectus may be offered
and sold from time to time by the selling stockholders for their own account.
The term "selling stockholders" includes permitted pledgees, donees,
transferees, designees, beneficiaries, distributees or other
successors-in-interest selling shares received after the date of this prospectus
from a selling stockholder. In addition, certain of the selling stockholders are
corporations or partnerships that may, in the future, distribute their shares to
their shareholders or partners, respectively. Those shares may later be sold by
those shareholders or partners.
The selling stockholders will act independently of us in making decisions
with respect to the timing, manner and size of each sale. Such sales may be made
on the New York Stock Exchange, or other exchanges or in the over-the-counter
market or otherwise, at prices and under terms then prevailing or at prices
related to the then-current market price or in negotiated transactions. The
selling stockholders may sell their shares by one or more of, or a combination
of, the following methods:
o purchases by a broker-dealer as principal and resale by such broker-dealer
for its own account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers, which may include long or short sales effected after
the filing of the registration statement of which this prospectus is a
part;
o cross trades or block trades in which the broker-dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
o in privately negotiated transactions;
9
o in options transactions;
o in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales affected through agents;
o any combination of the foregoing practices; or
o any other lawful method.
In addition, any shares that qualify for sale pursuant to Rule 144 of the
Securities Act of 1933, as amended, may be sold under Rule 144 rather than
pursuant to this prospectus. No selling stockholder has entered into any
agreement with a prospective underwriter and there is no assurance that any such
agreement will be entered into.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In connection with
distributions of the shares or otherwise, the selling stockholders may enter
into hedging transactions with broker-dealers or other financial institutions.
In connection with such transactions, broker-dealers or other financial
institutions may engage in short sales of the common stock in the course of
hedging the positions they assume with selling stockholders. The selling
stockholders may also sell the common stock short and redeliver the shares to
close out such short positions. The selling stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions
which require the delivery to such broker-dealer or other financial institution
of shares offered by this prospectus, which shares such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or
amended to reflect such transaction). The selling stockholders may also pledge
shares to a broker-dealer or other financial institution, and, upon a default,
such broker-dealer or other financial institution may effect sales of the
pledged shares pursuant to this prospectus (as supplemented or amended to
reflect such transaction).
In effecting sales, broker-dealers or agents engaged by the selling
stockholders may arrange for other broker-dealers to participate. Broker-dealers
or agents may receive commissions, discounts or concessions from the selling
stockholders in amounts to be negotiated immediately prior to the sale.
In offering the shares covered by this prospectus, the selling stockholders
and any broker-dealers who execute sales for the selling stockholders may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended, in connection with such sales. Any profits realized by the selling
stockholders and compensation of any broker-dealer may be deemed to be
underwriting discounts and commissions.
10
In order to comply with the securities laws of certain jurisdictions, the
shares offered by this prospectus may need to be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers.
Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in a distribution of the shares of common stock covered
by this prospectus may be limited in their ability to engage in market
activities with respect to such shares. The selling stockholders, for example,
will be subject to applicable provisions of the Securities Exchange Act of 1934
and the rules and regulations under it, including, without limitation Regulation
M, which provisions may restrict certain activities of the selling stockholders
and limit the timing of purchases and sales of any shares of common stock by the
selling stockholders. Furthermore, under Regulation M, persons engaged in a
distribution of securities are prohibited from simultaneously engaging in market
making and certain other activities with respect to such securities for a
specified period of time prior to the commencement of such distributions,
subject to specified exceptions or exemptions. The foregoing may affect the
marketability of the shares offered by this prospectus.
We, together with J. Whitney Haney, who sold shares to one of the selling
stockholders in connection with our private placement of our shares, have agreed
to pay the fees and expenses incurred in effecting the registration of the
shares covered by this prospectus, including, without limitation, all
registration and filing fees and fees and expenses of our counsel and our
accountants. The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the selling stockholders for brokerage,
accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the shares. We will not receive any of the proceeds
from the sale of our common stock by the selling stockholders.
We have agreed to indemnify the selling stockholders against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended.
We have agreed to use our best efforts to maintain the effectiveness of
this registration statement of which this prospectus forms a part until the
earliest of (i) the date on which all of the shares have been sold, (ii) the
date on which all of the then remaining unsold shares are able to be sold within
a 90-day period pursuant to Rule 144 of the Securities Act of 1933, as amended,
or (iii) December 3, 2004. We may suspend the selling stockholders' rights to
resell shares under this prospectus.
Our common stock is traded on the New York Stock Exchange under the symbol
"PTC." The Transfer Agent and Registrar for our shares of common stock is
Registrar and Transfer Company, 10 Commerce Drive, Cranford, New Jersey 07016.
11
LEGAL MATTERS
The validity of the shares of our common stock offered hereby will be
passed upon for us by Testa, Hurwitz & Thibeault, LLP, Boston, Massachusetts.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10K/Afor the year ended December 31, 2001 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and information that we file later with the Securities and Exchange
Commission will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the sale of
all the shares of common stock covered by this prospectus:
1. Our Annual Report on Form 10-K/A for the fiscal year ended December 31,
2001;
2. Our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002;
3. Our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002;
4. Our Quarterly Report on Form 10-Q for the quarter ended September 30, 2002;
and
5. The description of our common stock contained in the section entitled
"Description of New PAR Capital Stock" contained in Exhibit 28 to our
Registration Statement on Form 8-B, filed with the Securities and Exchange
Commission on August 23, 1993, pursuant to Section 12(g) of the Exchange
Act of 1934.
12
We will provide, without charge, a copy of any and all of the information
that is incorporated by reference in this prospectus, not including exhibits to
the information unless those exhibits are specifically incorporated by reference
into this prospectus, to any person, including any beneficial owner, to whom a
prospectus is delivered, upon written or oral request. Requests for copies of
this information should be directed to Investor Relations, PAR Technology
Corporation, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, NY
13413-4991, telephone number (315) 738-0600. Our website is
http://www.partech.com. Information contained on our website is not a part of
this prospectus.
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission. You should rely only on the information
incorporated by reference, provided in this prospectus or any supplement or to
which we have referred you. We have not authorized anyone to provide you with
different information. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of those documents. However, you should realize that our affairs may
have changed since the date of this prospectus. This prospectus will not reflect
such changes. You should not consider this prospectus to be an offer or
solicitation relating to the securities in any jurisdiction in which such an
offer or solicitation relating to the securities is not authorized. Furthermore,
you should not consider this prospectus to be an offer or solicitation relating
to the securities if the person making the offer or solicitation is not
qualified to do so, or if it is unlawful for you to receive such an offer or
solicitation.
AVAILABLE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information we file at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the Public Reference Room. In
addition, the Securities and Exchange Commission maintains a web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Securities and Exchange Commission.
13
================================================================================
508,019 shares
PAR TECHNOLOGY CORPORATION
Common Stock
-----------------------
PROSPECTUS
December 24, 2002
------------------------
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table provides an estimate (other than with respect to the
Registration Fee) of the expenses that we expect to incur in connection with the
sale and distribution of the securities being registered, other than
underwriting discounts and commissions:
Registration Fee -- Securities and Exchange Commission .............$ 328.57
Accounting Fees and Expenses .................. ...............$ 11,000.00
Legal Fees and Expenses ............................................$ 20,000.00
Miscellaneous.......................................................$ 5,671.43
------------
TOTAL......................................................$ 37,000.00
============
We, along with J. Whitney Haney, who sold shares to one of the selling
stockholders in connection with the private placement of our shares, will bear
all expenses shown above. As negotiated in a side letter agreement, Mr. Haney
will pay a pro rata portion of some of the expenses shown above, calculated
based on the aggregate gross proceeds that we and Mr. Haney receive from the
sale of the shares. The expenses covered by this arrangement include legal fees
in connection with the execution and performance of the stock purchase
agreements and the filing fees in connection with the filing of the registration
statement. The selling stockholders will bear all underwriting discounts and
selling commissions and stock transfer fees and taxes applicable to the sale of
the shares sold pursuant to this prospectus.
Item 15. Indemnification of Directors and Officers.
Our Certificate of Incorporation, as amended, provides that we shall, to
the fullest extent permitted under Delaware General Corporation Law, indemnify
all of our directors, except in certain circumstances involving wrongful acts,
such as (a) for any breach of the director's duty of loyalty to us or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under Section 174 of
the Delaware General Corporation Law, or (d) for any transaction from which the
director derived an improper personal benefit.
In addition, our By-Laws require us to indemnify any of our directors,
officers, employees or agents against all expenses and liabilities reasonably
incurred by him or her in connection with any legal action in which such person
is involved by reason of his or her position with us unless it is determined
that he or she did not act in good faith in the reasonable belief that his or
her action was in our best interest. Such indemnification shall include payment
by us of expenses incurred in defending a civil or criminal action or proceeding
in advance of the final disposition of such action or proceeding, upon our
receipt of the undertaking of the person indemnified to repay such payment if
such person shall ultimately be determined not to be entitled to such
indemnification. Our By-Laws require us to maintain, and we do so maintain, an
insurance policy insuring our directors and officers against liabilities.
1
Item 16. Exhibits.
The following exhibits, required by Item 601 of Regulation S-K, are filed
as a part of this Registration Statement. Exhibit numbers, where applicable, in
the left column correspond to those of Item 601 of Regulation S-K.
4.1 Certificate of Incorporation, as amended, of the Company (filed as Exhibit
3.1 to the Company's Registration Statement on Form S-2 (No. 333-04077) and
incorporated herein by reference).
4.2 Certificate of Amendment to the Certificate of Incorporation of the Company
(filed as Exhibit 3.2 to the Company's Registration Statement on Form S-2
(No. 333-04077) and incorporated herein by reference).
4.3 By-laws of the Registrant, as amended (filed as Exhibit 3.3 to the
Company's Registration Statement on Form S-2 (No. 333-04077) and
incorporated herein by reference).
4.4 Specimen certificate for shares of the Company's Common Stock (as filed as
Exhibit 4 to the Company's Registration Statement on Form S-2 (No.
333-04077) and incorporated herein by reference).
4.5 Form of Stock Purchase Agreement by and among the Company, J. Whitney Haney
and each of the Investors listed on Schedule I thereto (filed herewith).
4.6 Registration Rights Agreement, dated as of December 3, 2002, by and among
the Company and the parties named therein (filed herewith).
5.1 Legal Opinion of Testa, Hurwitz & Thibeault, LLP (to be filed pursuant to
an amendment hereto).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1) (to be
filed pursuant to an amendment hereto).
24.1 Power of Attorney (included as part of the signature page to this
Registration Statement).
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
2
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in this
registration statement.
provided, however, that paragraphs (1)(i) and 1(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New Hartford, State of New York, on December 24,
2002.
PAR TECHNOLOGY CORPORATION
By: /s/John W. Sammon, Jr.
-------------------------------------
John W. Sammon, Jr.
Chairman of the Board and President
Power of Attorney
We, the undersigned officers and directors of PAR Technology Corporation,
hereby severally constitute and appoint Ronald J. Casciano and Gregory T.
Cortese, and each of them singly, our true and lawful attorneys, with full power
to them and each of them singly, to sign for us in our names in the capacities
indicated below, any amendments to this Registration Statement on Form S-3
(including post-effective amendments), and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, and generally to do all things in our names and on our
behalf in our capacities as officers and directors to enable PAR Technology
Corporation to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission, hereby
ratifying and confirming our signatures as they may be signed by our said
attorneys, or any of them, to said Registration Statement and all amendments
thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-3 has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
Name Capacity Date
/s/ John W. Sammon, Jr. Chairman of the Board, December 24, 2002
--------------------------- President and
John W. Sammon, Jr. Director (Principal Executive
Officer and Director)
/s/ Charles A. Constantino Executive Vice President December 24, 2002
--------------------------- and Director
Charles A. Constantino
/s/ James A. Simms Director December 24, 2002
---------------------------
James A. Simms
/s/ Ronald J. Casciano Vice President, December 24, 2002
--------------------------- Chief Financial Officer,
Ronald J. Casciano and Treasurer (Principal
Financial Officer and
Principal Accounting Officer)
4
INDEX TO EXHIBITS
4.1 Certificate of Incorporation, as amended, of the Company (filed as Exhibit
3.1 to the Company's Registration Statement on Form S-2 (No. 333-04077) and
incorporated herein by reference).
