LIQUIDMETAL TECHNOLOGIES, INC. SUBSCRIPTION AGREEMENT
Exhibit
10.4
LIQUIDMETAL
TECHNOLOGIES, INC.
Gentlemen:
1. Subscription.
(a)
Subject to the conditions set forth in this Subscription Agreement (this
“Agreement”), the undersigned, intending to be legally bound, hereby irrevocably
subscribes to purchase from Liquidmetal Technologies, Inc., a Delaware
corporation (the “Company”), an aggregate of 7,870,307 shares of the common
stock, par value $0.001 of the Company (“Common Stock”), at a subscription price
of $0.26 per share (the Common Stock purchased pursuant hereto is hereinafter
sometimes referred to as the “Securities” herein). This subscription
is submitted to you in accordance with and subject to the terms and conditions
described in this Agreement.
(b)
The purchase price for the Securities shall be made payable to the Company and
should be delivered, together with two executed and properly completed copies of
this Agreement, to the Company.
(c)
The undersigned may not withdraw this subscription or any amount paid pursuant
thereto. The undersigned understands that his or her purchase of the
Securities is contingent upon the acceptance in writing of this Agreement by the
Company. The Company reserves the right, in its sole and absolute
discretion, to withdraw, cancel, modify, or reject any subscription, in whole or
in part, for any reason.
2. Representations, Warranties
and Covenants of the Subscriber. The undersigned hereby represents and
warrants to, and agrees with, the Company as follows:
(a)
The undersigned is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended
(the “Securities Act”). Specifically: [PLEASE RESPOND BELOW AS
APPROPRIATE]
If the
subscriber is an INDIVIDUAL, please answer the following
questions:
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(1)
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Did
your individual annual income during each of the two most recent years
exceed $200,000 and do you expect your annual income during the current
year to exceed $200,000?
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Yes ¨ No
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(2)
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If
you are married, did your joint annual income with your spouse during each
of the two most recent years exceed $300,000 and do you expect your joint
annual income with your spouse during the current year to exceed
$300,000?
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Yes ¨ No
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(3)
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Does
your individual or joint (together with your spouse) net worth (including
automobiles, but excluding your
primary residence) exceed
$1,000,000?
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Yes ¨ No ¨
IF
THE ANSWERS TO ALL OF THE IMMEDIATELY PRECEDING QUESTIONS ARE “NO,” THE
SUBSCRIBER DOES NOT MEET THE REQUISITE FINANCIAL SOPHISTICATION STANDARDS AND
WILL NOT BE ACCEPTED AS A PURCHASER OF THE NOTE.
If the
subscriber is a CORPORATION, LIMITED LIABILITY COMPANY, PARTNERSHIP, or TRUST
please answer the following questions:
(4) Was
the corporation, limited liability company, partnership or trust formed for the
specific purpose of investing in the Company?
Yes ¨ No x
(5) Does
the corporation, limited liability company, partnership or trust have total
assets in excess of $5,000,000?
Yes ¨ No x
If the
answer to question (4) is “Yes” or the answer to
question (5) is “No,” please answer the following questions:
(6) Please
list the names of each shareholder in the corporation, each member in the
limited liability company, each partner in the partnership, and in the
case of a revocable trust, each grantor of the trust:
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Furniture
Row, LLC
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(7) Does
each person listed in response to question (6) either (i) have an individual
annual income in excess of $200,000 in each of the two most recent years and
expect to have an annual income in excess of $200,000 during the current year,
(ii) if married, have a joint annual income with his/her spouse in excess of
$300,000 in each of the two most recent years and expect to have an annual
income in excess of $300,000 during the current year, or (iii) have an
individual or joint (together with his/her spouse) net worth (including
automobiles, but excluding the primary
residence) in excess of $1,000,000?
