Document:

Exhibit 4.7

		
			Exhibit 4.7
		

		
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			DESCRIPTION OF REGISTRANT’S SECURITIES
		

		
			REGISTERED PURSUANT TO SECTION 12 OF THE
		

		
			SECURITIES EXCHANGE ACT OF 1934
		

		
			 
		

		
			The following description of the securities of ParkerVision Inc. (the “Company”, “we”, “our” or similar terms) is based upon the Company’s amended and restated articles of incorporation (“Charter”), the Company’s bylaws (“Bylaws”) and applicable provisions of law. We have summarized certain portions of the Charter and Bylaws below. The summary is not complete and is subject to, and is qualified in its entirety by express reference to, the provisions of our Charter and Bylaws, each of which is filed as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.7 is a part.
		

		
			 
		

		
			Authorized Capital Stock
		

		
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			Pursuant to our Charter, our authorized capital stock consists of 165,000,000 shares, of which 150,000,000 is voting Common Stock, $0.01 par value per share, and 15,000,000 is Preferred Stock, $1.00 per share.
		

		
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			Common Stock
		

		
			 
		

		
			Authorization. The outstanding shares of the Company’s common stock are duly authorized, validly issued, fully paid and nonassessable.
		

		
			 
		

		
			Listing. The Company’s common stock is traded on the OTCQB Market under the ticker symbol “PRKR.”
		

		
			 
		

		
			Voting Rights. Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders.
		

		
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			Preemptive Rights, Etc. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to our common stock, except that upon the consummation of our initial business combination, subject to the limitations described herein, we will provide our stockholders with the opportunity to redeem their shares of our common stock for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account.
		

		
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			Preferred Stock
		

		
			 
		

		
			Our Charter provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions, applicable to the shares of each series. Our board of directors will be able, without stockholder approval, to issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have anti-takeover effects.
		

		
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			Series E Preferred Stock
		

		
			 
		

		
			On November 17, 2005, the board of directors designated 100,000 shares of authorized preferred stock as the Series E Preferred Stock in conjunction with its adoption of a Shareholder Protection Rights Plan (as described below). Certain rights of this series of preferred stock are defined in terms of a “Reference Package.”  The “Reference Package” is initially 1,000 shares of common stock, as adjusted for stock dividends, subdivisions and combinations. The holders of full or fractional shares of this series are entitled to receive dividends, when and as declared by the board of directors, on each date that dividends or other distributions (other than dividends or distributions payable in our common stock) are payable on or in respect of common stock comprising part of the Reference Package, in an amount per whole share of this series equal to the aggregate amount of dividends or other distributions that would be payable on such date to a holder of the Reference Package.  In addition, on the last day of March, June, September and December in each year, the holders of this series are entitled to receive dividends in an amount per whole share of this series equal to the excess (if any) of $100 over the aggregate dividends paid per whole share of this series 
		

		 

 

		during the three-month period ending on such last day. Dividends on each full and each fractional share of this series are cumulative from the date such full or fractional share is originally issued.  In the event of any liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary, the holders of full and fractional shares of this series shall be entitled, before any distribution or payment is made on any date to the holders of the common stock or any other stock of ours ranking junior to this series upon liquidation, to be paid in full an amount per whole share of this series equal to the greater of $100 or the aggregate amount distributed or to be distributed in connection with such liquidation, dissolution or winding up to a holder of the Reference Package, together with accrued dividends to such distribution or payment date, whether or not earned or declared. 
		

		
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			Our Series E Preferred Stock shall rank junior to all other series or classes of our preferred stock, now existing or hereafter created, as to payment of dividends and the distribution of assets, unless the terms of any such other series or class shall provide otherwise.
		

		
			 
		

		
			Each whole share of this series shall, on any matter, vote as a class with any other capital stock comprising part of the Reference Package and voting on such matter and shall have the number of votes thereon that a holder of the Reference Package would have.
		

		
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			Shareholder Protection Rights Plan
		

		
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			We have a Shareholder Protection Rights Agreement (“Rights Agreement”), originally adopted on November 21, 2005 and amended on November 20, 2015 and November 20, 2020 pursuant to which we issued, on November 29, 2005, as a dividend, one right to acquire a fraction of a share of Series E Preferred Stock for each then outstanding share of Common Stock. Each share of Common Stock issued by us after such date also has included, and any subsequent shares of Common Stock issued by us prior to the Separation Time (as defined in the Rights Agreement) will include, an attached right. The following description of the Rights Agreement, and any description of the Rights Agreement included in a prospectus supplement, may not be complete and is subject to and qualified in its entirety by reference to the terms and provisions of the Rights Agreement.
		

