Exhibit 10.4


 


REGISTRATION RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”) is made and entered into as of January 3, 2007,
by and among Liquidmetal Technologies, Inc., a Delaware corporation (the “Company”), and the investors signatory hereto (each an “Investor” and collectively, the “Investors”).


 


BACKGROUND


 


This Agreement is made pursuant to the Securities
Purchase Agreement, dated as of January 3, 2007, among the Company and the
Investors (the “Purchase Agreement”). In
connection with the Purchase Agreement, the Company has agreed, upon the terms
and subject to the conditions of the Purchase Agreement, (i) to issue and sell
on the date hereof to each Investor 8% Subordinated Convertible Unsecured Notes
of the Company (the “Notes”),
which are convertible into shares of Common Stock in accordance with the terms
of the Notes (the “Conversion Shares”)
and (ii) to issue and sell on the date hereof to the Investors warrants (the “Warrants”) to purchase shares of Common Stock  (the “Warrant Shares”).


 


AGREEMENT


 


The Company and the Investors hereby agree as
follows:


 


1.             Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the respective meanings set forth in this Section 1:


 


“Advice” shall
have the meaning set forth in Section 6(d).


 


“Common Stock” means
the common stock of the Company, $0.001 par value per share.


 


“Conversion
Shares” shall have the meaning set forth in the Background section.


 


“Effective Date”
means the date that the Registration Statement filed pursuant to Section 2(a)
is first declared effective by the SEC.


 


“Effectiveness Date”
means the earlier of: (i) the 90th calendar day following the
Closing Date; provided, that, if the SEC reviews and has written
comments to the filed Registration Statement that would require the filing of a
pre-effective amendment thereto with the SEC, then the Effectiveness Date under
this clause (i) shall be the 120th calendar day following the
Closing Date, and (ii) the fifth Trading Day following the date on which the
Company is notified by the SEC that the Registration Statement will not be
reviewed or is no longer subject to further review and comments.


 

















 


“Event” shall
have the meaning set forth in Section 2(b).


 


“Event Date” shall have the meaning set forth in Section 2(b).


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended.


 


“Filing Date” means
the 45th day following the date of this Agreement.


 


“Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.


 


“Indemnified Party”
shall have the meaning set forth in Section 5(c).


 


“Indemnifying Party”
shall have the meaning set forth in Section 5(c).


 


“Losses” shall
have the meaning set forth in Section 5(a).


 


“Notes”
shall have the meaning set forth in the Background section.


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.


 


“Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.


 


“Registrable
Securities” means (i) the Warrant Shares, (ii) the Conversion Shares,
(iii) any other securities into which the Warrant Shares and the Conversion
Shares may be reclassified after the date hereof, and (iv) any shares of Common
Stock issued as payment of principal amount or interest in lieu of cash with
respect to the Notes; provided however, that any shares of Common Stock will
cease to be Registrable Securities at such time as they have been sold under a
Registration Statement or pursuant to Rule 144, or otherwise or such time as
they are eligible to be sold without volume restrictions pursuant to Rule
144(k) promulgated under the Securities Act; and provided further that any
shares of Common Stock referred to in clause (iv) of this paragraph shall not
be deemed Registrable Securities until (A) in the case of shares of Common
Stock to be issued in satisfaction of the Amortization Redemption Amount
pursuant to Section 1(c) of the Notes, the Amortization Conversion Notice Date
(as defined in the Notes), (B) in the case of shares of Common Stock underlying
any additional Notes issued pursuant to Section 2 of the Notes, the date on
which the additional Notes are issued pursuant to said Section 2, and (C) in
the case of shares of Common Stock issuable pursuant to Section 9 of the Notes,
upon the Mandatory Conversion Notice Date.


 


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“Registration Expenses” means all registration and filing
fees, printing expenses, and fees and disbursements of counsel for the Company
to be incurred by the Company in connection with each Holder’ s registration
rights under this Agreement.


 


“Registration Period”
means the period commencing on any applicable Effectiveness Date and the
earliest of (i) the fifth anniversary of such Effectiveness Date, (ii) the date
on which the Holders are able to resell all of their respective Registrable
Securities without volume restrictions pursuant to Rule 144(k) promulgated
under the Securities Act, or (iii) the date on which all of the Registrable
Securities have been sold by the Investors under a Registration Statement or
pursuant to Rule 144.


 


“Registration Statement”
means the registration statement required to be filed in accordance with
Section 2(a) including the Prospectus, amendments and supplements to such
registration statements or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statements.


