EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("AGREEMENT") is entered into as of
March 1, 2004, between Liquidmetal Technologies, Inc., a Delaware corporation
with offices at 00000 Xxxxxxxxxxxx Xx., Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxxxx 00000
(the "COMPANY") and Michigan Venture Capital Co, Ltd., a Korean corporation with
offices at 15th Floor, Star Tower, 737 Yeoksam-dong, Kangnam-ku, Seoul, Korea,
and each of the parties listed under "Purchasers" hereto (collectively and
individually, the "PURCHASER").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Securities
Purchase Agreement, dated on or about the date hereof, by and between the
Company and the Purchaser (the "PURCHASE AGREEMENT"), the Company has agreed to
sell and issue to the Purchaser, and the Purchaser has agreed to purchase from
the Company, a 6% Senior Convertible Note in the principal amount of up to four
million United States dollars ("Dollars") ($4,000,000) (the "NOTE") and Warrants
(the "WARRANTS") to purchase shares of the Company's Common Stock, par value
$0.001 per share, subject to the terms and conditions set forth therein; and
WHEREAS, the Purchase Agreement contemplates that the Note will be
convertible and exercisable into shares (the "COMMON SHARES") of the Company's
Common Stock, par value $0.001 per share (the "COMMON STOCK") pursuant to the
terms and conditions set forth in the Note, and the Warrant contemplates that
the Warrant will be exercisable into shares of the Company's Common Stock
pursuant to the terms and conditions set forth in the Warrant (the "WARRANT
SHARES").
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the Purchase
Agreement and this Agreement, the Company and the Purchaser agree as follows:
1. Certain Definitions. Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the
Purchase Agreement or the Note. As used in this Agreement, the following terms
shall have the following respective meanings:
"CLOSING" and "CLOSING DATE" shall have the meanings ascribed to such
terms in the Purchase Agreement.
"COMMISSION" or "SEC" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"HOLDER" and "HOLDERS" shall include the Purchaser and any permitted
transferee or transferees of Registrable Securities (as defined below), the Note
and/or Warrant which have not been sold to the public to whom the registration
rights conferred by this Agreement have been transferred in compliance with this
Agreement and the Purchase Agreement; provided that
neither such person nor any affiliate of such person is registered as a broker
or dealer under Section 15(a) of the Securities Exchange Act of 1934, as
amended, or a member of the National Association of Securities Dealers, Inc.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"REGISTRABLE SECURITIES" shall mean: (i) the Common Shares and Warrant
Shares (without regard to any limitations on beneficial ownership contained in
the Note, the Warrant, or the Purchase Agreement) or other securities issued or
issuable to each Holder or its permitted transferee or designee (a) upon
conversion of the Note and exercise of the Warrant=, or (b) upon any
distribution with respect to, any exchange for or any replacement of such Note
or Warrant, (c) upon any conversion, exercise or exchange of any securities
issued in connection with any such distribution, exchange or replacement, or (d)
as payment of principal amount or interest in lieu of cash with respect to the
Note; (ii) securities issued or issuable upon any stock split, stock dividend,
recapitalization or similar event with respect to the foregoing; and (iii) any
other security issued as a dividend or other distribution with respect to, in
exchange for or in replacement of the securities referred to in the preceding
clauses; provided that all such shares shall cease to be Registrable Securities
at such time as they have been sold under a Registration Statement or pursuant
to Rule 144 under the Securities Act or otherwise or at such time as they are
eligible to be sold pursuant to Rule 144(k).
"REGISTRATION EXPENSES" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company, which shall be paid in any event by the Company).
"REGISTRATION STATEMENT" shall have the meaning set forth in Section
2(a) herein.
"REGULATION D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"SECURITIES ACT" or "ACT" shall mean the Securities Act of 1933, as
amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses".
