**Exhibit 10.4**

 

**AMENDED AND RESTATED REGISTRATION RIGHTSAGREEMENT**

 

This Amendedand Restated Registration Rights Agreement (“**Agreement**”)is entered into as of August 2, 2005, between Liquidmetal Technologies, Inc.,a Delaware corporation with offices at 25800 Commercentre Dr., Suite 100,Lake Forest, California 92630 (the “**Company**”) and each of the parties listed under “Purchasers”hereto (collectively and individually, the “**Purchaser**”).

 

**WITNESSETH:**

 

**WHEREAS**,the Company and the Purchasers have entered into a Securities PurchaseAgreement of even date herewith (the “**Purchase Agreement**”)pursuant to which, among other things, the Company has on or about the datehereof issued 7% Senior Secured Convertible Notes (the “**New Notes**”)and Warrants (collectively, the “**New Warrants**”) to purchase shares ofthe Company’s Common Stock, par value $0.001 per share (“**Common Stock**”), subject to the terms andconditions set forth therein; and

 

**WHEREAS,**the Company has also previously issued the July 2007 Notes, as defined inthe Purchase Agreement (such previously issued notes, together with the NewNotes, are hereafter referred to as the “**Notes**”) and haspreviously issued warrants to purchase Common Stock to certain Purchasers inconnection with the prior issuance of the July 2005 Notes, July 2007Notes, and June 2006 Notes, all as defined in the Purchase Agreement (suchpreviously issued warrants, together with the New Warrants, are hereafterreferred to as the “**Warrants**”); and

 

**WHEREAS**,the Notes are convertible into shares of Common Stock under the circumstancesand pursuant to the terms and conditions set forth in the Notes (the “**Conversion Shares**”), and the Warrants are exercisable intoshares of Common Stock pursuant to the terms and conditions set forth in the Warrants(the “**Warrant Shares**”).

 

**NOW,THEREFORE**, in consideration of the mutual promises,representations, warranties, covenants and conditions set forth in the PurchaseAgreement and this Agreement, the Company and the Purchaser agree as follows:

 

1.             Certain Definitions.  Capitalized terms used herein and nototherwise defined shall have the meaning ascribed thereto in the PurchaseAgreement, the Notes, or the Warrants. As used in this Agreement, the following terms shall have the followingrespective meanings:

 

“**Closing**” and “**Closing Date**”shall have the meanings ascribed to such terms in the Purchase Agreement.

 

“**Commission**” or “**SEC**” shall meanthe Securities and Exchange Commission or any other federal agency at the timeadministering the Securities Act.

 

“**Holder**” and “**Holders**” shallinclude the Purchaser and any permitted transferee or transferees ofRegistrable Securities (as defined below), the Notes and/or Warrants which havenot been sold to the public to whom the registration rights conferred by thisAgreement have

 

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been transferred in compliancewith this Agreement and the Purchase Agreement; provided that neither suchperson nor any affiliate of such person is registered as a broker or dealerunder Section 15(a) of the Securities Exchange Act of 1934, asamended, or a member of the National Association of Securities Dealers, Inc.

 

The terms “**register**,” “**registered**” and“**registration**” shall refer to aregistration effected by preparing and filing a registration statement incompliance with the Securities Act and applicable rules and regulationsthereunder, and the declaration or ordering of the effectiveness of suchregistration statement.

 

“**Registrable Securities**” shall mean:  (i) the Conversion Shares and WarrantShares or other securities issued or issuable to each Holder or its permittedtransferee or designee (a) upon the conversion of the Notes or theexercise of the Warrants, or (b) upon any distribution with respect to,any exchange for or any replacement of such Notes or Warrants, or (c) uponany conversion, exercise or exchange of any securities issued in connectionwith any such distribution, exchange or replacement; (ii) securitiesissued or issuable upon any stock split, stock dividend, recapitalization orsimilar event with respect to the foregoing; and (iii) any other securityissued as a dividend or other distribution with respect to, in exchange for orin replacement of the securities referred to in the preceding clauses; providedthat all such shares shall cease to be Registrable Securities at such time asthey have been sold under a Registration Statement or pursuant to Rule 144under the Securities Act or otherwise or at such time as they are eligible tobe sold pursuant to Rule 144(k). For purposes of this Agreement, the term “Warrant Shares” shall includeany shares of the Company’s Common Stock that are issued pursuant to thatcertain Placement Agent Common Stock Purchase Warrant of even date herewithbetween the Company and Commonwealth Associates, L.P.

 

“**Registration Expenses**” shall mean all expenses to beincurred by the Company in connection with each Holder’s registration rightsunder this Agreement, including, without limitation, all registration andfiling fees, printing expenses, fees and disbursements of counsel for the Company,blue sky fees and expenses, and the expense of any special audits incident toor required by any such registration (but excluding the compensation of regularemployees of the Company, which shall be paid in any event by the Company).

 

“**Registration Statement**” shall have the meaning set forth in Section 2(a) herein.

 

“**Regulation D**” shall mean Regulation D as promulgatedpursuant to the Securities Act, and as subsequently amended.

 

“**Securities Act**” or “**Act**” shall meanthe Securities Act of 1933, as amended.

 

“**Selling Expenses**” shall mean all underwriting discounts andselling commissions applicable to the sale of Registrable Securities and allfees and disbursements of counsel for Holders not included within “RegistrationExpenses.”