 


“Rule 144” means
Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC having substantially the same effect as such Rule.


 


“Rule 415” means
Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC having substantially the same effect as such Rule.


 


“Rule 424” means
Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC having substantially the same effect as such Rule.


 


“Securities Act”
means the Securities Act of 1933, as amended.


 


“SEC” means the Securities and Exchange
Commission.


 


“Selling Expenses” means all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for Holders.


 


“Selling Shareholder Questionnaire” shall have the meaning set forth in Section 3(j).


 


“Trading Day”
means (i) a day on which the Common Stock is traded on a Trading Market, or
(ii) if the Common Stock is not listed on a Trading Market, a day on which the
Common Stock is traded in the over-the-counter market or quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i) or (ii) hereof, then Trading Day shall
mean a Business Day.


 


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“Trading Market” means whichever of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ Global Market or Global Select Market, the NASDAQ Capital
Market or OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question.


 


“Warrants”
shall have the meaning set forth in the Background section.


 


“Warrant
Shares” shall have the meaning set forth in the Background section.


 


2.             Registration.


 


(a)           On or prior to the Filing Date
for the Warrant Shares, the Company shall use its commercially reasonable
efforts to prepare and file with the SEC a Registration Statement covering the
resale of 100% of the number of Conversion Shares and Warrant Shares underlying
the Notes and Warrants issued to the Holders on the date of this Agreement for
an offering to be made on a continuous basis pursuant to Rule 415 (which number
of shares is deemed by
the parties to be a reasonable, good faith estimate of the maximum number of
shares issuable pursuant to the Notes and Warrants through conversion or
exercise by the Holders or through the payment by the Company of principal,
interest, or redemption thereunder). The Registration
Statement shall be on Form S-1 (or on such other form appropriate for such
purpose) and shall contain (unless otherwise directed by the Holders and except
if otherwise required pursuant to comments received from the SEC upon a review
of such Registration Statement or pursuant to judicial and SEC interpretations)
substantially the “Plan of Distribution” attached hereto as Annex A. The
Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as soon as
reasonably possible but, in any event, no later than the applicable
Effectiveness Date, and shall use its commercially reasonable efforts to keep
the Registration Statement effective under the Securities Act during the
balance of the applicable Registration Period.


 


(b)           Subject to the last sentence
of this Section 2(b), if: (i) a Registration Statement under subsection (a)
above is not filed on or prior to its Filing Date, or (ii) a Registration
Statement under subsection (a) above is not declared effective by the SEC on or
prior to its required Effectiveness Date, (iii) after its Effective Date, such
Registration Statement under subsection (a) above ceases for any reason to be
effective and available to the Holders as to all Registrable Securities to
which it is required to cover at any time prior to the expiration of the
Registration Period for more than an aggregate of thirty (30) Trading Days during
any 12-month period (which need not be consecutive), or (iv) beginning on the
date on which the first Registration Statement required by this Agreement is
declared effective by the SEC, there are Excluded Securities (as defined in
Section 2(c) below) not included for resale in a Registration Statement (any
such failure or breach being referred to as an “Event,”
and for purposes of clauses (i) or (ii) the date on which such Event occurs, or
for purposes of clause (iii) the date which such thirty (30) Trading Day-period
is exceeded, being referred to as an “Event Date”), then,
in addition to any other rights available to the Holders under this Agreement
or under applicable law: on the last day of each 30-day period after each such
Event Date (if the applicable Event shall not have been cured by such date)
until the applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as liquidated damages and not as a penalty, equal to 1.0% of
the then-outstanding principal amount of the Notes purchased by such


 


4

















 


Holder pursuant to the Purchase Agreement (the “Note Amount”). Notwithstanding anything to the contrary in
this Section 2(b), the
parties agree that (A) the Company will not be liable for liquidated damages
under this Agreement with respect to any Warrants or Warrant Shares, (B) in no
event will the Company be liable for liquidated damages under this Agreement in
excess of 1.0% of the aggregate Note Amount of the Holders for any 30-day
period (even if there are multiple Events during the same 30-day period), (C)
the maximum aggregate liquidated damages payable to a Holder under this
Agreement shall be eighteen percent (18%) of the aggregate original Note Amount
of such Holder’s Notes, and (D) in the case of an Event described in clause
(iv) of this paragraph, liquidated damages will not begin to accrue until the
first Registration Statement filed under this Agreement is declared effective
by the SEC and will cease to accrue on any Conversion Shares that are Excluded
Securities as of the date on which an Additional Registration Statement is
declared effective by the SEC for the resale of such Conversion Shares or, if
earlier, on the date on which such Conversion Shares can first be sold by the
Holder under Rule 144. The liquidated damages pursuant to
the preceding sentence shall apply and be payable on a pro rata basis for any
portion of a 30-day period prior to the cure of an Event and shall cease to accrue
(unless earlier ceased) upon expiration of the Registration Period.


