ParkerVision, Inc.
PARKERVISION INC (Form: 10-Q, Received: 08/08/2007 15:10:23)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q
(Mark One)
x   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from ________to____________

Commission file number 0-22904

PARKERVISION, INC.
(Exact name of registrant as specified in its charter)

Florida
 
59-2971472
(State or other jurisdiction of
 
I.R.S. Employer ID No.
incorporation or organization)
 
 
 
7915 Baymeadows Way, Suite 400
Jacksonville, Florida 32256
(904) 737-1367
(Address of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o
Accelerated filer x
Non-accelerated filer o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x .

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of August 3, 2007, 24,904,034 shares of the Issuer’s Common Stock, $.01 par value, were outstanding.
 

 
PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

PARKERVISION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

   
June 30,
2007
 
December 31,
 2006
 
CURRENT ASSETS:
             
Cash and cash equivalents
 
$
19,422,217
 
$
13,225,528
 
Accounts receivable
   
89,546
   
-
 
Prepaid expenses
   
653,531
   
1,025,132
 
Other current assets
   
112,667
   
121,903
 
Total current assets
   
20,277,961
   
14,372,563
 
               
PROPERTY AND EQUIPMENT, net
   
2,075,123
   
2,094,300
 
               
OTHER ASSETS, net
   
10,254,567
   
10,208,484
 
Total assets
 
$
32,607,651
 
$
26,675,347
 
               
CURRENT LIABILITIES:
             
Accounts payable
 
$
896,996
 
$
382,489
 
Accrued expenses:
Salaries and wages
   
769,025
   
328,817
 
Professional fees
   
265,575
   
231,372
 
Other accrued expenses
   
152,125
   
116,713
 
Total current liabilities
   
2,083,721
   
1,059,391
 
               
DEFERRED RENT
   
391,472
   
433,340
 
Total liabilities
   
2,475,193
   
1,492,731
 
 
COMMITMENTS AND CONTINGENCIES
(Notes 7, 8, 9 and 10)
 
             
SHAREHOLDERS' EQUITY:
             
Common stock, $.01 par value, 100,000,000 shares
authorized, 24,904,034 and 23,387,566 shares issued
and outstanding at June 30, 2007 and December 31,
2006 respectively
   
249,040
   
233,876
 
Warrants outstanding
   
18,298,383
   
20,290,878
 
Additional paid-in capital
   
169,867,912
   
154,056,663
 
Accumulated deficit
   
(158,282,877
)
 
(149,398,801
)
Total shareholders' equity
   
30,132,458
   
25,182,616
 
Total liabilities and shareholders' equity  
 
$
32,607,651
 
$
26,675,347
 

The accompanying notes are an integral part of these consolidated financial statements.
 
2

 
PARKERVISION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
 
 
  Three Months Ended June 30,
Six Months Ended June 30,
     
2007
 
 
2006
 
 
2007
 
 
2006
 
                           
Service revenue
 
$
89,546
 
$
-
 
$
89,546
 
$
-
 
Cost of sales
   
76,685
   
-
   
76,685
   
-
 
Gross margin
   
12,861
   
-
   
12,861
   
-
 
                           
Research and development expenses
   
2,557,621
   
2,530,159
   
5,290,072
   
5,087,927
 
Marketing and selling expenses
   
680,732
   
522,367
   
1,347,555
   
1,076,759
 
General and administrative expenses
   
1,426,722
   
1,551,039
   
2,700,375
   
2,940,279
 
Total operating expenses
   
4,665,075
   
4,603,565
   
9,338,002
   
9,104,965
 
                           
Interest and other income
   
236,245
   
284,342
   
441,065
   
442,168
 
                           
Net loss
   
(4,415,969
)
 
(4,319,223
)
 
(8,884,076
)
 
(8,662,797
)
                           
Unrealized gain on securities
   
-
   
-
   
-
   
1,006
 
                           
Comprehensive loss
 
$
(4,415,969
)
$
(4,319,223
)
$
(8,884,076
)
$
(8,661,791
)
                           
Basic and diluted net loss per
common share
 
$
(0.18
)
$
(0.18
)
$
(0.37
)
$
(0.38
)
 
The accompanying notes are an integral part of these consolidated financial statements.
 
3


PARKERVISION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 
Three Months Ended
June 30,
Six Months Ended
June 30,
     
2007
   
2006
   
2007
   
2006
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                         
Net loss
 
$
(4,415,969
)
$
(4,319,223
)
$
(8,884,076
)
$
(8,662,797
)
Adjustments to reconcile net loss to net cash used in
operating activities:
                         
Depreciation and amortization
   
399,981
   
386,508
   
808,493
   
865,236
 
Stock compensation
   
515,170
   
830,889
   
1,010,595
   
1,486,273
 
Loss on disposal and impairment of equipment
   
12,156
   
-
   
12,925
   
-
 
Changes in operating assets and liabilities:
                         
Accounts receivable, net
   
(89,546
)
 
670
   
(89,546
)
 
14,854
 
      Prepaid expenses and other assets
   
233,208
   
291,378
   
329,330
   
320,515
 
Accounts payable and accrued expenses
   
694,101
   
482,196
   
1,020,222
   
737,600
 
Deferred rent
   
(19,221
)
 
-
   
(37,760
)
 
437,314
 
Total adjustments
   
1,745,849
   
1,991,641
   
3,054,259
   
3,861,792
 
Net cash used in operating activities
   
(2,670,120
)
 
(2,327,582
)
 
(5,829,817
)
 
(4,801,005
)
                           
CASH FLOWS FROM INVESTING ACTIVITIES:
                         
Purchases of property and equipment
   
(304,460
)
 
(359,245
)
 
(365,945
)
 
(801,663
)
Payments for patent costs
   
(278,143
)
 
(333,882
)
 
(457,629
)
 
(666,200
)
Proceeds from maturity of investments
   
-
   
-
   
-
   
295,000
 
Net cash used in investing activities
   
(582,603
)
 
(693,127
)
 
(823,574
)
 
(1,172,863
)
                           
CASH FLOWS FROM FINANCING ACTIVITIES:
                         
Proceeds from issuance of common stock
   
3,658,727
   
134,548
   
12,850,080
   
16,431,978
 
Net cash provided by financing activities
   
3,658,727
   
134,548
   
12,850,080
   
16,431,978
 
                           
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
   
406,004
   
(2,886,161
)
 
6,196,689
   
10,458,110
 
                           
CASH AND CASH EQUIVALENTS, beginning of
period
   
19,016,213
   
23,617,906
   
13,225,528
   
10,273,635
 
 
CASH AND CASH EQUIVALENTS, end of period
 
$
19,422,217
 
$
20,731,745
 
$
19,422,217
 
$
20,731,745
 
 
The accompanying notes are an integral part of these consolidated financial statements.
 
4

 
PARKERVISION, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1.
Description of Business

ParkerVision, Inc. and its subsidiary (the “Company”, “ParkerVision”, or “we”) design, develop and market semiconductor technologies for wireless applications. We are marketing our proprietary radio-frequency (RF) technology solutions to original equipment manufacturers (OEMs) who manufacture third generation (3G) mobile handsets and their semiconductor suppliers.

On May 2, 2007, we entered into an Engineering Services Agreement and a Licensing Agreement with ITT Corporation (ITT) for the design and use of our d2p™ technology. Under the agreements, we will provide engineering consulting and design services to ITT on a time and materials basis for the development of products using our technology and will be paid royalties on a per unit basis for products sold by ITT that incorporate our d2p technology. Under the terms of the agreements, ITT has rights to use our d2p technology in applications worldwide.


2.
Basis of Presentation

The accompanying unaudited consolidated financial statements of ParkerVision have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Operating results for the three and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. All normal and recurring adjustments which, in the opinion of management, are necessary for a fair statement of the financial condition and results of operations have been included.

The condensed balance sheet data for the year ended December 31, 2006 was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. These interim consolidated financial statements should be read in conjunction with our latest Annual Report on Form 10-K for the year ended December 31, 2006.

Certain reclassifications have been made to the 2006 consolidated interim financial statements in order to conform to the 2007 presentation.

3.
Accounting Policies
 
Revenue Recognition. We account for our service revenue under the provisions of Staff Accounting Bulletin No. 104 (SAB 104), “Revenue Recognition in Financial Statements” and AICPA Statement of Position No. 81-1 (SOP 81-1), “Accounting for Performance of Construction-Type and Certain Production-Type Contracts.” Under the provisions of SAB 104 and SOP 81-1, we recognize revenue when there is persuasive evidence of an arrangement, services have been rendered, the fee is fixed or determinable, and collectibility of the resulting receivable is reasonably assured. We use the percentage-of-completion method of accounting for cost reimbursement-type contracts which specify a certain billable fee amount. Revenues are recognized as costs are incurred assuming that collection is reasonably assured. Our cost of sales includes the direct labor costs of engineering staff providing services under these contracts, as well as indirect costs including depreciation and amortization and allocated facilities costs.

5

 
Income Taxes . We adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109”, (FIN 48) on January 1, 2007 as more fully discussed in Note 9.

There have been no other changes in accounting policies from those stated in the Annual Report on Form 10-K for the year ended December 31, 2006.
 
4.
Consolidated Statements of Cash Flows

On May 31, 2006, we issued an option to purchase 10,000 shares of our common stock at an exercise price of $10.20 per share, with a fair value of approximately $63,000, to a third party as consideration for professional services. On January 3, 2006, we issued 6,035 shares of our common stock valued at approximately $53,000 to a consultant as consideration for engineering consulting services. In connection with the private placement of 2,373,355 shares of our common stock on February 3, 2006, we issued warrants to purchase 593,335 shares of common stock. These warrants were recorded at their relative fair value of approximately $2.6 million (see Note 8).

5.
Loss per Share

Basic loss per share is determined based on the weighted-average number of common shares outstanding during each period. Diluted loss per share is the same as basic loss per share as all common share equivalents are excluded from the calculation, as their effect is anti-dilutive. The weighted average number of common shares outstanding for the three-month periods ended June 30, 2007 and 2006 are 24,568,839 and 23,366,304, respectively. The weighted average number of common shares outstanding for the six-month periods ended June 30, 2007 and 2006 are 24,194,157 and 22,880,780, respectively. Options and warrants to purchase 6,849,271 and 7,337,371 shares of common stock were outstanding at June 30, 2007 and 2006, respectively, and were excluded from the computation of diluted earnings per share as the effect of these options and warrants would have been anti-dilutive.

6.
Other Assets

Other assets consist of the following:
 
   
June 30, 2007
 
   
  Gross Carrying Amount
   
Accumulated Amortization
   
Net Value
 
Patents and copyrights
 
$
13,883,782
 
$
4,065,987
 
$
9,817,795
 
Prepaid licensing fees
   
705,000
   
683,036
   
21,964
 
Deposits and other
   
414,808
   
-
   
414,808
 
   
$
15,003,590
 
$
4,749,023
 
$
10,254,567
 
 
   
December 31, 2006
 
   
  Gross Carrying Amount
   
Accumulated Amortization
   
Net Value
 
Patents and copyrights
 
$
13,426,154
 
$
3,706,477
 
$
9,719,677
 
Prepaid licensing fees
   
705,000
   
606,250
   
98,750
 
Deposits and other
   
390,057
   
-
   
390,057
 
   
$
14,521,211
 
$
4,312,727
 
$
10,208,484
 
 
6

 
7.
Accounting for Stock-Based Compensation
 
The following table presents share-based compensation expense included in our consolidated statements of operations for the three and six months ended June 30, 2007 and 2006, respectively:

   
Three months ended
June 30,
 
Six months ended
June 30,
 
   
2007
 
2006
 
2007
 
2006
 
Cost of sales
 
$
4,959
 
$
0
 
$
4,959
 
$
0
 
Research and development expense
   
160,338
 
$
237,317
   
323,096
 
$
496,514
 
Sales and marketing expense
   
94,624
   
70,464
   
197,093
   
188,556
 
General and administrative expense
   
255,249
   
523,108
   
485,447
   
801,203
 
Total share-based expense
 
$
515,170
 
$
830,889
 
$
1,010,595
 
$
1,486,273
 

We did not capitalize any expense related to share-based payments. We estimate the fair value of each option award on the date of the grant using the Black-Scholes option valuation model. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, expected volatility of our common stock over the option’s expected term, the risk-free interest rate over the option’s expected term, and the expected dividend yield.