4.2 Certificate of Amendment to the Certificate of Incorporation of the Company
(filed as Exhibit 3.2 to the Company's Registration Statement on Form S-2
(No. 333-04077) and incorporated herein by reference).
4.3 By-laws of the Registrant, as amended (filed as Exhibit 3.3 to the
Company's Registration Statement on Form S-2 (No. 333-04077) and
incorporated herein by reference).
4.4 Specimen certificate for shares of the Company's Common Stock (as filed as
Exhibit 4 to the Company's Registration Statement on Form S-2 (No.
333-04077) and incorporated herein by reference).
4.5 Form of Stock Purchase Agreement by and among the Company, J. Whitney Haney
and each of the Investors listed on Schedule I thereto (filed herewith).
4.6 Registration Rights Agreement, dated as of December 3, 2002, by and among
the Company and the parties named therein (filed herewith).
5.1 Legal Opinion of Testa, Hurwitz & Thibeault, LLP (to be filed pursuant to
an amendment hereto).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1) (to be
filed pursuant to an amendment hereto).
24.1 Power of Attorney (included as part of the signature page to this
Registration Statement).
5
EXHIBIT 4.5
Form of Stock Purchase Agreement by and among the Company,
J. Whitney Haney and each of the Investors
PAR TECHNOLOGY CORPORATION
INSTRUCTION SHEET FOR INVESTOR
(to be read in conjunction with the entire Stock Purchase Agreement and Investor
Questionnaire attached hereto, and all capitalized terms used but not defined
herein shall have the respective meaning assigned to each such term in the Stock
Purchase Agreement)
A. Complete the following items in the Stock Purchase Agreement and in the
Investor Questionnaire:
1. Provide the information regarding the Investor requested on the
signature page to the Stock Purchase Agreement and in the Investor
Questionnaire. The Stock Purchase Agreement must be executed by an
individual authorized to bind the Investor.
2. Return the signed Stock Purchase Agreement and Investor Questionnaire
to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Kathy A. Fields, Esq.
Phone: (617) 248-7306
Fax: (617) 790-0097
And fax copies to:
PAR Technology Corporation
Attn: Ronald J. Casciano, VP, CFO & Treasurer
Phone: (315) 738-0600 x273
Fax: (315) 738-0411
An executed original Stock Purchase Agreement and Investor Questionnaire or
a fax thereof must be received by 5:00 p.m. Boston time on December 3,
2002.
B. Instructions regarding the transfer of funds for the purchase of Shares
will be faxed to the Investor at a later date.
C. To resell the Shares after the Registration Statement covering the Shares
is effective:
1. Provided that a suspension of the Registration Statement is not then
in effect pursuant to the terms of the Stock Purchase Agreement, the
Investor may sell Shares under the Registration Statement subject to
the notification provisions in the Stock Purchase Agreement; provided
that the Investor arranges for delivery of a current prospectus to the
transferee. Upon receipt of a request therefor, the Company has agreed
to provide an adequate number of current prospectuses to each Investor
and to supply copies to any other parties requiring such prospectuses.
2. The Investor must also deliver to the Company's transfer agent, with a
copy to the Company, a Certificate of Subsequent Sale in the form
attached to the Stock Purchase Agreement, so that the Shares may be
properly transferred.
E-1
STOCK PURCHASE AGREEMENT
PAR Technology Corporation
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
J. Whitney Haney
c/o PAR Technology Corporation
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
Ladies and Gentlemen:
The undersigned, _________________________________(the "Investor"), hereby
confirms its agreement with you as follows:
1. This Stock Purchase Agreement (the "Agreement") is made as of December 3,
2002 between PAR Technology Corporation, a Delaware corporation (the
"Company"), J. Whitney Haney (the "Selling Stockholder" and, together with
the Company, the "Sellers") and the Investor.
2. The Company has authorized the sale of up to 400,000 shares (the "Company
Shares") of common stock of the Company, $0.02 par value per share (the
"Common Stock"), subject to adjustment by the Company's Board of Directors,
to certain investors in a private placement (the "Company Offering"). The
Selling Stockholder proposes to sell up to 125,000 shares of Common Stock
(the "Selling Stockholder Shares" and, together with the Company Shares,
the "Shares") to certain investors in a private placement (the "Selling
Stockholder Offering" and, together with the Company Offering, the
"Offering").
3. The Company, the Selling Stockholder and the Investor agree that the
Investor will purchase from the Company and, if applicable, the Selling
Stockholder, and the Company and the Selling Stockholder will issue or
transfer, as applicable, and sell to the Investor an aggregate of
___________ Shares, for a purchase price of $5.30 per share, or an
aggregate purchase price of $_______________, pursuant to the Terms and
Conditions for Purchase of Shares attached hereto as Annex I and
incorporated herein by reference as if fully set forth herein. Unless
otherwise requested by the Investor, certificates representing the Shares
purchased by the Investor will be registered in the Investor's name and
address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years
with the Company or persons known to it to be affiliates of the Company,
(b) neither it, nor any group of which it is a member or to which it is
related, beneficially owns (including the right to acquire or vote) any
securities of the Company and (c) it has no direct or indirect affiliation
or association with any NASD member as of the date hereof. Exceptions:
___________________________________________________________________________
__________________________________________________________________________.
(If no exceptions, write "none." If left blank, response will be deemed to
be "none.")
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose. By executing
this Agreement, you acknowledge that the Company may use the information in
paragraph 4 above and the name and address information below in preparation of
the Registration Statement (as defined in Annex I).
AGREED AND ACCEPTED:
PAR TECHNOLOGY CORPORATION "INVESTOR"
By: By: __________________________________
Name:
Title: Print Name:
Title:
Address:
J. Whitney Haney
Tax ID No.:
Contact name:
Telephone:
Name in which Shares
should be registered
(if different):_______________________
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. Authorization and Sale of the Shares. Subject to the terms and conditions
of this Agreement, the Company has authorized the sale of up to 400,000
Shares. Subject to the terms and conditions of this Agreement, the Selling
Stockholder proposes to sell up to 125,000 Shares. Each of the Company and
the Selling Stockholder reserves the right to increase or decrease this
number. The Shares to be purchased by the Investors may be sold to the
Investors by either the Company or the Selling Stockholder, or a
combination thereof, as determined by the Company and the Selling
Stockholder.
2. Agreement to Sell and Purchase the Shares; Subscription Date.
2.1. At the Closing (as defined in Section 3), the Company and, if
applicable, the Selling Stockholder will sell to the Investor, and the
Investor will purchase from the Company and, if applicable, the
Selling Stockholder, upon the terms and conditions hereinafter set
forth, the number of Shares set forth in Section 3 of the Stock
Purchase Agreement to which these Terms and Conditions are attached at
the purchase price set forth thereon.
2.2. The Sellers are entering into a substantially similar form of Stock
Purchase Agreement, including these Terms and Conditions, with the
other investors listed along with the Investor on Schedule I hereto
(the "Other Investors") and expects to complete sales of Shares to
them. (The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the "Investors," and the Stock Purchase
Agreement to which these Terms and Conditions are attached and the
Stock Purchase Agreements executed by the Other Investors are
hereinafter sometimes collectively referred to as the "Agreements.")
2.3. The Investor acknowledges that the Company and/or the Selling
Stockholder, as applicable, intends to pay First Albany Corporation
(in its capacity as Placement Agent for the Shares, the "Placement
Agent") a fee with respect to the sales of Shares to the Investors,
such fee not to exceed $87,500 in the aggregate plus any related fees
and expenses incurred by the Placement Agent in connection with such
sales.
3. Delivery of the Shares at Closing. The completion of the purchase and sale
of the Shares (the "Closing") shall occur on December 3, 2002 (the "Closing
Date"), at the offices of Testa, Hurwitz & Thibeault, LLP, the Company's
counsel. At the Closing, the Sellers shall deliver to the Investor one or
more stock certificates representing, in the aggregate, the number of
Shares set forth in Section 3 of the Stock Purchase Agreement, each such
stock certificate to be registered in the name of the Investor or, if so
indicated on the signature page of the Stock Purchase Agreement, in the
name of a nominee designated by the Investor.
The Seller's obligation to issue or transfer, as applicable, the Shares to
the Investor shall be subject to the following conditions, any one or more of
which may be waived by the Sellers: (a) receipt by the Company and/or the
Selling Stockholder, or the nominee designated by the Company and/or the Selling
Stockholder, as applicable, of a certified or official bank check or wire
transfer of funds in the full amount of the purchase price for the Shares being
purchased hereunder as set forth in Section 3 of the Stock Purchase Agreement;
and (b) the accuracy of the representations and warranties made by the Investors
and the fulfillment of those undertakings of the Investors to be fulfilled prior
to the Closing.
The Investor's obligation to purchase the Shares shall be subject to the
following conditions, any one or more of which may be waived by the Investor:
(a) the representations and warranties of the Company and/or the Selling
Stockholder, as applicable, set forth herein shall be true and complete as of
the Closing Date in all material respects; (b) the Investor shall have received
such documents as such Investor shall reasonably have requested, including an
opinion of Company counsel as to the matters set forth in Section 4.2, and as to
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act"), of the sale of the Shares; (c) the Company shall
not have experienced a material adverse change in its financial condition,
results of operations, or prospects; (d) the completion of the purchase and sale
under the Agreements with other Investors such that the Offering yields gross
proceeds to the Company of $2,000,000; (e) the registration rights agreement in
the form previously agreed upon by the Company and the Investors (the
"Registration Rights Agreement") shall have been fully executed and delivered to
the Investor by the Company; and (f) the Company shall have delivered to
Investor a certificate of its Chief Executive Officer dated as of the Closing
Date certifying (i) that the representations and warranties of the Company
remain true and complete as of the Closing, (ii) that the Company has performed
all covenants in the Agreements to be performed by it on or prior to Closing,
(iii) setting forth in detail the capitalization of the Company as of November
27, 2002, (iv) that the Company has not experienced a Material Adverse Effect,
(v) that the Common Stock has not been suspended from trading on the NYSE, and
(vi) except for that certain letter from the NYSE dated April 27, 2001, the
Company has not received notice from the NYSE or the SEC that it has failed to
comply with any material rule or agreement applicable to it.
4. Representations, Warranties and Covenants of the Company. The Company
hereby represents and warrants to, and covenants with, the Investor, as
follows:
4.1. Organization. The Company is duly organized and validly existing in
good standing under the laws of the jurisdiction of its organization.
Each of the Company and its subsidiaries listed on Exhibit 22 to its
Annual Report on Form 10-K for the year ended December 31, 2001 (the
"Subsidiaries") has full power and authority to own, operate and
occupy its properties and to conduct its business as presently
conducted and as described in Company's Annual Report on Form 10-K for
the year ended December 31, 2001 and Quarterly Report on Form 10-Q
(the "Form 10-Q") for the quarter ended September 30, 2002, including
all exhibits, supplements and amendments thereto (the "SEC Filings"),
and is registered or qualified to do business and in good standing in
each jurisdiction in which the failure to be so qualified would have a
material adverse effect upon the business, financial condition,
properties, operations or prospects of the Company and its
Subsidiaries, considered as one enterprise ("Material Adverse
Effect"), and to the Company's knowledge, no proceeding has been
instituted in any such jurisdiction, revoking, limiting or curtailing,
or seeking to revoke, limit or curtail, such power and authority or
qualification.