		
			 
		

		
			The principal objective of the Rights Agreement is to cause someone interested in acquiring us to negotiate with our Board rather than launch an unsolicited or hostile bid. The Rights Agreement subjects a potential acquirer to substantial voting and economic dilution.
		

		
			 
		

		
			The rights initially are not exercisable and trade with our Common Stock. In the future, the rights may become exercisable with various provisions that may discourage a takeover bid. If a potential acquirer initiates a takeover bid or becomes the beneficial owner of 15% or more of our Common Stock, the rights will separate from the Common Stock. Upon separation, the holders of the rights may exercise their rights at an exercise price of $14.50 per right (the “Exercise Price”), subject to adjustment and payable in cash. Additionally, the rights have what are known as “flip-in” and “flip-over” provisions that could make any acquisition of us more costly to the potential acquirer. The “flip-in” provision provides that, in the event a potential acquirer acquires 15% or more of the outstanding shares of our Common Stock, upon payment of the exercise price, the holders of the rights will receive from us that number of shares of Common Stock having an aggregate market price equal to twice the Exercise Price, as adjusted. The “flip-over” provision allows the holder to purchase that number of shares of common/voting equity of a successor entity, if we are not the surviving corporation in a business combination, with an aggregate market price equal to twice the Exercise Price.
		

		
			 
		

		
			We have the right to substitute for any of our shares of Common Stock that we are obligated to issue, shares of Series E Preferred Stock at a ratio of one thousandth of a share of Series E Preferred Stock for each share of Common Stock.
		

		
			 
		

		
			The rights may be redeemed upon approval of the Board at a redemption price of $0.01 per right. The Rights Agreement expires on November 20, 2023.
		

		
			 
		

		
			Classified Board; Director Nominations; Special Meetings
		

		
			 
		

		
			Our Board is divided into three classes, with only one class of directors elected at each annual meeting, and our shareholders may remove our directors only for cause. Nominations for our Board may be made by our Board or by any holder of Common Stock.  A shareholder entitled to vote for the election of directors may nominate a person for 
		

		 

 

		election as director only if the shareholder provides written notice of his nomination to our secretary not later than 120 days in advance of the same day and month that our proxy statement was released to shareholders in connection with the previous year’s annual meeting of shareholders or, if no annual meeting was held in the previous year, then by the end of the fiscal year to which the annual meeting in which the nomination will be made relates. A special meeting of our shareholders may be called only by our Board or our chief executive officer. These provisions and the Board’s right to issue shares of our preferred stock from time to time, in one or more classes or series without stockholder approval, are intended to enhance the likelihood of continuity and stability in the composition of the policies formulated by our Board. These provisions are also intended to discourage some tactics that may be used in proxy fights.
		

		
			﻿tempest-2017eipxformofst

  Tempest - Form of Stock Option Agreement (1-48 Monthly, 1 yr. Cliff)   TEMPEST THERAPEUTICS, INC.  2017 EQUITY INCENTIVE PLAN  STOCK OPTION AGREEMENT  Unless otherwise defined herein, the terms defined in the 2017 Equity Incentive Plan (the  “Plan”) shall have the same defined meanings in this Stock Option Agreement (the “Option  Agreement”).  I. NOTICE OF STOCK OPTION GRANT  Name:  Address:    The undersigned Participant has been granted an Option to purchase Common Stock of the  Company, subject to the terms and conditions of the Plan and this Option Agreement, as follows:  Date of Grant: <As described on Carta>   Vesting Commencement Date: <As described on Carta>   Exercise Price per Share: $<As described on Carta>   Total Number of Shares Granted: <As described on Carta>   Total Exercise Price : $<As described on Carta>   Type of Option: <As described on Carta>   Incentive Stock Option   <As described on Carta>   Nonstatutory Stock Option  Term/Expiration Date: <As described on Carta>   Vesting Schedule:  This Option shall be exercisable, in whole or in part, according to the following vesting  schedule:  One fourth (1/4th) of the shares subject to the Option shall vest on the twelve (12) month  anniversary of the Vesting Commencement Date; the balance of the shares shall vest in a series of  thirty-six (36) successive equal monthly installments measured from the twelve (12) month  anniversary of the Vesting Commencement Date, subject to Participant remaining a Service Provider  (as defined in the Plan) as of each such vesting date.  