 

2.             Registration Requirements.  The Company shall use its best efforts toeffect the registration of the Registrable Securities (including, withoutlimitation, the execution of an undertaking to file post-effective amendments,appropriate qualification under applicable blue sky or other state securitieslaws and appropriate compliance with applicable regulations

 

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issued under the Securities Act) as wouldpermit or facilitate the sale or distribution of all the Registrable Securitiesin the manner (including manner of sale) and in all states reasonably requestedby the Holder.  Such best efforts by theCompany shall include, without limitation, the following:

 

(a)           The Company shall, as expeditiouslyas possible after the Closing Date:

 

(i)            But in any event by the date whichis 90 days after the Closing Date, prepare and file a registration statementwith the Commission pursuant to Rule 415 under the Securities Act on Form S-3under the Securities Act (or in the event that the Company is ineligible to usesuch form, such other form as the Company is eligible to use under theSecurities Act provided that such other form shall be converted into an S-3 assoon as Form S-3 becomes available to the Company) covering resales by theHolders as selling stockholders (not underwriters) of the RegistrableSecurities (“**Registration Statement**”), whichRegistration Statement, to the extent allowable under the Securities Act andthe rules promulgated thereunder (including Rule 416), shall statethat such Registration Statement also covers such number of additional sharesof Common Stock as may become issuable pursuant to the anti-dilution provisionsof the Notes or Warrants.  The number ofshares of Common Stock initially included in such Registration Statement shallbe no less than the product of 1.2 times the sum of the number of shares ofCommon Stock that are issuable upon exercise of the Warrants as of the date ofthis Agreement at the then applicable Exercise Price (as defined in the Warrant)plus the number of shares of Common Stock that would be issuable pursuant tothe conversion of the Notes (assuming that the Notes were to become convertibleon the date before which the Registration Statement is filed).  Thereafter the Company shall use its bestefforts to cause such Registration Statement and other filings to be declaredeffective as soon as possible, and in any event no later than the followingdate, as appropriate (the “**Required EffectiveDate**”): (A) if the SEC notifies the Company that the SEC willnot review the Registration Statement, the Required Effective Date shall befive (5) days after the SEC provides such notification, or (B) if theSEC notifies the Company that it will review the Registration Statement, thenthe Required Effective Date shall be sixty (60) days after the Company receivesthe first written comments on the Registration Statement from the SEC.  Without limiting the foregoing, the Companywill promptly respond to all SEC comments, inquiries and requests, and shallrequest acceleration of effectiveness at the earliest possible date.

 

(ii)           Prepare and file with the SEC suchamendments and supplements to such Registration Statement and the prospectusused in connection with such Registration Statement as may be necessary tocomply with the provisions of the Act with respect to the disposition of allsecurities covered by such Registration Statement and notify the Holders of thefiling and effectiveness of such Registration Statement and any amendments orsupplements.

 

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(iii)          Furnish to each Holder that hasRegistrable Securities included in the Registration Statement such numbers ofcopies of a current prospectus conforming with the requirements of the Act,copies of the Registration Statement, any amendment or supplement thereto andany documents incorporated by reference therein and such other documents assuch Holder may reasonably require in order to facilitate the disposition ofRegistrable Securities owned by such Holder.

 

(iv)          Register and qualify the securitiescovered by such Registration Statement under the securities or “Blue Sky” lawsof all domestic jurisdictions; provided that the Company shall not be requiredin connection therewith or as a condition thereto to qualify to do business orto file a general consent to service of process in any such states orjurisdictions.

 

(v)           Notify promptly each Holder that hasRegistrable Securities included in the Registration Statement of the happeningof any event (but not the substance or details of any such event) of which theCompany has knowledge as a result of which the prospectus (including anysupplements thereto or thereof) included in such Registration Statement, asthen in effect, includes an untrue statement of material fact or omits to statea material fact required to be stated therein or necessary to make thestatements therein not misleading in light of the circumstances then existing(each an “**Event**”), and use its best efforts topromptly update and/or correct such prospectus. Each Holder will hold inconfidence and will not make any disclosure of any such Event and any relatedinformation disclosed by the Company.

 

(vi)          Notify each Holder of the issuance bythe SEC or any state securities commission or agency of any stop ordersuspending the effectiveness of the Registration Statement or the threat orinitiation of any proceedings for that purpose. The Company shall use its best efforts to prevent the issuance of anystop order and, if any stop order is issued, to obtain the lifting thereof atthe earliest possible time.

 

(vii)         List the Registrable Securities coveredby such Registration Statement with all securities exchange(s) and/or marketson which the Common Stock is then listed and prepare and file any requiredfilings with the Nasdaq National Market System or any other exchange or marketwhere the shares of Common Stock are traded.

 

(viii)        Take all steps reasonably necessary toenable Holders to avail themselves of the prospectus delivery mechanism setforth in Rule 153 (or successor thereto) under the Act.