4.2. Due Authorization and Valid Issuance. The Company has all requisite
power and authority to execute, deliver and perform its obligations
under the Agreements, and the Agreements have been duly authorized and
validly executed and delivered by the Company and constitute legal,
valid and binding agreements of the Company enforceable against the
Company in accordance with their terms, except as rights to indemnity
and contribution may be limited by state or federal securities laws or
the public policy underlying such laws, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws
affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The Shares being purchased by the
Investor from the Company hereunder will be duly authorized and
validly issued and, upon issuance pursuant to the terms hereof,
fully-paid and nonassessable.
4.3. Non-Contravention. The execution and delivery of the Agreements by the
Company, the issuance and sale of the Shares to be sold by the Company
under the Agreements, the fulfillment of the terms of the Agreements
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby will not (A) conflict with or
constitute a violation of, or default (with the passage of time or
otherwise) under (i) any material bond, debenture, note or other
evidence of indebtedness, lease, contract, indenture, mortgage, deed
of trust, loan agreement, joint venture or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which it or any of its Subsidiaries or their respective properties are
bound, (ii) the charter, by-laws or other organizational documents of
the Company or any Subsidiary, or (iii) any material law,
administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the
Company or any Subsidiary or their respective properties, or (B)
result in the creation or imposition of any lien, encumbrance, claim,
security interest or restriction whatsoever upon any of the material
properties or assets of the Company or any Subsidiary or an
acceleration of indebtedness pursuant to any obligation, agreement or
condition contained in any material bond, debenture, note or any other
evidence of indebtedness or any material indenture, mortgage, deed of
trust or any other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them is bound or to which any
of the property or assets of the Company or any Subsidiary is subject.
No consent, approval, authorization or other order of, or
registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body in the United States
or any other person is required for the execution and delivery of the
Agreements by the Company and the valid issuance and sale of the
Shares to be sold by the Company pursuant to the Agreements, other
than such as have been made or obtained, and except for any
post-closing securities filings or notifications required to be made
under federal or state securities laws.
4.4. Capitalization. The capitalization of the Company as of September 30,
2002 is as set forth in the SEC Filings. The Company has not issued
any capital stock since that date other than pursuant to (i) employee
benefit plans disclosed in the SEC Filings, or (ii) outstanding
warrants, options or other securities disclosed in the SEC Filings.
The Shares to be sold by the Company pursuant to the Agreements have
been duly authorized and issued, and when issued and paid for in
accordance with the terms of the Agreements, will be fully paid and
nonassessable. Except (i) as set forth in the SEC Filings and (ii)
except for the Company granting to employees, directors, officers,
advisors or consultants of the Company rights, warrants or options to
acquire, or instruments convertible into or exchangeable for,
authorized but unissued shares of Common Stock from a pool of shares
of Common Stock reserved by the Company for such purpose and reported
in the SEC Filings, there are no outstanding rights (including,
without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any
unissued shares of capital stock or other equity interest in the
Company or any Subsidiary, or any contract, commitment, agreement,
understanding or arrangement of any kind to which the Company is a
party or of which the Company has knowledge and relating to the
issuance or sale of any capital stock of the Company or any
Subsidiary, any such convertible or exchangeable securities or any
such rights, warrants or options. Without limiting the foregoing, no
preemptive right, co-sale right, right of first refusal, registration
right (except as set forth herein), or other similar right exists with
respect to the Shares to be issued and sold by the Company or the
issuance and sale thereof. No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is
required for the issuance and sale of the Shares by the Company.
Except as disclosed in the SEC Filings, there are no stockholders'
agreements, voting agreements or other similar agreements with respect
to the Common Stock to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company's
stockholders.
4.5. Legal Proceedings. There is no material legal or governmental
proceeding pending or, to the knowledge of the Company, threatened to
which the Company or any Subsidiary is or may be a party or of which
the business or property of the Company or any Subsidiary is subject.
4.6. No Violations. Neither the Company nor any Subsidiary is in violation
of its charter, bylaws, or other organizational document, or in
violation of any material law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or
authority applicable to the Company or any Subsidiary, or in default
(and there exists no condition which, with the passage of time or
otherwise, would constitute a default) in any respect in the
performance of any material bond, debenture, note or any other
evidence of indebtedness in any indenture, mortgage, deed of trust or
any other material agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is
bound or by which the properties of the Company or any Subsidiary are
bound.
4.7. Intellectual Property. (i) Each of the Company and its Subsidiaries
owns or possesses sufficient rights to use all patents, patent rights,
trademarks, copyrights, licenses, inventions, trade secrets, trade
names and know-how (collectively, "Intellectual Property") that are
necessary for the conduct of its business as now conducted, and (ii)
neither the Company nor any of its Subsidiaries, to its knowledge, is
infringing, or has received any notice of or has any knowledge of any
asserted infringement by the Company or any of its Subsidiaries of,
any rights of a third party with respect to any Intellectual Property.
4.8. Financial Statements. The financial statements of the Company and the
related notes contained in the SEC Filings present fairly, in
accordance with generally accepted accounting principles, the
consolidated financial position of the Company and its Subsidiaries as
of the dates indicated, and the results of its operations and cash
flows for the periods therein specified. Such financial statements
(including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as disclosed in the
SEC Filings. The other financial information contained in the SEC
Filings has been prepared on a basis consistent with the financial
statements of the Company.
4.9. No Material Adverse Change. Except as otherwise disclosed in the SEC
Filings, since December 31, 2001, the Company has not experienced or
suffered an event or condition that has caused a Material Adverse
Effect.
4.10.Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") during the 12
months preceding the date of this Agreement (the "SEC Documents"). The
SEC Documents and all other materials filed with the SEC during such
period complied in all material respects with the SEC's requirements
as of their respective filing dates, and the information contained
therein as of the date thereof did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading. The Company
meets the requirements for filing Form S-3 for the resale of the
Shares by the Investors and will use its best efforts to maintain S-3
status with the SEC during the Registration Period (as defined below).
4.11.No Manipulation of Stock. The Company has not taken and will not, in
violation of applicable law, take, any action designed to or that
might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale
or resale of the Shares.
4.12.NYSE. The Company's Common Stock is registered pursuant to Section
12(g) of the Exchange Act and is listed on the New York Stock Exchange
(the "NYSE"), and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or de-listing the Common Stock
from the NYSE. Upon the Closing, the Company and the Common Stock meet
the criteria for continued listing and trading on the NYSE.
4.13.Listing of the Shares. The Shares being sold by the Company to the
Investor pursuant hereto are being issued out of the Company's
treasury. Accordingly, the Company is not required to file any
additional applications, or pay any additional fees, for the listing
of the Shares on the NYSE.
4.14.Insurance. The Company maintains and will continue to maintain
insurance against loss or damage by fire or other casualty and such
other insurance, including, but not limited to, product liability
insurance, in such amounts and covering such risks as is reasonably
adequate consistent with industry practice for the conduct of its
business and the value of its properties, all of which insurance is in
full force and effect.
4.15.Environmental Matters. The Company and its Subsidiaries (i) are in
compliance in all material respects with any and all applicable and
material foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all material permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any material
permit, license or approval.
4.16.Employment Matters. The Company is in compliance with all material
federal, state, local and foreign laws and regulations respecting
employment and employment practices, terms and conditions of
employment and wages and hours. The Company is not bound by or subject
to (and none of its assets or properties is bound by or subject to)
any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or,
to the Company's knowledge, has sought to represent any of the
employees, representatives or agents of the Company. There is no
strike or other material labor dispute involving the Company pending,
or to the Company's knowledge, threatened, nor is the Company aware of
any labor organization activity involving its employees, and the
Company's relations with its employees are satisfactory. The Company
is not aware that any officer or key employee, or that any group of
officers or key employees, intends to terminate their employment with
the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing.
4.17.Tax Matters. The Company has filed all material federal, state and
local income and franchise and other tax returns required to be filed
and has paid or accrued all taxes due in accordance therewith; no
material tax deficiency has been determined adversely to the Company,
nor does the Company have any knowledge of any material tax
deficiency.
4.18.No Conflict of Interest. The Company is not indebted, directly or
indirectly, to any of its officers or directors or to their respective
spouses or children, in any amount whatsoever other than in connection
with expenses or advances of expenses incurred in the ordinary course
of business or relocation expenses of employees. Except as set forth
in the SEC Documents, none of the Company's officers, directors or
employees, or any members of their immediate families, are directly,
or indirectly, indebted to the Company or, to the best of the
Company's knowledge, have any direct or indirect ownership interest in
any entity with which the Company is affiliated or with which the
Company has a business relationship, or any entity which competes with
the Company, except that officers, directors, employees and/or
stockholders of the Company may own stock in (but not exceeding five
percent (5%) of the outstanding capital stock of) any publicly traded
company that may compete with the Company. Except as set forth in the
SEC Documents, none of the Company's officers, directors or employees
or any members of their immediate families are, directly or
indirectly, interested in any material contract with the Company
(other than for services as employees, officers or directors),
including without limitation any contract, agreement or arrangement
providing for the furnishing of services to or from such person,
providing for rental of real property to or from such person, or
otherwise providing for payments to or from such person. The Company
is not a guarantor or indemnitor of any indebtedness of any other
person or entity.
4.19.Investment Company. The Company is not an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and
the rules and regulations of the SEC thereunder and will not become an
investment company upon the receipt and application of the net
proceeds of this offering.
4.20.No Registration. Assuming the accuracy of the representations and
warranties made by, and compliance with the covenants of, the
Investors in Section 6 of the Agreements, no registration of the
Shares under the Securities Act is required in connection with the
offer and sale of the Shares by the Company to the Investors as
contemplated by the Agreements.
4.21.Internal Accounting Controls. To the knowledge of the Company's
certifying officers, the Company's financial statements included in
the Form 10-Q fairly present in all material respects the financial
condition, results of operations and cash flows of the Company as of,
and for, the period presented in the Form 10-Q. The Company's
certifying officers are responsible for establishing disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the Company and they have (a) designed such disclosure
controls and procedures to ensure that material information relating
to the Company, including the Subsidiaries, is made known to the
certifying officers by others within those entities, particularly
during the period in which the Form 10-Q is being prepared; (b)
evaluated the effectiveness of the Company's disclosure controls and
procedures as of a date within ninety (90) days prior to the filing
date of the Form 10-Q (the "Evaluation Date"); and (c) presented in
the Form 10-Q the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.
4.22.Form D. The Company agrees to file one or more Forms D with respect to
the Shares on a timely basis as required under Regulation D under the
Securities Act to claim the exemption provided by Rule 506 of
Regulation D and to, upon request, provide a copy thereof to the
Investors and their counsel.
4.23.Use of Proceeds. The Company will use the net proceeds from the sale
of the Shares as working capital.
4.24. Integration and Future Financings
a. The Company shall not, and shall use its best efforts to ensure
that no affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that
would be integrated with the Offering in a manner that would
require the registration under the Securities Act of the sale of
the Securities to the Purchasers or that would be integrated with
the offer or sale of the Securities for purposes of the rules and
regulations of the NYSE.
b. The Company shall not offer, sell, contract to sell or issue (or
engage any person to assist the Company in taking any such
action) any equity securities or securities convertible into,
exchangeable for or otherwise entitling the holder to acquire,
any Common Stock at a price below the market price of the Common
Stock during the period from the date of this Agreement to the
effective date of the Registration Statement; provided, however,
that nothing in this Section 4.24(b) shall prohibit the Company
from issuing securities (i) to employees, directors, officers,
advisors or consultants of the Company; (ii) upon exercise of
conversion, exchange, purchase or similar rights issued, granted
or given by the Company and outstanding as of the date of this
Agreement; (iii) pursuant to a public offering underwritten on a
firm commitment basis registered under the Securities Act; (iv)
for the purpose of funding the acquisition of securities or
assets of any entity in a single transaction or a series of
related transactions; or (v) pursuant to a strategic partnership
or alliance agreement, loan agreement, equipment lease or similar
commercial agreement (including licensing and similar
arrangements).