 


(c)           Notwithstanding anything to
the contrary contained in this Agreement, the Company shall not be required
under this Agreement to file or amend a Registration Statement for any offering
that would be deemed by the SEC to constitute a primary offering of securities
by the Company. In the event that, as a result of the operation of the
preceding sentence, the Company cannot include all of the Registrable
Securities in the Registration Statement, then the Company shall include in the
Registration Statement the maximum number of Registrable Securities that can be
included therein without causing the Registration Statement to be deemed to
register a primary offering by the Company, with the number of Registrable
Securities included in the Registration Statement to be allocated among the
Holders in proportion to the total Warrant Shares and Conversion Shares held by
each Holder (or issuable upon conversion or exercise of such Holder’s Notes and
Warrants) on the date that the Registration Statement is filed. With respect to
any Registrable Securities that are not included in the Registration Statement
(the “Excluded Securities”), the Company
shall include the Excluded Securities in a subsequently filed second
Registration Statement (the “Additional Registration
Statement”) that is filed on the earliest possible date on which
Excluded Securities can be included in the Additional Registration Statement
without the Additional Registration Statement being deemed to register a
primary offering of securities by the Company (the “Additional
Filing Date”); provided that if the Company is advised by the SEC
that the inclusion of all Excluded Securities in the Additional Registration
Statement would cause the Additional Registration Statement to be deemed a
registration of a primary offering by the Company, then such Additional
Registration Statement shall include only the maximum number of Excluded
Securities that could be included in such Registration Statement without it
being deemed to be a registration for a primary offering by the Company. If all
Excluded Securities cannot be registered on the Additional Registration
Statement, then the Company will be obligated to file a second Additional
Registration Statement as soon as is permitted by the SEC to cover as many
additional Excluded Securities as possible, although the Company will not be
obligated to file any more than two (2) Additional Registration Statements for
Excluded Securities. The Company’s obligations under this Agreement with
respect to the first Additional Registration Statement and second Additional
Registration Statement shall be the same as its obligations for the original
Registration Statement, provided that the “Filing Date” for the first
Additional Registration Statement shall be


 


5

















 


the Additional Filing Date, and the “Effectiveness
Date” for the Additional Registration Statement shall be delayed by the number
of days that elapses between the Filing Date and Additional Filing Date; and
further provided that the “Filing Date” for the second Additional Registration
Statement (if applicable) shall be the earliest possible date on which Excluded
Securities can be included in the second Additional Registration Statement
without the second Additional Registration Statement being deemed to register a
primary offering of securities by the Company (the “Second
Additional Filing Date”), and the “Effectiveness Date” for such
second Additional Registration Statement shall be delayed by the number of days
that elapses between the Filing Date for the original Registration Statement
and the Second Additional Filing Date. In the event that a Holder sells or
otherwise transfers any of such Holder’s Registrable Securities, each
transferee shall be allocated a pro rata portion of the then-remaining number
of Registrable Securities included in any Registration Statement for such
transferor. To the extent permitted under applicable SEC rules, procedures, or
practices, any shares of Common Stock included in a Registration Statement and
which remain allocated to any Person which ceases to hold any Registrable
Securities covered by such Registration Statement shall be allocated to the
remaining Holders pro rata based on the number of Registrable Securities then
held by such Holders which are covered by such Registration Statement.


 


3.             Registration
Procedures.


 


In connection with the Company’s registration
obligations hereunder, the Company shall:


 


(a)           Not less than three (3)
Trading Days prior to the filing of a Registration Statement or any pre-effective
amendment thereto, furnish to the Holders by e-mail copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of
such Holders (and changes (if any) to correct appropriate information about the
Holder). The Company shall not file a Registration Statement or any
pre-effective amendments thereto to which the Holders of a majority of the
Registrable Securities shall reasonably object in good faith, provided that,
the Company is notified of such objection in writing no later than three (3)
Trading Days after the Holders have been so furnished copies of such documents.


 


(b)           (i)  Prepare and file with the SEC such
amendments, including post-effective amendments, to each Registration Statement
and the Prospectus used in connection therewith as may be necessary to keep
such Registration Statement continuously effective as to the applicable
Registrable Securities for the applicable Registration Period; (ii) cause the
related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) comply in all material respects with the provisions of the Securities Act
and the Exchange Act with respect to the Registration Statements and the
disposition of all Registrable Securities covered by each Registration
Statement.