 

(b)           Notwithstanding the obligations underSection 2(a)(v) or any provision of this Agreement, if (i) inthe good faith judgment of the Company, following consultation with legalcounsel, it would be detrimental to the Company and its stockholders forresales of Registrable Securities to be made pursuant to the RegistrationStatement due to the

 

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existence of a materialdevelopment or potential material development involving the Company that theCompany would be obligated to disclose in the Registration Statement, whichdisclosure would be premature or otherwise inadvisable at such time or wouldhave a material adverse effect upon the Company and its stockholders, or (ii) inthe good faith judgment of the Company, it would adversely affect or requirepremature disclosure of the filing of a Company-initiated registration of anyclass of its equity securities, then the Company will have the right to suspendthe use of the Registration Statement for a period of not more than 30consecutive calendar days, but only if the Company reasonably concludes, afterconsultation with outside legal counsel, that the failure to suspend the use ofthe Registration Statement as such would create a risk of a material liabilityor violation under applicable securities laws or regulations.

 

(c)           Set forth below in this Section 2(c) are(I) events that may arise that the Purchaser considers will interfere with thefull enjoyment of their rights under this Agreement, the Purchase Agreement,and the Notes (the “**Interfering Events**”),and (II) certain remedies applicable in each of these events.

 

(i)            Payments by the Company.  If (i) at any time after effectivenessof the Registration Statement, sales thereunder during the registration period(as described in Section 5) cannot be made for any reason, other than byreason of the operation of Section 2(b), for a period of more than 10consecutive business days, (ii) at any time after effectiveness of theRegistration Statement, sales thereunder during the Registration Period cannotbe made for a period of time that exceeds the limitations set forth in Section 2(b),or (iii) at any time after the Registrable Securities are listed in accordancewith Section 2(a)(vii), the Conversion Shares and Warrant Shares are notlisted or included for quotation on the Nasdaq National Market or otherexchange, market, or the OTC Bulletin Board where shares of the Company’sCommon Stock are then traded or quoted for more than 10 consecutive calendardays, then the Company will thereafter make a payment to each Holder as setforth below.  The amount of the paymentmade to each Holder will be equal to 1% of (a) the Warrant exercise pricemultiplied by the number of then-outstanding and unexercised Warrants held bythe Holder plus (b) the then-outstanding principal amount of the Note heldby the Holder, for each 30 business days that sales cannot be made under theeffective Registration Statement or the Conversion Shares or Warrant Shares arenot listed or included for quotation on the Nasdaq National Market or otherexchange, market, or the OTC Bulletin Board where shares of the Company’sCommon Stock are then traded or quoted (but any day on which both conditionsexist shall count as a single day and no day taken into account for purposes ofdetermining whether any payment is due under Section 2 (c)(ii) shallbe taken into account for purposes of determining whether any payment is dueunder this Section 2(c)(i) or the amount of such payment).  The number of shares not previously sold asspecified in the previous sentence shall be determined as of the end of therespective 30-business day period.  In noevent shall payment pursuant to this Section for the entire registrationperiod (as described in Section 5) exceed 10% in the aggregate of (a) theWarrant exercise price multiplied by the number of then-outstanding andunexercised Warrants held by the Holder (including such Holder’s predecessorsand successors) for the entire registration period (as

 

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described in Section 5) plus (b) the initial principal amountof the Note held by the Holder.  Thesepayments will be prorated on a daily basis during the 30-business day periodand will be paid to each Holder within ten business days following the end ofeach 30- business day period as to which payment is due hereunder.  The Holders may make a claim for additionaldamages as a remedy for the Company’s failure to comply with the timelines setforth in this Section, but acknowledgement of such right in this Agreementshall not constitute an admission by the Company that any such damages exist ormay exist.  Notwithstanding the foregoing,if the Company has used its best efforts to avoid circumstances as a result ofwhich sales cannot be made under the Registration Statement during theregistration period or the Conversion Shares or Warrant Shares are not listedor included for quotation on the Nasdaq National Market or other exchange,market, or the OTC Bulletin Board where the shares of Common Stock are tradedor quoted, then the damages described above shall be the Holders’ sole andexclusive remedy for damages arising out of such circumstances.  Nothing contained in the preceding sentenceshall be read to limit the ability of the Holders to seek specific performanceof this Agreement.

 

(ii)           Effect of Late Filing orRegistration.  If the RegistrationStatement has not been filed by the Required Filing Date other than by reasonof the operation of Section 2(b), then the Company will make a payment toeach Holder for such delay (each a “**LateFiling Payment**”).  Each LateFiling Payment will be equal to 3% of (a) the Warrant exercise pricemultiplied by the number of then-outstanding and unexercised Warrants held bythe Holder plus (b) the then-outstanding principal amount of the Note heldby the Holder, for each period of 30 business days that the filing of theRegistration Statement is made past the Required Filing Date (but no day takeninto account for purposes of determining whether any payment is due under Section 2(c)(i) shallbe taken into account for purposes of determining whether any payment is dueunder this Section 2(c)(ii) or the amount of such payment).  If the Registration Statement has not beendeclared effective by the Required Effective Date other than by reason of theoperation of Section 2(b), then the Company will make a payment to eachHolder for such delay (each a “**LateRegistration Payment**”).  EachLate Registration Payment will be equal to 2% of (a) the Warrant exerciseprice multiplied by the number of then-outstanding and unexercised Warrantsheld by the Holder plus (b) the then-outstanding principal amount of theNote held by the Holder, for the first 30 business days after the RequiredEffective Date, and 1% of such exercise price for each period of 30 businessdays thereafter (but no day taken into account for purposes of determiningwhether any payment is due under Section 2(c)(i) shall be taken into accountfor purposes of determining whether any payment is due under this Section 2(c)(ii) orthe amount of such payment).  In no eventshall payments pursuant to this Section 2(c)(ii) exceed for theentire registration period (as described in Section 5) 18% in theaggregate of (a) the Warrant exercise price multiplied by the number ofthen-outstanding and unexercised Warrants held by the Holder (including suchHolder’s predecessors and successors) for the period beginning of the datehereof and continuing through the expiration of the registration period (asdescribed in Section 5) plus