 

  -2-  Termination Period:  This Option shall be exercisable for three (3) months after Participant ceases to be a Service  Provider, unless such termination is due to Participant’s death or Disability, in which case this  Option shall be exercisable for twelve (12) months after Participant ceases to be a Service Provider.   Notwithstanding the foregoing sentence, in no event may this Option be exercised after the  Term/Expiration Date as provided above and this Option may be subject to earlier termination as  provided in Section 13 of the Plan.  II. AGREEMENT  1. Grant of Option.  The Administrator of the Company hereby grants to the Participant  named in the Notice of Stock Option Grant in Part I of this Option Agreement (“Participant”), an  option (the “Option”) to purchase the number of Shares set forth in the Notice of Stock Option  Grant, at the exercise price per Share set forth in the Notice of Stock Option Grant (the “Exercise  Price”), and subject to the terms and conditions of the Plan, which is incorporated herein by  reference.  Subject to Section 18 of the Plan, in the event of a conflict between the terms and  conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail.  If designated in the Notice of Stock Option Grant as an Incentive Stock Option  (“ISO”), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of  the Code.  Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this  Option shall be treated as a Nonstatutory Stock Option (“NSO”).  Further, if for any reason this  Option (or portion thereof) shall not qualify as an ISO, then, to the extent of such nonqualification,  such Option (or portion thereof) shall be regarded as a NSO granted under the Plan.  In no event  shall the Administrator, the Company or any Parent or Subsidiary or any of their respective  employees or directors have any liability to Participant (or any other person) due to the failure of the  Option to qualify for any reason as an ISO.  2. Exercise of Option.  (a) Right to Exercise.  This Option shall be exercisable during its term in  accordance with the Vesting Schedule set out in the Notice of Stock Option Grant and with the  applicable provisions of the Plan and this Option Agreement.  (b) Method of Exercise.  This Option shall be exercisable by delivery of an  exercise notice in the form attached as Exhibit A (the “Exercise Notice”) or in a manner and  pursuant to such procedures as the Administrator may determine, which shall state the election to  exercise the Option, the number of Shares with respect to which the Option is being exercised (the  “Exercised Shares”), and such other representations and agreements as may be required by the  Company.  The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as  to all Exercised Shares, together with any applicable tax withholding.  This Option shall be deemed  to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied  by the aggregate Exercise Price, together with any applicable tax withholding.  No Shares shall be issued pursuant to the exercise of an Option unless such issuance  and such exercise comply with Applicable Laws.  Assuming such compliance, for income tax  

 

  -3-  purposes the Shares shall be considered transferred to Participant on the date on which the Option is  exercised with respect to such Shares.  3. Participant’s Representations.  In the event the Shares have not been registered under  the Securities Act of 1933, as amended (the “Securities Act”), at the time this Option is exercised,  Participant shall, if required by the Company, concurrently with the exercise of all or any portion of  this Option, deliver to the Company his or her Investment Representation Statement in the form  attached hereto as Exhibit B.  4. Lock-Up Period.  Participant hereby agrees that Participant shall not offer, pledge,  sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell,  grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or  indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging  or other arrangement that transfers to another, in whole or in part, any of the economic consequences  of ownership of any Common Stock (or other securities) of the Company held by Participant (other  than those included in the registration) for a period specified by the representative of the  underwriters of Common Stock (or other securities) of the Company not to exceed one hundred and  eighty (180) days following the effective date of any registration statement of the Company filed  under the Securities Act (or such other period as may be requested by the Company or the  underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of  research reports and (ii) analyst recommendations and opinions, including, but not limited to, the  restrictions contained in NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).   Participant agrees to execute and deliver such other agreements as may be reasonably  requested by the Company or the underwriter which are consistent with the foregoing or which are  necessary to give further effect thereto.  In addition, if requested by the Company or the  representative of the underwriters of Common Stock (or other securities) of the Company,  Participant shall provide, within ten (10) days of such request, such information as may be required  by the Company or such representative in connection with the completion of any public offering of  the Company’s securities pursuant to a registration statement filed under the Securities Act.  The  obligations described in this Section 4 shall not apply to a registration relating solely to employee  benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a  registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that  may be promulgated in the future.  The Company may impose stop-transfer instructions with respect  to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end  of said one hundred and eighty (180) day (or other) period.  Participant agrees that any transferee of  the Option or shares acquired pursuant to the Option shall be bound by this Section 4.  5. Method of Payment.  Payment of the aggregate Exercise Price shall be by any of the  following, or a combination thereof, at the election of the Participant:  (a) cash;   (b) check;  (c) consideration received by the Company under a formal cashless exercise  program adopted by the Company in connection with the Plan; or   