5. Representations, Warranties and Covenants of the Selling Stockholder. If
applicable, the Selling Stockholder hereby represents and warrants to, and
covenants with, the Investor as follows:
5.1 Good and Valid Title. The Selling Stockholder has, and immediately
prior to the Closing will have, good and valid title to the Shares, if
any, to be sold by the Selling Stockholder hereunder at the Closing,
free and clear of all liens, encumbrances, equities or claims; and
upon delivery of such Shares and payment therefor pursuant hereto,
good and valid title to such Shares free and clear of all liens,
encumbrances, equities or claims, will pass to the Investor.
5.2 Due Authorization; Non-Contravention. The Selling Stockholder has all
requisite power and authority to enter into this Agreement. The
execution, delivery and performance of this Agreement by the Selling
Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Selling
Stockholder is a party or by which the Selling Stockholder is bound or
to which any property or assets of the Selling Stockholder is subject,
nor will such actions result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Selling Stockholder or the property or
assets of the Selling Stockholder. No consent, approval, authorization
or order of or registration, qualification or filing with, any such
court or governmental agency or body is required for the execution and
delivery of this Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby, other than such as have been made or obtained,
and except for any post-closing securities filings or notifications
required to be made under federal or state securities laws.
5.3 Company Information. The Selling Stockholder has no reason to believe
that the representations and warranties of the Company contained in
Section 4 hereof are not materially true and correct. The Selling
Stockholder is familiar with the SEC Filings, and, except as otherwise
disclosed in the SEC Filings, to the knowledge of the Selling
Stockholder, the Company has not experienced, since December 31, 2001,
an event or condition which has caused a Material Adverse Effect.
5.4 No Manipulation of Stock. The Selling Stockholder has not taken and
will not take, in violation of applicable law, any action designed to
or that might reasonably be expected to cause or result in the
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
6. Representations, Warranties and Covenants of the Investor.
6.1 The Investor represents and warrants to, and covenants with, each of
the Company, and the Selling Stockholder, as applicable, that: (i) the
Investor is an "accredited investor" as defined in Regulation D under
the Securities Act and the Investor is also knowledgeable,
sophisticated and experienced in making, and is qualified to make
decisions with respect to, investments in shares presenting an
investment decision like that involved in the purchase of the Shares,
including investments in securities issued by the Company and
investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making
an informed decision to purchase the Shares; (ii) the Investor is
acquiring the number of Shares set forth in Section 3 of the Stock
Purchase Agreement in the ordinary course of its business and for its
own account for investment only and with no present intention of
distributing any of such Shares or any arrangement or understanding
with any other persons regarding the distribution of such Shares;
(iii) the Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the
Shares except in compliance with the Securities Act, applicable state
securities laws and the respective rules and regulations promulgated
thereunder; (iv) the Investor has answered all questions on the
signature page hereto for use in preparation of the Registration
Statement (as defined in Section 8.1(a)) and the answers thereto are
true and complete as of the date hereof and will be true and complete
as of the Closing Date; (v) the Investor will notify the Company
immediately of any change in any of such information until such time
as the Investor has sold all of its Shares or until the Company is no
longer required to keep the Registration Statement effective; (vi) the
Investor and the Investor's representatives, if any, have been solely
responsible for the Investor's own "due diligence" investigation of
the Company and its management and business, for its own analysis of
the merits and risks of this investment, and for the Investor's own
analysis of the fairness and desirability of the terms of the
investment; and (vii) the Investor has, in connection with its
decision to purchase the number of Shares set forth in Section 3 of
the Stock Purchase Agreement, relied only upon the SEC Filings and the
representations and warranties of the Company and the Selling
Stockholder, as applicable, contained herein. The Investor understands
that its acquisition of the Shares has not been registered under the
Securities Act or registered or qualified under any state securities
law in reliance on specific exemptions therefrom, which exemptions may
depend upon, among other things, the bona fide nature of the
Investor's investment intent as expressed herein. The Investor has
completed or caused to be completed and delivered to the Company and
the Selling Stockholder, as applicable, the Investor Questionnaire
attached hereto as Exhibit A, which completed questionnaire is true,
correct and complete in all material respects.
6.2 The Investor acknowledges, represents and agrees that no action has
been or will be taken in any jurisdiction outside the United States by
the Company that would permit an offering of the Shares, or possession
or distribution of the offering materials in connection with the issue
of the Shares, if any, in any jurisdiction outside the United States
where legal action by the Company for that purpose is required. The
Investor will comply with all applicable laws and regulations in each
foreign jurisdiction, if any, in which it purchases, offers, sells or
delivers Shares or has in its possession or distributes any offering
material, in all cases at its own expense.
6.3 The Investor hereby covenants with the Company not to make any sale of
the Shares without complying with the provisions of this Agreement and
without causing the prospectus delivery requirement under the
Securities Act to be satisfied, and the Investor acknowledges that the
certificates evidencing the Shares will be imprinted with a legend
that prohibits their transfer except in accordance therewith. The
Investor acknowledges that there may occasionally be times when the
Company determines that it must suspend the use of the prospectus
forming a part of the Registration Statement, as set forth in Section
8.2(c).
6.4 The Investor further represents and warrants to, and covenants with,
the Company and the Selling Stockholder, as applicable, that (i) the
Investor has full right, power, authority and capacity to enter into
this Agreement and to consummate the transactions contemplated hereby
and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement, and (ii) this Agreement
constitutes a valid and binding obligation of the Investor enforceable
against the Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may
be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
except as the indemnification and contribution agreements of the
Investor herein may be legally unenforceable.
6.5 The Investor will not, prior to the effectiveness of the Registration
Statement, if then prohibited by law or regulation, sell, offer to
sell, solicit offers to buy, dispose of, loan, pledge or grant any
right with respect to (collectively, a "Disposition") the Shares, nor
will the Investor engage in any hedging or other transaction which is
designed to or could reasonably be expected to lead to or result in a
Disposition of Shares by the Investor or any person or entity. Such
prohibited hedging or other transaction would include, without
limitation, effecting any short sale or having in effect a short
position (whether or not such sale or position is "against the box"
and regardless of when such position was entered into) or any
purchase, sale or grant of any right (including, without limitation,
any put or call option) with respect to the Shares or with respect to
any security (other than a broad-based market basket or index) that
includes, relates or derived any significant part of its value from
the Shares.
6.6 The Investor understands that nothing in the SEC Filings, this
Agreement or any other materials presented to the Investor in
connection with the purchase and sale of the Shares constitutes legal,
tax or investment advice. The Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Shares.
7. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all covenants,
agreements, representations and warranties made herein by the Company, the
Selling Stockholder and the Investor shall survive the execution of this
Agreement, the delivery to the Investor of the Shares being purchased and
the payment therefor.
8. Registration of the Shares; Compliance with the Securities Act.
8.1 Registration Procedures and Other Matters. The Company shall:
(a) subject to receipt of necessary information from the Investors
after prompt request from the Company to the Investors to provide
such information, prepare and file with the Securities and
Exchange Commission (the "SEC"), within thirty (30) days after
the Closing Date, a registration statement on Form S-3 (the
"Registration Statement") to enable the resale of the Shares by
the Investors from time to time;
(b) use its best efforts, subject to receipt of necessary information
from the Investors after request from the Company to the
Investors to provide such information, to cause the Registration
Statement to become effective as soon as practicable, but in no
event more than ninety (90) days, after the Registration
Statement is filed by the Company, and provide prompt notice to
the Investor on the day the Registration Statement becomes
effective or as soon thereafter as feasible;
(c) use its best efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the
prospectus used in connection therewith as may be necessary to
keep the Registration Statement current and effective for a
period not to exceed the earlier of (i) the second anniversary of
the Closing Date, (ii) the first date on which the Investor may
sell all Shares then held by the Investor within a ninety (90)
day period pursuant to Rule 144 under the Securities Act or any
other rule of similar effect, or (iii) such time as all Shares
purchased by the Investor pursuant to this Agreement have been
sold (the "Registration Period");
(d) furnish to the Investor with respect to the Shares registered
under the Registration Statement such number of copies of the
Registration Statement, prospectuses and preliminary prospectuses
in conformity with the requirements of the Securities Act and
such other documents as the Investor may reasonably request, in
order to facilitate the public sale or other disposition of all
or any of the Shares by the Investor; provided, however, that the
obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to the Investor shall be subject to the
receipt by the Company of reasonable assurances from the Investor
that the Investor will comply with the applicable provisions of
the Securities Act and of such other securities or blue sky laws
as may be applicable in connection with any use of such
prospectuses or preliminary prospectuses;
(e) furnish the Investor a confirmation that at the time of
effectiveness the Registration Statement does not contain an
untrue statement of a material fact or omit to state a material
fact required to make the statements therein, in light of the
circumstances they were made, not misleading;
(f) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Investor;
provided, however, that the Company shall not be required to
qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so
consented;
(g) bear all expenses in connection with the procedures in paragraph
(a) through (e) of this Section 8.1 and the registration of the
Shares pursuant to the Registration Statement; other than fees
and expenses, if any, of counsel or other advisors to the
Investor or underwriting discounts, brokerage fees and
commissions incurred by the Investor; and
(h) advise the Investor promptly after it shall receive notice or
obtain knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration
Statement or of the initiation or threat of any proceeding for
that purpose; and it will promptly use its best efforts to
prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order
should be issued and shall promptly notify the Investor of any
such withdrawal. Notwithstanding anything to the contrary herein,
the Registration Statement shall cover only the Shares.
8.2 Transfer of Shares After Registration; Suspension.
(a) The Investor agrees that it will not effect any Disposition of
the Shares or its right to purchase the Shares that would
constitute a sale within the meaning of the Securities Act except
as contemplated in the Registration Statement referred to in
Section 8.1 and as described below or as otherwise permitted by
law, and that it will promptly notify the Company of any changes
in the information set forth in the Registration Statement
regarding the Investor or its plan of distribution.
(b) Except in the event that paragraph (c) below applies, the Company
shall (i) if deemed necessary by the Company, prepare and file
from time to time with the SEC a post-effective amendment to the
Registration Statement or a supplement to the related prospectus
or a supplement or amendment to any document incorporated therein
by reference or file any other required document so that such
Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to purchasers of
the Shares being sold thereunder, such prospectus will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading; (ii) provide the Investor copies
of any documents filed pursuant to Section 8.2(b)(i); and
(iii) inform each Investor that the Company has complied with its
obligations in Section 8.2(b)(i) (or that, if the Company has
filed a post-effective amendment to the Registration Statement
which has not yet been declared effective, the Company will
notify the Investor to that effect, will use its best efforts to
secure the effectiveness of such post-effective amendment as
promptly as possible and will promptly notify the Investor
pursuant to Section 8.2(b)(i) hereof when the amendment has
become effective).
(c) Subject to paragraph (d) below, in the event (i) of any request
by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement
for amendments or supplements to a Registration Statement or
related prospectus or for additional information; (ii) of the
issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for
that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification
or exemption from qualification of any of the Shares for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose; or (iv) of any event or circumstance
which, upon the advice of its counsel, would necessitate the
making of any changes in the Registration Statement or
prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the
Registration Statement, it will not contain any untrue statement
of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the prospectus,
it will not contain any untrue statement of a material fact or
any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
then the Company shall deliver a certificate in writing to the
Investor (the "Suspension Notice") to the effect of the foregoing
and, upon receipt of such Suspension Notice, the Investor will
refrain from selling any Shares pursuant to the Registration
Statement (a "Suspension") until the Investor's receipt of copies
of a supplemented or amended prospectus prepared and filed by the
Company, or until it is advised in writing by the Company that
the current prospectus may be used, and has received copies of
any additional or supplemental filings that are incorporated or
deemed incorporated by reference in any such prospectus. In the
event of any Suspension, the Company will use its best efforts to
cause the use of the prospectus so suspended to be resumed as
soon as practicable within 20 business days after the delivery of
a Suspension Notice to the Investor.