2. Registration Requirements. The Company shall use its
best efforts to effect the registration of the Registrable Securities
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as would permit or facilitate the
sale or distribution of all the Registrable Securities in the manner (including
manner of sale) and in all states reasonably
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requested by the Holder. Such best efforts by the Company shall include, without
limitation, the following:
(a) The Company shall, as expeditiously as
possible after the Closing Date:
(i) But in any event by the later (i)
of March 5, 2004, or (ii) twenty-five (25) days after the
Closing Date, prepare and file a registration statement with
the Commission pursuant to Rule 415 under the Securities Act
on Form S-3 under the Securities Act (or in the event that the
Company is ineligible to use such form, such other form as the
Company is eligible to use under the Securities Act provided
that such other form shall be converted into an S-3 as soon as
Form S-3 becomes available to the Company) covering resales by
the Holders as selling stockholders (not underwriters) of the
Registrable Securities ("REGISTRATION STATEMENT"), which
Registration Statement, to the extent allowable under the
Securities Act and the rules promulgated thereunder (including
Rule 416), shall state that such Registration Statement also
covers such indeterminate number of additional shares of
Common Stock as may become issuable upon conversion of the
Note. The number of shares of Common Stock initially included
in such Registration Statement shall be no less than the sum
of 1.5 times the sum of the number of Common Shares that are
issuable upon conversion of the Note as of the date of this
Agreement, at the then applicable Conversion Price (as defined
in the Note). Thereafter the Company shall use its best
efforts to cause such Registration Statement and other filings
to be declared effective as soon as possible, and in any event
no later than the following date, as appropriate (the
"REQUIRED EFFECTIVE DATE"): (A), if the SEC notifies that the
Company that the SEC will not review the Registration
Statement, the Required Effective Date shall be five (5) days
after the SEC provides such notification, or (B) if the SEC
notifies the Company that it will review the Registration
Statement, then the Required Effective Date shall be sixty
(60) days after the Company receives the first written
comments on the Registration Statement from the SEC. Without
limiting the foregoing, the Company will promptly respond to
all SEC comments, inquiries and requests, and shall request
acceleration of effectiveness at the earliest possible date.
(ii) Prepare and file with the SEC such
amendments and supplements to such Registration Statement and
the prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions of
the Act with respect to the disposition of all securities
covered by such Registration Statement and notify the Holders
of the filing and effectiveness of such Registration Statement
and any amendments or supplements.
(iii) Furnish to each Holder that has
Common Shares included in the Registration Statement such
numbers of copies of a current prospectus conforming with the
requirements of the Act, copies of the Registration Statement,
any amendment or supplement thereto and any documents
incorporated by reference therein and such other documents as
such Holder may
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reasonably require in order to facilitate the disposition of
Registrable Securities owned by such Holder.
(iv) Register and qualify the securities
covered by such Registration Statement under the securities or
"Blue Sky" laws of all domestic jurisdictions; provided that
the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or
jurisdictions.
(v) Notify promptly each Holder that
has Common Shares included in the Registration Statement of
the happening of any event (but not the substance or details
of any such event) of which the Company has knowledge as a
result of which the prospectus (including any supplements
thereto or thereof) included in such Registration Statement,
as then in effect, includes an untrue statement of material
fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading in light of the circumstances then existing (each
an "EVENT"), and use its best efforts to promptly update
and/or correct such prospectus. Each Holder will hold in
confidence and will not make any disclosure of any such Event
and any related information disclosed by the Company.
(vi) Notify each Holder of the issuance
by the Commission or any state securities commission or agency
of any stop order suspending the effectiveness of the
Registration Statement or the threat or initiation of any
proceedings for that purpose. The Company shall use its best
efforts to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the
earliest possible time.
(vii) [Intentionally omitted.]
(viii) List the Registrable Securities
covered by such Registration Statement with all securities
exchange(s) and/or markets on which the Common Stock is then
listed and prepare and file any required filings with the
Nasdaq National Market System or any other exchange or market
where the Common Shares are traded.
(ix) Take all steps reasonably necessary
to enable Holders to avail themselves of the prospectus
delivery mechanism set forth in Rule 153 (or successor
thereto) under the Act.
(b) Notwithstanding the obligations under
Section 2(a)(v) or any provision of this Agreement, if (i) in the good faith
judgment of the Company, following consultation with legal counsel, it would be
detrimental to the Company and its stockholders for resales of Registrable
Securities to be made pursuant to the Registration Statement due to the
existence of a material development or potential material development involving
the Company that the Company would be obligated to disclose in the Registration
Statement, which disclosure would be premature or otherwise inadvisable at such
time or would have a material adverse
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effect upon the Company and its stockholders, or (ii) in the good faith judgment
of the Company, it would adversely affect or require premature disclosure of the
filing of a Company-initiated registration of any class of its equity
securities, then the Company will have the right to suspend the use of the
Registration Statement for a period of not more than 30 consecutive calendar
days, but only if the Company reasonably concludes, after consultation with
outside legal counsel, that the failure to suspend the use of the Registration
Statement as such would create a risk of a material liability or violation under
applicable securities laws or regulations.