 

  -4-  (d) surrender of other Shares which (i) shall be valued at its Fair Market Value on  the date of exercise, and (ii) must be owned free and clear of any liens, claims, encumbrances or  security interests, if accepting such Shares, in the sole discretion of the Administrator, shall not  result in any adverse accounting consequences to the Company.  6. Restrictions on Exercise.  This Option may not be exercised until such time as the  Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon  such exercise or the method of payment of consideration for such shares would constitute a violation  of any Applicable Law.  7. Non-Transferability of Option.    (a) This Option may not be transferred in any manner otherwise than by will or  by the laws of descent or distribution and may be exercised during the lifetime of Participant only by  Participant.  The terms of the Plan and this Option Agreement shall be binding upon the executors,  administrators, heirs, successors and assigns of Participant.  (b) Further, until the Company becomes subject to the reporting requirements of  Section 13 or 15(d) of the Exchange Act, or after the Administrator determines that it is, will, or may  no longer be relying upon the exemption from registration of Options under the Exchange Act as set  forth in Rule 12h-1(f) promulgated under the Exchange Act (the “Reliance End Date”), Participant  shall not transfer this Option or, prior to exercise, the Shares subject to this Option, in any manner  other than (i) to persons who are “family members” (as defined in Rule 701(c)(3) of the Securities  Act) through gifts or domestic relations orders, or (ii) to an executor or guardian of Participant upon  the death or disability of Participant.  Until the Reliance End Date, the Options and, prior to  exercise, the Shares subject to this Option, may not be pledged, hypothecated or otherwise  transferred or disposed of, including by entering into any short position, any “put equivalent  position” or any “call equivalent position” (as defined in Rule 16a-1(h) and Rule 16a-1(b) of the  Exchange Act, respectively), other than as permitted in clauses (i) and (ii) of this paragraph.   8. Term of Option.  This Option may be exercised only within the term set out in the  Notice of Stock Option Grant, and may be exercised during such term only in accordance with the  Plan and the terms of this Option Agreement.  9. Tax Obligations.  (a) Tax Withholding.  Participant agrees to make appropriate arrangements with  the Company (or the Parent or Subsidiary employing or retaining Participant) for the satisfaction of  all Federal, state, local and foreign income and employment tax withholding requirements applicable  to the Option exercise.  Participant acknowledges and agrees that the Company may refuse to honor  the exercise and refuse to deliver the Shares if such withholding amounts are not delivered at the  time of exercise.  (b) Notice of Disqualifying Disposition of ISO Shares.  If the Option granted to  Participant herein is an ISO, and if Participant sells or otherwise disposes of any of the Shares  acquired pursuant to the ISO on or before the later of (i) the date two (2) years after the Date of  Grant, or (ii) the date one (1) year after the date of exercise, Participant shall immediately notify the  

 