(d) Notwithstanding the foregoing paragraphs of this Section 8.2, the
Investor shall not be prohibited from selling Shares under the
Registration Statement as a result of any Suspension (i) on more
than two occasions in any twelve-month period, (ii) of a duration
of more than 30 business days or (iii) commencing within
30 business days of the end of any prior Suspension (unless the
second Suspension is caused by a different and unrelated event or
events than that which caused the initial Suspension), unless, in
the good faith judgment of the Company's Board of Directors, upon
advice of counsel, the sale of Shares under the Registration
Statement in reliance on this paragraph 8.2(d) would be
reasonably likely to cause a violation of the Securities Act or
the Exchange Act and result in liability to the Company.
(e) Provided that a Suspension is not then in effect, the Investor
may sell Shares under the Registration Statement, provided that
it arranges for delivery of a current prospectus to the
transferee of such Shares.
(f) In the event of a sale of Shares by the Investor pursuant to the
Registration Statement, the Investor must also deliver to the
Company's transfer agent, with a copy to the Company, a completed
Certificate of Subsequent Sale substantially in the form attached
hereto as Exhibit A to Annex II, so that the Shares may be
properly transferred.
8.3 Indemnification. For the purpose of this Section 8.3:
(i) the term "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 8.1; and
(ii) the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state
in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless the Investor
(and each officer, director or controlling person of the
Investor) from and against any losses, claims, damages or
liabilities to which the Investor may become subject (under the
Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon (i) any untrue statement
of a material fact contained in the Registration Statement, (ii)
any failure by the Company to fulfill any undertaking included in
the Registration Statement, or (iii) a breach of any
representation, warranty or covenant made by the Company in this
Agreement, and the Company will reimburse the Investor for any
reasonable legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action,
proceeding or claim, or preparing to defend any such action,
proceeding or claim, provided, however, that the Company shall
not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, (x)
an untrue statement made in such Registration Statement in
reliance upon and in conformity with information furnished to the
Company by or on behalf of the Investor specifically for use in
the preparation of the Registration Statement, (y) the failure of
the Investor to comply with its covenants and agreements
contained in Section 8.2 hereof respecting sale of the Shares, or
(z) any statement or omission in any prospectus that is corrected
in any subsequent prospectus that was delivered to the Investor
prior to the pertinent sale or sales by the Investor. The Company
shall reimburse the Investor (or such officer, director or
controlling person) for the amounts provided for herein on demand
as such expenses are incurred.
(b) The Investor agrees to indemnify and hold harmless the Company
(and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of
the Company) and the Selling Stockholder, as applicable, from and
against any losses, claims, damages or liabilities to which the
Company (or any such officer, director or controlling person) or
the Selling Stockholder, as applicable, may become subject (under
the Securities Act or otherwise), insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, (i) any failure by the
Investor to comply with the covenants and agreements contained in
Section 8.2 hereof respecting sale of the Shares, or (ii) any
untrue statement of a material fact contained in the Registration
Statement if such untrue statement was made in reliance upon and
in conformity with information furnished by or on behalf of the
Investor specifically for use in preparation of the Registration
Statement, and the Investor will reimburse the Company (or such
officer, director or controlling person) or the Selling
Stockholder, as applicable, on demand, as the case may be, for
any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or
claim; provided that the Investor's obligation to indemnify the
Company and the Selling Stockholder, as applicable, shall be
limited to the amount received by the Investor from the sale of
the Shares.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant
to this Section 8.3, such indemnified person shall notify the
indemnifying person in writing of such claim or of the
commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which
it may have to any indemnified person under this Section 8.3
(except to the extent that such omission materially and adversely
affects the indemnifying person's ability to defend such action)
or from any liability otherwise than under this Section 8.3.
Subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person, the
indemnifying person shall be entitled to participate therein,
and, to the extent that it shall elect by written notice
delivered to the indemnified person promptly after receiving the
aforesaid notice from such indemnified person, shall be entitled
to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be
liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection
with the defense thereof, provided, however, that if there exists
or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified
person, for the same counsel to represent both the indemnified
person and such indemnifying person or any affiliate or associate
thereof, the indemnified person shall be entitled to retain its
own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the
fees and expenses of more than one separate counsel (together
with appropriate local counsel) for all indemnified parties. In
no event shall any indemnifying person be liable in respect of
any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably
withheld. No indemnifying person shall, without the prior written
consent of the indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and
indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all
liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in this Section 8.3 is
unavailable to or insufficient to hold harmless an indemnified
person under subsection (a) or (b) above in respect of any
losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to therein, then each indemnifying
person shall contribute to the amount paid or payable by such
indemnified person as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as
is appropriate to reflect the relative fault of the Company and
the Selling Stockholder, as applicable, on the one hand and the
Investor, as well as any of the other Investors under such
Registration Statement, on the other in connection with the
statements or omissions or other matters which resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the
untrue statement relates to information supplied by the Company
or the Selling Stockholder, as applicable, on the one hand or
specifically for use in the preparation of the Registration
Statement by the Investor, or any of the other Investors, on the
other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue
statement. The Company and the Investor agree that it would not
be just and equitable if contribution pursuant to this subsection
(d) were determined by pro rata allocation (even if the Investor
and other Investors were treated as one entity for such purpose)
or by any other method of allocation which does not take into
account the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified
person as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified person in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), the
Investor shall not be required to contribute any amount in excess
of the net amount by which the amount received by the Investor
from the sale of the Shares to which such loss relates exceeds
the amount of any damages which such Investor has otherwise been
required to pay by reason of such untrue statement. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Investor's obligations in this
subsection to contribute shall be in proportion to its sale of
Shares to which such loss relates and shall not be joint with any
other Investors.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel
(or waived such right) during the negotiations regarding the
provisions hereof including, without limitation, the provisions
of this Section 8.3, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this
Section 8.3 fairly allocate the risks in light of the ability of
the parties to investigate the Company and its business in order
to assure that adequate disclosure is made in the Registration
Statement as required by the Act and the Exchange Act. The
parties are advised that federal or state public policy as
interpreted by the courts in certain jurisdictions may be
contrary to certain of the provisions of this Section 8.3, and
the parties hereto hereby expressly waive and relinquish any
right or ability to assert such public policy as a defense to a
claim under this Section 8.3 and further agree not to attempt to
assert any such defense.
8.4 Termination of Conditions and Obligations. The conditions precedent
imposed by Section 6 or this Section 8 upon the transferability of the
Shares shall cease and terminate as to any particular number of the
Shares when such Shares shall have been effectively registered under
the Securities Act and sold or otherwise disposed of or at such time
as an opinion of counsel satisfactory to the Company shall have been
rendered to the effect that such conditions are not necessary in order
to comply with the Securities Act.
8.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the
Company will furnish to the Investor upon the Investor's request:
(a) as soon as practicable after it is available, one copy of (i) its
Annual Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally
accepted accounting principles by a national firm of certified
public accountants), (ii) its Annual Report on Form 10-K and
(iii) its Quarterly Reports on Form 10-Q (the foregoing, in each
case, excluding exhibits);
(b) all exhibits excluded by the parenthetical to subparagraph (a) of
this Section 8.5 as filed with the SEC and all other information
that is made available to shareholders; and
(c) an adequate number of copies of the prospectuses to supply to any
other party requiring such prospectuses; and upon the reasonable
request of the Investor, the Company will meet with the Investor
or a representative thereof at the Company's headquarters to
discuss all information relevant for disclosure in the
Registration Statement covering the Shares and will otherwise
cooperate with the Investor if the Investor is conducting an
investigation for the purpose of reducing or eliminating the
Investor's exposure to liability under the Securities Act,
including the reasonable production of information at the
Company's headquarters; provided, however, that the Company shall
not be required to disclose any confidential information to or
meet at its headquarters with the Investor until and unless the
Investor shall have entered into a confidentiality agreement in
form and substance reasonably satisfactory to the Company with
the Company with respect thereto.
8.6 Transfer of Registration Rights. The right to require the Company to
maintain the Registration Statement for the sale of the Shares shall
automatically be assigned to (i) the Listed Transferees and (ii) any
person to whom the Investor transfers twenty percent (20%) or more of
the Shares purchased by the Investor and retained by the Investor
after the transfer to the Listed Transferees.
9. Notices. All notices, requests, consents and other communications hereunder
shall be in writing, shall be mailed (A) if within the United States by
first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile, or (B) if
delivered from outside the United States, by International Federal Express
or facsimile, and shall be deemed given (i) if delivered by first-class
registered or certified airmail, three business days after so mailed,
(ii) if delivered by nationally recognized overnight carrier, one business
day after so mailed, (iii) if delivered by International Federal Express,
two business days after so mailed, (iv) if delivered by facsimile, upon
electronic confirmation of receipt and shall be delivered as addressed as
follows:
(a) if to the Company, to:
PAR Technology Corporation
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
Attention: Ronald J. Casciano, VP, CFO & Treasurer
Fax: 315-738-0411
(b) with a copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Kathy A. Fields, Esq.
Fax: 617-790-0097
(c) if to the Investor, at its address on the signature page hereto,
or at such other address or addresses as may have been furnished
to the Company in writing.
10. Changes. This Agreement may not be modified or amended except pursuant to
an instrument in writing signed by the Company, the Investor and, if
applicable, the Selling Stockholder.
11. Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
12. Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not
in any way be affected or impaired thereby.
13. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, without giving
effect to the principles of conflicts of law.
14. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
15. Rule 144. The Company covenants that it will file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules
and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Investor
holding Shares purchased hereunder made after the first anniversary of the
Closing Date, make publicly available such information as necessary to
permit sales pursuant to Rule 144 under the Securities Act), and it will
take such further action as the Investor may reasonably request, all to the
extent required from time to time to enable the Investor to sell Shares
purchased hereunder without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the request
of the Investor, the Company will deliver to the Investor a written
statement as to whether it has complied with such information and
requirements.
16. Confidential Information. The Investor represents to the Company that, at
all times during the Company's offering of the Shares, the Investor has
maintained in confidence all non-public information regarding the Company
received by the Investor from the Company or its agents, has not traded in
the Company's securities on the basis of any non-public information and
covenants that it will continue to maintain in confidence such information
until such information becomes generally publicly available other than
through a violation of this provision by the Investor or its agents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
Investors
---------
E*Capital Corporation
Gary S. Siperstein and Mynde S. Siperstein JT TEN
S. Harry Siperstein, TTEE of the S. Harry Siperstein Trust, dated 12/13/85, as
amended
Charles H. Tanner, in Contributory IRA
EXHIBIT A
PAR TECHNOLOGY CORPORATION INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To: PAR Technology Corporation
This Investor Questionnaire ("Questionnaire") must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $.02 per share, of PAR Technology Corporation (the
"Securities"). The Securities are being offered and sold by PAR Technology
Corporation (the "Corporation") without registration under the Securities Act of
1933, as amended (the "Act"), and the securities laws of certain states, in
reliance on the exemptions contained in Section 4(2) of the Act and on
Regulation D promulgated thereunder and in reliance on similar exemptions under
applicable state laws. The Corporation must determine that a potential investor
meets certain suitability requirements before offering or selling Securities to
such investor. The purpose of this Questionnaire is to assure the Corporation
that each investor will meet the applicable suitability requirements. The
information supplied by the potential investor will be used in determining
whether such investor meets such criteria, and reliance upon the private
offering exemption from registration is based in part on the information herein
supplied.