Yes x No ¨
IF
THE ANSWER TO QUESTION 7 IS “NO,” THE SUBSCRIBER DOES NOT SATISFY THE INVESTOR
SUITABILITY REQUIREMENTS FOR THIS OFFERING AND WILL NOT BE ACCEPTED AS A
PURCHASER OF THE NOTE. IN THE CASE OF A TRUST THAT IS NOT A REVOCABLE
TRUST, IF THE ANSWER TO QUESTION 4 IS “YES” OR THE ANSWER TO QUESTION 5 IS “NO”,
THE SUBSCRIBER DOES NOT SATISFY THE INVESTOR SUITABILITY REQUIREMENTS FOR THIS
OFFERING AND WILL NOT BE ACCEPTED AS A PURCHASER OF THE NOTE.
(b) The
undersigned has a fundamental understanding of the Company’s
business.
(c) The
undersigned has had access to and has received all materials that have been
requested by the undersigned and has had a reasonable opportunity to ask
questions of the Company and its representatives. The Company has
answered all inquiries that the undersigned or the undersigned’s representatives
have asked the Company. The undersigned has taken all the steps necessary to
evaluate the merits and risks of an investment in the Securities.
(d) The
undersigned has such knowledge and experience in finance, securities,
investments and other business matters so as to be able to protect the interests
of the undersigned in connection with this transaction, and the undersigned’s
investment in the Company is not material when compared to the undersigned’s
total financial capacity.
(e) The
undersigned understands that there are significant risks incident to an
investment in the Company as proposed herein, and the undersigned can afford to
bear such risks, including, without limitation, the risk of losing the entire
investment.
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(f) The
undersigned understands that the Securities have not been registered under the
Securities Act, that the Securities will be issued on the basis of the exemption
provided by Section 4(2) of the Securities Act and Regulation D promulgated
thereunder and under exemptions under certain state securities laws, that this
transaction has not been reviewed by, passed on or submitted to any federal or
state agency or self-regulatory organization where an exemption is being relied
upon, and that the Company’s reliance thereon is based in part upon the
representations made by the undersigned in this Agreement.
(g) The
undersigned acknowledges that the undersigned is familiar with the limitations
imposed by the Securities Act and the rules and regulations thereunder on the
transfer of the Securities. In particular, the undersigned agrees
that the Company shall not be required to give any effect to a sale, assignment
or transfer of the Securities, unless (i) the sale, assignment or transfer of
the Securities is registered under the Securities Act, it being understood that
the Securities are not currently registered for sale and that the Company has no
obligation or intention to so register the Securities, or (ii) such Securities
are sold, assigned or transferred in accordance with all the requirements and
limitations of Rule 144 under the Securities Act, it being understood that Rule
144 is not available at the present time for the sale of the Securities, or
(iii) such sale, assignment or transfer is otherwise exempt from registration
under the Securities Act. The undersigned further understands that an opinion of
counsel and other documents may be required to transfer the
Securities.
(h) If
the undersigned is an individual, the undersigned is a bona-fide resident of the
state set forth in the address provided on the undersigned’s signature page to
this Agreement.
(i) If
the undersigned is a partnership, trust, corporation or other entity: (A) it has
made other investments or engaged in other substantial business activities prior
to receiving an opportunity to purchase the Securities; (B) it was not organized
for the purpose of acquiring the Securities; (C) the person executing on behalf
of the partnership, trust, corporation or other entity has the full power and
authority to execute and comply with the terms of this Agreement on behalf of
such entity and to make the representations and warranties made herein on its
behalf; (D) its principal place of business and principal office are located in
the state set forth in its address below; and (E) the investment in the
Securities has been affirmatively authorized, if required, by the governing
board of such entity and is not prohibited by the governing documents of the
entity.
(j) The
undersigned will acquire the Securities for the undersigned’s own account for
investment and not with a view to the sale or distribution thereof or the
granting of any participation therein, and has no present intention of
distributing or selling to others any of such interest or granting any
participation therein.