The fair value of option grants issued during the six month periods ended June 30, 2007 and 2006 was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions:

 
 
Six months ended June 30, 2007
 
Six months ended June 30, 2006
Expected volatility
 
68.7% to 73.8%
 
69.4% to 74.0%
Expected life
 
4 to 7 years
 
4.25 to 7 years
Risk free interest rate
 
4.63% to 4.71%
 
4.85% to 5.21%
Dividend yield
 
-
 
-

Stock Incentive Plans

Options to purchase 809,240 shares of common stock were available for future grants under our stock incentive plans at June 30, 2007. A summary of option activity under our stock incentive plans during the six month period ended June 30, 2007 is presented below:

 
 
 
Shares (#)
 
Weighted-Average
Exercise
Price ($)
 
Weighted-Average Remaining Contractual Term
 
 
Aggregate Intrinsic Value ($)
 
Outstanding at January 1, 2007
   
5,109,590
 
$
20.38
             
Granted
   
140,003
   
10.38
             
Exercised
   
(70,350
)
 
8.03
       
$
282,978
 
Expired
   
(444,750
)
 
18.12
             
Outstanding at June 30, 2007
   
4,734,493
 
$
20.43
   
4.24 years
 
$
9,156,143
 
Exercisable at June 30, 2007
   
3,750,014
 
$
23.65
   
3.78 years
 
$
5,423,264
 

7


A summary of the status of nonvested shares as of June 30, 2007, and changes during the six months ended June 30, 2007 is presented below:

   
 
 
Shares (#)
 
Weighted-Average
Grant-Date
Fair Value ($)
 
Nonvested at January 1, 2007
   
928,053
 
$
4.82
 
Granted
   
140,003
   
6.99
 
Vested
   
(83,577
)
 
4.71
 
Nonvested at June 30, 2007
   
984,479
 
$
5.13
 

The total grant date fair value of shares vested during the six months ended June 30, 2007 was $393,535. As of June 30, 2007, there was approximately $3,480,000 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under our stock incentive plans. That cost is expected to be recognized over a weighted-average period of 2.24 years.

Non-Plan Options/Warrants

We have granted options and warrants outside our stock incentive plans for employment inducements, non-employee consulting services, and for underwriting and other services in connection with securities offerings. Non-plan options and warrants are generally granted with exercise prices equal to fair market value of the underlying shares at the date of grant. No non-plan options or warrants were granted in the six months ended June 30, 2007.

A summary of non-plan option and warrant activity during the six month period ended June 30, 2007 is presented below:

 
 
 
 
 
Shares
 
Weighted-Average
Exercise
Price
 
Weighted-Average Remaining Contractual Term
 
Aggregate Intrinsic Value ($)
 
Outstanding at January 1, 2007
   
2,570,736
 
$
25.26
             
Exercised
   
(455,958
)
 
8.59
       
$
1,614,629
 
Outstanding at June 30, 2007
   
2,114,778
 
$
28.86
   
3.76
 
$
2,637,367
 
Exercisable at June 30, 2007
   
2,114,778
 
$
28.86
   
3.76
 
$
2,637,367
 

Cash received from option and warrant exercises under all share-based payment arrangements for the six months ended June 30, 2007 was $4,449,832. No tax benefit was realized for the tax deductions from option or warrant exercises for the six months ended June 30, 2007 as the benefits were fully offset by a valuation allowance.
 
8.
Stock Authorization and Issuance
 
On February 23, 2007, we completed the sale of an aggregate of 992,441 shares of our common stock to a limited number of domestic   institutional and other investors in a private placement transaction pursuant to offering exemptions under the Securities Act of 1933. The shares were sold at a price of $8.50 per share, for net proceeds of approximately $8.4 million. The net proceeds from this transaction will be used for general working capital purposes.
 
8

 
We have a registration payment arrangement with regard to the common stock issued in the private offering. We were required to file a registration statement within 45 days of closing and cause the registration statement to become effective on or prior to the earlier of (i) the fifth trading day following the date we were notified by the SEC that the registration statement will not be reviewed or is no longer subject to review and (ii) 120 days after the closing date. Our registration statement became effective on March 30, 2007 thus fulfilling these obligations. In addition, we are required to use reasonable commercial efforts to maintain the registration statement’s effectiveness until the earlier of (i) two years after the closing or (ii) such time as all common stock purchased in the private placement has been sold pursuant to a registration statement. In the event the registration statement ceases to be effective for any continuous period that exceeds 30 days or for one or more periods that exceed an aggregate of 60 days in any 12-month period (a “Registration Default”), we shall pay the investors an amount in cash equal to 1% of the aggregate purchase price paid for each 30-day period of a Registration Default. The maximum penalty that we may incur under this registration payment arrangement is 10% of the aggregate purchase price, or $843,575, subject to reduction for shares sold or transferred and not held at the penalty determination date. Any payments made are to be prorated for any portion of a 30-day period of a Registration Default and allocated to the investor based on the number of shares owned by the investor at the time of the Registration Default. We do not believe that payment under the registration payment arrangement is probable and therefore no related liability has been recorded in the accompanying financial statements.

On February 3, 2006, we completed the sale of an aggregate of 2,373,335 shares of common stock in a private placement transaction. The shares were sold at a price of $7.50 per share, for net proceeds of approximately $16.2 million. Warrants to purchase an additional 593,335 shares of common stock were issued in connection with the transaction for no additional consideration. The warrants are immediately exercisable at an exercise price of $8.50 per share and expire on February 3, 2011. We may redeem the warrants after February 3, 2008, at $.01 per warrant, provided that the shares underlying the warrants are registered for resale and the common stock traded at a volume weighted-average price equal to or greater than 200% of the then exercise price for a prescribed period of time. The estimated fair value of the warrants of $2,597,396 was classified as equity on the issuance date.

We have a registration payment arrangement with regard to the common stock issued in the private offering. Specifically, we are required to use reasonable commercial efforts to maintain the registration statement’s effectiveness until the earlier of (i) two years after the closing, (ii) such time as all common stock purchased in the private placement have been sold pursuant to a registration statement, or (iii) the date on which the investors may sell all shares and warrant shares without restriction by the volume limitations of Rule 144(e) of the Securities Act. In the event the registration statement ceases to be effective for any continuous period that exceeds 30 days or for one or more periods that exceed an aggregate of 60 days in any 12-month period (a “Registration Default”), we shall pay the investors an amount in cash equal to 1% of the aggregate purchase price paid for each 30-day period of a Registration Default. The maximum penalty that we may incur under this arrangement is 10% of the aggregate purchase price, or $1,780,001, subject to reduction for shares sold or transferred and not held at the penalty determination date. Any payments, if made, will be prorated for any portion of a 30-day period of a Registration Default and allocated to the investor based on the number of shares owned by the investor at the time of the Registration Default. We are not required to pay any penalties related to warrants or shares underlying the warrants. We do not believe that payment under the registration payment arrangement is probable and therefore no related liability has been recorded in the accompanying financial statements.

9


9.
Accounting for Income Taxes
 
Effective January 1, 2007, we adopted the provisions of FIN 48.  FIN 48 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  This interpretation also provides guidance on recognition and classification of income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.   We file income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  We have identified our federal and Florida tax returns as our only major jurisdictions, as defined.  The periods subject to examination for those returns are the 1993 through 2006 tax years. 

At January 1, 2007, we had an unrecognized tax benefit of approximately $1.8 million which did not change significantly during the six months ended June 30, 2007.   Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of a valuation allowance.   The application of FIN 48 would have resulted in a decrease to retained earnings of $1.4 million, except that the decrease was fully offset by the application of a valuation allowance.  Additionally, as a result of the implementation of FIN 48, we decreased a deferred tax asset and its associated valuation allowance by approximately $1.8 million. 
 
At December 31, 2006, the Company had NOL and research and development tax credit carry-forwards for income tax purposes of $146,213,571 and $10,077,457, respectively, which expire in varying amounts from 2008 through 2025.  Utilization of the NOL and R&D credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations that have occurred previously or that could occur in the future provided by Section 382 of the Internal Revenue Code of 1986.  These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively.  In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.  We have raised capital through the issuance of capital stock on several occasions which, combined with the purchasing shareholders’ subsequent disposition of those shares, may have resulted in a change of control as defined by Section 382, or could result in a change of control in the future upon subsequent disposition.  We have not currently completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the Company’s formation due to the significant complexity and cost associated with such study and that there could be additional changes in control in the future.  If we have experienced a change of control at any time since the Company’s formation, utilization of our NOL and R&D credit carryforwards would be subject to an annual limitation under Section 382 which is determined first by multiplying the value of our stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required.  Any limitation may result in the expiration of a portion of the NOL or R&D credit carryforwards before utilization.  Further, until a study is completed and any limitation known, no amounts are being presented as an uncertain tax position under FIN 48. 

Our policy is that we recognize interest and penalties accrued on any unrecognized tax benefits as a component of our income tax expense.  As of the date of adoption of FIN 48, we did not have any accrued interest or penalties associated with any unrecognized tax benefits.  For the three and six month periods ended June 30, 2007 and 2006, we did not incur any income tax related interest income, expense or penalties.   

10

 
10.
Commitments and Contingencies

We are subject to legal proceedings and claims which arise in the ordinary course of our business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position, results of operations or liquidity.

11.
Liquidity and Capital Resources

We operate in a highly competitive industry with rapidly changing and evolving technologies and an increasing number of market entrants. Our potential competitors have substantially greater financial, technical and other resources than we do. We have made significant investments in developing our technologies and products, the returns on which are dependent upon the generation of future revenues for realization. We have not yet generated sufficient revenues to offset our expenses. We have incurred losses from operations and negative cash flows in every year since inception and have utilized the proceeds from the sale of our equity securities to fund our operations.

On February 23, 2007, we completed the sale of an aggregate of 992,441 shares of common stock to a limited number of institutional and other investors in a private placement for net proceeds of approximately $8.4 million (see Note 8). In addition, during the six months ended June 30, 2007, we received proceeds from the exercise of outstanding options and warrants of approximately $4.4 million.

At June 30, 2007, we had an accumulated deficit of approximately $158.3 million and working capital of approximately $18.2 million. Management does not expect that revenues in 2007 will be sufficient to offset the expenses from continued investment in product development and marketing activities. Therefore, we expect operating losses and negative cash flows to continue in 2007 and possibly beyond.

The long-term continuation of our business plans is dependent upon generation of sufficient revenues from our technologies and products to offset expenses. In the event that we do not generate sufficient revenues, we will be required to obtain additional funding through public or private financing and/or reduce certain discretionary spending. Failure to generate sufficient revenues, raise additional capital and/or reduce certain discretionary spending could have a material adverse effect on our ability to achieve our intended long-term business objectives.

12.
Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 157, “Fair Value Measurements” (SFAS 157). This statement defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosure related to the use of fair value measures in financial statements. SFAS 157 does not expand the use of fair value measures in financial statements, but standardizes its definition and guidance in GAAP. SFAS 157 is effective for fiscal years beginning after November 15, 2007. We will adopt the provisions of SFAS 157 on January 1, 2008. We have evaluated SFAS 157 and do not anticipate that it will have an impact on our financial statements when adopted.