This Questionnaire does not constitute an offer to sell or a solicitation
of an offer to buy any security. Except as expressly permitted herein, the
potential investor's answers are to be kept strictly confidential. However, by
signing this Questionnaire the potential investor will be authorizing the
Corporation to provide a completed copy of this Questionnaire to such parties as
the Corporation deems appropriate in order to ensure that the offer and sale of
the Securities will not result in a violation of the Act or the securities laws
of any state and that such investor otherwise satisfies the suitability
standards applicable to purchasers of the Securities. All potential investors
must answer all applicable questions and complete, date and sign this
Questionnaire. Please print or type the responses and attach additional sheets
of paper if necessary to complete the answers to any item.
A. BACKGROUND INFORMATION
Name: _________________________________________________________________________
Business Address: _____________________________________________________________
(Number and Street)
_______________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number:(___)_________________________________________________________
Residence Address: ____________________________________________________________
(Number and Street)
_______________________________________________________________________________
(City) (State) (Zip Code)
Telephone Number:(___)_________________________________________________________
If an individual:
Age: __________ Citizenship: ___________ Where registered to vote: __________
If a corporation, partnership, limited liability company, trust or other entity:
Type of entity: ___________________________________________________________
State of formation: _________________ Date of formation: ________________
Social Security or Taxpayer Identification No. ________________________________
Send all correspondence to (check one):
____ Residence Address ____ Business Address
B. STATUS AS ACCREDITED INVESTOR
The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable):(FN1)
____ (1) a bank as defined in Section 3(a)(2) of the Act, or a savings and loan
association or other institution as defined in Section 3(a)(5)(A) of the
Act whether acting in its individual or fiduciary capacity; a broker or
dealer registered pursuant to Section 15 of the Securities Exchange Act of
1934; an insurance company as defined in Section 2(13) of the Act; an
investment company registered under the Investment Corporation Act of 1940
or a business development company as defined in Section 2(a)(48) of that
Act; a Small Business Investment Corporation licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such plan has
total assets in excess of $5,000,000; an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of 1974 if the
investment decision is made by a plan fiduciary, as defined in
Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with the investment decisions made solely by persons
that are accredited investors;
____ (2) a private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940;
____ (3) an organization described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
Securities offered, with total assets in excess of $5,000,000;
____ (4) a natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of such person's purchase of the
Securities exceeds $1,000,000;
____ (5) a natural person who had an individual income in excess of $200,000, or
joint income with that person's spouse in excess of $300,000, in 2000 and
2001 and has a reasonable expectation of reaching the same income level in
2002;
____ (6) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D; and
____ (7) an entity in which all of the equity owners are accredited investors
(as defined above).
__________________________
(FN1) As used in this Questionnaire, the term "net worth" means the excess
of total assets over total liabilities. In computing net worth for the purpose
of subsection (4), the principal residence of the investor must be valued at
cost, including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor's adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depiction,
contributions to an IRA or KEOGH retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
C. REPRESENTATIONS
The undersigned hereby represents and warrants to the Corporation as
follows:
1. Any purchase of the Securities would be solely for the account of the
undersigned and not for the account of any other person or with a view to
any resale, fractionalization, division, or distribution thereof.
2. The information contained herein is complete and accurate and may be relied
upon by the Corporation, and the undersigned will notify the Corporation
immediately of any material change in any of such information occurring
prior to the closing, if any, with respect to the purchase of Securities by
the undersigned or any co-purchaser.
3. There are no suits, pending litigation, or claims against the undersigned
that could materially affect the net worth of the undersigned as reported
in this Questionnaire.
4. The undersigned acknowledges that there may occasionally be times when the
Corporation determines that it must suspend the use of the prospectus
forming a part of the Registration Statement (as such term is defined in
the Stock Purchase Agreement to which this Questionnaire is attached), as
set forth in Section 8.2(c) of the Stock Purchase Agreement. The
undersigned is aware that, in such event, the Securities will not be
subject to ready liquidation, and that any Securities purchased by the
undersigned would have to be held during such suspension. The overall
commitment of the undersigned to investments which are not readily
marketable is not excessive in view of the undersigned's net worth and
financial circumstances, and any purchase of the Securities will not cause
such commitment to become excessive. The undersigned is able to bear the
economic risk of an investment in the Securities.
5. In addition to reviewing the Corporation's filings with the Securities and
Exchange Commission, the undersigned has carefully considered the potential
risks relating to the Corporation and a purchase of the Securities, and
fully understands that the Securities are speculative investments which
involve a high degree of risk of loss of the undersigned's entire
investment.
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire
this _____ day of _______ ___, 2002, and declares under oath that it is
truthful and correct.
_____________________________________
Print Name
By:__________________________________
Signature
Title: ______________________________
(required for any purchaser that
is a corporation, partnership,
trust or other entity)
Annex II
LETTER REGARDING RESALE PROCEDURES
[Company Letterhead]
_________, 2002
Re: PAR Technology Corporation; Registration Statement on Form S-3
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Dear Selling Shareholder:
Enclosed please find five (5) copies of a prospectus dated ______________,
____ (the "Prospectus") for your use in reselling your shares of common stock,
$.02 par value (the "Shares"), of PAR Technology Corporation (the "Company"),
under the Company's Registration Statement on Form S-3 (Registration No. 333- )
(the "Registration Statement"), which has been declared effective by the
Securities and Exchange Commission. As a selling shareholder under the
Registration Statement, you have an obligation to deliver a copy of the
Prospectus to each purchaser of your Shares, either directly or through the
broker-dealer who executes the sale of your Shares.
The Company is obligated to notify you in the event that it suspends
trading under the Registration Statement in accordance with the terms of the
Stock Purchase Agreement between the Company and you. During the period that the
Registration Statement remains effective and trading thereunder has not been
suspended, you will be permitted to sell your Shares that are included in the
Prospectus under the Registration Statement. Upon a sale of any Shares under the
Registration Statement, you or your broker will be required to deliver to the
Transfer Agent, Registrar and Transfer Company, (1) your restricted stock
certificate(s) representing the Shares, (2) instructions for transfer of the
Shares sold and (3) a representation letter from your broker, or from you if you
are selling in a privately negotiated transaction, or from such other
appropriate party, in the form of Exhibit A attached hereto (the "Representation
Letter"). The Representation Letter confirms that the Shares have been sold
pursuant to the Registration Statement and in a manner described under the
caption "Plan of Distribution" in the Prospectus and that such sale was made in
accordance with all applicable securities laws, including the prospectus
delivery requirements.
Please note that you are under no obligation to sell your Shares during the
registration period. However, if you do decide to sell, you must comply with the
requirements described in this letter or otherwise applicable to such sale. Your
failure to do so may result in liability under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended. Please remember
that all sales of your Shares must be carried out in the manner set forth under
the caption "Plan of Distribution" in the Prospectus if you sell under the
Registration Statement. The Company may require an opinion of counsel reasonably
satisfactory to the Company if you choose another method of sale. You should
consult with your own legal advisor(s) on an ongoing basis to ensure your
compliance with the relevant securities laws and regulations.
You must notify the undersigned if you enter into any arrangement with a
broker-dealer for the sale of shares through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a
broker-dealer. Depending on the circumstances, such transactions may require the
filing of a supplement to the Prospectus in order to update the information set
forth under the caption "Plan of Distribution" in the Prospectus.
Should you need any additional copies of the Prospectus, or if you have any
questions concerning the foregoing, please write to me at PAR Technology
Corporation, PAR Technology Park, 8383 Seneca Turnpike, New Hartford, New York
13413-4991. Thank you.
Sincerely,
/s/Ronald J. Casciano
---------------------
Ronald J. Casciano
VP, CFO & Treasurer
Exhibit A
CERTIFICATE OF SUBSEQUENT SALE
Registrar and Transfer Company
10 Commerce Drive
Cranford, NJ 07016
RE: Sale of Shares of Common Stock of PAR Technology Corporation (the
"Company") pursuant to the Company's Prospectus dated _____________,
____ (the "Prospectus")
Dear Sir/Madam:
The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Shareholders in the
Prospectus, that the undersigned has sold the shares pursuant to the Prospectus
and in a manner described under the caption "Plan of Distribution" in the
Prospectus and that such sale complies with all securities laws applicable to
the undersigned, including, without limitation, the Prospectus delivery
requirements of the Securities Act of 1933, as amended.
Selling Shareholder (the beneficial owner):_____________________________________
Record Holder (e.g., if held in name of nominee):_______________________________
Restricted Stock Certificate No.(s):____________________________________________
Number of Shares Sold:__________________________________________________________
Date of Sale:___________________________________________________________________
In the event that you receive a stock certificate(s) representing more
shares of Common Stock than have been sold by the undersigned, then you should
return to the undersigned a newly issued certificate for such excess shares in
the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you
should place a stop transfer on your records with regard to such certificate.
Very truly yours,
Dated:___________________ By:______________________________
Print Name:______________________
Title:___________________________
cc: PAR Technology Corporation
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
Attn: Ronald J. Casciano, VP, CFO & Treasurer
EXHIBIT 4.6
Registration Rights Agreement
dated as of December 3, 2002
by and among the Company and the parties named therein
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is entered into as of December 3, 2002
(this "Agreement"), by and among PAR Technology Corporation (the "Corporation"),
E*Capital Corporation ("E*Capital"), Gary S. Siperstein and Mynde Siperstein
("Gary and Mynde Siperstein"), S. Harry Siperstein ("Harry Siperstein") and
Charles Tanner ("Tanner"). E*Capital, Gary and Mynde Siperstein, Harry
Siperstein and Tanner are referred to herein individually as an "Investor" and
collectively as the "Investors."
RECITALS
WHEREAS, pursuant to those certain Stock Purchase Agreements, each dated as
of the date hereof (collectively, the "Purchase Agreements"), by and among the
Corporation, the Selling Stockholder (as defined in the Purchase Agreement) and
each of the Investors, the Corporation and the Selling Stockholder have agreed
to sell to the Investors, and the Investors have agreed to purchase from the
Corporation, an aggregate of 508,019 shares of Common Stock (as defined below);
WHEREAS, the Corporation desires that the Investors purchase the Common
Stock; and
WHEREAS, in connection with the sale of the Common Stock by the Corporation
and the Selling Stockholder to the Investors, and in order to induce the
Investors to purchase the Common Stock, the parties hereto desire to enter into
certain arrangements relating to the Investors' ownership of the Registrable
Securities (as defined below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1. Definitions. Unless the context otherwise requires, the terms
defined in this Article I shall, for the purposes of this Agreement, have the
meanings herein specified.
"Affiliate" means with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person, and that Person's spouse, estate, personal
representative or lineal descendants or any trust for the benefit of such Person
and/or such Person's spouse and/or such Person's lineal descendants or any
entities controlled by such Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
E-2
"Agreement" shall have the meaning set forth in the preamble hereto.
"Board of Directors" shall mean the Board of Directors of the
Corporation.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banks in New York City are authorized or obligated by law or executive
order to not open or remain closed.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" shall mean the shares of common stock, par value $0.02 per
share, of the Corporation.
"Corporation" shall have the meaning set forth in the preamble hereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Investor" and "Investors" shall have the meanings set forth in the
preamble hereto.
"Person" includes any individual, corporation, association, partnership
(general or limited), joint venture, trust, estate, limited liability company,
or other legal entity or organization.
"Purchase Agreements" shall have the meaning set forth in the recitals
hereto.
"Registrable Securities" means the shares of Common Stock purchased by the
Investors pursuant to the Purchase Agreements.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Stockholder" shall have the meaning set forth in the recitals
hereto.
"Underwritten Offering" shall mean a registration in which securities of
the Corporation are sold to an underwriter for reoffering to the public.
Section 1.2. Headings. The headings and subheadings in this Agreement are
included for convenience and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof.