(k) The
undersigned acknowledges that the representations, warranties and agreements
made by the undersigned herein shall survive the execution and delivery of this
Agreement and the purchase of the Securities. The information stated
herein is true and complete as of the date hereof and will be true and complete
as of the date on which the Company shall sell the Securities to the
undersigned. If, prior to the final consummation of the offer and
sale of the Securities, there should be any change in such information or any of
such information becomes incorrect or incomplete, the undersigned agrees to
notify and supply promptly corrective information to the
Company.
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3. Representations and
Warranties of the Company. The Company hereby represents and
warrants to the undersigned that:
(a) Organization and
Qualification. The Company and its “Subsidiaries” (which for
purposes of this Agreement means any entity in which the Company, directly or
indirectly, owns capital stock or holds an
equity or similar interest) are corporations or other legal entities duly
organized and validly existing in good standing under the laws of the
jurisdictions in which they are organized, as set forth in the disclosure
schedule attached hereto (the “Disclosure Schedule”), and have the requisite
power and authorization to own their properties and to carry on their business
as now being conducted. The Company and each Subsidiary is duly
qualified as a foreign corporation or other legal entity to do business and is
in good standing in every jurisdiction in which its ownership of property or the
nature of the business conducted by it makes such qualification necessary, as
set forth in the Disclosure Schedule, except to the extent that the failure to
be so qualified or be in good standing would not have a Material Adverse
Effect. As used in this Agreement, “Material Adverse Effect” means
any material adverse effect on the business, properties, assets, operations,
results of operations, or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole. The Company has no Subsidiaries
except as set forth in the Disclosure Schedule or in the SEC Documents (as
defined below).
(b) Authorization; Enforcement;
Validity. The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement and to
issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Securities, have been duly
authorized by the Company’s Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders. This Agreement has been duly executed and delivered by
the Company, and constitutes the legal, valid and binding obligations of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies, and except that any rights to indemnity or contribution
under this Agreement may be limited by federal and state securities laws and
public policy considerations.
(c) Issuance of
Securities. The Securities are duly authorized and upon
issuance thereof in accordance with this Agreement will be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof, with the holder being entitled to all rights accorded to a
holder of Common Stock. Assuming the accuracy of each of the
representations and warranties of the undersigned contained in Section 2 of this
Agreement, the issuance by the Company of the Securities is exempt from the
registration requirements of Section 5 of the Securities Act.
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(d) No
Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby (including, without limitation, the issuance of the
Securities) will not (i) result in a violation of the certificate of
incorporation, any certificate of designations, preferences and rights of any
outstanding series of preferred stock or the bylaws of the Company or any of its
Subsidiaries, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture or instrument to which the Company or any of
its Subsidiaries is a party, except which are the subject of written waivers or
consents which have been obtained or effected on or prior to the date hereof or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable
to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected, except in the case
of clauses (ii) and (iii), for such breaches or defaults as could not reasonably
be expected to have a Material Adverse Effect.
(e) Consents. Except
as disclosed in the Disclosure Schedule or in the SEC Documents, the Company is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court, governmental agency or any regulatory or
self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its obligations under or contemplated by the Transaction
Documents, in each case in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof (other
than filings and reports relating to the offer and sale of the Securities
required under Regulation D or applicable securities or “Blue Sky” laws), and
the Company and its Subsidiaries are unaware of any facts or circumstances which
might prevent the Company from obtaining or effecting any of the registrations,
applications or filings pursuant to the preceding sentence.
(f) Acknowledgment Regarding the
Subscriber’s Purchase of Securities. The Company acknowledges
and agrees that the undersigned is acting solely in the capacity of arm’s length
purchaser with respect to the Transaction Documents and the transactions
contemplated hereby and thereby and that, except as set forth in the Disclosure
Schedule or in the SEC Documents, the undersigned is not (i) an officer or
director of the Company, (ii) an “affiliate” of the Company (as defined in Rule
144) or (iii) to the knowledge of the Company, a “beneficial owner” of more than
10% of the Common Stock (as defined for purposes of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)). The Company
further acknowledges that the undersigned is not acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and
any advice given by the undersigned or any of its representatives or agents in
connection with the Transaction Documents and the Transactions contemplated
hereby and thereby is merely incidental to the undersigned’s purchase of the
Securities.