 

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(b) the initial principal amount of the Note held by theHolder.  The Late Filing Payments andLate Registration Payments will be prorated on a daily basis during the 30-businessday period and will be paid to the Holders in cash within ten (10) businessdays following the end of each 30-business day period as to which payment isdue hereunder, provided that the respective Holder delivered to the Company atleast two business days prior thereto information with respect to the number ofConversion Shares, Warrants and Warrant Shares not previously sold by suchHolder (together with reasonable supporting documentation).  The Holders may make a claim for additionaldamages as a remedy for the Company’s failure to comply with the timelines setforth in this Section, but acknowledgement of such right in this Agreementshall not constitute an admission by the Company that any such damages exist ormay exist.  Notwithstanding theforegoing, if the Company has used its reasonable best efforts to avoidcircumstances as a result of which the Registration Statement has not beenfiled by the Required Filing Date or declared effective by the RequiredEffective Date, then the damages described above shall be the Holders’ sole andexclusive remedy for damages arising out of such circumstances.  Nothing contained in the preceding sentenceshall be read to limit the ability of the Holders to seek specific performanceof this Agreement.  Notwithstanding theforegoing, if the Registration Statement has not yet been declared effectiveand the Holders are no longer entitled to receive Late Registration Payments asa result of the above-described percentage limitation on said payments, theneach Holder shall have the right, at any time upon at least thirty (30) dayswritten notice, to sell all (but not less than all) of its Warrants and Notesto the Company for a cash purchase price equal to the aggregate amount by whichthe Fair Market Value of the Common Stock of the Company on the date of thedelivery of the written notice exceeds the exercise price of the Warrants andthe conversion price of the Notes, calculated separately.  For this purpose, “Fair Market Value” means,with respect to any determination date, the average per share closing price ofthe Common Stock for the 30 Trading Days immediately preceding thedetermination date.

 

(d)           During the registration period, theCompany will make available, upon reasonable advance notice during normalbusiness hours, for inspection by any Holder whose Registrable Securities arebeing sold pursuant to a Registration Statement, all pertinent financial andother records, pertinent corporate documents and properties of the Company(collectively, the “**Records**”) asreasonably necessary to enable each such Holder to exercise its due diligenceresponsibility in connection with or related to the contemplated offering. TheCompany will cause its officers, directors and employees to supply allinformation that any Holder may reasonably request for purposes of performingsuch due diligence.

 

(e)           Each Holder will hold in confidence,use only in connection with the contemplated offering and not make anydisclosure of all Records and other information that the Company determines ingood faith to be confidential, and of which determination the Holders are sonotified, unless (i) the disclosure of such Records is necessary to avoidor correct a misstatement or omission in any Registration Statement, (ii) therelease of such Records is ordered pursuant to a subpoena or other order from acourt or government body of competent

 

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jurisdiction, (iii) theinformation in such Records has been made generally available to the publicother than by disclosure in violation of this or any other agreement (to theknowledge of the relevant Holder), (iv) the Records or other informationwas developed independently by the Holder without breach of this Agreement, (v) theinformation was known to the Holder before receipt of such information from theCompany, or (vi) the information was disclosed to the Holder by a thirdparty not under an obligation of confidentiality. However, a Holder may make disclosureof such Records and other information to any attorney, adviser, or other thirdparty retained by it that needs to know the information as determined in goodfaith by the Holder (the “**Holder Representative**”),if the Holder advises the Holder Representative of the confidentialityprovisions of this Section 2(e), but the Holder will be liable for any actor omission of any of its Holder Representatives relative to such informationas if the act or omission was that of the Holder. The Company is not requiredto disclose any confidential information in the Records to any Holder unlessand until such Holder has entered into a confidentiality agreement (in form andsubstance satisfactory to the Company) with the Company with respect thereto,substantially to the effect of this Section 2(e). Unless legallyprohibited from so doing, each Holder will, upon learning that disclosure ofRecords containing confidential information is sought in or by a court orgovernmental body of competent jurisdiction or through other means, give promptnotice to the Company and allow the Company, at the Company’s expense, toundertake appropriate action to prevent disclosure of, or to obtain aprotective order for, the Records deemed confidential. Nothing herein will bedeemed to limit the Holder’s ability to sell Registrable Securities in a mannerthat is otherwise consistent with applicable laws and regulations.