 


(c)           Notify the Holders of
Registrable Securities to be sold (which notice shall, pursuant to clauses (ii)
through (v) hereof, be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made) as promptly as reasonably
possible (i) with respect to each Registration Statement or any post-effective
amendment, when the same


 


6

















 


has become effective; (ii) of any request by the SEC
or any other Federal or state governmental authority for amendments or
supplements to a Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and (v) of the occurrence of any event or
passage of time that makes the financial statements included in a Registration
Statement stale or otherwise ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material
respect or that requires any revisions to such Registration Statement,
Prospectus or other documents so that, in the case of such Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.


 


(d)           Use its commercially
reasonable efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.


 


(e)           Furnish to each Holder by e-mail,
without charge, at least one conformed copy of each Registration Statement and
each amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated herein by reference (to the
extent requested by such Holder), and all exhibits to the extent requested by
such Holder (including those previously furnished) promptly after the filing of
such documents with the SEC.


 


(f)            Comply with Rule 172,
promptly advise each Holder at any time the Company has not satisfied the
requirements of Rule 172 and promptly deliver to each Holder, without charge,
as many copies of each Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request in connection with resales by the Holder of Registrable
Securities. Subject to the terms of this Agreement, the Company hereby consents
to the use of such Prospectus and each amendment or supplement thereto by each
of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.


 


(g)           Prior to any public offering
of Registrable Securities by a Holder, use its commercially reasonable efforts to
register or qualify or cooperate with the selling Holders in connection with
the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of all jurisdictions within the United States as
any Holder reasonably requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Registration Period
and to do any and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by each Registration Statement; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is
not then so qualified, subject the Company to any material tax in any such
jurisdiction where it is not then so subject or file a general consent to
service of process in any such jurisdiction.


 


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(h)           If requested by the Holders, cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statements, which certificates shall be
free, to the extent permitted by the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holders may request.


 


(i)            Upon the occurrence of any
event contemplated by Sections 3(c)(ii) through (v), as promptly as reasonably
possible under the circumstances, and in the case of Section 3(c)(v) taking
into account the Company’s good faith assessment of any adverse consequences to
the Company and its stockholders of the premature disclosure of such event,
prepare a supplement or amendment, including a post-effective amendment, to the
affected Registration Statements or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference,
and file any other required document so that, as thereafter delivered, neither
a Registration Statement nor such Prospectus will contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and that the event
that resulted in the suspension of such Prospectus is otherwise cured. If the
Company notifies the Holders in accordance with Sections 3(c)(ii) through (v)
to suspend the use of any Prospectus until the requisite changes to such
Prospectus have been made, then the Holders shall suspend use of such
Prospectus. The Company will use its commercially reasonable efforts to ensure
that the use of the Prospectus may be resumed as promptly as is practicable.


 


(j)            Each Holder agrees to furnish
to the Company a completed Questionnaire in the form attached to this Agreement
as Annex B (a “Selling
Shareholder Questionnaire”) not less than five (5)
Trading Days prior to the date on which a Registration Statement under this
Agreement is to be filed or (if earlier) by the end of the fourth Trading Day
following the date on which such Holder receives draft materials in accordance
with this Section. The Company shall not be required to include the Registrable
Securities of a Holder in a Registration Statement and shall not be required to
pay any liquidated or other damages under Section 2(b) hereof to such Holder
who fails to furnish to the Company a fully completed Selling Shareholder
Questionnaire as required by this Section or other information reasonably
requested by the Company for compliance with applicable registration and
disclosure requirements.


 


4.             Registration
Expenses. 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.


 


5.             Indemnification.


 


(a)           Indemnification by the
Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors, partners, members and
employees of each of them, each


 


8

















 


Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”) arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in any Registration Statement,
any Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus or
form of prospectus or supplement thereto, in light of the circumstances under
which they were made) not misleading, except to the extent, but only to the
extent, that (1) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in the Registration Statement, such Prospectus or
such form of Prospectus or in any amendment or supplement thereto (it being
understood that the Holder has approved Annex A hereto for this purpose)
or (2) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii) through (v), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding of which the
Company is aware arising from or in connection with the transactions
contemplated by this Agreement.