ARTICLE II
REGISTRATION RIGHTS
Section 2.1. Registration on Form S-3. In addition to the registration
rights granted to the Investors in the Purchase Agreements, an Investor may
request in writing, at any time the Registration Statement prepared and filed by
the Corporation in compliance with Section 7.1 of the Purchase Agreements is not
current and effective and the Corporation is so eligible, that the Corporation
file a Registration Statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the shares of Registrable Securities.
Following receipt of such written notice, the Corporation shall immediately
notify any Investor from whom notice has not been received, and any such
Investor shall then be entitled within ten (10) days thereafter to request the
Corporation to include in the requested registration all or any portion of its
shares of Registrable Securities. The Corporation shall use its best efforts to
register under the Securities Act on Form S-3 or any successor thereto, for
public sale in accordance with the method of disposition specified in such
notice, the number of shares of Registrable Securities specified in such notice
(and in all notices received by the Corporation from any other Investor within
ten (10) days after the giving of such notice by the Corporation). Whenever the
Corporation is required by this Section 2.1 to use its best efforts to effect
the registration of Registrable Securities, each of the procedures and
requirements of Section 2.5 shall apply to such registration; provided, however,
that there shall be no limitation on the number of registrations on Form S-3 or
any successor thereto that may be requested and obtained under this Section 2.1.
Notwithstanding any of the foregoing, the Corporation shall not be required to
effect a registration pursuant to this Section 2.1 if (a) the Corporation is not
a registrant entitled to use Form S-3 or any successor thereto to register such
shares of Registrable Securities for a public offering, (b) the reasonably
anticipated aggregate price to the public of the shares of Registrable
Securities to be included in the requested registration would not exceed
$500,000, or (c) the Corporation has already effectuated two (2) registrations
pursuant to this Section 2.1 in the preceding twelve (12) months.
Section 2.2. Priority on Registration on Form S-3. In the event that a
registration pursuant to Section 2.1 is for an Underwritten Offering, the right
of the Investors to enter into a registration statement pursuant to Section 2.1
shall be conditioned on the Investors' participation in the underwriting
arrangement required by this Section 2.2, and the inclusion of the Investors'
Registrable Securities in the underwriting to the extent requested shall be
limited to the extent provided herein.
The Corporation shall (together with the participating Investors and all
other holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Investors proposing
to distribute securities through such underwriting, with such selection of the
managing underwriter to be subject to the reasonable approval of the
Corporation. Notwithstanding any other provision of this Section 2.2, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the underwriter may limit the
Registrable Securities to be included in such registration and underwriting
(provided that securities of all other security holders are not included
therein) in such manner that the shares to be sold shall be allocated among the
selling Investors pro rata based on the number of shares of Registrable
Securities being requested by each Investor to be included in such underwriting.
No Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
The Corporation shall be entitled to register securities for sale for its
own account in any registration requested pursuant to Section 2.1 unless the
managing underwriter shall indicate in writing to the Investor or Investors
requesting the registration that the inclusion of the shares to be sold for the
account of the Corporation will adversely affect the registration, the price of
the shares to be sold and the number of shares of Registrable Securities to be
sold. The Corporation may not cause any other registration of securities for
sale for its own account (other than registration statements on Form S-4, S-8 or
any successor thereto) to be initiated after a registration requested pursuant
to Section 2.1 and to become effective less than 90 days after the effective
date of any registration requested pursuant to Section 2.1.
Section 2.3. Incidental Registration.
(a) If the Corporation, at any time that the Registration Statement
prepared and filed by the Corporation in compliance with Section 7.1 of the
Purchase Agreements is not current and effective, proposes to register (other
than pursuant to Section 2.1) any of its capital stock or other equity
securities (including any securities convertible into or exchangeable for equity
securities) under the Securities Act for sale to the public, whether for its own
account or for the account of other security holders or both (except with
respect to registration statements on Forms S-4, S-8 or another form not
available for registering the Registrable Securities for sale to the public),
the Corporation shall, at such time, give at least fifteen (15) days prior
written notice to the Investors of its intentions to file a registration
statement under the Securities Act. Upon the written request of any Investor
given within ten (10) days after the receipt of such notice by the Corporation
(which request shall specify the aggregate number of Registrable Securities
owned by such Investor that such Investor elects to be registered), the
Corporation shall, subject to the terms hereof, use its best efforts to cause
the Registrable Securities as to which registration shall have been so requested
to be covered by the registration statement proposed to be filed by the
Corporation; provided, however, that if, prior to or after the effective date of
the registration statement filed in connection with such registration, the
Corporation shall determine for any reason to terminate or withdraw such
registration, the Corporation shall give written notice of such determination to
each Investor that proposed selling Registrable Securities and, thereupon, shall
be relieved of its obligation under this Section 2.3 to register any Registrable
Securities in connection with such aborted registration.
(b) In the event that a registration pursuant to this Section 2.3 is for an
Underwritten Offering, the Corporation shall promptly so advise the Investors.
In such event, the right of the Investors to enter into a registration statement
pursuant to this Section 2.3 shall be conditioned on the Investors'
participation in the underwriting arrangements required by this Section 2.3, and
the inclusion of the Investors' Registrable Securities in the underwriting to
the extent requested shall be limited to the extent provided herein.
The Corporation (together with the participating Investors and other
holders proposing to distribute their securities through such underwriting)
shall enter into an underwriting agreement in customary form with the managing
underwriter selected by the Corporation. Notwithstanding any other provision of
this Section 2.3, if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the managing
underwriter may limit the number of shares to be included in the underwriting
and allocate the shares in priority as follows: (i) all shares of Common Stock
proposed to be underwritten on behalf of the Corporation for its own account;
and then (ii) all shares of Registrable Securities proposed to be underwritten
on behalf of each requesting Investor, or if less than all, such number of
shares of Registrable Securities proposed to be underwritten on behalf of each
Investor as is determined pro rata based on the number of shares of Registrable
Securities being requested by each Investor to be included in such underwriting;
and then (iii) all other shares of Common Stock proposed to be included in such
registration. No Registrable Securities excluded from the underwriting by reason
of the underwriter's marketing limitation shall be included in such
registration.
If an Investor disapproves of the terms of the underwriting, such Investor
may elect to withdraw therefrom by written notice to the Corporation, the
managing underwriter and the other holders proposing to distribute their
securities through such underwriting. The Registrable Securities so withdrawn
shall also be withdrawn from registration, and such Registrable Securities shall
not be transferred in a public distribution prior to ninety (90) days after the
effective date of such registration, or such other shorter period of time as the
underwriters may require.
Section 2.4. Expenses of Registration. The Corporation shall bear and pay
all reasonable and documented expenses other than underwriting fees, discounts
and commissions relating to shares of Registrable Securities incurred in
connection with each registration, filing or qualification pursuant to this
Agreement, including (without limitation) all registration, blue sky, securities
exchange or listing fees, filing and qualification fees, printing and accounting
fees (including for audits and comfort letters), and fees and disbursements of
one counsel for the Investor. Underwriting fees, discounts and commissions
relating to the shares of Registrable Securities included in a registration
pursuant to this Agreement shall be borne and paid ratably by each Investor in
proportion to its participation in such registration.
Section 2.5. Registration Procedures. If and whenever the Corporation is
required to effect or cause the registration of any Registrable Securities under
the Securities Act as provided in this Agreement, the Corporation will, as
expeditiously as reasonably possible:
(a) prepare and file with the Commission a registration statement with
respect to such Registrable Securities, and use its best efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby;
(b) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for the period
specified on paragraph (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement;
(c) furnish to each seller of Registrable Securities covered by such
registration statement such number of copies of such registration statement and
the prospective included therein (including each preliminary prospectus) as such
Person may reasonably request in order to facilitate the disposition of the
Registrable Securities covered by such registration statement;
(d) use its best efforts to register or qualify such Registrable Securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as the sellers of the Registrable Securities covered
by such registration statement or, in the case of an Underwritten Offering, the
managing underwriter shall reasonably request; provided, however, that the
Corporation shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to general service of process in any such jurisdiction where it is
not then so subject or subject itself to general taxation in any jurisdiction
where it is not then so subject;
(e) cooperate with the sellers of the Registrable Securities covered by
such registration statement and the managing underwriter, if any, to facilitate
the timely preparation and delivery of certificates representing Registrable
Securities to be sold; and enable such Registrable Securities to be in such
denominations and registered in such names as each Investor or the managing
underwriter, if any, may request at least two (2) business days prior to any
sale of Registrable Securities to the underwriters;
(f) immediately notify each seller of Registrable Securities, at any time
when the registration statement is required to be kept effective under clause
(b) of this Section 2.5, of the Corporation becoming aware that the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances existing at such time;
(g) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a registration statement at the earliest
possible moment;
(h) use its best efforts to list such Registrable Securities on any
securities exchange or quoted on a quotation system on which the Common Stock is
then listed or quoted, and provide a transfer agent and registrar for such
Registrable Securities covered by such registration statement not later than the
effective date of such registration statement;
(i) upon request, use its best efforts to furnish:
(i) an opinion of counsel for the Corporation, dated the effective date of
such registration statement (or, if such registration involves an underwritten
public offering, dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to the requesting
seller of Registrable Securities and the managing underwriter, if any; and
(ii) a "comfort" letter, dated the effective date of such registration
statement (or, if such registration involves an underwritten public offering,
dated the date of the closing under the underwriting agreement), signed by the
independent public accountants who have certified the Corporation's financial
statements included in such registration statement, covering such matters with
respect to such registration statement as are customarily covered in
accountants' letters delivered to the underwriters in underwritten offerings of
securities as may reasonably be requested by the requesting seller of
Registrable Securities and the managing underwriter, if any;
(j) make available for inspection by each seller of Registrable Securities,
by any underwriter participating in any disposition to be effected pursuant to
such registration statement and by any attorney, accountant or other agent
retained by such Person or any such underwriter (individually, an "Inspector"
and collectively, the "Inspectors"), all pertinent financial and other records,
pertinent corporate documents and properties of the Corporation as shall be
reasonably necessary to enable them to exercise their due diligence
responsibilities (collectively, the "Records"), and cause all of the
Corporation's officers, directors and employees to supply all information
reasonably requested by an Inspector; provided that each Investor agrees that
non-public information obtained by it as a result of such inspections shall be
deemed confidential and acknowledges its obligations under the federal
securities laws not to trade any securities of the Corporation on the basis of
material non-public information. The rights granted pursuant to this subsection
(j) may not be assigned or otherwise conveyed by such Person or by any
subsequent transferee of any such rights without the written consent of the
Corporation, which consent shall not be unreasonably withheld; provided that the
Corporation may refuse such written consent if the proposed transferee is a
competitor of the Corporation as determined by the Board of Directors; and
provided, further, that no such written consent shall be required if the
transfer is made to a party who cannot reasonably be deemed to be a competitor
of the Corporation and who is a parent, subsidiary, affiliate, partner or group
member of such person; and
(k) take such other reasonable steps that are necessary or advisable to
permit the sale of such Registrable Securities.
The Investors agree that, upon receipt of any notice from the Corporation
of the happening of any event of the kind described in clause (f) of this
Section 2.5, the Investors will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until receipt of the copies of a supplemented or amended prospectus
and, if so directed by the Corporation, the Investors will deliver to the
Corporation (at the Corporation's expense) all copies, other than permanent file
copies then in their possession, of the prospectus covering such Registrable
Securities current at the time of receipt of the Corporation's notice.
Section 2.6. Furnishing of Information. It shall be a condition precedent
to the obligations of the Corporation to take any action pursuant to this
Article II that each Investor selling Registrable Securities under the
applicable registration statement shall have furnished to the Corporation such
information as the Corporation shall request regarding such Investor, the shares
of Registrable Securities held by it, and the intended method of disposition of
such shares of Registrable Securities as shall be required to effect the
requested registration. Upon request, the Corporation shall provide each
Investor with copies of all correspondence with the Commission related to any
registration statement filed pursuant to this Article II and in which the
Investor is participating on a reasonably prompt basis.