 

(f)            The Company shall file aRegistration Statement with respect to any newly authorized and/or reservedRegistrable Securities consisting of Conversion Shares and Warrant Sharesdescribed in clause (i) of the definition of Registrable Securities withinten (10) business days of any stockholders’ meeting authorizing same andshall use its best efforts to cause such Registration Statement to becomeeffective within ninety (90) days of such stockholders’ meeting.  If the Holders become entitled, pursuant toan event described in clause (ii) and (iii) of the definition ofRegistrable Securities, to receive any securities in respect of RegistrableSecurities that were already included in a Registration Statement, subsequentto the date such Registration Statement is declared effective, and the Companyis unable under the securities laws to add such securities to the then effectiveRegistration Statement, the Company shall promptly file, in accordance with theprocedures set forth herein, an additional Registration Statement with respectto such newly Registrable Securities. The Company shall use its best efforts to (i) cause any suchadditional Registration Statement, when filed, to become effective within 30days of that date that the need to file the Registration Statement arose.  All of the registration rights and remediesunder this Agreement shall apply to the registration of such newly reservedshares and such new Registrable Securities.

 

3.             Expenses of Registration.   All Registration Expenses in connection with any registration,qualification or compliance with registration pursuant to this Agreement shallbe borne by the Company, and all Selling Expenses of a Holder shall be borne bysuch Holder.

 

4.             Registration on Form S-3.  The Company shall use its reasonable bestefforts to meet the “registrant eligibility” requirements for a secondaryoffering set forth in the general instructions to Form S-3 or anycomparable or successor form or forms, or in the event

 

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that the Company is ineligible to use suchform, such form as the Company is eligible to use under the Securities Act,provided that if such other form is used, the Company shall convert such otherform to a Form S-3 as soon as the Company becomes so eligible.

 

5.             Registration Period.  In the case of the registration effected bythe Company pursuant to this Agreement, the Company shall keep suchregistration effective until the later of (a) the date on which all theHolders have completed the sales or distribution described in the RegistrationStatement relating thereto or, if earlier until such Registrable Securities maybe sold by the Holders under Rule 144(k) (provided that the Company’stransfer agent has accepted an instruction from the Company to such effect) or (b) thesecond (2nd) anniversary of the Closing Date.

 

6.             Indemnification.

 

(a)           Company Indemnity.  The Company will indemnify each Holder, eachof its officers, directors, agents and partners, and each person controllingeach of the foregoing, within the meaning of Section 15 of the SecuritiesAct and the rules and regulations thereunder with respect to whichregistration, qualification or compliance has been effected pursuant to thisAgreement, and each underwriter, if any, and each person who controls, withinthe meaning of Section 15 of the Securities Act and the rules andregulations thereunder, any underwriter, against all claims, losses, damagesand liabilities (or actions in respect thereof) arising out of or based on anyuntrue statement (or alleged untrue statement) of a material fact contained inany final prospectus (as amended or supplemented if the Company files anyamendment or supplement thereto with the SEC), Registration Statement filedpursuant to this Agreement or any post-effective amendment thereof or based onany omission (or alleged omission) to state therein a material fact required tobe stated therein or necessary to make the statements therein not misleading inlight of the circumstances under which they were made, or any violation by theCompany of the Securities Act or any state securities law or in either case,any rule or regulation thereunder applicable to the Company and relatingto action or inaction required of the Company in connection with any suchregistration, qualification or compliance, and will reimburse each Holder, eachof its officers, directors, agents and partners, and each person controllingeach of the foregoing, for any reasonable legal fees of a single counsel andany other expenses reasonably incurred in connection with investigating anddefending any such claim, loss, damage, liability or action, provided that theCompany will not be liable in any such case to a Holder to the extent that anysuch claim, loss, damage, liability or expense arises out of or is based on (i) anyuntrue statement or omission based upon written information furnished to theCompany by such Holder or underwriter (if any) therefor and stated to bespecifically for use therein, (ii) any failure by any Holder to complywith prospectus delivery requirements or the Securities Act or Exchange Act orany other law or legal requirement applicable to them or any covenant oragreement contained in the Purchase Agreement or this Agreement or (iii) anoffer of sale of Conversion Shares or Warrant Shares occurring during a periodin which sales under the Registration Statement are suspended as permitted bythis Agreement.  The indemnity agreementcontained in this Section 6(a) shall not apply to amounts paid insettlement of any such loss, claim, damage, liability or action if suchsettlement is effected without the consent of the Company (which consent willnot be unreasonably withheld).

 

(b)           Holder Indemnity.  Each Holder will, severally but not jointly,if

 