 


(b)           Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each
Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest
extent permitted by applicable law, from and against all Losses to the extent
arising out of or relating to: (i) such Holder’s failure to comply with the
prospectus delivery requirements of the Securities Act after being advised by
the Company that it has not satisfied the conditions of Rule 172 and that such
Holder is, as a consequence, required to deliver a prospectus in connection
with any disposition of Registrable Securities and has provided the Holder with
a current prospectus to be used in connection with any such dispositions, (ii)
an offer or sale of shares of Common Stock by such Holder occurring during a
period in which sales under the Registration Statement are suspended as
permitted by this Agreement, or (iii) any untrue statement of a material fact
contained in any Registration Statement, any Prospectus, or any form of
prospectus, or in any amendment or supplement thereto, or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading to
the extent, but only to the extent that, such untrue statements or omissions
are based upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for this
purpose). In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.


 


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(c)           Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or
asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly
notify the Person from whom indemnity is sought (the “Indemnifying
Party”) in writing, and the Indemnifying Party shall have the right
to participate in, and, to the extent the Indemnifying Party so desires, assume
the defense thereof, including the employment of counsel (one law firm)
reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this
Agreement, except to the extent that the Indemnifying Party is prejudiced by
such failure, including impairment in its ability to defend such action.


 


An Indemnified Party shall have the right to
employ separate counsel in any such Proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless:  (1) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (2)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of
interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
such counsel (one law firm) shall be at the expense of the Indemnifying Party).
The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding. The Indemnified Party shall
cooperate fully with the Indemnifying Party in connection with any negotiation
or defense of any such Proceeding by the Indemnifying Party and shall furnish
to the Indemnifying Party all information reasonably available to the
Indemnified Party that relates to such Proceeding.


 


Subject to the terms of this Agreement, all reasonable
fees and expenses of the Indemnified Party subject to indemnification under
Section 5(a) (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with these Sections) shall be paid to the Indemnified
Party, as incurred, within ten (10) Trading Days of written notice thereof to
the Indemnifying Party (provided, that the Indemnifying Party may require such
Indemnified Party to undertake to reimburse all such fees and expenses to the
extent it is finally judicially determined that such Indemnified Party is not
entitled to indemnification hereunder).


 


10

















 


(d)           Contribution. In the event that indemnification under Section 5(a) or 5(b) is unavailable
to or insufficient to hold harmless an Indemnified Party for any Losses (by
reason of unenforceability due to public policy or otherwise), then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates
to information supplied by, such Indemnifying Party or Indemnified Party, and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in Section 5(c), any reasonable attorneys’
or other reasonable fees or expenses incurred by such party in connection with
any Proceeding to the extent such party would have been indemnified for such
fees or expenses if the indemnification provided for in this Section was
available to such party in accordance with its terms.


 


The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
5(d), no Holder shall be required to contribute, in the aggregate, any amount
in excess of the amount by which the proceeds actually received by such Holder
from the sale of the Registrable Securities subject to the Proceeding exceeds
the amount of any damages that such Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission or other event under 5(a) or 5(b), as the case may be, to which such
contribution applies.


 


The indemnity and contribution agreements
contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties.


 


6.             Miscellaneous.


 


(a)           Remedies. In the event of a breach by the Company or by a Holder, of any of
their obligations under this Agreement, each Holder or the Company, as the case
may be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.


 


(b)           No Piggyback on
Registrations. Except as and to the extent specified
in Schedule 6(b) hereto, neither the Company nor any of its security
holders (other than the Holders


 


11

















 


in such capacity pursuant hereto) may include
securities of the Company in the Registration Statement other than the
Registrable Securities and any shares of Common Stock issued upon conversion of
the Notes in accordance with the terms of the Notes, and the Company shall not
after the date hereof enter into any agreement providing any such right to any
of its security holders.


 


(c)           Compliance. Each Holder covenants and agrees that (i) it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement; and (ii) it has no present plan, intention or understanding and has
made no arrangement to sell the Registrable Securities at any predetermined
time or for any predetermined price (other than such Holder’s right to sell the
Registrable Securities pursuant to a Registration Statement filed pursuant
hereto).


 


(d)           Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement
until such Holder’s receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company will use its commercially reasonable efforts to ensure that the use of
the Prospectus may be resumed as promptly as practicable. The Company may
provide appropriate stop orders to enforce the provisions of this paragraph.