(c) Set forth below in this Section 2(c) are (I)
events that may arise that the Purchaser considers will interfere with the full
enjoyment of their rights under this Agreement, the Purchase Agreement, and the
Notes (the "INTERFERING EVENTS"), and (II) certain remedies applicable in each
of these events.
(i) Payments by the Company. If (i) at
any time after effectiveness of the Registration Statement,
sales thereunder during the registration period (as described
in Section 5) cannot be made for any reason, other than by
reason of the operation of Section 2(b), for a period of more
than 10 consecutive business days, (ii) at any time after
effectiveness of the Registration Statement, sales thereunder
during the Registration Period cannot be made for a period of
time that exceeds the limitations set forth in Section 2(b),
or (iii) at any time after the Registrable Securities are
listed in accordance with Section 2(a)(viii), the Common
Shares are not listed or included for quotation on the Nasdaq
National Market or other exchange or market where shares of
the Company's common stock are then traded for more than 10
consecutive calendar days, then the Company will thereafter
make a payment to each Holder as set forth below. The amount
of the payment made to each Holder will be equal to 1% of the
purchase price paid for the Notes purchased by the Holder and
not previously converted into Common Shares and sold by the
Holder for each 30 business days that sales cannot be made
under the effective Registration Statement or the Common
Shares are not listed or included for quotation on the Nasdaq
National Market or other exchange or market where shares of
the Company's common stock are then traded (but any day on
which both conditions exist shall count as a single day and no
day taken into account for purposes of determining whether any
payment is due under Section 2 (c)(ii) shall be taken into
account for purposes of determining whether any payment is due
under this Section 2(c)(i) or the amount of such payment). The
number of shares not previously sold as specified in the
previous sentence shall be determined as of the end of the
respective 30-business day period. In no event shall payment
pursuant to this Section exceed 10% in the aggregate of the
purchase price paid for the Notes purchased by the Holder
(including such Holder's predecessors and successors) for the
entire registration period (as described in Section 5). These
payments will be prorated on a daily basis during the
30-business day period and will be paid to each Holder within
ten business days following the end of each 30- business day
period as to which payment is due hereunder or, at the
Company's option, will be added to the outstanding Principal
Amount of the Notes, provided that the respective Holder
delivered to the Company at least two business days prior
thereto information with respect to the number of Notes and
Common
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Shares not previously sold by such Holder (together with
reasonable supporting documentation). The Holders may make a
claim for additional damages as a remedy for the Company's
failure to comply with the timelines set forth in this
Section, but acknowledgement of such right in this Agreement
shall not constitute an admission by the Company that any such
damages exist or may exist. Notwithstanding the foregoing, if
the Company has used its reasonable best efforts to avoid
circumstances as a result of which sales cannot be made under
the Registration Statement during the Registration Period or
the Common Shares are not listed or included for quotation on
the Nasdaq National Market or other exchange or market where
the Common Shares are traded, then the damages described above
shall be the Holders' sole and exclusive remedy for damages
arising out of such circumstances. Nothing contained in the
preceding sentence shall be read to limit the ability of the
Holders to seek specific performance of this Agreement.
(ii) Effect of Late Registration. If the
Registration Statement has not been declared effective by the
Required Effective Date other than by reason of the operation
of Section 2(b), then the Company will make a payment to each
Holder for such delay (each a "LATE REGISTRATION PAYMENT").
Each Late Registration Payment will be equal to 2% of the
purchase price paid for the Notes purchased by such Holder and
not previously sold (or converted into Common Shares and sold)
by such Holder for the first 30 business days after the
Required Effective Date, and 1% of such purchase price for
each period of 30 business days thereafter (but no day taken
into account for purposes of determining whether any payment
is due under Section 2(c)(i) shall be taken into account for
purposes of determining whether any payment is due under this
Section 2(c)(ii) or the amount of such payment). In no event
shall payment pursuant to this Section exceed 10% in the
aggregate of the purchase price paid for the Notes purchased
by the Holder (including such Holder's predecessors and
successors) for the entire registration period (as described
in Section 5). The Late Registration Payments will be prorated
on a daily basis during the 30-business day period and will be
paid to the initial Holders or, at the Company's option, will
be added to the outstanding Principal Amount of the Notes,
within ten business days following the end of each 30-business
day period as to which payment is due hereunder, provided that
the respective Holder delivered to the Company at least two
business days prior thereto information with respect to the
number of Notes and Common Shares not previously sold by such
Holder (together with reasonable supporting documentation).