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(g) No General Solicitation;
Placement Agent’s Fees. Neither the Company, nor any of its
affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the
Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other
than for persons engaged by the undersigned or its investment advisor) relating
to or arising out of the transactions contemplated hereby.
(h) No Integrated
Offering. None of the Company, its Subsidiaries, any of their
affiliates, or any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of the
Securities under the Securities Act or cause this offering of the Securities to
be integrated with prior offerings by the Company for purposes of the Securities
Act or any applicable stockholder approval provisions, including, without
limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated.
(i) Rights
Agreement. The Company has not adopted a stockholder rights
plan or similar arrangement relating to accumulations of beneficial ownership of
Common Stock or a change in control of the Company.
(j) SEC
Documents. Except for its Form 10-K for the year ended
December 31, 2009 (the “2009 10-K”) and its Form 10-Q for the quarter ended
March 31, 2009 (the “3/31/10 10-Q”), the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the United States Securities and Exchange Commission (the “SEC”) pursuant to the
reporting requirements of the Exchange Act. True, correct and
complete drafts of the 2009 10-K and the 3/31/10 10-Q, as of the date hereof,
have been provided to the undersigned (All of the foregoing filed prior to the
date hereof (whether or not required to be filed), the draft 2009 10-K and
3/31/10 10-Q, and all exhibits included therein and financial statements and
schedules thereto and documents incorporated by reference therein being
hereinafter referred to as the “SEC Documents”). As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and, to the Company’s
knowledge, none of the SEC Documents, at the time they were filed with the SEC
or are intended to be filed with the SEC, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(k) Financial
Statements. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
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(l) Conduct of
Business. Neither the Company nor any of its Subsidiaries is
in violation of any term of or in default under its Certificate of Incorporation
or Bylaws or its organizational charter or bylaws,
respectively. Except as disclosed in the Disclosure Schedule or in
the SEC Documents, neither the Company nor any of its Subsidiaries is in
violation of any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company or its Subsidiaries, and neither the
Company nor any of its Subsidiaries will conduct its business in violation of
any of the foregoing, except for possible violations which would not,
individually or in the aggregate, have a Material Adverse Effect.
(m) Regulatory
Permits. The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.
(n) Equity
Capitalization. As of the date hereof, the number of shares
and type of all authorized, issued, and outstanding capital stock of the
Company, and all shares of Common Stock reserved for issuance under the
Company’s employee and director benefit, incentive, or option plans, is set
forth in the Disclosure Schedule. All of such outstanding shares have
been, or upon issuance will be, validly issued and are fully paid and
nonassessable. All of such outstanding shares of capital stock are
duly authorized, validly issued, fully paid and nonassessable. No
shares of capital stock of the Company are subject to preemptive rights or any
other similar rights of the shareholders of the Company or any liens or
encumbrances imposed through the actions or failure to act of the
Company. Except as disclosed in the Disclosure Schedule and other
than pursuant to this Agreement, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, or rights of first refusal, and
(ii) there are no agreements, understandings, claims, antidilution protection or
other commitments or rights of any character whatsoever that could require the
Company to issue additional shares of capital stock of the Company or adjust the
purchase or exercise price of any such instrument. Except as
disclosed in the Disclosure Schedule, there are no agreements or arrangements
(other than the Registration Rights Agreement, dated as of May 1, 2009, between
the Company and the buyers signatory thereto) under which the Company is
obligated to register the sale of any of its securities under the Securities
Act.