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Registrable Securitiesheld by it are included in the securities as to which such registration,qualification or compliance is being effected, indemnify the Company, each ofits directors, officers, agents and partners, and any other stockholder sellingsecurities pursuant to the Registration Statement and any of its directors,officers, agents, partners, and any person who controls such stockholder withinthe meaning of the Securities Act or Exchange Act and each underwriter, if any,of the Company’s securities covered by such a Registration Statement, eachperson who controls the Company or such underwriter within the meaning of Section 15of the Securities Act and the rules and regulations thereunder, each otherHolder (if any), and each of their officers, directors and partners, and eachperson controlling such other Holder(s) against all claims, losses, damages andliabilities (or actions in respect thereof) arising out of or based on (i) anyuntrue statement (or alleged untrue statement) of a material fact contained inany such final prospectus (as amended or supplemented if the Company files anyamendment or supplement thereto with the SEC), Registration Statement filedpursuant to this Agreement or any post-effective amendment thereof or based onany omission (or alleged omission) to state therein a material fact required tobe stated therein or necessary to make the statement therein not misleading inlight of the circumstances under which they were made or (ii) failure byany Holder to comply with prospectus delivery requirements or the SecuritiesAct, Exchange Act or any other law or legal requirement applicable to them orany covenant or agreement contained in the Purchase Agreement or thisAgreement, and will reimburse the Company and such other Holder(s) and theirdirectors, officers and partners, underwriters or control persons for any reasonablelegal fees or any other expenses reasonably incurred in connection withinvestigating and defending any such claim, loss, damage, liability or action,in each case to the extent, but only to the extent, that such untrue statement(or alleged untrue statement) or omission (or alleged omission) is made in suchfinal prospectus (as amended or supplemented if the Company files any amendmentor supplement thereto with the SEC), Registration Statement filed pursuant tothis Agreement or any post-effective amendment thereof in reliance upon and inconformity with written information furnished to the Company by such Holder andstated to be specifically for use therein, and provided that the maximum amountfor which such Holder shall be liable under this indemnity shall not exceed thenet proceeds received by the Holders from the sale of the RegistrableSecurities pursuant to the registration statement in question.  The indemnity agreement contained in this Section 6(b) shallnot apply to amounts paid in settlement of any such claims, losses, damages orliabilities if such settlement is effected without the consent of such Holder(which consent shall not be unreasonably withheld).

 

(c)           Procedure.  Each party entitled to indemnification underthis Section 6 (the “**Indemnified Party**”)shall give notice to the party required to provide indemnification (the “**Indemnifying Party**”) promptly after such Indemnified Partyhas actual knowledge of any claim as to which indemnity may be sought, andshall permit the Indemnifying Party to assume the defense of any such claim inany litigation resulting therefrom, provided that counsel for the IndemnifyingParty, who shall conduct the defense of such claim or any litigation resultingtherefrom, shall be approved by the Indemnified Party (whose approval shall notbe unreasonably withheld), and the Indemnified Party may participate in suchdefense at its own expense, and provided further that the failure of anyIndemnified Party to give notice as provided herein shall not relieve theIndemnifying Party of its obligations under this Section 6 except to theextent that the Indemnifying Party is materially and adversely affected by suchfailure to provide notice.  NoIndemnifying Party, in the defense of any such claim or litigation, shall,except with the consent of each Indemnified Party, consent to entry of anyjudgment or enter into

 

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any settlement which doesnot include as an unconditional term thereof the giving by the claimant orplaintiff to such Indemnified Party of a release from all liability in respectto such claim or litigation.  EachIndemnified Party shall furnish such non-privileged information regardingitself or the claim in question as an Indemnifying Party may reasonably requestin writing and as shall be reasonably required in connection with the defenseof such claim and litigation resulting therefrom.

 

7.             Contribution.  If the indemnification provided for in Section 6herein is unavailable to the Indemnified Parties in respect of any losses,claims, damages or liabilities referred to herein (other than by reason of theexceptions provided therein), then each such Indemnifying Party, in lieu ofindemnifying such Indemnified Party, shall contribute to the amount paid orpayable by such Indemnified Party as a result of such losses, claims, damagesor liabilities as between the Company on the one hand and any Holder(s) on theother, in such proportion as is appropriate to reflect the relative fault ofthe Company and of such Holder(s) in connection with the statements oromissions which resulted in such losses, claims, damages or liabilities, aswell as any other relevant equitable considerations.  The relative fault of the Company on the onehand and of any Holder(s) on the other shall be determined by reference to,among other things, whether the untrue or alleged untrue statement of amaterial fact or omission or alleged omission to state a material fact relatesto information supplied by the Company or by such Holder(s).

 

In no eventshall the obligation of any Indemnifying Party to contribute under this Section 7exceed the amount that such Indemnifying Party would have been obligated to payby way of indemnification if the indemnification provided for under Section 6(a) or6(b) hereof had been available under the circumstances.

 

The Companyand the Holders agree that it would not be just and equitable if contributionpursuant to this Section 7 were determined by pro rata allocation (even ifthe Holders were treated as one entity for such purpose) or by any other methodof allocation which does not take account of the equitable considerationsreferred to in the immediately preceding paragraphs.  The amount paid or payable by an IndemnifiedParty as a result of the losses, claims, damages and liabilities referred to inthe immediately preceding paragraphs shall be deemed to include, subject to thelimitations set forth above, any legal or other expenses reasonably incurred bysuch Indemnified Party in connection with investigating or defending any suchaction or claim.  Notwithstanding theprovisions of this Section, no Holder shall be required to contribute anyamount in excess of the amount equal to the net proceeds received by suchHolder from the sale of Registrable Securities pursuant to the registrationstatement in question.  No person guiltyof fraudulent misrepresentation (within the meaning of Section 11(f) ofthe Securities Act) shall be entitled to contribution from any person who wasnot guilty of such fraudulent misrepresentation.

 

8.             Survival.  The indemnity and contribution agreementscontained in Sections 6 and 7 shall remain operative and in full force andeffect regardless of (i) any termination of this Agreement or the PurchaseAgreement, and (ii) the consummation of the sale or successive resales ofthe Registrable Securities.