The Holders may make a claim for additional damages as a
remedy for the Company's failure to comply with the timelines
set forth in this Section, but acknowledgement of such right
in this Agreement shall not constitute an admission by the
Company that any such damages exist or may exist.
Notwithstanding the foregoing, if the Company has used its
reasonable best efforts to avoid circumstances as a result of
which the Registration Statement has not been declared
effective by the Required Effective Date, then the damages
described above shall be the Holders' sole and exclusive
remedy for damages arising out of such circumstances. Nothing
contained in the preceding sentence shall be read to limit the
ability of the Holders to seek specific performance of this
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Agreement. Notwithstanding the foregoing, if the Registration
Statement has not yet been declared effective and the Holders
are no longer entitled to receive Late Registration Payments
as a result of the above-described percentage limitation on
said payments, then each Holder shall have the right, at any
time upon at least thirty (30) days written notice, to sell
all (but not less than all) of its Notes to the Company for a
cash purchase price equal to the outstanding Principal Amount
of the Notes plus any accrued but unpaid interest.
(d) During the registration period, the Company
will make available, upon reasonable advance notice during normal business
hours, for inspection by any Holder whose Registrable Securities are being sold
pursuant to a Registration Statement, all pertinent financial and other records,
pertinent corporate documents and properties of the Company (collectively, the
"RECORDS") as reasonably necessary to enable each such Holder to exercise its
due diligence responsibility in connection with or related to the contemplated
offering. The Company will cause its officers, directors and employees to supply
all information that any Holder may reasonably request for purposes of
performing such due diligence.
(e) Each Holder will hold in confidence, use
only in connection with the contemplated offering and not make any disclosure of
all Records and other information that the Company determines in good faith to
be confidential, and of which determination the Holders are so notified, unless
(i) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (ii) the release of such
Records is ordered pursuant to a subpoena or other order from a court or
government body of competent jurisdiction, (iii) the information in such Records
has been made generally available to the public other than by disclosure in
violation of this or any other agreement (to the knowledge of the relevant
Holder), (iv) the Records or other information was developed independently by
the Holder without breach of this Agreement, (v) the information was known to
the Holder before receipt of such information from the Company, or (vi) the
information was disclosed to the Holder by a third party not under an obligation
of confidentiality. However, a Holder may make disclosure of such Records and
other information to any attorney, adviser, or other third party retained by it
that needs to know the information as determined in good faith by the Holder
(the "HOLDER REPRESENTATIVE"), if the Holder advises the Holder Representative
of the confidentiality provisions of this Section 2(e), but the Holder will be
liable for any act or omission of any of its Holder Representatives relative to
such information as if the act or omission was that of the Holder. The Company
is not required to disclose any confidential information in the Records to any
Holder unless and until such Holder has entered into a confidentiality agreement
(in form and substance satisfactory to the Company) with the Company with
respect thereto, substantially to the effect of this Section 2(e). Unless
legally prohibited from so doing, each Holder will, upon learning that
disclosure of Records containing confidential information is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, the Records deemed confidential. Nothing herein will be
deemed to limit the Holder's ability to sell Registrable Securities in a manner
that is otherwise consistent with applicable laws and regulations.