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(o) Indebtedness and Other
Contracts. Except as disclosed in the Disclosure Schedule or
in the SEC Documents, neither the Company nor any of its Subsidiaries (i) has
any outstanding Indebtedness, or (ii) is in violation of any term of or in
default under any contract, agreement or instrument relating to any
Indebtedness. For purposes of this Agreement: (x)
“Indebtedness” of any Person means, without duplication (A) all indebtedness for
borrowed money, (B) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business), (C) all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (F) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (G) all
indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (H) all Contingent Obligations (as defined below) in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (A) through (G) above; (y) “Contingent Obligation” means, as to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to any indebtedness, lease, dividend or other obligation of
another Person if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance to the obligee
of such liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto; and (z) “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(p) Absence of
Litigation. Except as disclosed in the Disclosure Schedule or
in the SEC Documents, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, the Common Stock or any of
the Company’s Subsidiaries that would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(q) Insurance. The
Company and each of its Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
management of the Company reasonably believes to be prudent and customary in the
businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused
any insurance coverage sought or applied for and neither the Company nor any
such Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse
Effect.
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(r) Employee
Relations. Except as disclosed in the Disclosure Schedule or
in the SEC Documents, neither the Company nor any of its Subsidiaries is a party
to any collective bargaining agreement or employs any member of a
union. The Company and its Subsidiaries believe that their relations
with their employees are good. No executive officer of the Company
(as defined in Rule 501(f) of the Securities Act) has notified the Company that
such officer intends to leave the Company or otherwise terminate such officer’s
employment with the Company. No executive officer of the Company, to
the knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant. The Company and
its Subsidiaries are in compliance with all federal, state, local and foreign
laws and regulations respecting employment and employment practices, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(s) Title. The
Company and its Subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal property owned by
them which is material to the business of the Company and its Subsidiaries, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the Disclosure Schedule or in the SEC Documents or such as do
not materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company and any of its
Subsidiaries. Any real property and facilities held under lease by
the Company and any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.
(t) Intellectual Property
Rights. To the knowledge of the Company and except as set
forth in the Disclosure Schedule or in the SEC Documents, the Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights
(“Intellectual Property Rights”) necessary to conduct their respective
businesses as now conducted. The Company does not have any knowledge
of any infringement by the Company or its Subsidiaries of Intellectual Property
Rights of others. Except as set forth in the Disclosure Schedule or
in the SEC Documents, there is no claim, action or proceeding being made or
brought, or to the knowledge of the Company, being threatened, against the
Company or its Subsidiaries regarding its Intellectual Property Rights which
could have a Material Adverse Effect.
(u) Environmental
Laws. The Company and its Subsidiaries (i) are in material
compliance with any and all Environmental Laws (as hereinafter defined), (ii)
have received all material permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in material compliance with all terms and conditions of any such
permit, license or approval where, in each of the foregoing clauses (i), (ii)
and (iii), the failure to so comply could be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. The term
“Environmental Laws” means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic
or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved
thereunder.
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(v) Tax
Status. The Company and each of its Subsidiaries (i) has made
or filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction in which such filings are required,
(ii) has paid all taxes and other governmental assessments and charges that are
owed by it, including all taxes shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and for
which adequate reserves have been established on the Company’s books, and (iii)
has set aside on its books provision reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction.
(w) Disclosure. The
Company confirms that it has not provided the undersigned or its agents or
counsel with any information that will constitute material, nonpublic
information as of the date hereof, other than information and documentation
regarding the transactions contemplated by this Agreement, which information
shall be included on a Form 8-K to be filed by the Company in connection with
this transaction, and information included in draft SEC Documents that have not
yet been filed. The Company understands and confirms that the
undersigned will rely on the foregoing representations in effecting transactions
in securities of the Company. The Company acknowledges and agrees
that the undersigned does not make and has not made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2 of this Agreement.
(x) Manipulation of
Price. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.