In February 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 159, “Fair Value Option for Financial Assets and Financial Liabilities” (SFAS 159). This statement permits entities to elect to measure many financial instruments and certain other items at fair value and also amends SFAS 115, “Accounting for Certain Investments in Debt and Equity Securities”. SFAS 159 is effective for fiscal years beginning after November 15, 2007. We are currently evaluating the impact of SFAS 159; however we do not anticipate that it will have a significant impact on the financial statements when adopted.
 
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements
When used in this Form 10-Q and in future filings by the Company with the Securities and Exchange Commission, the words or phrases “will likely result”, “management expects” or “Company expects”, “will continue”, “is anticipated”, “estimated” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on such forward-looking statements, each of which speaks only as of the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including the timely development and acceptance of new products, sources of supply and concentration of customers. We have no obligation to publicly release the results of any revisions, which may be made to any forward-looking statements to reflect, anticipated events or circumstances occurring after the date of such statements.

Results of Operations for Each of the Three and Six Month Periods Ended June 30, 2007 and 2006

General
We have made significant investments in developing our technologies and products, the returns on which are dependent upon the generation of future revenues for realization. We have not yet generated revenues sufficient to offset our operating expenses and have used the proceeds from the sale of our equity securities to fund our operations.

ITT Agreements
On May 2, 2007, we entered into an Engineering Services Agreement and a Licensing Agreement (collectively, the “Agreements”) with ITT Corporation (ITT) for the design and use of our d2p technology. Under the Agreements, we will provide engineering consulting and design services to ITT on a time and materials basis for the development of products using our technology and will be paid royalties on a per unit basis for products sold by ITT that incorporate our d2p technology. Under the terms of the Agreements, ITT has rights to use our d2p technology in applications worldwide.
 
Future revenues from engineering services and royalties under the ITT agreements are expected to offset a portion of our annual operating expenses, and cumulative royalties for the license of our d2p technology to ITT are estimated to be approximately $25 million.

Critical Accounting Policies
Revenue Recognition. We account for our service revenue under the provisions of Staff Accounting Bulletin No. 104 (SAB 104), “Revenue Recognition in Financial Statements” and AICPA Statement of Position No. 81-1 (SOP 81-1), “Accounting for Performance of Construction-Type and Certain Production-Type Contracts.” Under the provisions of SAB 104 and SOP 81-1, we recognize revenue when there is persuasive evidence of an arrangement, services have been rendered, the fee is fixed or determinable, and collectibility of the resulting receivable is reasonably assured. We use the percentage-of-completion method of accounting for cost reimbursement-type contracts which specify a certain billable fee amount. Revenues are recognized as costs are incurred assuming that collection is reasonably assured.
 
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Income Taxes . We adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109”, (FIN 48) on January 1, 2007 as more fully discussed in Note 9.

There have been no other changes in accounting policies from those stated in the Annual Report on Form 10-K for the year ended December 31, 2006.

Revenues and Gross Margin
We had service revenue of $89,546 for the three month period ended June 30, 2007, representing initial revenue from the engineering services agreement with ITT entered into in May 2007. We had a gross margin of $12,861, or 14% for the period. Our cost of sales included the direct labor costs of engineering staff providing services to ITT, as well as depreciation and amortization and allocated facilities costs. We had no revenue in 2006 or the first quarter of 2007.

We expect our services revenue will fluctuate from period to period depending on the status of ongoing projects and the complexity of services requested by ITT. Also, we anticipate that we will secure new customers in future periods who will also engage us for consulting and design services. We anticipate that royalty revenues from license agreements will not be recognized for a minimum of twelve to eighteen months following execution of a license agreement.

Research and Development Expenses
Our research and development expenses for the three months ended June 30, 2007 were $2,557,621, as compared to $2,530,159 for the same period in 2006, an increase of $27,462 or 1%. This increase was due to increased outside design consulting fees of approximately $110,000, offset by decreased stock-based compensation of approximately $70,000. In addition, approximately $77,000 of engineering costs were classified as cost of sales as they represented direct and indirect costs related to service revenue.

For the six months ended June 30, 2007, our research and development expenses were $5,290,072 as compared to $5,087,927 for the same period in 2006, representing an increase of $202,145 or 4%. The increase was a result of increased prototype fabrication costs of approximately $240,000, increased outside design consulting fees of approximately $98,000 and increased direct personnel costs of approximately $110,000, offset by decreased stock-based compensation of approximately $170,000. In addition, approximately $77,000 of engineering costs were classified as cost of sales as they represented direct and indirect costs related to service revenue.

Prototype fabrication costs vary based on the number of foundry runs, the materials specified and the number of variants requested on each run. Outside design consulting fees are generally project-based and will vary based on timing of certain development projects. The increases in personnel costs were a result of increases in engineering personnel and related recruitment costs. The decreases in stock-based compensation were due to the expiration of a stock-based contract with a third-party in late 2006 as well as decreases in employee stock-based compensation primarily as a result of forfeitures of unvested options.

We expect to continue to invest a significant amount of our working capital in research and development activities, although we do not anticipate that the total amount spent on research and development will increase substantially from current levels without an offsetting increase in revenues.

Marketing and Selling Expenses
Marketing and selling expenses for the three months ended June 30, 2007 were $680,732, representing an increase of $158,365, or 30%, from marketing and selling expenses of $522,367 for the same period in 2006. For the six months ended June 30, 2007, marketing and selling expenses were $1,347,555, representing an increase of $270,796, or 25%, from the same period in 2006.
 
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The increase in sales and marketing expenses for both the three and six month periods was due to increased personnel and consulting costs for technical sales support and expansion of network carrier relationships, as well as increased legal fees related to the ITT agreements.

General and Administrative Expenses
General and administrative expenses for the three months ended June 30, 2007 were $1,426,722, as compared to $1,551,039 for the same period in 2006, representing a decrease of $124,317, or 8%. The decrease in general and administrative expenses was due to decreased stock compensation expense of approximately $270,000, offset by increased outside professional fees of approximately $120,000.

For the six months ended June 30, 2007, general and administrative expenses were $2,700,375, as compared to $2,940,279 for the same period in 2006, representing a decrease of $239,904 or 8%. This decrease was due to decreased stock compensation expense of approximately $320,000, offset by increased outside professional fees of approximately $78,000.

The decrease in stock-based compensation expense was due to expiration of a stock-based compensation arrangement with a third party in 2006 and a decrease in stock-based compensation expense related to directors’ stock options. The increase in outside professional fees is primarily due to consulting fees related to implementation of a new financial accounting system.

Interest and Other Income
Interest and other income consist of interest earned on our investments and other miscellaneous income. Interest and other income for the three months ended June 30, 2007 was $236,245, compared to $284,342 for the same period in 2006. The decrease of $48,097 was due to lower average interest-bearing cash balances during the second quarter of 2007 compared to the same period in 2006. For the six months ended June 30, 2007, interest and other income was $441,065, compared $442,168 for the same period in 2006.

Loss and Loss per Share
We had a net loss of $(4,415,969) or $(0.18) per common share for the three months ended June 30, 2007, as compared to net loss of $(4,319,223) or $(0.18) per common share for the same period in 2006, representing an increase in net loss of $96,746. This increase was primarily due to a 1.3% increase in operating expenses from the same period in 2006.

We had a net loss of $(8,884,076) or $(0.37) per common share for the six months ended June 30, 2007, as compared to net loss of $(8,662,797) or $(0.38) per common share for the same period in 2006. This represents an increase in net loss of $221,279 which was primarily a result of a 2.6% increase in operating expenses.

On a per share basis, the net loss for the six months ended June 30, 2007 decreased when compared to the same period in 2006. This decrease was due to an increase in the weighted average number of shares outstanding as a result of the sale of approximately 992,000 shares of common stock in a private placement transaction in February 2007 and the issuance of approximately 526,000 shares of common stock upon the exercise of options and warrants during the six months ended June 30, 2007.

Liquidity and Capital Resources
At June 30, 2007, we had working capital of approximately $18.2 million which represented an increase of approximately $4.9 million from working capital of $13.3 million at December 31, 2006. The increase was primarily due to a $6.2 million increase in cash and cash equivalents. The increase in cash and cash equivalents was a result of the proceeds from the private placement in February 2007 of approximately $8.4 million and proceeds from the exercise of warrants and employee stock options of approximately $4.4 million during the six month period ended June 30, 2007. These increases were somewhat offset by approximately $5.8 million in cash used for operating activities and approximately $0.8 million of cash invested in equipment and intellectual property protection for the six month period ended June 30, 2007.
 
14

 
Our future business plans call for continued investment in sales, marketing and product development for our wireless technologies and products. Our ability to generate revenues will largely depend upon the rate at which we are able to secure OEM adoption of our technology and products. The expected revenues for 2007 will not be sufficient to cover our operational expenses for 2007. The expected continued losses and negative cash flow will continue to be funded by the use of our available working capital.

We believe that our current capital resources will be sufficient to support our liquidity requirements at least through the first half of 2008. The long-term continuation of our business plans is dependent upon generation of sufficient revenues from our products to offset expenses. In the event that we do not generate sufficient revenues, we will be required to obtain additional funding through public or private financing and/or reduce certain discretionary spending. Failure to generate sufficient revenues, raise additional capital and/or reduce certain discretionary spending could have a material adverse effect on our ability to achieve our intended long-term business objectives.

Off-Balance Sheet Transactions, Arrangements and Other Relationships
As of June 30, 2007, we had outstanding warrants to purchase 1,999,778 shares of common stock that were issued in connection with the sale of equity securities in various private placement transactions in 2000, 2001, 2005 and 2006. These warrants have exercise prices ranging from $8.50 to $56.66 per share with a weighted average exercise price of $29.19 and a weighted average remaining contractual life of approximately 3.9 years. The estimated fair value of these warrants of $18,298,383 is included in shareholders’ equity in our consolidated balance sheets.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable

ITEM 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures
An evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2007 was made under the supervision and with the participation of our management, including the chief executive officer and chief financial officer. Based on that evaluation, they concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in our Exchange Act reports is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and regulations.

Changes in Internal Control over Financial Reporting
For the three month period covered by this report, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

15

 
PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings.
 
We are subject to legal proceedings and claims which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, we believe that the final disposition of such matters will not have a material adverse effect on our financial position, results of operations or liquidity.
 
ITEM 1A. Risk Factors

In addition to other information in this Quarterly Report on Form 10-Q, the risk factors discussed in Part I, Item 1A, “Risk Factors” in our Form 10-K for the year ended December 31, 2006 should be carefully considered in evaluating our business because such factors may have a significant impact on our business, operating results, liquidity and financial condition. The risks described in our 2006 Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition or operating results.

ITEM 2.   Unregistered Sales of Equity Securities and Use of Proceeds.

Sales of Unregistered Securities
 
 
Date of sale
 
 
Title of security
 
 
Number sold
Consideration received and description of underwriting or other discounts to market price afforded to purchasers
Exemption from registration claimed
If option, warrant or convertible security, terms of exercise or conversion
           
5/15/07
Options to purchase common stock granted to officers and other employees pursuant to the 2000 Plan
72,750
Option granted - no consideration received by Company until exercised
4(2)
Options vest over three years and remain exercisable for seven years from the grant date at an exercise price of $10.82 per share.
5/15/07
Options to purchase common stock granted to employee pursuant to the 2000 Plan
736
Option granted - no consideration received by Company until exercised
4(2)
Options vest immediately and remain exercisable for seven years from the grant date at an exercise price of $10.82 per share.
4/13/07 - 5/17/07
Common Stock
28,833
Received proceeds of $259,497
4(2)
Exercise of warrants issued in connection with private placement transaction in March 2005.
5/1/07 - 6/15/07
Common Stock
377,125
Received proceeds of $3,205,563
4(2)
Exercise of warrants issued in connection with private placement transaction in February 2006.
 
16

 
ITEM 3.   Defaults Upon Senior Securities.

Not applicable.
 