 


(e)           Piggy-Back
Registrations. If at any time during the Effectiveness
Period  there is not an effective
Registration Statement covering all of the Registrable Securities then required
hereunder to be registered at such time and the Company shall determine to
prepare and file with the SEC a registration statement relating to an offering
for its own account or the account of others under the Securities Act of any of
its equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with stock option or
other employee benefit plans, then the Company shall send to each Holder
written notice of such determination and, if within fifteen days after receipt
of such notice, any such Holder shall so request in writing, the Company shall
include in such registration statement all or any part of such Registrable
Securities (not already covered by an effective Registration Statement) such Holder
requests to be registered, subject to customary underwriter cutbacks applicable
to holders of registration rights and subject to restrictions in prior
registration rights agreements. Notwithstanding anything to the contrary
contained herein, this Section 6(e) shall not apply with respect to any
Excluded Securities. In
connection with any offering involving an underwriting of shares of Common
Stock being issued by the Company for its own account or for the account of
others pursuant to a registration statement, the Company shall not be required
to include in such registration statement, the Registrable Securities held by
any Holder that does not accept and agree to the terms of the underwriters
selected by the Company.


 


12

















 


(f)            Amendments and Waivers. No provision of this Agreement may be waived or amended and waivers
or consents to departures from the provisions hereof may not be given except in
a written instrument signed by the Company and the Holders who hold (or have
the right to acquire upon exercise of the Warrants) majority of the shares of
Common Stock issued or issuable upon exercise of the Warrants. No waiver 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 subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of one or more Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by Holders to which such waiver or consent relates; provided, however,
that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.


 


(g)           Notices. Any and all notices or other communications or deliveries required or
permitted to be provided hereunder shall be delivered as set forth in the
Purchase Agreement.


 


(h)           Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of each of the parties and shall inure to the
benefit of each Holder. The Company may not assign its rights or obligations
hereunder without the prior written consent of each Holder of then-outstanding
Registrable Securities. Each Holder may assign their respective rights
hereunder in the manner and to the Persons as permitted under the Purchase
Agreement.


 


(i)            Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.


 


(j)            Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that
all Proceedings to resolve any dispute concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan (the “New York Courts”) although depositions may be taken in other
places. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the jurisdiction
of any New York Court, or that such Proceeding has been commenced in an
improper or inconvenient forum. Each party hereto hereby irrevocably waives
personal service


 


13

















 


of process and consents to process being served in any
such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) 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
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by
jury in any Proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding
to enforce any provisions of this Agreement, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.


 


(k)           Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.


 


(l)            Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions
set forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.


 


(m)          Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.


 


(n)           Independent Nature of
Holders’ Obligations and Rights. The obligations of
each Holder hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. The decision of
each Holder to acquire Registrable Securities pursuant to the Transaction
Documents has been made independently of any other Holder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Holder acknowledges that no other Holder
has acted as agent for such Holder in connection with making its investment
hereunder and that no Holder will be acting as agent of such Holder in
connection with monitoring its investment in the Securities or enforcing its
rights under the Transaction Documents. Each Holder shall be entitled to
protect and enforce its rights, including without limitation the rights arising
out of this Agreement, and it shall not be necessary (but may be permissible)
for any other Holder to be joined as an additional party in any Proceeding for
such purpose.


 


14

















 


IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.


 


	
   

  	
   

  	
  LIQUIDMETAL TECHNOLOGIES, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Larry E. Buffington

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  Larry
  E. Buffington

  	
   

  	
   

  
	
   

  	
   

  	
  Title:  CEO/President

  	
   

  	
   

  
							



 


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF INVESTORS TO FOLLOW]


 

















 


IN WITNESS WHEREOF, the parties have executed
this Registration Rights Agreement as of the date first written above.


 


	
   

  	
  INVESTOR

  
	
   

  	
   

  
	
   

  	
  /s/ Diamond Opportunity Fund,
  LLC

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Fort Mason Master, LP

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Fort Mason Partners, LP

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Solomon Strategic Holdings,
  Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ The Tail Wind Fund Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Abdi Mahamedi

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Whitebox Intermarket
  Partners LP

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ BridgePointe Master Fund
  Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rockmore Investment Master
  Fund Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Castlerigg Master
  Investments Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Iroquois Master Fund

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Wynnefield Partners Small
  Cap Value, LP

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Wynnefield Partners Small
  Cap Value, LP I

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Wynnefield Small Cap Value
  Offshore Fund, Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rodd Friedman

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Eric Brachfeld

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Myron Neugeboren

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ricardo Salas

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Winvest Venture Partners
  Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ed Neugeboren

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gryphon Master Fund, L.P.

  	
   

  
																							



 

















 


	
   

  	
  /s/ GSSF Master Fund, LP

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Leon Frenkel

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Triage Capital Management
  L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Triage Capital Management B,
  L.P.