(y) Internal Accounting and
Disclosure Controls. The Company and each of its Subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset and liability
accountability, (iii) access to assets or incurrence of liabilities is permitted
only in accordance with management’s general or specific authorization and (iv)
the recorded accountability for assets and liabilities is compared with the
existing assets and liabilities at reasonable intervals and appropriate action
is taken with respect to any difference. Except as set forth in the
Disclosure Schedule or in the SEC Documents, the Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act) that are effective in ensuring that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal
financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure. Except as set forth in the Disclosure
Schedule or in the SEC Documents, during the twelve months prior to the date
hereof neither the Company nor any of its Subsidiaries have received any notice
or correspondence from any accountant relating to any potential material
weakness in any part of the system of internal accounting controls of the
Company or any of its Subsidiaries.
- 11
-
(z) Investment Company
Status. The Company is not, and upon consummation of the sale of
the Securities will not be, an “investment company,” a company controlled by an
“investment company” or an “affiliated person” of, or “promoter” or “principal
underwriter” for, an “investment company” as such terms are defined in the
Investment Company Act of 1940, as amended.
(aa) U.S. Real Property Holding
Corporation. The Company is not, nor has it ever been, a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon the
request of the undersigned.
(bb) Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries is subject to
the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation
by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates
owns or controls, directly or indirectly, five percent (5%) or more of the
outstanding shares of any class of voting securities or twenty-five (25%) or
more of the total equity of a bank or any equity that is subject to the
BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the
management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(cc) Shell Company
Status. The Company is not, nor
has it at any time previously been, considered a “shell company” within the
meaning of Rule 144(i)(1)(i) (or any successor rule) under the Securities
Act.
(dd) Survivability of Company’s
Representations and Warranties. The Company acknowledges that
the representations, warranties and agreements made by the Company herein shall
survive the execution and delivery of this Agreement and the Company’s delivery
of the Securities. The information stated herein is true and complete as of the
date hereof and will be true and complete as of the date on which the
undersigned shall purchase the Securities from the Company. If, prior
to the final consummation of the offer and sale of the Securities, there should
be any change in such information or any of such information becomes incorrect
or incomplete, the Company agrees to notify and supply promptly corrective
information to the undersigned.
- 12
-
4. Indemnification. The
undersigned agrees to indemnify and hold harmless the Company and each officer,
director, employee, agent and controlling person of the Company from and against
any and all loss, damage or liability due to or arising out of a breach of any
representation or warranty in this Agreement.
5. Miscellaneous.
(a) This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
the successors and assigns of the Company, and the permitted successors and
assigns of the undersigned.
(b) This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement.
(c) The
validity, construction, enforcement, and interpretation of this Agreement are
governed by the laws of the State of California and the United States of
America, without regard to principles of conflict of laws.
(d) The
undersigned hereby agrees that the venue of any action, proceeding,
counterclaim, crossclaim, or other litigation relating to, involving, or
resulting from this Agreement shall be the state or federal courts located in
Orange County, California.
(e) This
Agreement may not be amended except in a writing specifically intended for the
purpose and executed by the party against whom enforcement of the amendment is
sought.
(f) This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
(g) This
Agreement may be executed in counterparts, each of which shall constitute an
original, and all of which, together, shall constitute the same
instrument.
[SIGNATURES
FOLLOW]
- 13
-
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day and year this
subscription has been accepted by the Company as set forth
below.
|
Date
of Subscription: August 10, 2010
|
|||
|
Norden,
LLC
|
X
|
/s/ Xxxxxxx A, Xxxxxxxxxx, Vice
President
|
|
|
(Print
Name of Subscriber)
|
(Signature
of Subscriber or Authorized Person
|
||
|
on
behalf of Subscriber if Subscriber is an Entity)
|
|||
|
Xxxxxxx A, Xxxxxxxxxx, Vice
President
|
|||
|
(Print
Name and Title of Authorized Person if
|
|||
|
Subscriber
is an Entity)
|
|||
|
X
|
|||
|
(Print
Name of Joint Subscriber,
|
(Signature
of Joint Subscriber, if any)
|
||
|
if
any)
|
|||
|
Address:
|
Social
Security Number or other Taxpayer Identification
Number:
|
||
|
8641 N.
Broadway
|
00-0000000
|
||
|
Xxxxxx, XX
00000
|
|||
|
ACCEPTED
BY:
|
||
|
Liquidmetal
Technologies, Inc.