ITEM 4. Submission of Matters to a Vote of Security Holders.  

None
 
ITEM 5. Other Information.

Not applicable.
 
ITEM 6. Exhibits and Reports on Form 8-K.

(a)  
Exhibits.

3.1
Articles of Incorporation, as amended (incorporated by reference from Exhibit 3.1 of Registration Statement No. 33-70588-A)
   
3.2
Amendment to Amended Articles of Incorporation dated March 6, 2000 (incorporated by reference from Exhibit 3.2 of Annual Report on Form 10-K for the year ended December 31, 1999)
   
3.2
Bylaws, as amended (incorporated by reference from Exhibit 3.2 of Annual Report on Form 10-K for the year ended December 31, 1998)
   
4.1
Shareholder Protection Rights Agreement between the Registrant and American Stock Transfer & Trust Company, as Rights Agent (incorporated by reference from Exhibit 4.01 of Form 8-K dated November 21, 2005)
   
10.1
Engineering Services Agreement, dated May 2, 2007, between Registrant and ITT Corporation*
   
10.2
License Agreement, dated May 2, 2007, between Registrant and ITT Corporation*
   
31.1
Section 302 Certification of Jeffrey L. Parker, CEO
   
31.2
Section 302 Certification of Cynthia Poehlman, CFO
   
32.1
Section 906 Certification
 
* Portions of this exhibit have been omitted under a request for confidential treatment filed separately with the Securities and Exchange Commission.

(b)  
Reports on Form 8-K. None

17


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
     
 
ParkerVision, Inc.
Registrant
 
 
 
 
 
 
August 7, 2007   By:   /s/ Jeffrey L. Parker
 
 
Jeffrey L. Parker
Chairman and Chief Executive Officer
 
     
   
 
 
 
 
 
 
August 7, 2007 By:   /s/ Cynthia L. Poehlman
 
 
Cynthia L. Poehlman
Chief Financial Officer
 
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Index to Exhibits

10.1
 
Engineering Services Agreement, dated May 2, 2007, between Registrant and ITT Corporation*
     
10.2
 
License Agreement, dated May 2, 2007, between Registrant and ITT Corporation*
 
   
31.1
 
Rule 13a-14 and 15d-14 Certification of Jeffrey Parker
 
   
31.2
 
Rule 13a-14 and 15d-14 Certification of Cynthia Poehlman
 
   
32.1
 
Section 1350 Certification of Jeffrey Parker and Cynthia Poehlman

19


 
Engineering Services Agreement
 
Between ParkerVision and ITT
 
* CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
 
This Engineering Services Agreement (“ Agreement ”) is entered into and made effective as of 2 May 2007 (the “ Effective Date ”) by and between ITT Corporation, an Indiana corporation with offices at 1919 W. Cook Road Fort Wayne, Indiana 46801 (“ ITT ”) [*] ; and ParkerVision, Inc., a Florida corporation with offices at 7915 Baymeadows Way, Suite 400, Jacksonville, Florida, 32256 (“ ParkerVision ”).
 
Recitals
 
WHEREAS, ParkerVision has developed and patented technology known as direct2power or d2p, that was designed to address certain limitations in applying traditional approaches to RF transmit and power amplification, and
 
WHEREAS, d2p Technology allows for the creation of [*] , known as “RF Power Transmitters”, and
 
WHEREAS, ITT desires to have ParkerVision provide engineering services to ITT with respect to the development of [*] , and ParkerVision desires to provide such services for ITT, pursuant to the terms and conditions of this Agreement, and
 
WHEREAS, concurrently with entering into this Agreement, the parties are also entering into a License Agreement for the license of d2p Technology embodied in [*] by ParkerVision to ITT pursuant to the terms and conditions set forth therein,
 
NOW, THEREFORE, in consideration of the mutual premises and of the performance of the mutual covenants herein, the parties agree as follows:
 
1.    DEFINITIONS
 
1.1    ASIC ” means an application specific integrated circuit.
 
1.2    Confidential Information ” has the meaning set forth in Section 7.1.
 
1.3    Development Tools ” means the ParkerVision development tools described in Sections 3.1.4, 3.2.2 and 3.3.2 of the SOW.
 
1.4    d2p Technology ” means technology delivered by ParkerVision to ITT under this Agreement [*] that is designed to address certain limitations in applying traditional approaches to RF transmit and power amplification. d2p Technology generally consists of [*] .
 
1.5    Effective Date ” has the meaning provided in the first paragraph of this Agreement.
 

 
1.6    Implementation Technology ” means any technology for incorporating or embodying the d2p Technology into a semiconductor device, wireless system or product (but excluding any technology that is developed based on the d2p Technology or that requires knowledge of the d2P Technology, which shall be deemed to fall within the definition of Improvements to d2p Technology) [*]  
 
1.7    Improvements to d2p Technology ” means any modifications, enhancements and improvements to the d2p Technology, but in no event includes any Implementation Technology except as set forth in the definition of Implementation Technology.
 
1.8    Intellectual Property Rights ” means patents, certificates of invention, utility models, design rights and similar invention rights, copyrights, trade secret rights, mask work rights, and any other intangible property or proprietary rights (other than trademarks, trade names, service marks and trade dress rights) recognized anywhere in the world under any state or national statute or treaty or common law right, including without limitation all applications and registrations with respect to any of the foregoing.
 
1.9    [*] ” means the [*] that is developed under this Agreement and the SOW and that is based on the d2p Technology.
 
1.10    Open License Terms ” means terms in any license for software which require, as a condition of use, modification and/or distribution of such software or other software incorporated into, incorporating, derived from or distributed with such software (a “ Work ”), any of the following:
 

(a)  
the making available of source code, object code, or design information regarding the Work;

(b)  
the granting of permission for creating derivative works regarding the Work; or

(c)  
the granting of a license to any party under any Intellectual Property Rights in or to the Work.

By means of an example and without limitation, the following licenses and distribution models have Open License Terms: the GNU General Public License (GPL), the GNU Lesser or Library GPL (LGPL), Mozilla Public License (MPL), or any similar open source, free software or community licenses.
 
1.11    ParkerVision Software ” means any software delivered by ParkerVision to ITT under this Agreement, including without limitation the [*] and any software included within the Development Tools.
 
1.12    Second ” means to temporarily reassign an employee or consultant, on a full-time or part-time basis, from his or her regular organization to another organization.
 
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1.13    SOW ” means the Statement of Work containing the tasks, deliverables, target delivery dates and payments set forth in Exhibit A attached hereto, as such SOW may be modified pursuant to Section 2.1.3 below.
 
 
2.    ENGINEERING SERVICES AND ACCEPTANCE
 
2.1    Engineering Services .
 
2.1.1    Obligations . Subject to the terms, conditions and schedule set forth in the SOW, ParkerVision shall exercise commercially reasonable efforts to provide the engineering services specified in the SOW to ITT for the development of [*] . ITT shall exercise its commercially reasonable efforts to fulfill its obligations under the SOW and to further develop [*] into a production release of [*] . The SOW outlines a three-phase program for ParkerVision to provide engineering services to ITT for the development of [*] .
 
2.1.2    Phase 1 Deliverables . Subject to the terms and conditions of the SOW, deliverables to be provided by ParkerVision in phase 1 of the SOW include a description of the technical approach selected for implementing [*] of such technical approach, a development plan for phase 2, a preliminary development plan for phase 3 and a list of the Development Tools as specified in Section 3.1.4 of the SOW.
 
2.1.2.1    Acceptance . Upon successful completion of, and closure of action items from, the review of phase 1 deliverables pursuant to Section 3.1.5 of the SOW (including any mutually agreed upon extensions of time pursuant to Section 2.1.2.2(ii) below), ITT shall accept such deliverables provided ITT reasonably determines that the selected technical approach complies in all material respects with the Specification For [*] provided by ITT (“ Specification ”) and provided the parties are able to agree on material details, such as schedules and division of responsibilities, for the phase 2 development plan and the phase 3 preliminary development plan. If ITT within [*] of such review fails to provide ParkerVision with either written notice of acceptance or written notice of rejection of the phase 1 deliverables, ITT will be deemed to have accepted such deliverables. [*]  
 
2.1.2.2    Rejection . If ITT has not accepted the phase 1 deliverables specified in the SOW, then ITT may, at its sole option, pursue any of the following options upon provision of written notice to ParkerVision:
 
(i)    [*]
 
(ii)    [*]
 
The parties acknowledge and agree that: (a) [*] ; and (b) provided ParkerVision has [*] to deliver phase 1 deliverables that comply with the Specifications, then the [*] .
 
2.1.3    Addendum to SOW . Upon acceptance of phase 1 deliverables by ITT pursuant to Section 2.1.2 of this Agreement, the parties shall execute an addendum to the SOW incorporating the phase 1 deliverables, including (i) material details, such as schedules and division of responsibilities, for the phase 2 development plan and phase 3 preliminary development plan and (ii) a list of the Development Tools as specified in Section 3.1.4 of the SOW.
 
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2.2    Exchange of Deliverables . Except as otherwise specified in Section 4 of the SOW, each party shall provide to the other party one (1) copy of any deliverables specified in the SOW to be delivered by such party.
 
2.3    Project Managers . Each party shall appoint one (1) project manager who will act as a liaison with the other party for the term of this Agreement.
 
3.    DEVELOPMENT TOOLS AND DEVELOPMENT LICENSE
 
3.1    Software .
 
3.1.1    License Grant . ParkerVision hereby grants ITT, for the term of this Agreement, [*] license to use and reproduce [*] and any software included within the Development Tools as may be reasonably necessary solely for the purposes of (i) fulfilling ITT’s specific development tasks under the SOW with respect to development of [*] , and (ii) exercising ITT’s rights under the License Agreement with respect to [*] .
 
3.1.2    No Reverse Engineering . ITT shall not (a) modify, translate, reverse engineer, decompile, disassemble or otherwise attempt (i) to defeat, avoid, bypass, remove, deactivate or otherwise circumvent any software protection mechanisms in the ParkerVision Software, including without limitation any such mechanism used to restrict or control the functionality of the ParkerVision Software, or (ii) to derive the source code or the underlying ideas, algorithms, structure or organization from the ParkerVision Software; (b) alter, adapt, modify or translate the ParkerVision Software in any way for any purpose, including without limitation error correction; or (c) distribute, rent, loan, lease, transfer or grant any rights in the ParkerVision Software or modifications thereof in any form to any person or entity.
 
3.2    [*] .
 
3.2.1    Transfer . Upon acceptance of the phase 1 SOW deliverables by ITT pursuant to Section 2.1.2 of this Agreement, pursuant to the delivery date specified in Section 4 of the SOW, ParkerVision agrees to provide ITT with [*] , as specified in Section 3.2.2 of the SOW. ITT agrees to use the [*] solely for the purposes of (i) fulfilling ITT’s specific obligations under the SOW with respect to development of [*] , and (ii) exercising ITT’s rights under the License Agreement with respect to [*] , and agrees not to dispose of the [*] (by sale, transfer or otherwise) without the prior written consent of ParkerVision. Shipment of the [*] shall be F.O.B. ParkerVision’s facility and the [*] shall be delivered in like new condition.
 
3.2.2    Risk of Loss . ITT assumes the entire risk of loss, damage, theft, or destruction of the [*] while it is in the possession of ITT and during transportation to and from ITT’s premises.
 
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4.    SUPPORT
 
After completion of each party’s tasks specified in the SOW, ParkerVision shall provide to ITT support with respect to the use, functioning and implementation of the d2p Technology and [*] into [*] as ITT may request from time to time, subject to the reasonable availability of ParkerVision personnel and resources.
 
5.    FEES AND PAYMENT
 
5.1    Payments . In consideration of the duties and obligations of ParkerVision hereunder, ITT shall pay to ParkerVision the amounts and at the times set forth in the SOW.
 