  -5-  Company in writing of such disposition.  Participant agrees that Participant may be subject to  income tax withholding by the Company on the compensation income recognized by Participant.   (c) Code Section 409A.  Under Code Section 409A, an Option that vests after  December 31, 2004 (or that vested on or prior to such date but which was materially modified after  October 3, 2004) that was granted with a per Share exercise price that is determined by the Internal  Revenue Service (the “IRS”) to be less than the Fair Market Value of a Share on the date of grant (a  “discount option”) may be considered “deferred compensation.”  An Option that is a “discount  option” may result in (i) income recognition by Participant prior to the exercise of the Option, (ii) an  additional twenty percent (20%) federal income tax, and (iii) potential penalty and interest charges.   The “discount option” may also result in additional state income, penalty and interest tax to the  Participant.  Participant acknowledges that the Company cannot and has not guaranteed that the IRS  will agree that the per Share exercise price of this Option equals or exceeds the Fair Market Value of  a Share on the date of grant in a later examination.  Participant agrees that if the IRS determines that  the Option was granted with a per Share exercise price that was less than the Fair Market Value of a  Share on the date of grant, Participant shall be solely responsible for Participant’s costs related to  such a determination.  10. Entire Agreement; Governing Law.  The Plan is incorporated herein by reference.   The Plan and this Option Agreement constitute the entire agreement of the parties with respect to the  subject matter hereof and supersede in their entirety all prior undertakings and agreements of the  Company and Participant with respect to the subject matter hereof, and may not be modified  adversely to the Participant’s interest except by means of a writing signed by the Company and  Participant.  This Option Agreement is governed by the internal substantive laws but not the choice  of law rules of California.  11. No Guarantee of Continued Service.  PARTICIPANT ACKNOWLEDGES AND  AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE  HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL  OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING  PARTICIPANT) AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS  OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER  ACKNOWLEDGES AND AGREES THAT THIS OPTION AGREEMENT, THE  TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET  FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF  CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR  ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH  PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR  SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT) TO TERMINATE  PARTICIPANT’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR  WITHOUT CAUSE.  

 

  -6-  Participant acknowledges receipt of a copy of the Plan and represents that he or she is  familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the  terms and provisions thereof.  Participant has reviewed the Plan and this Option in their entirety, has  had an opportunity to obtain the advice of counsel prior to executing this Option and fully  understands all provisions of the Option.  Participant hereby agrees to accept as binding, conclusive  and final all decisions or interpretations of the Administrator upon any questions arising under the  Plan or this Option.  Participant further agrees to notify the Company upon any change in the  residence address indicated below.  PARTICIPANT  TEMPEST THERAPEUTICS, INC.         Signature  By         Print Name  Print Name            Title      Residence Address  

 

     EXHIBIT A  2017 EQUITY INCENTIVE PLAN  EXERCISE NOTICE    Tempest Therapeutics, Inc.  7000 Shoreline Court  Suite 278  South San Francisco, CA 94080    Attention: President  1. Exercise of Option.  Effective as of today, ________________, ____, the undersigned  (“Participant”) hereby elects to exercise Participant’s option (the “Option”) to purchase  ________________ shares of the Common Stock (the “Shares”) of Tempest Therapeutics, Inc. (the  “Company”) under and pursuant to the 2017 Equity Incentive Plan (the “Plan”) and the Stock  Option Agreement dated ______________, _____ (the “Option Agreement”).  2. Delivery of Payment.  Participant herewith delivers to the Company the full purchase  price of the Shares, as set forth in the Option Agreement, and any and all withholding taxes due in  connection with the exercise of the Option.  3. Representations of Participant.  Participant acknowledges that Participant has  received, read and understood the Plan and the Option Agreement and agrees to abide by and be  bound by their terms and conditions.  4. Rights as Stockholder.  Until the issuance of the Shares (as evidenced by the  appropriate entry on the books of the Company or of a duly authorized transfer agent of the  Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with  respect to the Common Stock subject to the Option, notwithstanding the exercise of the Option.  The  Shares shall be issued to Participant as soon as practicable after the Option is exercised in  accordance with the Option Agreement.  No adjustment shall be made for a dividend or other right  for which the record date is prior to the date of issuance except as provided in Section 13 of the Plan.  5. Company’s Right of First Refusal.  Before any Shares held by Participant or any  transferee (either being sometimes referred to herein as the “Holder”) may be sold or otherwise  transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have  a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 5  (the “Right of First Refusal”).  (a) Notice of Proposed Transfer.  The Holder of the Shares shall deliver to the  Company a written notice (the “Notice”) stating: (i) the Holder’s bona fide intention to sell or  otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee  (“Proposed Transferee”); (iii) the number of Shares to be transferred to each Proposed Transferee;  

 