Section 2.7. Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, the Corporation agrees to use its best lawful efforts to:
(a) make and keep public certain information regarding the Corporation
available, as those terms are understood and defined in Rule 144 under the
Securities Act;
(b) file with the Commission in a timely manner all reports and other
documents required of the Corporation under the Securities Act and the Exchange
Act; and
(c) so long as any Investor owns any Registrable Securities, furnish to
such Investor forthwith upon request a written statement by the Corporation as
to its compliance with the reporting requirements of said Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Corporation, and such other reports and documents of the
Corporation and other information in the possession of or reasonably obtainable
by the Corporation as such Investor may reasonably request in availing itself of
any rule or regulation of the Commission allowing such Investor to sell any such
securities without registration.
Section 2.8. Transfer of Registration Rights. Except as specifically
provided herein, including Section 2.5(j), the rights granted to an Investor
under this Article II may be assigned to a transferee or assignee in connection
with any transfer or assignment of Registrable Securities by an Investor
provided that the transferee is a Listed Transferee (as defined in the Purchase
Agreement between the Company and E*Capital), or (i) such transfer may be
effected in accordance with applicable securities laws, (ii) such assignee or
transferee acquires all of the Registrable Securities held by such Investor or,
in the case of E*Capital, acquires 20% or more of the Registrable Securities
retained by E*Capital after the transfers to the Listed Transferees, and (iii)
such Investor notifies the Corporation in writing of the transfer or assignment,
stating the name and the address of the transferee or assignee and identifying
the securities with respect to which such registration rights are being
transferred or assigned and the assignee or transferee agrees in writing to be
bound by the provisions of this Agreement. Such assignee or transferee shall be
deemed to be an "Investor" for purposes of this Agreement.
Section 2.9. Limitation on Subsequent Registration Rights. The Corporation
shall not grant to any third party any registration rights inconsistent with any
of those contained herein, so long as any of the registration rights under this
Agreement remains in effect; provided, however, that the Corporation may grant
to a third party piggy-back registration rights upon the approval of such grant
by a majority of the Board of Directors.
Section 2.10. Standoff Period. If at the time of any request to register
Registrable Securities pursuant to Section 2.1 the Corporation is preparing or
within thirty (30) days thereafter commences to prepare a registration statement
for a public offering (other than in connection with a registration requested
pursuant to Section 2.1 or the registration of equity securities issued or
issuable pursuant to an employee stock option, stock purchase, stock bonus or
similar plan) which in fact is filed and becomes effective within ninety (90)
days after the request, or is engaged in any activity which, in the good faith
determination of the Board of Directors, would be adversely affected by the
requested registration to the detriment of the Corporation, then the Corporation
may at its option direct that such request be delayed for a period not to exceed
ninety (90) days in any 12-month period, provided that the Corporation may so
direct only once in each 12-month period. Nothing in this Section 2.10 shall
preclude the Investor from enjoying registration rights which it might otherwise
possess under Section 2.3.
ARTICLE III
INDEMNIFICATION
Section 3.1. Definitions. For the purpose of this Article III, (a) the term
"Registration Statement" shall include any final prospectus, exhibit, supplement
or amendment included in or related to any registration statement effected
pursuant to this Agreement; and (b) the term "untrue statement" shall include
any untrue statement or alleged untrue statement, or any omission or alleged
omission to state in the Registration Statement a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Section 3.2. Indemnification by the Corporation. The Corporation agrees to
indemnify and hold harmless each seller of Registrable Securities pursuant to a
Registration Statement (and each officer, director or controlling person of each
such Person) from and against any losses, claims, damages or liabilities to
which each such Person may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon (i) any untrue
statement of a material fact contained in the Registration Statement, or (ii)
any failure by the Corporation to fulfill any undertaking included in the
Registration Statement, and the Corporation will reimburse each such Person for
any reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim, provided,
however, that the Corporation shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, (x)
an untrue statement made in such Registration Statement in reliance upon and in
conformity with information furnished to the Corporation by or on behalf of any
such seller specifically for inclusion in the Registration Statement, (y) the
failure of any such seller to comply with its covenants and agreements contained
herein respecting sale of Registrable Securities, or (z) any statement or
omission in any prospectus that is corrected in any subsequent prospectus that
was delivered to the selling Investors prior to the pertinent sale or sales by
such Person. The Corporation shall reimburse the indemnified party for the
amounts provided for herein on demand as such expenses are incurred.
Section 3.3. Indemnification by the Investor. Each seller of Registrable
Securities agrees to indemnify and hold harmless the Corporation (and each
person, if any, who controls the Corporation within the meaning of Section 15 of
the Securities Act, each officer of the Corporation who signs the Registration
Statement and each director of the Corporation) from and against any losses,
claims, damages or liabilities to which the Corporation (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, (i) any
failure by such seller to comply with the covenants and agreements contained
herein respecting sale of the Registrable Securities, or (ii) any untrue
statement of a material fact contained in the Registration Statement if such
untrue statement was made in reliance upon and in conformity with information
furnished by or on behalf of such seller specifically for use in preparation of
the Registration Statement, and such seller will reimburse the Corporation (or
such officer, director or controlling person), on demand, as the case may be,
for any legal or other expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim; provided that the
such seller's obligation to indemnify any party hereunder shall be limited to
the amount received by such seller from the sale of the Registrable Securities.
Section 3.4. Notice. Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this Article III,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified person under this Article III (except to the extent that such
omission materially and adversely affects the indemnifying person's ability to
defend such action) or from any liability otherwise than under this Article III.
Subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified person promptly after receiving the aforesaid
notice from such indemnified person, shall be entitled to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its election
to assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless the
indemnifying person shall have approved the terms of such settlement; provided
that such consent shall not be unreasonably withheld. No indemnifying person
shall, without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
Section 3.5. Contribution. If the indemnification provided for in this
Article III is unavailable to or insufficient to hold harmless an indemnified
person under Sections 3.2 or 3.3 above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying person shall contribute to the amount paid or
payable by such indemnified person as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Corporation on the one hand and
the Investors selling shares of Registrable Securities in the offering, as well
as all other shareholders offering securities in the offering (the "Selling
Shareholders"), on the other in connection with the statements or omissions or
other matters which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, in the case of an untrue statement, whether the untrue statement
relates to information supplied by the Corporation on the one hand or an
Investor selling shares of Registrable Securities in the offering, or any of the
other Selling Shareholders, on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement. The Corporation and the Investors agree that it would not be
just and equitable if contribution pursuant to this Section 3.5 were determined
by pro rata allocation (even if the Investors and the other Selling Shareholders
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this Section 3.5. The amount paid or payable by an
indemnified person as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 3.5 shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 3.5, the Investors
shall not be required to contribute any amount in excess of the amount by which
the amount received by such Investor from the sale of the Registrable Securities
to which such loss relates exceeds the amount of any damages which such Investor
has otherwise been required to pay by reason of such untrue statement. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Each Investor's obligations in
this subsection to contribute shall be in proportion to its sale of Registrable
Securities to which such loss relates and shall not be joint with any other
Investor or any Selling Shareholders. Section 3.6. Underwriting Agreements.
Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with an Underwritten Offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.
Section 3.7. Waiver of the Parties. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Article III, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Article III fairly allocate the risks in light of the ability of the parties to
investigate the Corporation and its business in order to assure that adequate
disclosure is made in the Registration Statement as required by the Securities
Act and the Exchange Act. The parties have been advised that federal or state
public policy as interpreted by the courts in certain jurisdictions may be
contrary to certain of the provisions of this Article III, and the parties
hereto hereby expressly waive and relinquish any right or ability to assert such
public policy as a defense to a claim under this Article III and further agree
not to attempt to assert any such defense.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed (A) if within the
United States by first-class registered or certified airmail, or nationally
recognized overnight express courier, postage prepaid, or by facsimile, or (B)
if delivered from outside the United States, by International Federal Express or
facsimile, and shall be deemed given (i) if delivered by first-class registered
or certified airmail, three business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed, (iii)
if delivered by International Federal Express, two business days after so
mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt
and shall be delivered as addressed as follows:
(a) if given to the Corporation, at the following address:
PAR Technology Corporation
PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413-4991
Attention: Ronald J. Casciano, VP, CFO & Treasurer
Fax: 315-738-0411
(b) with a copy to:
Testa, Hurwitz & Thibeault, L.L.P.
125 High Street
Boston, MA 02110
Telecopy: 617-248-7100
Attention: Kathy A. Fields, Esq.
(c) If to an Investor, at its address on the signature page hereto, or at
such other address or addresses as may have been furnished to the Corporation in
writing with a copy to the additional address or addresses furnished by the
Investors.
Section 4.2. Amendments. This Agreement may not be modified or amended, and
no provision hereof may be waived, except pursuant to an instrument in writing
signed by the Corporation and the holders of a majority of the outstanding
shares of Registrable Securities that are subject to this Agreement. The failure
of any party to enforce any of the provisions of this Agreement shall in no way
be construed as a waiver of such provisions and shall not affect the right of
such party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
Section 4.3. Failure to Pursue Remedies. The failure of any party to seek
redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation, from having the effect of an original
violation.
Section 4.4. Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement. Any remedy under this Section 4.4 is subject to certain equitable
defenses and to the discretion of the court before which any proceedings
therefor may be brought.
Section 4.5. Cumulative Remedies. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
shall not preclude or waive its right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by law, statute, ordinance or otherwise.
Section 4.6. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
Section 4.7. Interpretation. Throughout this Agreement, nouns, pronouns and
verbs shall be construed as masculine, feminine, neuter, singular or plural,
whichever shall be applicable. All references herein to "Articles," "Sections"
and "Paragraphs" shall refer to corresponding provisions of this Agreement.
Section 4.8. Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
Section 4.9. Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document. All counterparts shall be construed together and shall constitute one
instrument.
Section 4.10. Integration. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof and, except as
otherwise provided herein, supersedes all prior agreements and understandings
pertaining thereto.
Section 4.11. Governing Law. This Agreement and the rights of the parties
hereunder shall be interpreted in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of laws.
Section 4.12. Termination. The rights of each Investor under this Agreement
shall terminate upon the earlier of such time as such Investor (a) has sold or
otherwise disposed of all the Registrable Securities held by it or (b) is able
to sell, within any three month period, all of the Registrable Securities
beneficially owned by it pursuant to Rule 144 under the Securities Act.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above stated.
PAR TECHNOLOGY CORPORATION
By: /s/ Ronald J. Casciano
-------------------------
Name: Ronald J. Casciano
Title: Vice President,
Chief Financial Officer and Treasurer
Address: PAR Technology Park
8383 Seneca Turnpike
New Hartford, NY 13413
E*CAPITAL CORPORATION
By: /s/ Eric Wedbush
-------------------
Name: Eric Wedbush
Title: Executive Vice President
Address: 1000 Wilshire Blvd.
Los Angeles, CA 90017
/s/ Gary S. Siperstein and Mynde Siperstein
-------------------------------------------
Gary S. Siperstein and Mynde Siperstein
Address: 130 Joseph Court
Warwick, RI 02886
/s/ S. Harry Siperstein
-----------------------
S. Harry Siperstein
Address: 91 Rutland Street
Cranston, RI 02920
/s/ Charles Tanner
-----------------------
Charles Tanner
Address: 9 Shore Drive
Warren, RI 02885
EXHIBIT 23.1
Consent of PricewaterhouseCoopers LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 4, 2002 relating to the
financial statements and financial statement schedules, which appears in PAR
Technology Corporation's Annual Report on Form 10-K/A for the year ended
December 31, 2001. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Syracuse, New York
December 20, 2002
E-3