 

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9.             Information by Holders.  As a condition to the obligations of theCompany to complete any registration pursuant to this Agreement with respect tothe Registrable Securities of each Holder, such Holder will furnish to theCompany such information regarding itself, the Registrable Securities held byit and the intended methods of disposition of the Registrable Securities heldby it as is reasonably required by the Company to effect the registration ofthe Registrable Securities.  At least tenbusiness days prior to the first anticipated filing date of a RegistrationStatement for any registration under this Agreement, the Company will notifyeach Holder of the information the Company requires from that Holder whether ornot such Holder has elected to have any of its Registrable Securities includedin the Registration Statement. If the Company has not received the requestedinformation from a Holder by the business day prior to the anticipated filingdate, then the Company may file the Registration Statement without includingRegistrable Securities of that Holder.

 

10.           Further Assurances. EachHolder will cooperate with the Company, as reasonably requested by the Company,in connection with the preparation and filing of any Registration Statementhereunder, unless such Holder has notified the Company in writing of suchHolder’s irrevocable election to exclude all of such Holder’s RegistrableSecurities from such Registration Statement.

 

11.           Suspension of Sales. Uponreceipt of any notice from the Company under Section 2(a)(v) or 2(b),each Holder will immediately discontinue disposition of Registrable Securitiespursuant to the Registration Statement covering such Registrable Securitiesuntil (i) it receives copies of a supplemented or amended prospectuscontemplated by Sections 2(a)(v) or (ii) the Company advises theHolder that a suspension of sales under Section 2(b) has terminated.If so directed by the Company, each Holder will deliver to the Company (at theexpense of the Company) or destroy all copies in the Holder’ s possession(other than a limited number of file copies) of the prospectus covering suchRegistrable Securities that is current at the time of receipt of such notice.

 

12.           Replacement Certificates.  The certificate(s) representing theRegistrable Securities held by the Purchaser (or then Holder) may be exchangedby the Purchaser (or such Holder) at any time and from time to time forcertificates with different denominations representing an equal aggregatenumber of shares of Common Stock, as reasonably requested by such Purchaser (orsuch Holder) upon surrendering the same. No service charge will be made for such registration or transfer orexchange.  Upon receipt by the Company ofevidence reasonably satisfactory to it of the loss, theft, destruction ormutilation of the Note or certificates for the underlying shares of Common Stockof any of the foregoing, and, in the case of loss, theft or destruction, ofindemnity reasonably satisfactory to it, or upon surrender and cancellation ofsuch certificate if mutilated, the Company will make and deliver a new Note orcertificate of like tenor and dated as of such cancellation at no charge to theholder.

 

13.           Transfer or Assignment.  Except as otherwise provided herein, thisAgreement shall be binding upon and inure to the benefit of the parties andtheir successors and permitted assigns. The rights granted to the Purchaser by the Company under this Agreementto cause the Company to register Registrable Securities may be transferred orassigned (in whole or in part) to a transferee or assignee of the Notes,Warrants or Registrable Securities, and all other rights granted to the Purchaserby the Company hereunder may be transferred or assigned to any

 

12

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transferee or assignee of the Notes, Warrantsor Registrable Securities; provided in each case that (i) the Company isgiven written notice by the Purchaser at the time of or within a reasonabletime after such transfer or assignment, stating the name and address of saidtransferee or assignee and identifying the securities with respect to whichsuch registration rights are being transferred or assigned; and providedfurther that the transferee or assignee of such rights agrees in writing to bebound by the registration provisions of this Agreement, (ii) such transferor assignment is not made under the Registration Statement or Rule 144, (iii) suchtransfer is made according to the applicable requirements of the PurchaseAgreement, and (iv) the transferee has provided to the Company an investorquestionnaire (or equivalent document) evidencing that the transferee is a “qualifiedinstitutional buyer” or an “accredited investor” defined in Rule 501(a)(1),(2),(3),or (7) of Regulation D.

 

14.           Miscellaneous.

 

(a)           Remedies.  The Company and the Purchaser acknowledge andagree that irreparable damage would occur in the event that any of the provisionsof this Agreement were not performed in accordance with their specific terms orwere otherwise breached.  It isaccordingly agreed that the parties shall be entitled to an injunction orinjunctions to prevent or cure breaches of the provisions of this Agreement andto enforce specifically the terms and provisions hereof, this being in additionto any other remedy to which any of them may be entitled by law or equity.

 

(b)           Jurisdiction.  Each of the Company and the Purchaser (i) herebyirrevocably submits to the exclusive jurisdiction of the United States DistrictCourt, the New York state courts and other courts of the United States sittingin New York, New York for the purposes of any suit, action or proceedingarising out of or relating to this Agreement and (ii) hereby waives, andagrees not to assert in any such suit action or proceeding, any claim that itis not personally subject to the jurisdiction of such court, that the suit,action or proceeding is brought in an inconvenient forum or that the venue ofthe suit, action or proceeding is improper. The Company and the Purchaser consent to process being served in anysuch suit, action or proceeding by mailing a copy thereof to such party at theaddress in effect for notices to it under this Agreement and agrees that suchservice shall constitute good and sufficient service of process and noticethereof.  Nothing in this paragraph shallaffect or limit any right to serve process in any other manner permitted bylaw.

 

(c)           Notices.  Any notice or other communication required orpermitted to be given hereunder shall be in writing by facsimile, mail orpersonal delivery and shall be effective upon actual receipt of suchnotice.  The addresses for such communicationsshall be:

 

13

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to the Company:

 

Liquidmetal Technologies, Inc.