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Stratford Partners, LP

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kenneth Lisiak

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Vestal Venture Capital

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James Kang

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kurtis Jang

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Charles Kim

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Chuck Myong

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Hamilton Investment
  Partners, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Rockport Funding, LLC

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jay Deahna

  	
   

  
														



 


2

















 


SCHEDULE 6(b)


 


The holders of
the warrants issued in connection with the Company 8% Unsecured Subordinated
Notes have piggyback registration rights with respect to any registration
statement filed pursuant to this Agreement.


 

















 


Annex A


 


Plan of Distribution


 


The Selling Stockholders and any of their
pledgees, donees, assignees and successors-in-interest may, from time to time,
sell any or all of their shares of Common Stock registered hereunder on any
stock exchange, market or trading facility on which the shares are traded or in
private transactions. These sales may be at fixed or negotiated prices. The
Selling Stockholders may use any one or more of the following methods when
selling shares:


 


•      ordinary
brokerage transactions and transactions in which the broker-dealer solicits
investors;


 


•      block trades
in which the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction;


 


•      purchases by a
broker-dealer as principal and resale by the broker-dealer for its account;


 


•      an exchange
distribution in accordance with the rules of the applicable exchange;


 


•      pledge,
hypothecation, or assignment of shares;


 


•      privately
negotiated transactions;


 


•      settlement of
short sales (other than short sales established prior to the effectiveness of
the Registration Statement to which this Prospectus is a part);


 


•      broker-dealers
may agree with the Selling Stockholders to sell a specified number of such
shares at a stipulated price per share;


 


•      a combination
of any such methods of sale; and


 


•      any other
method permitted pursuant to applicable law.


 


The Selling Stockholders may also sell shares
under Rule 144 under the Securities Act, if available, rather than under this
prospectus.


 


Broker-dealers engaged by the Selling
Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers
may receive commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser) in
amounts to be negotiated. The Selling Stockholders do not expect these commissions
and discounts to exceed what is customary in the types of transactions
involved.


 


The Selling Stockholders may from time to time
pledge or grant a security interest in some or all of their shares of Common
Stock that are covered by this prospectus and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell such shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.


 

















 


Upon the Company being notified in writing by
a Selling Stockholder that any material arrangement has been entered into with
a broker-dealer for the sale of Common Stock through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a
broker or dealer, a supplement to this prospectus will be filed, if required,
pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of
each such Selling Stockholder and of the participating broker-dealer(s), (ii)
the number of shares involved, (iii) the price at which such the shares of
Common Stock were sold, (iv) the commissions paid or discounts or concessions
allowed to such broker-dealer(s), where applicable, (v) that such
broker-dealer(s) did not conduct any investigation to verify the information
set out or incorporated by reference in this prospectus, and (vi) other facts
material to the transaction. In addition, upon the Company being notified in
writing by a Selling Stockholder that a donee or pledgee intends to sell more
than 500 shares of Common Stock, a supplement to this prospectus will be filed
if then required in accordance with applicable securities law.


 


The Selling Stockholders also may transfer the
shares of Common Stock in other circumstances, in which case the transferees,
pledgees or other successors in interest may be the selling beneficial owners
for purposes of this prospectus.


 


The Selling Stockholders and any
broker-dealers or agents that are involved in selling the shares may be deemed
to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the shares purchased by them may be
deemed to be underwriting commissions or discounts under the Securities Act. Discounts,
concessions, commissions and similar selling expenses, if any, that can be
attributed to the sale of securities will be paid by the Selling Stockholder
and/or the purchasers. Each Selling Stockholder has represented and warranted
to the Company that it acquired the securities subject to this Registration
Statement in the ordinary course of such Selling Stockholder’s business and, at
the time of its purchase of such securities such Selling Stockholder had no
agreements or understandings, directly or indirectly, with any person to
distribute any such securities.


 


The Company is required to pay the Company’s
fees and expenses incident to the registration of the shares. The Company has
agreed to indemnify the Selling Stockholders against certain losses, claims,
damages and liabilities, including liabilities under the Securities Act.


 


The Company has advised each Selling
Stockholder that it may not use shares registered on this Registration
Statement to cover short sales of Common Stock made prior to the date on which
this Registration Statement shall have been declared effective by the SEC. If a
Selling Stockholder uses this prospectus for any sale of the Common Stock, it
will be subject to the prospectus delivery requirements of the Securities Act. The
Selling Stockholders will be responsible to comply with the applicable
provisions of the Securities Act and Exchange Act, and the rules and
regulations thereunder promulgated, including, without limitation, Regulation
M, as applicable to such Selling Stockholders in connection with resales of
their respective shares under this Registration Statement.