5.2    Support . For [*] and support services provided to ITT pursuant to Sections 4 and 12.1 of this Agreement, ITT agrees to pay ParkerVision [*] for rendering such support services [*] .
 
5.3    Payment Terms . All payments made hereunder shall be in United States Dollars and may be made, at ParkerVision’s option, by wire transfer or check. Unless otherwise stated, all fees are due within [*] of invoice by ParkerVision.
 
5.4    Late Payment Charges . ITT shall pay ParkerVision a late fee on all amounts not paid within [*] of the date due set forth herein equal to [*] .
 
5.5    Taxes . All payments by ITT shall be made free and clear of, and without reduction for, any and all taxes, including, without limitation, sales, use, property, license, value added, excise, franchise, income, withholding or similar taxes, other than such taxes which are imposed by the United States or any political subdivision thereof based on the net income of ParkerVision. Any such taxes which are otherwise imposed on payments to ParkerVision shall be the sole responsibility of ITT. ITT shall provide ParkerVision with official receipts issued by the appropriate taxing authority or such other evidence as is reasonably requested by ParkerVision to establish that such taxes have been paid.
 
6.    OWNERSHIP AND LICENSE GRANTS
 
6.1    ParkerVision .
 
6.1.1    ParkerVision retains all right, title and interest in and to the d2p Technology developed prior to, or outside the scope of, this Agreement, and in and to any Improvements to d2p Technology and Implementation Technology that may be made, invented, authored, developed or otherwise created solely by ParkerVision or its employees under this Agreement.
 
6.1.2    [*]  
 
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6.1.3    ITT’s license rights to the d2p Technology, Improvements to d2p technology and Implementation Technology shall be solely as set forth in the License Agreement.
 
6.2    ITT .
 
6.2.1    [*]  
 
6.2.2    [*]
 
6.2.3    [*]  
 
7.    CONFIDENTIAL INFORMATION
 
7.1    Confidential Information ” means, with respect to either party, any confidential business or technical information, including know-how, whether or not patentable or copyrightable, that the disclosing party identifies as confidential or proprietary at the time it is disclosed or delivered to the receiving party. The d2p Technology, any jointly developed Improvements to d2p Technology, [*] and the Development Tools shall in any event be deemed the Confidential Information of ParkerVision. Further, any [*] shall be deemed the Confidential Information of the developing party and such party shall have no obligation to disclose such [*] to the other party.
 
7.2    Exceptions . Confidential Information does not include any information that the receiving party can demonstrate by written records: (a) was known to the receiving party prior to its disclosure hereunder by the disclosing party; (b) is independently developed by the receiving party; (c) is or becomes publicly known through no wrongful act of the receiving party; (d) has been rightfully received from a third party whom the receiving party has reasonable grounds to believe is authorized to make such disclosure without restriction; or (e) has been approved for public release by the disclosing party’s prior written authorization. Each party may disclose any Confidential Information as required to be produced or disclosed pursuant to applicable law, regulation or court order, provided that the receiving party provides prompt advance notice thereof to enable the disclosing party to seek a protective order or otherwise prevent such disclosure. In addition, each party may disclose the existence and terms of this Agreement in confidence in connection with [*] or [*] or to the extent required by law in connection with a public offering of such party’s securities.
 
7.3    Non-Disclosure and Non-Use . Each party will: (i) not use any Confidential Information of the other party except in the performance of this Agreement or as permitted by the License Agreement; (ii) not disclose any such Confidential Information to any person or entity other than its own employees, consultants and subcontractors and customers of ITT that fall under the U.S. Federal Government who have a need to know and who have executed in advance of receiving such Confidential Information a suitable nondisclosure and restricted use agreement that comports with the applicable provisions of this Agreement; and (iii) use all reasonable efforts to keep such Confidential Information strictly confidential. Each party will use reasonable efforts to enforce such nondisclosure and restricted use agreements.
 
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8.    TERM
 
Unless earlier terminated in accordance with the terms of this Agreement, this Agreement shall extend until [*] from the Effective Date of this Agreement.
 
9.    TERMINATION
 
9.1    Termination for Breach . At any time after the occurrence of an Event of Default, this Agreement may be terminated at the election of the Non-Defaulting Party, effective as of the date specified in a notice of termination provided to the Defaulting Party. As used herein, “ Event of Default ” means one or more of the following events: if there should occur a material breach, default or noncompliance by one party (the “ Defaulting Party ”) of or with any term or condition hereof followed by written notice of such breach, default or noncompliance from the other party (the “ Non-Defaulting Party ”) and the failure of the Defaulting Party to remedy or correct such breach, default or noncompliance within [*] after receipt of such notice (the “ Cure Period ”).
 
9.2    [*]
 
9.3    Effect of Termination or Expiration .
 
9.3.1    Return of Software and Confidential Information . Upon the termination or expiration of this Agreement, ITT may keep only one (1) copy of the ParkerVision Software provided to it by ParkerVision hereunder solely for archival purposes and shall return to ParkerVision or destroy all other copies of ParkerVision Software delivered by ParkerVision to ITT or otherwise within the possession of ITT. Shipping terms for returned copies of ParkerVision Software shall be F.O.B. ParkerVision’s facility. In addition, upon the termination or expiration of this Agreement, each party may keep only one (1) copy of the Confidential Information provided to it by the other party hereunder solely for archival purposes and shall return to the other party or destroy all other copies of any Confidential Information provided to it by the other party hereunder, or any portion thereof, in its possession or control. The foregoing shall not, however, require either party to return or destroy any technology, materials or information that it has a right to retain under the License Agreement.
 
9.3.2    Survival of Certain Provisions . The provisions of Sections 3.1.2, 3.2, 4, 5, 6, 7, 10.2, 11, 12 and this Section 9.3 of this Agreement will survive any expiration or termination of this Agreement.
 
10.    WARRANTIES
 
10.1    Warranties .
 
10.1.1    Warranties by ParkerVision.   ParkerVision hereby represents and warrants to ITT that: (a) it has the full right, power and authority to enter into this Agreement and to grant the licenses and make the assignments granted and made hereunder; (b) this Agreement is a valid and binding obligation of such party; and (c) it has obtained and shall maintain throughout the term of this Agreement all necessary licenses, authorizations, approvals and consents to enter into and perform its obligations hereunder in compliance with all applicable laws, rules and regulations. ParkerVision represents and warrants that the ParkerVision Software is not subject to Open License Terms. In the event of a breach of the preceding warranty against Open License Terms, ParkerVision will, at its sole expense, promptly (i) notify ITT of any affected portions of ParkerVision Software, and (ii) take all reasonable efforts to replace such affected portions of ParkerVision Software with software of equivalent functionality that is not subject to Open License Terms.
 
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10.1.2    Warranties by ITT.   ITT hereby represents and warrants to ParkerVision that: (a) it has the full right, power and authority to enter into this Agreement and to grant the licenses and make the assignments granted and made hereunder; (b) this Agreement is a valid and binding obligation of such party; and (c) it has obtained and shall maintain throughout the term of this Agreement all necessary licenses, authorizations, approvals and consents to enter into and perform its obligations hereunder in compliance with all applicable laws, rules and regulations . ITT represents and warrants that ITT shall not act in any manner that would require any ParkerVision Software to be licensed under Open License Terms.
 
10.2    Disclaimer of Other Warranties . EXCEPT AS SET FORTH IN SECTION 10.1, NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER, EITHER EXPRESS, IMPLIED OR STATUTORY, AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL SUCH WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.  
 
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11.    LIMITATION OF LIABILITY
 
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (EXCEPT TO THE EXTENT THAT SUCH LOST PROFITS OR SUCH DAMAGES CONSTITUTE THE MEASURE OF DIRECT DAMAGES UNDER THE RELEVANT INTELLECTUAL PROPERTY LAWS AND EXCEPT FOR A BREACH OF EITHER PARTY’S CONFIDENTIALITY OBLIGATIONS UNDER SECTION 7 OF THIS AGREEMENT), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT. THIS LIMITATION WILL APPLY EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. EXCEPT FOR (i) EITHER PARTY’S BREACH, OR EXCEEDING THE SCOPE, OF THE LICENSE RIGHTS GRANTED TO SUCH PARTY UNDER SECTIONS 3.1 AND 6.2.3 OF THIS AGREEMENT AND (ii) EITHER PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 7 OF THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY’S LIABILITY ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT EXEED [*] .
 
12.    GENERAL PROVISIONS
 
12.1    Assignment . This Agreement may not be assigned in whole or in part by either party without the written consent of the other, which consent will not be unreasonably withheld. Notwithstanding the foregoing, ITT or ParkerVision may assign this Agreement in connection with a merger, reorganization, change of control or sale of all or substantially all of its assets or business to which this Agreement relates, [*] .
 
12.1.1    [*]
 
12.1.2    [*]  
 
12.1.2.1    [*]
 
12.1.2.2    [*]
 
12.1.2.3    [*]
 
12.1.2.4    [*]
 
12.2    Notice .
 
12.2.1    Unless otherwise changed by notice in writing from ITT to ParkerVision, ParkerVision shall serve notice upon ITT as follows:
 
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General Counsel
[*] ITT Corporation
1919 West Cook Road
Fort Wayne, Indiana 46801
 
12.2.2    Unless otherwise changed by notice in writing from ParkerVision to ITT, ITT shall serve notice upon ParkerVision as follows:

ParkerVision, Inc.
7915 Baymeadows Way, Suite 400
Jacksonville, Florida, 32256

With copy to:

CFO
ParkerVision, Inc.
7915 Baymeadows Way, Suite 400
Jacksonville, Florida, 32256
 
12.2.3    Notice shall be by regular or priority mail, recognized commercial overnight courier, hand delivery, facsimile transmission or electronic mail with proof of receipt, and shall be effective as of the date received.
 
12.3    Severability . If any paragraph or provision of this Agreement shall be deemed void or invalid as a matter of law, the remaining paragraphs or provisions of this Agreement shall nevertheless remain in full force and effect.
 
12.4    No Joint Venture, etc. Nothing herein shall be deemed to constitute ParkerVision and ITT as partners, joint venturers or otherwise associated in or with the business of the other. Neither party shall be liable for any debts, accounts, obligations or other liabilities of the other party. Neither party is authorized to incur any debts or other obligations of any kind on the part of or as agent for the other except as may be specifically authorized in writing.
 
12.5    Waiver . Except for any mutually agreed extensions of time pursuant to Section 2.1.2.2(ii) of this Agreement, no relaxation, forbearance, delay or negligence by any party hereto in enforcing any of the terms and conditions of this Agreement, or the granting of time by any party to another, shall operate as a waiver or prejudice, affect or restrict the rights, powers or remedies of any party hereto.
 
12.6    Complete Agreement . This Agreement and the Exhibits attached hereto represents the full and complete agreement and understanding of the parties hereto with respect to the subject matter hereof. Any amendment thereof must be in writing and executed by the parties hereto.
 
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12.7    Governing Law . All questions of law, rights, and remedies regarding any act, event or occurrence undertaken prior to or pursuant to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to or application of choice of law rules or principles, and the United States. The Parties agree that all proceedings, disputes and claims concerning the interpretation or the performance of this Agreement, including questions involving its existence, validity and duration shall be subject to the exclusive jurisdiction of federal courts in the State of New York, and the parties voluntarily subject themselves to the jurisdiction of such courts.
 
12.8    Compliance with Export Control Laws .  Each party agrees to comply with all applicable export and reexport control laws and regulations, including the Export Administration Regulations ("EAR") maintained by the United States Department of Commerce.  Specifically, each party covenants that it shall not -- directly or indirectly -- sell, export, reexport, transfer, divert, or otherwise dispose of any software, source code, or technology (including products derived from or based on such technology) received from the other party under this Agreement to any country (or any individual national thereof) subject to antiterrorism controls or U.S. embargo, or to any other person, entity, or destination prohibited by the laws or regulations of the United States, without obtaining prior authorization from the competent government authorities as required by those laws and regulations. 
 
