Exhibit 10.17
NOTE CONVERSION AGREEMENT
THIS NOTE CONVERSION AGREEMENT (the "Agreement") is made and entered into
as of November 30, 2001, by and between LIQUIDMETAL TECHNOLOGIES, a California
corporation (the "Company"), and XXXX XXXXX SONG, an individual residing in
Singapore ("Holder").
RECITALS
A. Holder is the holder of a Subordinated Promissory Note, dated
March 15, 2000, in the original principal amount of $500,000, payable by the
Company (the "Note").
X. Xxxxxx desires to convert the Note into common stock, no par
value, of the Company ("Common Stock") in full and complete satisfaction of the
Note.
NOW, THEREFORE, in consideration of the foregoing recitals, and of
the representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows.
1. NOTE EXCHANGE
Holder and the Company hereby agree that, as of the date hereof, the
Note (and all unpaid principal and accrued but unpaid interest thereunder) shall
be converted 141,053 fully paid and nonassessable shares of Common Stock issued
by the Company (the "Payment Shares"). Holder and Company agree that, as of the
date hereof, the Note has an outstanding balance of US $564,212.00, consisting
of US $500,000.00 in unpaid principal and US $64,212.00 in accrued but unpaid
interest. Holder and Company further agree that the outstanding balance of the
Note is being converted into Common Stock at a rate of US $4.00 per share. Upon
the surrender and cancellation of the Note by Holder, the Company shall issue
and deliver to Holder one or more certificates representing the Payment Shares.
Holder agrees that the conversion of the Note pursuant to this Agreement
constitutes the full and complete payment of the Note, and Holder hereby waives
and releases any and all claims, rights, and causes of action that he may have
arising under or relating to the Note.
2. REPRESENTATIONS AND WARRANTIES
Holder hereby makes the following representations and warranties to
the Company as of the date hereof, which representations and warranties shall
survive the closing of this transaction:
(a) Regulation S. The Holder understands that the Payment Shares have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance on an exemption contained in Regulation S promulgated under
the Securities Act ("Regulation S"), and that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of Holder set forth herein in
order to determine the applicability of such exemptions and the Holder's
suitability to acquire the Payment Shares.
(b) Non-U.S. Person. The Holder is not a "U.S. person" as defined in
Regulation S under the Securities Act. The Holder is not, and at the time of the
issuance and delivery of the Payment Shares will not be, acquiring the Payment
Shares for the benefit of a "U.S. person" as defined in Regulation S under the
Securities Act. Upon the issuance of the Payment Shares, the Holder will be the
sole beneficial owner of the Payment Shares, and the Holder has not pre-arranged
any sale with any purchaser or purchasers in the United States. For purposes of
this Agreement, a "U.S. person" includes, without limitation, any natural person
resident in the United States, any partnership or corporation organized or
incorporated under the laws of the United States (other than certain branches of
non-U.S. banks or insurance companies), any estate of which any executor or
administrator is a U.S. person or any trust of which any trustee is a U.S.
person (with certain exceptions) and any agency or branch of a foreign entity
located in the United States, but does not include a natural person not resident
in the United States. The "United States" means the United States of America,
its territories and possessions, any state of the United States and the District
of Columbia.
(c) Outside the U.S. The Holder is outside the United States as of the
date of the execution and delivery of this Agreement and the delivery of the
Payment Shares.
(d) Limitation on Transfer. The Holder understands that the Payment Shares
cannot be offered for sale, sold or otherwise transferred unless in accordance
with the provisions of Regulation S of the Securities Act, and the certificates
representing the Payment Shares will bear a legend to such effect. The Holder
has no present intention to sell or otherwise transfer the Payment Shares,
except in accordance with the provisions of Regulation S of the Securities Act,
pursuant to registration under the Securities Act, or pursuant to an available
exemption from registration under the Securities Act. The Holder understands
that the Company is required, under Rule 903 of Regulation S, to refuse to
register the transfer of any Payment Shares to the extent that the same are not
transferred pursuant to a registration statement under the Securities Act, in
compliance with Regulation S under the Securities Act or otherwise pursuant to
an available exemption from registration.
(e) No Short Position. The Holder covenants that the Holder will not,
directly or indirectly, or through one or more intermediaries, maintain any
short position in the Common Stock during the Distribution Compliance Period, as
defined in Regulation S.
(f) No Hedging Transactions. The Holder hereby agrees not to engage in
hedging transactions with regard to the Payment Shares unless in compliance with
the provisions of Regulation S, pursuant to registration under the Securities
Act or pursuant to an exemption from the registration requirements of the
Securities Act.
(g) Limitations on Resale. The Holder will resell the Payment Shares only
in accordance with the provisions of Regulation S of the Securities Act,
pursuant to registration under the Securities Act, or pursuant to an available
exemption from registration under the Securities Act.
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(h) Receipt and Review of Certain Information. The Holder has had a
thorough and adequate opportunity to ask questions of the Company, or a person
or persons acting on its behalf, concerning the Company and the terms and
conditions of this investment in the Payment Shares, and all such questions have
been answered to the full satisfaction of the Holder. The Holder has also had
the opportunity to review any documents relating to the Company that he has
requested and to otherwise conduct due diligence, and such due diligence review
has been fully satisfactory to the Holder. The Holder understands and
acknowledges that the Company cannot provide assurances with respect to any
predictions as to the future business or financial performance of the Company.
(i) Risk Associated with Investment. The Holder recognizes that an
investment in the Payment Shares involves a high degree of risk for an
indefinite period of time, and he has taken full cognizance of and understands
all of the risks related thereto. The Holder has the financial ability to bear
the economic risk of this investment, including a total loss of the investment,
and has adequate means for providing for his current needs and personal
contingencies and has no need for liquidity with respect to his investment. The
Holder has such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the Payment
Shares.
3. MISCELLANEOUS
This Agreement represents the entire contract between the parties
with respect to the subject matter hereof and supersede all offers, proposals,
statements, representations and agreements with respect to the subject matter
hereof. This Agreement may not be amended except by action of each of the
parties hereto set forth in an instrument in writing signed on behalf of each of
the parties hereto. This Agreement and all other documents given in connection
herewith shall be construed in accordance with the laws of the State of Florida,
U.S.A., without regard to the principles of conflicts of laws. This Agreement
may be executed in any number of counterparts, each of which shall be considered
an original but all of which shall constitute but one and the same Agreement by
and among the parties. The invalidity or unenforceability of any provision of
this Agreement shall not affect the other provisions hereof, and the Agreement
shall be construed in all respects as if such invalid or unenforceable
provisions were omitted. Furthermore, upon the request of any party hereto, the
parties to this Agreement shall add, in lieu of such invalid or unenforceable
provisions, provisions as similar in terms to such invalid or unenforceable
provisions as may be possible and legal, valid and enforceable.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
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LIQUIDMETAL TECHNOLOGIES XXXX XXXXX SONG
By: /s/ Xxxx Xxxx /s/ Xxxx Xxxxx Song
Xxxx Xxxx, President Xxxx Xxxxx Song, individually
00X Xxxxxxxxx Xxxx
Xxxxxxxxxxx Xxxxxxxxxxxx Xxxxxxxxx
000 Xxxxx Xxxxx Xx., Xxxxx 0000
Xxxxx, Xxxxxxx 00000
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