|
||
|
By:
|
/s/ Xxxx Xxxxx
|
|
|
Name:
|
Xxxx
Xxxxx
|
|
|
Title:
|
Chief
Financial officer
|
|
|
Date:
|
8/10/10
|
|
- 14
-
DISCLOSURE
SCHEDULE
Schedule
3 (a)
Subsidiaries
|
Name of Subsidiary
|
Jurisdiction of
Incorporation or
Organization
|
Jurisdictions in which
Qualified to Do Business as a
Foreign Corporation or
Entity
|
||
|
Liquidmetal
Golf
|
California
corporation
|
None
|
||
|
Liquidmetal
Korea Co., Ltd.
|
South
Korea organized entity
|
South
Korea
|
||
|
Amorphous
Technologies International (Asia) PTE Ltd.
|
Singapore
organized entity(inactive, dissolution in process)
|
Singapore
|
||
|
Liquidmetal
Coatings, LLC
|
Delaware
Limited Liability Company
|
None
|
||
|
Crucible
Intellectual Property, LLC
|
Delaware
Limited Liability Company
|
None
|
Schedule
3(e)
None.
Schedule
3(f)
None
other than that disclosed in SEC Documents.
Schedule
3(l)
None
other than that disclosed in SEC Documents.
Schedule
3(m)
None.
Schedule
3(n)
|
Outstanding
as of August
10, 2010**
|
As converted into
common stock**
|
|||||||
|
Shares
Outstanding
|
||||||||
|
Common
shares
|
55,950,201 | 55,950,201 | ||||||
|
Series
A-1 Preferred Shares outstanding*
|
680,000 | 34,000,000 | ||||||
|
Series
A-1 Accrued Dividends*
|
52,715 | 2,635,750 | ||||||
|
Series
A-2 Preferred Shares outstanding*
|
2,444,663 | 55,560,523 | ||||||
|
Series
A-2 Accrued Dividends*
|
219,298 | 4,984,045 | ||||||
|
Total
Outstanding
|
59,346,877 | 153,130,519 | ||||||
|
Options
and Warrants Outstanding
|
||||||||
|
1996
stock option plan
|
53,734 | 53,734 | ||||||
|
2002
Equity incentive plan
|
5,648,993 | 5,648,993 | ||||||
|
2002
non employee director stock option plan
|
90,000 | 90,000 | ||||||
|
Warrants
|
52,732,484 | 52,732,484 | ||||||
|
Options
not issued under plan
|
1,591,399 | 1,591,399 | ||||||
|
Total
Options and Warrants Outstanding
|
60,116,610 | 60,116,610 | ||||||
|
Total
Shares
|
119,463,487 | 213,247,129 | ||||||
* In
addition to the above, the Company intends to make a conversion offer to the
holders of preferred shares to convert their shares plus accrued but unpaid
dividends, plus any dividends that would have accrued through June 1, 2011, into
common shares at their respective exercise prices of $.10 for the Series A-1
shares and $.22 for the Series A-2 shares.
** This
table does not take into account (i) any shares of common stock issued pursuant
to preferred stock conversions or warrant exercises on August 10, 2010, or (ii)
shares issuable in payment of $250,000 in fees owing to Xxxx Xxxxxxxx, as the
number of shares issuable will be based on the closing price of the Company's
common stock on August 12, 2010, or (iii) up to approximately 214,000 shares
that the company is authorized to issue to directors in lieu of director
fees.
Schedule
3(o)
None
other than that disclosed in SEC Documents.
Schedule
3(p)
None
other than that disclosed in SEC Documents.
Schedule
3(r)
None
other than that disclosed in SEC Documents.
Schedule
3(s)
None
other than that disclosed in SEC Documents.
Schedule
3(t)
None
other than that disclosed in SEC Documents.
Schedule
3(u)
None.
Schedule
3(y)
None
other than that disclosed in SEC Documents.