12.9    Multiple Counterparts . This Agreement may be executed in multiple counterparts, each of which will be considered an original and all of which together will constitute one agreement. This Agreement may be executed by the attachment of signature pages which have been previously executed.
 
12.10    Remedies Cumulative . Except as expressly provided herein, all rights and remedies enumerated in this Agreement will be cumulative and none will exclude any other right or remedy permitted herein or by law or in equity.
 
12.11    Headings . The headings contained in this Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
 
12.12    Force Majeure . No party shall be responsible or liable to another party for nonperformance or delay in performance of any terms or conditions of this Agreement due to acts or occurrences beyond the reasonable control of the nonperforming or delayed party, including but not limited to, acts of God, acts of government, wars, riots, strikes or other labor disputes, fires and floods, provided the nonperforming or delayed party provides to the other party written notice of the existence and the reason for such nonperformance or delay. Notwithstanding the foregoing, either party may terminate this agreement if such nonperformance or delay extends for a period greater than ninety (90) days.
 
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IN WITNESS WHEREOF, the parties have executed this Agreement through their duly authorized representatives as set forth below:
 
 
ITT CORPORATION     ParkerVision, Inc.
       
Signature: /s/      Signature: /s/ 

   
Printed Name:        
 
Title:
   
Printed Name:        
 
Title:
 
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License Agreement
 
Between ParkerVision and ITT
 
* CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
 
This Agreement (“ Agreement ”) is entered into and made effective as of 2 May 2007 (the “ Effective Date ”) by and between ITT Corporation, an Indiana corporation with offices at 1919 West Cook Road, Fort Wayne, Indiana 46801 (“ ITT ”) [*] ; and ParkerVision, Inc., a Florida corporation with offices at 7915 Baymeadows Way, Suite 400, Jacksonville, Florida, 32256 (“ ParkerVision ”).
 
Recitals
 
WHEREAS, ParkerVision has developed and patented technology known as direct2power or d2p (d2p Technology, as defined hereafter), that was designed to address certain limitations in applying traditional approaches to RF transmit and power amplification, and
 
WHEREAS, d2p Technology allows for the creation of [*] , known as “RF Power Transmitters”, and
 
WHEREAS, ITT desires to license from ParkerVision, and ParkerVision desires to license to ITT, the d2p Technology, pursuant to the terms and conditions of this Agreement, and
 
WHEREAS, concurrently with entering into this Agreement, the parties are also entering into an Engineering Services Agreement pursuant to which ParkerVision will provide engineering services to ITT with respect to the development by ITT of [*] pursuant to the terms and conditions set forth therein,
 
NOW, THEREFORE, in consideration of the mutual premises and of the performance of the mutual covenants herein, the parties agree as follows:
 
1.    DEFINITIONS
 
1.1    Confidential Information ” has the meaning set forth in Section 10.1.
 
1.2    d2p Technology ” means technology delivered by ParkerVision to ITT under the Engineering Services Agreement [*] that is designed to address certain limitations in applying traditional approaches to RF transmit and power amplification. d2p Technology generally consists of [*] .
 
1.3    Development Tools ” means the ParkerVision development tools described in Sections 3.1.4, 3.2.2 and 3.3.2 of the Statement of Work attached to the Engineering Services Agreement.
 
1.4    [*]  
 

 
1.5    Government Channels ” means the channels of marketing, sale, lease to and/or procurement for U.S. and foreign military and/or government entities including federal, state and local government entities and further including the respective departments and agencies that fall under such government entities. For clarification purposes, such government entities, purchasing for both civilian and military purposes, shall include, without limitation, the Department of Homeland Security, the National Guard and Fire/Police Departments under the respective agencies noted above.
 
1.6    Implementation Technology means any technology for incorporating or embodying the d2p Technology into a semiconductor device, wireless system or product (but excluding any technology that is developed based on the d2p Technology or that requires knowledge of the d2P Technology, which shall be deemed to fall within the definition of Improvements to d2p Technology) [*]
 
1.7    Improvements to d2p Technology ” means any modifications, enhancements and improvements to the d2p Technology, but in no event includes any Implementation Technology except as set forth in the definition of Implementation Technology.
 
1.8    Intellectual Property Rights ” means patents, certificates of invention, utility models, design rights and similar invention rights, copyrights, trade secret rights, mask work rights, and any other intangible property or proprietary rights (other than trademarks, trade names, service marks and trade dress rights) recognized anywhere in the world under any state or national statute or treaty or common law right, including without limitation all applications and registrations with respect to any of the foregoing.
 
1.9    ITT Field of Use ” means [*] systems that are specifically designed, developed and adapted to meet the specifications and standards unique to  [*] (with regard to matters such as the physical and operational characteristics, manufacturing processes, materials, reliability, compatibility with logistics systems and the like).  ITT Field of Use shall include the marketing, sale, lease to and/or procurement of such [*] systems  [*] .  ITT Field of Use shall not include any [*] (i.e., not specifically designed, developed and adapted to meet the specifications and standards unique to  [*] ) [*] systems, irrespective of whether such [*] systems are marketed, sold, leased to and/or procured  [*] .
 
1.10    [*] ” means the [*] that is developed under the Engineering Services Agreement and the Statement of Work attached thereto and that is based on the d2p Technology.
 
1.11    Licensed Patents ” means:
 
1.11.1    the issued patents listed in Exhibit A hereto;
 
1.11.2    all patent(s) that may issue to ParkerVision based upon the United States patent application(s) listed in Exhibit A hereto;
 
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1.11.3    all patent(s) that may issue to ParkerVision based upon the international patent application(s) listed in Exhibit A hereto;
 
1.11.4    [*]
 
1.11.5    all continuations, divisionals, reissues, reexaminations, and substitutions (“ Continuations ”) that may issue from any of the foregoing based on the subject matter disclosed in any of the foregoing, provided that such Continuations have Patent Claims covering [*] within the ITT Field of Use (as the ITT Field of Use is defined on the Effective Date).
 
1.12    Licensed Process ” means any process or method claimed in any of the Licensed Patents.
 
1.13    Licensed Product ” means any product in the ITT Field of Use that is developed by ITT and that incorporates one or more [*] .
 
1.14    Licensed Technology ” means the d2p Technology, Improvements to d2p Technology, and Implementation Technology, all to the extent owned by ParkerVision and delivered by ParkerVision to ITT under the Engineering Services Agreement.
 
1.15    Open License Terms ” means terms in any license for software which require, as a condition of use, modification and/or distribution of such software or other software incorporated into, incorporating, derived from or distributed with such software (a “ Work ”), any of the following:
 
(a) the making available of source code, object code, or design information regarding the Work;
 
(b) the granting of permission for creating derivative works regarding the Work; or
 
(c) the granting of a license to any party under any Intellectual Property Rights in or to the Work.
 
By means of example and without limitation, the following licenses and distribution models have Open License Terms: the GNU General Public License (GPL), the GNU Lesser or Library GPL (LGPL), Mozilla Public License (MPL), or any similar open source, free software or community licenses.
 
1.16    ParkerVision Software ” means any software delivered by ParkerVision to ITT under the Engineering Services Agreement, including without limitation the [*] and any software included within the Development Tools.
 
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1.17    Patent Claim ” shall have the meaning given to such term under the applicable laws of a patent office or jurisdiction and, for purposes of clarification, refers to a portion of a patent or patent application that defines the scope of protection for an invention.
 
1.18    Royalty Fiscal Year ” means each twelve (12) month period beginning January 1 and ending December 31 of a particular calendar year.
 
1.19    Sell ” means sell, lease or otherwise distribute except for (i) distribution without any payment received by ITT for the purpose of testing, qualifications, or packaging, and (ii) distribution of a limited quantity without payment received by ITT for the purpose of evaluation.
 
1.20    Sold ” shall mean the past tense of Sell.
 
2.    GRANT OF LICENSES
 
2.1    Licensed Patents and Licensed Technology .
 
2.1.1    Grant . Subject to the terms and conditions of this Agreement, ParkerVision grants to ITT, during the term of this Agreement, a [*] license, under the Licensed Patents and any copyrights and trade secrets and mask work rights (recognized anywhere in the world under any state or national statute or treaty or common law right, including without limitation all applications and registrations with respect to any of the foregoing) in and to the Licensed Technology owned or licensable by ParkerVision (with no right to sublicense), to use, modify, reproduce [*] (except as set forth below) of the Licensed Technology in order to develop Licensed Products only in the ITT Field of Use; to make, have made, use, lease, sell, offer for sale, import, distribute, transfer and otherwise exploit Licensed Products only in the ITT Field of Use; and to practice any Licensed Process involved in the manufacture or use thereof.
 
2.1.2    Have Made Rights . ITT understands and acknowledges that the “have made” rights granted in Section 2.1.1 extend only to Licensed Products that are made by a third party for the use, lease, sale, offer for sale and/or import by or on behalf of ITT and (A) for which the Licensed Product will be branded by ITT or (B) where (whether branded by ITT or not) both (i) the designs, specifications and working drawings for the manufacture of the Licensed Product to be manufactured by that third party are furnished primarily by ITT and (ii) such designs, specifications and working drawings are in sufficient detail that no material additional design work is required by the third party, other than adaptation to the production processes and standards normally used by that third party, provided such adaptation only changes the characteristics of such Licensed Products to an extent that is not material . Upon written request from ParkerVision, ITT shall promptly inform ParkerVision in writing whether and to what extent any manufacturer identified by ParkerVision is operating under the Licensed Patents pursuant to ITT's “have made” rights granted under Section 2.1.1.
 
2.1.3    No Reverse Engineering . Notwithstanding the above, with respect to any software included in the Licensed Technology, ITT shall not (a) modify, translate, reverse engineer, decompile, disassemble or otherwise attempt (i) to defeat, avoid, bypass, remove, deactivate or otherwise circumvent any software protection mechanisms in such software, including without limitation any such mechanism used to restrict or control the functionality of such software, or (ii) to derive the source code or the underlying ideas, algorithms, structure or organization from such software; (b) alter, adapt, modify or translate such software in any way for any purpose, including without limitation error correction; or (c) distribute, rent, loan, lease, transfer or grant any rights in such software or modifications thereof in any form to any person or entity.
 
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2.1.4    [*]
 
2.2    No Other Licenses . Except as expressly set forth in this Section 2, no license or other right is granted herein by either party to the other party, directly or by implication, estoppel or otherwise, and no such license or other right will arise from the consummation of this Agreement or from any acts, statements or dealings leading to such consummation.
 
3.    MARKETING OBLIGATIONS
 
3.1    ITT Commitment to and Investment in d2p Technology . In the event that ITT fails to institute and diligently continue a program (including the continued allocation by ITT of commercially reasonable budget and resources for such program) with respect to the development of a Licensed Product up to its first customer shipment, then the [*] unless ITT is able to cure such failure within [*] of notice from ParkerVision. ITT agrees to respond promptly to ParkerVision’s inquiries regarding such program and in sufficient reasonable detail to enable ParkerVision to reasonably verify that ITT has instituted and is diligently continuing such a program with respect to the development of a Licensed Product by ITT.
 
3.2    Public Announcements of this Agreement . Within three (3) business days after the Effective Date of this Agreement, either party may issue the press release in Exhibit C. Otherwise, neither party shall make any public announcement about this Agreement without the prior, written consent of the other party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, either of the parties may at any time make announcements which are required by applicable law, regulatory bodies, or stock exchange or stock association rules, so long as such party so required to make the announcement, promptly upon learning of such requirement, notifies the other party of such requirement and discusses with the other party in good faith the exact wording of any such announcement.
 