(f) The Company shall file a Registration
Statement with respect to any newly authorized and/or reserved Registrable
Securities consisting of Common Shares
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described in clause (i) of the definition of Registrable Securities within ten
(10) business days of any stockholders' meeting authorizing same and shall use
its best efforts to cause such Registration Statement to become effective within
ninety (90) days of such stockholders' meeting. If the Holders become entitled,
pursuant to an event described in clause (ii) and (iii) of the definition of
Registrable Securities, to receive any securities in respect of Registrable
Securities that were already included in a Registration Statement, subsequent to
the date such Registration Statement is declared effective, and the Company is
unable under the securities laws to add such securities to the then effective
Registration Statement, the Company shall promptly file, in accordance with the
procedures set forth herein, an additional Registration Statement with respect
to such newly Registrable Securities. The Company shall use its best efforts to
(i) cause any such additional Registration Statement, when filed, to become
effective within 30 days of that date that the need to file the Registration
Statement arose. All of the registration rights and remedies under this
Agreement shall apply to the registration of such newly reserved shares and such
new Registrable Securities.(f)
3. Expenses of Registration. All Registration Expenses
in connection with any registration, qualification or compliance with
registration pursuant to this Agreement shall be borne by the Company, and all
Selling Expenses of a Holder shall be borne by such Holder.
4. Registration on Form S-3. The Company shall use its
reasonable best efforts to continue to meet the "registrant eligibility"
requirements for a secondary offering set forth in the general instructions to
Form S-3 or any comparable or successor form or forms, or in the event that the
Company is ineligible to use such form, such form as the Company is eligible to
use under the Securities Act, provided that if such other form is used, the
Company shall convert such other form to a Form S-3 as soon as the Company
becomes so eligible.
5. Registration Period. In the case of the registration
effected by the Company pursuant to this Agreement, the Company shall keep such
registration effective until the later of (a) the date on which all the Holders
have completed the sales or distribution described in the Registration Statement
relating thereto or, if earlier until such Registrable Securities may be sold by
the Holders under Rule 144(k) (provided that the Company's transfer agent has
accepted an instruction from the Company to such effect) or (b) the second (2nd)
anniversary of the Closing Date.
6. Indemnification.
(a) Company Indemnity. The Company will
indemnify each Holder, each of its officers, directors, agents and partners, and
each person controlling each of the foregoing, within the meaning of Section 15
of the Securities Act and the rules and regulations thereunder with respect to
which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls,
within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder, any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any final prospectus (as amended or supplemented if the Company files any
amendment or supplement thereto with the SEC), Registration Statement filed
pursuant to this Agreement or any post-effective amendment thereof or based on
any omission (or alleged
8
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, or any violation by the Company of the
Securities Act or any state securities law or in either case, any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each Holder, each of its
officers, directors, agents and partners, and each person controlling each of
the foregoing, for any reasonable legal fees of a single counsel and any other
expenses reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to a Holder to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on (i) any untrue
statement or omission based upon written information furnished to the Company by
such Holder or underwriter (if any) therefor and stated to be specifically for
use therein, (ii) any failure by any Holder to comply with prospectus delivery
requirements or the Securities Act or Exchange Act or any other law or legal
requirement applicable to them or any covenant or agreement contained in the
Purchase Agreement or this Agreement or (iii) an offer of sale of Common Shares
occurring during a period in which sales under the Registration Statement are
suspended as permitted by this Agreement. The indemnity agreement contained in
this Section 6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, jointly
and severally, if Registrable Securities held by it are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors, officers, agents and
partners, and any other stockholder selling securities pursuant to the
Registration Statement and any of its directors, officers, agents, partners, and
any person who controls such stockholder within the meaning of the Securities
Act or Exchange Act and each underwriter, if any, of the Company's securities
covered by such a Registration Statement, each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act and
the rules and regulations thereunder, each other Holder (if any), and each of
their officers, directors and partners, and each person controlling such other
Holder(s) against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or alleged
untrue statement) of a material fact contained in any such final prospectus (as
amended or supplemented if the Company files any amendment or supplement thereto
with the SEC), Registration Statement filed pursuant to this Agreement or any
post-effective amendment thereof or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to
make the statement therein not misleading in light of the circumstances under
which they were made or (ii) failure by any Holder to comply with prospectus
delivery requirements or the Securities Act, Exchange Act or any other law or
legal requirement applicable to them or any covenant or agreement contained in
the Purchase Agreement or this Agreement, and will reimburse the Company and
such other Holder(s) and their directors, officers and partners, underwriters or
control persons for any reasonable legal fees or any other expenses reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such final prospectus (as amended or supplemented if the
Company files any amendment or supplement thereto with the SEC), Registration
Statement filed pursuant
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to this Agreement or any post-effective amendment thereof in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein, and provided that the maximum
amount for which such Holder shall be liable under this indemnity shall not
exceed the net proceeds received by the Holders from the sale of the Registrable
Securities pursuant to the registration statement in question. The indemnity
agreement contained in this Section 6(b) shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities if such settlement
is effected without the consent of such Holder (which consent shall not be
unreasonably withheld).