 

















 


Annex B


 


Selling
Shareholder Questionnaire


 


The undersigned beneficial
owner of common stock, par value $0.001 per share (the “Common Stock”),
of Liquidmetal Technologies, Inc., a Delaware corporation (the “Company”),
(the “Registrable Securities”) understands that the Company has filed or
intends to file with the Securities and Exchange Commission (the “SEC”)
a registration statement on Form S-1 (the “Registration Statement”) for
the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Registrable Securities, in
accordance with the terms of the Registration Rights Agreement, dated as of January
3, 2007 (the “Registration Rights Agreement”), among the Company and the
Investors named therein. A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.


 


Certain legal consequences
arise from being named as a selling shareholder in the Registration Statement
and the related prospectus. Accordingly, holders and beneficial owners of
Registrable Securities are advised to consult their own securities law counsel
regarding the consequences of being named or not being named as a selling
shareholder in the Registration Statement and the related prospectus.


 


NOTICE


 


The undersigned beneficial
owner (the “Selling Shareholder”) of Registrable Securities hereby
elects to include the Registrable Securities owned by it and listed below in
Item 3 (unless otherwise specified under such Item 3) in the Registration
Statement.


 

















 


The undersigned hereby provides the following
information to the Company and represents and warrants that such information is
accurate:


 


QUESTIONNAIRE


 


1. Name.


 


(a)           Full Legal Name of
Selling Shareholder


 


 


 


(b)           Full Legal Name of
Registered Holder (if not the same as (a) above) through which Registrable
Securities Listed in Item 3 below are held:


 


 


 


(c)           Full Legal Name of
Natural Control Person (which means a natural person who directly or indirectly
alone or with others has power to vote or dispose of the securities covered by
the questionnaire):


 


 


 


2. Address
for Notices to Selling Shareholder:


 


 


 


Telephone:


Fax:


Contact Person:


 


3. Beneficial
Ownership of Registrable Securities:


 


(a)           Type and Number of
Registrable Securities beneficially owned:


 


 


 

















 


4. Broker-Dealer
Status:


 


(a)           Are you a
broker-dealer?


 


	
   

  	
  Yes   o

  	
  No   o

  



 


(b)           If “yes” to Section
4(a), did you receive your Registrable Securities as compensation for
investment banking services to the Company.


 


	
   

  	
  Yes   o

  	
  No   o

  



 


Note:      If no, the SEC staff has
indicated that you should be identified as an underwriter in the Registration
Statement.


 


(c)           Are you an affiliate
of a broker-dealer?


 


	
   

  	
  Yes   o

  	
  No   o

  



 


(d)           If you are an
affiliate of a broker-dealer, do you certify that you bought the Registrable
Securities in the ordinary course of business, and at the time of the purchase
of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the
Registrable Securities?


 


	
   

  	
  Yes   o

  	
  No   o

  



 


Note:      If no, the SEC staff has
indicated that you should be identified as an underwriter in the Registration
Statement.


 


5. Beneficial
Ownership of Other Securities of the Company Owned by the Selling Shareholder.


 


Except as set forth below in this Item 5, the
undersigned is not the beneficial or registered owner of any securities of the
Company other than the Registrable Securities listed above in Item 3.


 


(a)           Type and Amount of
Other Securities beneficially owned by the Selling Shareholder:


 


 


 

















 


6. Relationships
with the Company:


 


Except as set forth below, neither the undersigned
nor any of its affiliates, officers, directors or principal equity holders
(owners of 5% of more of the equity securities of the undersigned) has held any
position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.


 


State any exceptions
here:


 


 


 


 


By signing below, the
undersigned consents to the disclosure of the information contained herein in
its answers to Items 1 through 6 and the inclusion of such information in the
Registration Statement and the related prospectus and any amendments or
supplements thereto. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Registration Statement and the related prospectus.


 


IN WITNESS WHEREOF the
undersigned, by authority duly given, has caused this Questionnaire to be
executed and delivered either in person or by its duly authorized agent.


 


	
  Dated:

  	
   

  	
   

  	
  Beneficial Owner:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
							



 


PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE
AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:


 


Curt Creely


Foley & Lardner LLP


100 North Tampa St., Suite 2700


Tampa, Florida 33602


ccreely@foley.com


Fax No.: 
813.221.4210