4.    LICENSE FEES AND ROYALTIES
 
4.1    Royalties .
 
4.1.1    Royalty Structure . Until ITT has Sold at least [*] Licensed Product [*] , ITT will in any event pay royalties at the rate of [*] per Licensed Product irrespective of whether such Licensed Product is Sold [*] . Thereafter, ITT will pay royalties with respect to each Licensed Product that is Sold [*] at the rate that is the lesser of (i) the royalty per Licensed Product under [*] Royalty Schedule A in Exhibit B , or (ii) the royalty per Licensed Product under [*] Royalty Schedule B in Exhibit B. Licensed Products Sold by ITT [*] shall not, in any event, be included in determining (i) [*] that triggers [*] under Royalty Schedule A in Exhibit B, and (ii) [*] that trigger [*] under Royalty Schedule B in Exhibit B.
 
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4.1.2    [*]
 
4.2    [*]
 
4.3    [*]
 
4.4    [*]
 
4.5    When Royalties Become Payable . Royalties shall be calculated and paid for each quarter of a Royalty Fiscal Year with respect to Licensed Products Sold during that quarter, less Licensed Products returned to ITT for which (i) ITT refunded the purchase price and (ii) a royalty was previously paid by ITT to ParkerVision. Royalties due by ITT for each quarter shall be paid to ParkerVision within [*] following the end of each quarter of a Royalty Fiscal Year and shall be accompanied by the reports described in Section 5 below. In no event will ITT be entitled to any refund of any royalties previously paid.
 
4.6    Taxes . All payments by ITT shall be made free and clear of, and without reduction for, any and all taxes, including, without limitation, sales, use, property, license, value added, excise, franchise, income, withholding or similar taxes, other than such taxes which are imposed by the United States or any political subdivision thereof based on the net income of ParkerVision. Any such taxes which are otherwise imposed on payments to ParkerVision shall be the sole responsibility of ITT. ITT shall provide ParkerVision with official receipts issued by the appropriate taxing authority or such other evidence as is reasonably requested by ParkerVision to establish that such taxes have been paid.
 
5.    REPORTS AND AUDIT
 
5.1    Records and Royalty Reports . ITT shall keep accurate records of its operations respecting the sale, lease or other distribution of the Licensed Products by ITT to the extent necessary (i) for the royalties payable hereunder to be determined, or (ii) to inform ParkerVision of all Licensed Products sold, leased or otherwise distributed by ITT, including without limitation for testing, qualifications and evaluation purposes. Such records shall include, without limitation, records of the quantity of such Licensed Products. ITT shall prepare quarterly written reports of the same, disclosing the quantity of such Licensed Products sold, leased or otherwise distributed by ITT and showing the amount of royalties due for such quarter, and shall promptly submit such reports to ParkerVision within [*] after the end of each quarter of a Royalty Fiscal Year.
 
5.2    Audit . Upon at least [*] advance, written notice and no more frequently than once per calendar year, ParkerVision shall have the right, at its own expense, to examine such records through an independent representative during ordinary business hours to the extent reasonably necessary to confirm or correct such reports. Such inspections shall be made by a mutually agreed upon representative, which representative may furnish to ParkerVision only its conclusions as to the accuracy of such reports, as to any discrepancies therein, and as to any adjustment necessary to be made to provide for payment of the proper amount of royalties, but not any other information of ITT gleaned in the course of such audit. In the event that any examination by such mutually agreed upon representative reveals that ITT has underpaid royalties due to ParkerVision by [*] or more, then ITT shall reimburse ParkerVision for the reasonable cost of such audit. ITT shall further promptly pay to ParkerVision any additional royalties due after the receipt of written notice by ParkerVision of ITT’s underpayment.   With respect to any underpayments more than [*] old, ITT agrees to pay interest on such underpayments at the lowest rate that ITT is currently paying, or has most recently paid, for a loan from a commercial bank as of the date the audit reveals such underpayment. All information disclosed under this Section 5.2 shall be deemed ITT Confidential Information and shall be used for the sole purpose of verifying proper reporting of Licensed Products and proper payment of royalties. For any audit under this Section 5.2 that is subject to U.S. federal security regulations, such mutually agreed upon representative shall comply with applicable regulations and shall obtain any required security clearance prior to conducting any such audit.
 
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5.3    Maintenance of Records . ITT shall maintain all records relating to the sale, lease or other distribution of the Licensed Products during the term of this Agreement for a period of four (4) Royalty Fiscal Years after the applicable Royalty Fiscal Year, after which ITT shall have no obligation to maintain, and ParkerVision shall have no right to inspect, any such records relating to such applicable Royalty Fiscal Year.
 
6.    [*]
 
          [*]  
 
7.    [*]
 
          [*]  
 
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8.    [*]
 
          [*]
 
 
9.    PATENTS
 
9.1    Current Patents . ParkerVision hereby represents that the issued patents and patent applications listed on Exhibit A include all issued patents and patent applications owned by ParkerVision as of the Effective Date that have Patent Claims covering the Licensed Technology. [*]
 
9.2    [*]
 
10.    CONFIDENTIAL INFORMATION
 
10.1    Confidential Information ” means, with respect to either party, any confidential business or technical information, including know-how, whether or not patentable or copyrightable, that the disclosing party identifies as confidential or proprietary at the time it is disclosed or delivered to the receiving party. The d2p Technology, the Licensed Technology and the contents of any Licensed Patents and patent applications listed in Exhibit A shall in any event be deemed the Confidential Information of ParkerVision. Further, any [*] shall be deemed the Confidential Information of the developing party and such party shall have no obligation to disclose such [*] to the other party.
 
10.2    Exceptions . Confidential Information does not include any information that the receiving party can demonstrate by written records: (a) was known to the receiving party prior to its disclosure hereunder by the disclosing party; (b) is independently developed by the receiving party; (c) is or becomes publicly known through no wrongful act of the receiving party; (d) has been rightfully received from a third party whom the receiving party has reasonable grounds to believe is authorized to make such disclosure without restriction; or (e) has been approved for public release by the disclosing party’s prior written authorization. Each party may disclose any Confidential Information as required to be produced or disclosed pursuant to applicable law, regulation or court order, provided that the receiving party provides prompt advance notice thereof to enable the disclosing party to seek a protective order or otherwise prevent such disclosure. In addition, each party may disclose the existence and terms of this Agreement in confidence in connection with [*] or [*] , or to the extent required by law in connection with a public offering of such party’s securities pursuant to Section 3.2.
 
10.3    Non-Disclosure and Non-Use . Each party will: (i) not use any Confidential Information of the other party except in the performance of the Engineering Services Agreement or as permitted by this Agreement; (ii) not disclose any such Confidential Information to any person or entity other than its own employees, consultants, subcontractors and customers of ITT that fall under the U.S. Federal Government who have a need to know and who have executed in advance of receiving such Confidential Information a suitable nondisclosure and restricted use agreement that comports with the applicable provisions of this Agreement; and (iii) use all reasonable efforts to keep such Confidential Information strictly confidential. Each party will use reasonable efforts to enforce such nondisclosure and restricted use agreements.
 
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11.    PATENT MARKING
 
ITT agrees to mark the documentation associated with the Licensed Products with the number(s) of the Licensed Patent(s) covering such Licensed Products and with “Patent Pending” (along with a listing of the relevant patent application numbers) if any patent applications relating to such Licensed Products are pending before the United States Patent and Trademark Office or the patent office of a foreign country, as applicable.
 
12.    TERM
 
Unless earlier terminated in accordance with the terms of this Agreement, this Agreement shall extend until [*] .
 
13.    TERMINATION
 
13.1    Termination for Breach . At any time after the occurrence of an Event of Default, this Agreement may be terminated at the election of the Non-Defaulting Party, effective as of the date specified in a notice of termination provided to the Defaulting Party. As used herein, “ Event of Default ” means one or more of the following events: if there should occur a material breach, default or noncompliance by one party (the “ Defaulting Party ”) of or with any term or condition hereof followed by written notice of such breach, default or noncompliance from the other party (the “ Non-Defaulting Party ”) and the failure of the Defaulting Party to remedy or correct such breach, default or noncompliance within [*] after receipt of such notice (the “ Cure Period ”).
 
13.2    Termination if ITT discontinues Licensed Products after [*] . Either party may terminate this Agreement upon written notice to the other party in the event that after [*] , ITT has not Sold any Licensed Products in any consecutive [*] period following [*] . [*]  
 
13.3    Termination upon ITT Challenge to the Licensed Patents . ParkerVision may terminate this Agreement upon written notice to ITT in the event ITT leads or supports (other than as required by law or court order) any effort to challenge the validity, enforceability or scope of any Licensed Patent. In the event that ITT is a party to any claim, suit, action or other proceeding before a court or other government agency, in which ITT supports (other than as required by law or court order) a challenge to the validity, enforceability or scope of any Licensed Patent, ParkerVision shall be entitled to recover from ITT any and all costs and expenses, including reasonable attorneys’ fees and expenses of investigation and defense, incurred by ParkerVision in such claim, suit, action or other proceeding, and ITT will not be entitled to any refund of any royalties previously paid.
 
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13.4    Effect of Termination or Expiration .
 
13.4.1    Cease Use of Technology and Return Materials . In the event this Agreement is terminated by either party, then all licenses granted to ITT will automatically cease as of the date of termination, provided, however, that:
 
13.4.1.1.    For a period of [*] after termination, and subject to the payment of royalties under Section 4, ITT shall have the right to Sell off any Licensed Products in inventory, except that ITT shall not have such rights to Sell off any Licensed Products in inventory in the event this Agreement is terminated by ParkerVision under Section 13.3; and
 
13.4.1.2.    Upon termination or expiration of this Agreement and except as otherwise provided herein, each party may keep only one (1) copy of the technology, materials and information provided to it by the other party hereunder solely for archival purposes and shall return to the other party or destroy all other copies of the technology, materials and information provided to it by the other party hereunder, or any portion thereof, in its possession or control.  
 
13.4.2    Payment of Royalties . Upon any expiration or termination becoming effective, ITT will, within [*] thereafter, pay all royalties and interest owed ParkerVision as of the date of such termination or expiration.
 
13.5    Survival of Certain Provisions . The provisions of Sections 2.1.3, 4, 5, 6, 10, 11, 13.3, 13.4, 14.2 and 15-17 of this Agreement will survive any expiration or termination of this Agreement.
 
14.    WARRANTIES
 
14.1    Warranties .
 
14.1.1    Warranties by ParkerVision . ParkerVision hereby represents and warrants to ITT that: (a) it has the full right, power and authority to enter into this Agreement and grant the licenses granted hereunder; (b) this Agreement is a valid and binding obligation of such party; and (c) it has obtained and shall maintain throughout the term of this Agreement all necessary licenses, authorizations, approvals and consents to enter into and perform its obligations hereunder in compliance with all applicable laws, rules and regulations. ParkerVision further represents and warrants that, as of the Effective Date, ParkerVision is not aware of and has not received any notice of any claim, by a third party, that the copyrights, patents, trade secrets, or other Intellectual Property Rights of any third party are infringed by the Licensed Technology. ParkerVision represents and warrants that the ParkerVision Software is not subject to Open License Terms. In the event of a breach of the preceding warranty against Open License Terms, ParkerVision will, at its sole expense, promptly (i) notify ITT of any affected portions of ParkerVision Software, and (ii) take all reasonable efforts to replace such affected portions of ParkerVision Software with software of equivalent functionality that is not subject to Open License Terms. For purposes of clarification, a claim alleging that ITT’s authorized use of the ParkerVision Software infringes any Open License Terms in the ParkerVision Software is an allegation of copyright infringement under Section 15 below.
 
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14.1.2    Warranties by ITT . ITT hereby represents and warrants to ParkerVision that: (a) it has the full right, power and authority to enter into this Agreement and grant the licenses granted hereunder; (b) this Agreement is a valid and binding obligation of such party; and (c) it has obtained and shall maintain throughout the term of this Agreement all necessary licenses, authorizations, approvals and consents to enter into and perform its obligations hereunder in compliance with all applicable laws, rules and regulations. ITT represents and warrants that ITT shall not act in any manner that would require any ParkerVision Software to be licensed under Open License Terms.
 