  -2-  and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the  Shares (the “Offered Price”), and the Holder shall offer the Shares at the Offered Price to the  Company or its assignee(s).  (b) Exercise of Right of First Refusal.  At any time within thirty (30) days after  receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the  Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one  or more of the Proposed Transferees, at the purchase price determined in accordance with subsection  (c) below.  (c) Purchase Price.  The purchase price (“Purchase Price”) for the Shares  purchased by the Company or its assignee(s) under this Section 5 shall be the Offered Price.  If the  Offered Price includes consideration other than cash, the cash equivalent value of the non-cash  consideration shall be determined by the Board of Directors of the Company in good faith.  (d) Payment.  Payment of the Purchase Price shall be made, at the option of the  Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding  indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the  assignee), or by any combination thereof within thirty (30) days after receipt of the Notice or in the  manner and at the times set forth in the Notice.  (e) Holder’s Right to Transfer.  If all of the Shares proposed in the Notice to be  transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s)  as provided in this Section 5, then the Holder may sell or otherwise transfer such Shares to that  Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other  transfer is consummated within one hundred and twenty (120) days after the date of the Notice, that  any such sale or other transfer is effected in accordance with any applicable securities laws and that  the Proposed Transferee agrees in writing that the provisions of this Section 5 shall continue to  apply to the Shares in the hands of such Proposed Transferee.  If the Shares described in the Notice  are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the  Company, and the Company and/or its assignees shall again be offered the Right of First Refusal  before any Shares held by the Holder may be sold or otherwise transferred.  (f) Exception for Certain Family Transfers.  Anything to the contrary contained  in this Section 5 notwithstanding, the transfer of any or all of the Shares during the Participant’s  lifetime or on the Participant’s death by will or intestacy to the Participant’s immediate family or a  trust for the benefit of the Participant’s immediate family shall be exempt from the provisions of this  Section 5.  “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent,  father, mother, brother or sister.  In such case, the transferee or other recipient shall receive and hold  the Shares so transferred subject to the provisions of this Section 5, and there shall be no further  transfer of such Shares except in accordance with the terms of this Section 5.  (g) Termination of Right of First Refusal.  The Right of First Refusal shall  terminate as to any Shares upon the earlier of (i) the first sale of Common Stock of the Company to  the general public, or (ii) a Change in Control in which the successor corporation has equity  securities that are publicly traded.   

 

  -3-  6. Tax Consultation.  Participant understands that Participant may suffer adverse tax  consequences as a result of Participant’s purchase or disposition of the Shares.  Participant  represents that Participant has consulted with any tax consultants Participant deems advisable in  connection with the purchase or disposition of the Shares and that Participant is not relying on the  Company for any tax advice.  7. Restrictive Legends and Stop-Transfer Orders.  (a) Legends.  Participant understands and agrees that the Company shall cause the  legends set forth below or legends substantially equivalent thereto, to be placed upon any  certificate(s) evidencing ownership of the Shares together with any other legends that may be  required by the Company or by state or federal securities laws:  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE  OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR  HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR,  IN THE OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE  SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR  HYPOTHECATION IS IN COMPLIANCE THEREWITH.  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO  CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST  REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN  THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL  HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT  THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS  AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF  THESE SHARES.  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO  RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME FOLLOWING THE  EFFECTIVE DATE OF THE UNDERWRITTEN PUBLIC OFFERING OF THE  COMPANY’S SECURITIES SET FORTH IN AN AGREEMENT BETWEEN THE  ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT  BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE  EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE  COMPANY OR THE MANAGING UNDERWRITER.  (b) Stop-Transfer Notices.  Participant agrees that, in order to ensure compliance  with the restrictions referred to herein, the Company may issue appropriate “stop transfer”  instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may  make appropriate notations to the same effect in its own records.  (c) Refusal to Transfer.  The Company shall not be required (i) to transfer on its  books any Shares that have been sold or otherwise transferred in violation of any of the provisions of  

 