(c) Procedure. Each party entitled to
indemnification under this Section 6 (the "INDEMNIFIED PARTY") shall give notice
to the party required to provide indemnification (the "INDEMNIFYING PARTY")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim in any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at its own expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 6 except to the extent that the Indemnifying Party is
materially and adversely affected by such failure to provide notice. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such non-privileged information regarding itself
or the claim in question as an Indemnifying Party may reasonably request in
writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
7. Contribution. If the indemnification provided for in
Section 6 herein is unavailable to the Indemnified Parties in respect of any
losses, claims, damages or liabilities referred to herein (other than by reason
of the exceptions provided therein), then each such Indemnifying Party, in lieu
of indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder(s) on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder(s) in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company on
the one hand and of any Holder(s) on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by such Holder(s).
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 7 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.
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The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraphs. The amount
paid or payable by an Indemnified Party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraphs
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section, no Holder shall be required to
contribute any amount in excess of the amount by which in the case of any
Holder, the net proceeds received by such Holder from the sale of Registrable
Securities pursuant to the registration statement in question. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements
contained in Sections 6 and 7 shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement or the Purchase
Agreement, and (ii) the consummation of the sale or successive resales of the
Registrable Securities.
9. Information by Holders. As a condition to the
obligations of the Company to complete any registration pursuant to this
Agreement with respect to the Registrable Securities of each Holder, such Holder
will furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended methods of disposition of the Registrable
Securities held by it as is reasonably required by the Company to effect the
registration of the Registrable Securities. At least five business days prior to
the first anticipated filing date of a Registration Statement for any
registration under this Agreement, the Company will notify each Holder of the
information the Company requires from that Holder whether or not such Holder has
elected to have any of its Registrable Securities included in the Registration
Statement. If the Company has not received the requested information from a
Holder by the business day prior to the anticipated filing date, then the
Company may file the Registration Statement without including Registrable
Securities of that Holder.
10. Further Assurances. Each Holder will cooperate with
the Company, as reasonably requested by the Company, in connection with the
preparation and filing of any Registration Statement hereunder, unless such
Holder has notified the Company in writing of such Holder's irrevocable election
to exclude all of such Holder's Registrable Securities from such Registration
Statement.
11. Suspension of Sales. Upon receipt of any notice from
the Company under Section 2(a)(v) or 2(b), each Holder will immediately
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until (i) it receives copies of a
supplemented or amended prospectus contemplated by Sections 2(a)(v) or (ii) the
Company advises the Holder that a suspension of sales under Section 2(b) has
terminated. If so directed by the Company, each Holder will deliver to the
Company (at the expense of the Company) or destroy all copies in the Holder' s
possession (other than a limited number of file copies) of the prospectus
covering such Registrable Securities that is current at the time of receipt of
such notice.
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12. Replacement Certificates. The certificate(s)
representing the Registrable Securities held by the Purchaser (or then Holder)
may be exchanged by the Purchaser (or such Holder) at any time and from time to
time for certificates with different denominations representing an equal
aggregate number of Common Shares, as reasonably requested by such Purchaser (or
such Holder) upon surrendering the same. No service charge will be made for such
registration or transfer or exchange. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
the Note or certificates for the underlying Common Shares of any of the
foregoing, and, in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, or upon surrender and cancellation of such
certificate if mutilated, the Company will make and deliver a new Note or
certificate of like tenor and dated as of such cancellation at no charge to the
holder.
13. Transfer or Assignment. Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns. The rights granted to the
Purchaser by the Company under this Agreement to cause the Company to register
Registrable Securities may be transferred or assigned (in whole or in part) to a
transferee or assignee of the Note or Registrable Securities, and all other
rights granted to the Purchaser by the Company hereunder may be transferred or
assigned to any transferee or assignee of the Note or Registrable Securities;
provided in each case that (i) the Company is given written notice by the
Purchaser at the time of or within a reasonable time after such transfer or
assignment, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned; and provided further that the transferee or
assignee of such rights agrees in writing to be bound by the registration
provisions of this Agreement, (ii) such transfer or assignment is not made under
the Registration Statement or Rule 144, (iii) such transfer is made according to
the applicable requirements of the Purchase Agreement, and (iv) the transferee
has provided to the Company an investor questionnaire (or equivalent document)
evidencing that the transferee is a "qualified institutional buyer" or an
"accredited investor" defined in Rule 501(a)(1),(2),(3), or (7) of Regulation D.