14.2    Disclaimer of Other Warranties . EXCEPT AS SET FORTH IN SECTION 14.1, NEITHER PARTY MAKES ANY WARRANTIES TO THE OTHER, EITHER EXPRESS, IMPLIED OR STATUTORY, AND EACH PARTY HEREBY DISCLAIMS ANY AND ALL SUCH WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. Nothing contained in this Agreement shall be construed as (i) a warranty or representation by ParkerVision as to the validity and/or scope of any Licensed Patent; (ii) imposing upon ParkerVision any obligation to institute any suit or action for infringement of any Licensed Patent; or (iii) imposing on ParkerVision any obligation to file any patent application or to secure any patent or maintain any patent in force.
 
15.    INDEMNIFICATION
 
15.1    ParkerVision Obligations .
 
15.1.1    Intellectual Property Indemnity . Subject to prompt, written notification by ITT, cooperation by ITT and control of all litigation and/or settlement by ParkerVision, ParkerVision shall defend and indemnify ITT and hold ITT harmless from and against any third party claims brought against ITT alleging that any Licensed Technology incorporated into Licensed Products in the ITT Field of Use infringes or misappropriates any patent, copyright or trade secret of any third party. Each party agrees to notify the other promptly of any matters in respect to which the foregoing indemnity in this Section 15.1.1 may apply. If notified in writing of any action or claim for which ParkerVision is to provide the foregoing indemnity, [*] . Notwithstanding the foregoing, ParkerVision shall obtain ITT’s consent, which shall not be unreasonably withheld or delayed, if ITT is required to incur or admit liability as a result of such settlement by ParkerVision.
 
15.1.2    Remedy in the Event of Prohibition of Use . If a preliminary or final judgment is, or is reasonably likely to be, entered against ITT’s use, sale, lease or distribution of a Licensed Product in the ITT Field of Use that incorporates any Licensed Technology, due to infringement of any third party patents, copyrights or trade secrets by the Licensed Technology, or if ParkerVision reasonably believes that the Licensed Technology may be found to infringe any third party patents, copyrights or trade secrets, then ParkerVision shall, at its sole discretion and expense, either (a) modify the Licensed Technology so that such technology becomes noninfringing, (b) substitute the Licensed Technology with other technology that is as close functionally as reasonably, commercially possible to the infringing technology, while still avoiding infringement and preserving all material functional aspects of the technology or (c) obtain a license to permit ITT to exercise the rights granted hereunder; provided, however, that in the event that ParkerVision is unable after its [*] to accomplish either (a), (b) or (c), then ITT agrees to cease any and all use, sale, lease and distribution of any Licensed Product that incorporates such Licensed Technology within [*] of receipt of notice from ParkerVision or such earlier time as may be required to comply with a court order. [*] In the event [*] then [*] this Agreement may not be terminated under Section 13.2 for ITT’s failure to Sell Licensed Products. For a period of [*] after the receipt of such notice by ITT, the parties agree to use [*] to cooperate in formulating and implementing a strategy (including negotiating cooperatively to obtain a license or any other mutually acceptable strategy) that will enable ITT to exercise the rights granted hereunder without infringement of such third party patents, copyrights or trade secrets by the Licensed Technology.
 
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15.2    Limitation of Indemnification Liability . In no event shall ParkerVision be liable under Section 15.1 for any infringement or misappropriation: (i) by any product or technology not provided and licensed by ParkerVision hereunder; or (ii) arising from a combination with, addition to, or modification of the Licensed Technology. In no event shall ParkerVision’s liability under Section 15.1 over the term of this Agreement, including without limitation any damages, settlement or license fees paid to a third party pursuant to ParkerVision’s indemnification obligations to ITT under Section 15.1, exceed [*] . However, the foregoing limitation of liability in the previous sentence shall not apply with respect to [*] .
 
15.3    Sole Remedy . THIS SECTION 15 STATES THE SOLE AND EXCLUSIVE LIABILITY OF THE PARTIES FOR INFRINGEMENT OR ALLEGATIONS OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES FOR ANY PRODUCT OR TECHNOLOGY PROVIDED HEREUNDER, AND IS IN LIEU OF ALL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY IN REGARD THERETO, INCLUDING BUT NOT LIMITED TO THE WARRANTY AGAINST INFRINGEMENT SPECIFIED IN THE UNIFORM COMMERCIAL CODE.
 
16.    LIMITATION OF LIABILITY
 
16.1    IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR LOST PROFITS OR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (EXCEPT TO THE EXTENT THAT SUCH LOST PROFITS OR SUCH DAMAGES CONSTITUTE THE MEASURE OF DIRECT DAMAGES UNDER THE RELEVANT INTELLECTUAL PROPERTY LAWS AND EXCEPT FOR A BREACH OF EITHER PARTY’S CONFIDENTIALITY OBLIGATIONS UNDER SECTION 10 OF THIS AGREEMENT), HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT. THIS LIMITATION WILL APPLY EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
 
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16.2    IN NO EVENT WILL EITHER PARTY’S LIABILITY ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT (INCLUDING WITHOUT LIMITATION ANY DAMAGES, SETTLEMENT OR LICENSE FEES OWED BY PARKERVISION UNDER SECTION 15 OF THIS AGREEMENT) EXEED [*] . HOWEVER, THE FOREGOING LIMITATION OF LIABILITY IN THIS SECTION 16.2 SHALL NOT APPLY WITH RESPECT TO (i) EITHER PARTY’S BREACH, OR EXCEEDING THE SCOPE, OF THE LICENSE RIGHTS GRANTED TO SUCH PARTY UNDER SECTIONS 2 AND 6 OF THIS AGREEMENT, AND (ii) EITHER PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 10 OF THIS AGREEMENT, AND (iii) [*] .
 
17.    GENERAL PROVISIONS
 
17.1    Assignment . This Agreement may not be assigned in whole or in part by either party without the written consent of the other, which consent will not be unreasonably withheld, except that ITT or ParkerVision may assign this Agreement in connection with a merger, reorganization, change of control or sale of all or substantially all of its assets or business to which this Agreement relates.
 
17.2    Notice .
 
17.2.1    Unless otherwise changed by notice in writing from ITT to ParkerVision, ParkerVision shall serve notice upon ITT as follows:
 
General Counsel
[*] ITT Corporation
1919 West Cook Road
Fort Wayne, Indiana 46801
 
17.2.2    Unless otherwise changed by notice in writing from ParkerVision to ITT, ITT shall serve notice upon ParkerVision as follows:
 
ParkerVision, Inc.
7915 Baymeadows Way, Suite 400
Jacksonville, Florida, 32256

With copy to:

CFO
ParkerVision, Inc.
7915 Baymeadows Way, Suite 400
Jacksonville, Florida, 32256
 
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17.2.3    Notice shall be by regular or priority mail, recognized commercial overnight courier, hand delivery, facsimile transmission or electronic mail with proof of receipt, and shall be effective as of the date received.
 
17.3    Severability . If any paragraph or provision of this Agreement shall be deemed void or invalid as a matter of law, the remaining paragraphs or provisions of this Agreement shall nevertheless remain in full force and effect.
 
17.4    No Joint Venture, etc. Nothing herein shall be deemed to constitute ParkerVision and ITT as partners, joint venturers or otherwise associated in or with the business of the other. Neither party shall be liable for any debts, accounts, obligations or other liabilities of the other party. Neither party is authorized to incur any debts or other obligations of any kind on the part of or as agent for the other except as may be specifically authorized in writing.
 
17.5    Waiver . No relaxation, forbearance, delay or negligence by any party hereto in enforcing any of the terms and conditions of this Agreement, or the granting of time by any party to another, shall operate as a waiver or prejudice, affect or restrict the rights, powers or remedies of any party hereto.
 
17.6    Complete Agreement . This Agreement and the Exhibits attached hereto represent the full and complete agreement and understanding of the parties hereto with respect to the subject matter hereof. Any amendment thereof must be in writing and executed by the parties hereto.
 
17.7    Governing Law . All questions of law, rights, and remedies regarding any act, event or occurrence undertaken prior to or pursuant to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to or application of choice of law rules or principles, and the United States. The parties agree that all proceedings, disputes and claims concerning the interpretation or the performance of this Agreement, including questions involving its existence, validity and duration shall be subject to the exclusive jurisdiction of federal courts in the State of New York, and the parties voluntarily subject themselves to the jurisdiction of such courts .
 
17.8    Compliance with Export Control Laws .  Each party agrees to comply with all applicable export and reexport control laws and regulations, including the Export Administration Regulations ("EAR") maintained by the United States Department of Commerce.  Specifically, each party covenants that it shall not -- directly or indirectly -- sell, export, reexport, transfer, divert, or otherwise dispose of any software, source code, or technology (including products derived from or based on such technology) received from the other party under this Agreement to any country (or any individual national thereof) subject to antiterrorism controls or U.S. embargo, or to any other person, entity, or destination prohibited by the laws or regulations of the United States, without obtaining prior authorization from the competent government authorities as required by those laws and regulations. 
 
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17.9    Multiple Counterparts . This Agreement may be executed in multiple counterparts, each of which will be considered an original and all of which together will constitute one agreement. This Agreement may be executed by the attachment of signature pages which have been previously executed.
 
17.10      Remedies Cumulative . Except as expressly provided herein, all rights and remedies enumerated in this Agreement will be cumulative and none will exclude any other right or remedy permitted herein or by law or in equity.
 
17.11      Headings . The headings contained in this Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
 
17.12    Force Majeure . No party shall be responsible or liable to another party for nonperformance or delay in performance of any terms or conditions of this Agreement due to acts or occurrences beyond the reasonable control of the nonperforming or delayed party, including but not limited to, acts of God, acts of government, wars, riots, strikes or other labor disputes, fires and floods, provided the nonperforming or delayed party provides to the other party written notice of the existence and the reason for such nonperformance or delay. Notwithstanding the foregoing, the other party may terminate this agreement if such nonperformance or delay extends for a period greater than ninety (90) days.

IN WITNESS WHEREOF, the parties have executed this Agreement through their duly authorized representatives as set forth below:
 
ITT Corporation     ParkerVision, Inc.
       
Signature: /s/      Signature: /s/ 

   
Printed Name: [*]
 
Title: [*]
   
Printed Name: [*]
 
Title: [*]
 
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EXHIBIT 31.1
SECTION 302 CERTIFICATION
I, Jeffrey L. Parker, certify that:
 
1.   I have reviewed this Quarterly Report on Form 10-Q of ParkerVision, Inc.;
 
2.   based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.   based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
 
(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)   Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
 
(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)   all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
     
   
 
 
 
 
 
 
Date: August 7, 2007 Name:   /s/ Jeffrey L. Parker
 
  Title: Chief Executive Officer  

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EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Cynthia Poehlman certify that:

 
1.   I have reviewed this Quarterly Report on Form 10-Q of ParkerVision, Inc.;
 
 
2.based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
 
3.   based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
 
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
 
(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
(b)   Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
 
(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)   all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
     
   
 
 
 
 
 
 
Date: August 7, 2007     Name :   /s/ Cynthia Poehlman
 
  Title: Chief Financial Officer  
 
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EXHIBIT 32.1

SECTION 906 CERTIFICATION

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of ParkerVision, Inc. (the “Company”) on Form 10-Q, for the period ended June 30, 2007 as filed with the Securities and Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   the information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
 
     
 
 
 
 
 
 
 
Dated: August 7, 2007   Name:   /s/ Jeffrey L. Parker
 
  Title: Chief Executive Officer  
 
     
 
 
 
 
 
 
 
Dated: August 7, 2007   Name:   /s/Cynthia Poehlman 
 
  Title: Chief Financial Officer  
 
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