  -4-  this Exercise Notice or (ii) to treat as owner of such Shares or to accord the right to vote or pay  dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.  8. Successors and Assigns.  The Company may assign any of its rights under this  Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the benefit of  the successors and assigns of the Company.  Subject to the restrictions on transfer herein set forth,  this Exercise Notice shall be binding upon Participant and his or her heirs, executors, administrators,  successors and assigns.  9. Interpretation.  Any dispute regarding the interpretation of this Exercise Notice shall  be submitted by Participant or by the Company forthwith to the Administrator, which shall review  such dispute at its next regular meeting.  The resolution of such a dispute by the Administrator shall  be final and binding on all parties.  10. Governing Law; Severability.  This Exercise Notice is governed by the internal  substantive laws, but not the choice of law rules, of California.  In the event that any provision  hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or  void, this Exercise Notice shall continue in full force and effect.  11. Entire Agreement.  The Plan and Option Agreement are incorporated herein by  reference.  This Exercise Notice, the Plan, the Option Agreement and the Investment Representation  Statement constitute the entire agreement of the parties with respect to the subject matter hereof and  supersede in their entirety all prior undertakings and agreements of the Company and Participant  with respect to the subject matter hereof, and may not be modified adversely to the Participant’s  interest except by means of a writing signed by the Company and Participant.  Submitted by:  Accepted by:  PARTICIPANT  TEMPEST THERAPEUTICS, INC.           Signature  By         Print Name  Print Name           Title  Address:  Address:                                Date Received  

 

     EXHIBIT B  INVESTMENT REPRESENTATION STATEMENT    PARTICIPANT  :   COMPANY : TEMPEST THERAPEUTICS, INC.  SECURITY : COMMON STOCK  AMOUNT :   DATE :   In connection with the purchase of the above-listed Securities, the undersigned Participant  represents to the Company the following:  (a) Participant is aware of the Company’s business affairs and financial condition and  has acquired sufficient information about the Company to reach an informed and knowledgeable  decision to acquire the Securities.  Participant is acquiring these Securities for investment for  Participant’s own account only and not with a view to, or for resale in connection with, any  “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities  Act”).  (b) Participant acknowledges and understands that the Securities constitute “restricted  securities” under the Securities Act and have not been registered under the Securities Act in reliance  upon a specific exemption therefrom, which exemption depends upon, among other things, the bona  fide nature of Participant’s investment intent as expressed herein.  In this connection, Participant  understands that, in the view of the Securities and Exchange Commission, the statutory basis for  such exemption may be unavailable if Participant’s representation was predicated solely upon a  present intention to hold these Securities for the minimum capital gains period specified under tax  statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities,  or for a period of one (1) year or any other fixed period in the future.  Participant further understands  that the Securities must be held indefinitely unless they are subsequently registered under the  Securities Act or an exemption from such registration is available.  Participant further acknowledges  and understands that the Company is under no obligation to register the Securities. Participant  understands that the certificate evidencing the Securities shall be imprinted with any legend required  under applicable state securities laws.  (c) Participant is familiar with the provisions of Rule 701 and Rule 144, each  promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted  securities” acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to  the satisfaction of certain conditions.  Rule 701 provides that if the issuer qualifies under Rule 701 at  the time of the grant of the Option to Participant, the exercise shall be exempt from registration  under the Securities Act.  In the event the Company becomes subject to the reporting requirements  

 

  -2-  of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such  longer period as any market stand-off agreement may require) the Securities exempt under Rule 701  may be resold, subject to the satisfaction of the applicable conditions specified by Rule 144,  including in the case of affiliates (1) the availability of certain public information about the  Company, (2) the amount of Securities being sold during any three (3) month period not exceeding  specified limitations, (3) the resale being made in an unsolicited “broker’s transaction”, transactions  directly with a “market maker” or “riskless principal transactions” (as those terms are defined under  the Securities Exchange Act of 1934) and (4) the timely filing of a Form 144, if applicable.  In the event that the Company does not qualify under Rule 701 at the time of grant of  the Option, then the Securities may be resold in certain limited circumstances subject to the  provisions of Rule 144, which may require (i) the availability of current public information about the  Company; (ii) the resale to occur more than a specified period after the purchase and full payment  (within the meaning of Rule 144) for the Securities; and (iii) in the case of the sale of Securities by  an affiliate, the satisfaction of the conditions set forth in sections (2), (3) and (4) of the paragraph  immediately above.  (d) Participant further understands that in the event all of the applicable requirements of  Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation  A, or some other registration exemption shall be required; and that, notwithstanding the fact that  Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has  expressed its opinion that persons proposing to sell private placement securities other than in a  registered offering and otherwise than pursuant to Rules 144 or 701 shall have a substantial burden  of proof in establishing that an exemption from registration is available for such offers or sales, and  that such persons and their respective brokers who participate in such transactions do so at their own  risk.  Participant understands that no assurances can be given that any such other registration  exemption shall be available in such event.  PARTICIPANT     Signature     Print Name     Date

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