14. Miscellaneous.
(a) Remedies. The Company and the Purchaser
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof, this being in addition to any other remedy to which
any of them may be entitled by law or equity.
(b) Jurisdiction. Each of the Company and the
Purchaser (i) hereby irrevocably submits to the exclusive jurisdiction of the
United States District Court, the California state courts and other courts of
the United States sitting in Orange County, California for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement and (ii)
hereby waives, and agrees not to assert in any such suit action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper. The Company and the
Purchaser consent to process being served in any such suit, action or
12
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
paragraph shall affect or limit any right to serve process in any other manner
permitted by law.
(c) Notices. Any notice or other communication
required or permitted to be given hereunder shall be in writing by facsimile,
mail or personal delivery and shall be effective upon actual receipt of such
notice. The addresses for such communications shall be:
to the Company:
Liquidmetal Technologies, Inc.
00000 Xxxxxxxxxxxx Xx., Xxxxx 000
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxx Xxxx, President
with a copy to:
Xxxxx & Lardner LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000-0000
Telephone: 000-000-0000
Facsimile:
Attention: Xxxx X. Xxxxxx
If to the Purchasers, to the addresses set forth on Schedule I to the
Purchase Agreement:
with a copy to:
Horizon Law Group
Xxxxxx Xxxxx Xxxx., 000-00 Xxxxxx-xxxx,
Xxxxxxx-xx, Xxxxx, Xxxxx
Telephone: 000-0000-0000
Facsimile: 000-0000-0000
Attention: Xxxxxx-Ki Xxx, Esq.
Any party hereto may from time to time change its address for notices by giving
at least five days' written notice of such changed address to the other parties
hereto.
(d) Waivers. No waiver by any party of any
default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
13
exercise of any such right accruing to it thereafter. The representations and
warranties and the agreements and covenants of the Company and each Purchaser
contained herein shall survive the Closing.
(e) Execution in Counterpart. This Agreement may
be executed in two or more counterparts, all of which shall be considered one
and the same agreement, it being understood that all parties need not sign the
same counterpart.
(f) Signatures. Facsimile signatures shall be
valid and binding on each party submitting the same.
(g) Entire Agreement; Amendment. This Agreement,
together with the Purchase Agreement, the Note, the Warrant, and the agreements
and documents contemplated hereby and thereby, contains the entire understanding
and agreement of the parties, and may not be amended, modified or terminated
except by a written agreement signed by the Company plus the Holders of 75% of
the outstanding Principal Amount of the Notes issued under the Purchase
Agreement to that date; provided that for the purposes of this Section 14(g) the
Holders of Registrable Securities still entitled to registration rights under
this Agreement will be deemed to still be Holders of that amount of Notes which
were converted into such number of Registrable Securities issued upon conversion
which are still held by them.
(h) Governing Law. This Agreement and the
validity and performance of the terms hereof shall be governed by and construed
in accordance with the laws of the State of California applicable to contracts
executed and to be performed entirely within such state, except to the extent
that the law of the State of Delaware regulates the Company's issuance of
securities.
(i) Jury Trial. EACH PARTY HERETO WAIVES THE
RIGHT TO A TRIAL BY JURY.
(j) Force Majeure. The Company shall not be
deemed in breach of its commitments under this Agreement and no payments by the
Company as set forth in Section 2 shall be required if the Company is unable to
fulfill it obligations hereunder in a timely fashion if the SEC or the Nasdaq
National Market are closed or operating on a limited basis as a result of the
occurrence of a Force Majeure. As used herein, "FORCE MAJEURE" means war or
armed hostilities or other national or international calamity, or one or more
acts of terrorism, which are having a material adverse effect on the financial
markets in the United States. Furthermore, any payments owed as a result of
Section 2 shall not accrue during any period during which the Company's
performance hereunder has been delayed or the Company's ability to fulfill its
obligations hereunder has been impaired by a Force Majeure.
(k) Titles. The titles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
(l) No Strict Construction. The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rule of strict construction will be applied
against any party.
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*** Signatures on following page(s) ***
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
COMPANY:
LIQUIDMETAL TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxx
------------------------
Xxxx Xxxx, President and Chief Executive Officer
PURCHASERS:
MICHIGAN VENTURE CAPITAL CO, LTD.
By: /s/ Michigan Venture Capital Co., Ltd.
Signature(s) of additional Purchasers set forth on following page(s).
16
COUNTERPART SIGNATURE PAGE
TO REGISTRATION RIGHTS AGREEMENT,
DATED MARCH 1, 2004,
AMONG LIQUIDMETAL TECHNOLOGIES, INC.,
MICHIGAN VENTURE CAPITAL CO., LTD., AND
THE "PURCHASERS" IDENTIFIED THEREIN
The undersigned hereby executes and delivers the Registration Rights Agreement
to which this Signature Page is attached, which, together with all counterparts
of the Registration Rights Agreement and Signature Pages of the Company and
other "Purchasers" under the Registration Rights Agreement, shall constitute one
and the same document in accordance with the terms of the Registration Rights
Agreement.
eIPO Co., Ltd.
/s/ Yangkwon Moon
Yangkwon Moon
Chief Executive Officer
17
COUNTERPART SIGNATURE PAGE
TO REGISTRATION RIGHTS AGREEMENT,
DATED MARCH 1, 2004,
AMONG LIQUIDMETAL TECHNOLOGIES, INC.,
MICHIGAN VENTURE CAPITAL CO., LTD., AND
THE "PURCHASERS" IDENTIFIED THEREIN
The undersigned hereby executes and delivers the Registration Rights Agreement
to which this Signature Page is attached, which, together with all counterparts
of the Registration Rights Agreement and Signature Pages of the Company and
other "Purchasers" under the Registration Rights Agreement, shall constitute one
and the same document in accordance with the terms of the Registration Rights
Agreement.
WINVEST VENTURE PARTNERS, INC.
/s/ Xxxxx Ki Xxx
Xxxxx Ki Xxx
President and CEO
18
COUNTERPART SIGNATURE PAGE
TO REGISTRATION RIGHTS AGREEMENT,
DATED MARCH 1, 2004,
AMONG LIQUIDMETAL TECHNOLOGIES, INC.,
MICHIGAN VENTURE CAPITAL CO., LTD., AND
THE "PURCHASERS" IDENTIFIED THEREIN
The undersigned hereby executes and delivers the Registration Rights Agreement
to which this Signature Page is attached, which, together with all counterparts
of the Registration Rights Agreement and Signature Pages of the Company and
other "Purchasers" under the Registration Rights Agreement, shall constitute one
and the same document in accordance with the terms of the Registration Rights
Agreement.
DONG XXX XXX
/s/ Dong Xxx Xxx
19
COUNTERPART SIGNATURE PAGE
TO REGISTRATION RIGHTS AGREEMENT,
DATED MARCH 1, 2004,
AMONG LIQUIDMETAL TECHNOLOGIES, INC.,
MICHIGAN VENTURE CAPITAL CO., LTD., AND
THE "PURCHASERS" IDENTIFIED THEREIN
The undersigned hereby executes and delivers the Registration Rights Agreement
to which this Signature Page is attached, which, together with all counterparts
of the Registration Rights Agreement and Signature Pages of the Company and
other "Purchasers" under the Registration Rights Agreement, shall constitute one
and the same document in accordance with the terms of the Registration Rights
Agreement.
XXXXX XXX-JUN YOON
/s/ Xxxxx Xxxx
20
COUNTERPART SIGNATURE PAGE
TO REGISTRATION RIGHTS AGREEMENT,
DATED MARCH 1, 2004,
AMONG LIQUIDMETAL TECHNOLOGIES, INC.,
MICHIGAN VENTURE CAPITAL CO., LTD., AND
THE "PURCHASERS" IDENTIFIED THEREIN
The undersigned hereby executes and delivers the Registration Rights Agreement
to which this Signature Page is attached, which, together with all counterparts
of the Registration Rights Agreement and Signature Pages of the Company and
other "Purchasers" under the Registration Rights Agreement, shall constitute one
and the same document in accordance with the terms of the Registration Rights
Agreement.
MOONCHEOL YANG
/s/ Mooncheol Yang
21