25800 Commercentre Dr., Suite 100

Lake Forest, California92630

Telephone:  (949) 206-8002

Fax:  (949) 206-8008

Attention:  John Kang, President

 

with a copy to:

 

Foley & Lardner LLP

100 North Tampa Street, Suite 2700

Tampa, FL 33602-5804

Telephone:  813-229-2300

Facsimile:  813-221-4210

Attention: Curt P. Creely

 

If to thePurchasers, to the addresses set forth on Schedule I to the PurchaseAgreement:

 

with a copy to:

 

Greenberg Traurig LLP

The MetLife Building

200 Park Avenue

New York, New York 10166

Telephone:  (212) 801-9200

Facsimile:   (212) 801-6400

Attention:  Alan I. Annex

 

Any partyhereto may from time to time change its address for notices by giving at leastfive days’ written notice of such changed address to the other parties hereto.

 

(d)           Waivers.  No waiver by any party of any default withrespect to any provision, condition or requirement of this Agreement shall bedeemed to be a continuing waiver in the future or a waiver of any otherprovision, condition or requirement hereof, nor shall any delay or omission ofany party to exercise any right hereunder in any manner impair the exercise ofany such right accruing to it thereafter. The representations and warranties and the agreements and covenants ofthe Company and each Purchaser contained herein shall survive the Closing.

 

(e)           Execution in Counterpart.  This Agreement may be executed in two or morecounterparts, all of which shall be considered one and the same agreement, itbeing understood that all parties need not sign the same counterpart.

 

(f)            Signatures.  Facsimile signatures shall be valid andbinding on each party submitting the same.

 

14

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(g)           Entire Agreement; Amendment.  This Agreement, together with the PurchaseAgreement, the Notes, the Warrants, and the agreements and documentscontemplated hereby and thereby, contains the entire understanding andagreement of the parties, and may not be amended, modified or terminated exceptby a written agreement signed by the Company and the Holder of the RegistrableSecurities seeking registration of such securities.

 

(h)           Governing Law.  This Agreement and the validity andperformance of the terms hereof shall be governed by and construed inaccordance with the laws of the State of New York applicable to contractsexecuted and to be performed entirely within such state, except to the extentthat the law of the State of Delaware regulates the Company’s issuance ofsecurities.

 

(i)            Jury Trial.  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIALBY JURY.

 

(j)            Force Majeure.  The Company shall not be deemed in breach ofits commitments under this Agreement and no payments by the Company as setforth in Section 2 shall be required if the Company is unable to fulfillits obligations hereunder in a timely fashion if the SEC or the Nasdaq NationalMarket are closed or operating on a limited basis as a result of the occurrenceof a Force Majeure.  As used herein, “**Force Majeure**” means war or armed hostilities or othernational or international calamity, or one or more acts of terrorism, which arehaving a material adverse effect on the financial markets in the UnitedStates.  Furthermore, any payments owedas a result of Section 2 shall not accrue during any period during whichthe Company’s performance hereunder has been delayed or the Company’s abilityto fulfill its obligations hereunder has been impaired by a Force Majeure.

 

(k)           Titles.  The titles used in this Agreement are usedfor convenience only and are not to be considered in construing or interpretingthis Agreement.

 

(l)            No Strict Construction.  The language used in this Agreement will bedeemed to be the language chosen by the parties to express their mutual intent,and no rule of strict construction will be applied against any party.

 

(m)          Prior Registration RightsAgreements.  This Agreement shallamend and restate, and replace in their entirety, each of the March 2004Registration Rights Agreement, Winvest Registration Rights Agreement, and June 2005Registration Rights Agreement (the “**Prior Registration RightsAgreements**”).  Each Purchaserwho was a party to one or more of the Prior Registration Rights Agreementshereby agrees that (i) the Prior Registration Rights Agreements areterminated as of the date hereof, (ii) such Purchasers have no furtherrights under the Prior Registration Rights Agreements, (iii) suchPurchasers hereby forever waive and release the Company from any current orprior breach of, and any current or prior damages, claims, expenses, or otherentitlements arising from or under, the Prior Registration Rights Agreements(including without limitation the Accrued Registration Fees thereunder).

 

15

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**IN WITNESSWHEREOF**, the parties hereto have caused this Agreementto be duly executed as of the date first above written.

 
|   | **COMPANY:**                    |
|--------|---------------------------------|
|   |                            |
|   | LIQUIDMETAL  TECHNOLOGIES, INC. |
|   |                            |
|   |                            |
|   | By:                             |  /s/ | John Kang |   |
|   |                            | John Kang, President  and Chief Executive Officer |
|   |                            |
|   |                            |
|   | **PURCHASERS:**                 |
|   |                            |
|   | COMMONWEALTH  ASSOCIATES, L.P.  |
|   |                            |
|   |                            |
|   | By:                             | Signature on  Counterpart Signature Page |   |
|   | Name:                           |
|   | Title:                          |
|        |                                 |  |  |  |  |  |

 

16

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COUNTERPART SIGNATUREPAGE

TO AMENDED ANDRESTATED REGISTRATION RIGHTS AGREEMENT,

DATED AUGUST 2,2005,

AMONG LIQUIDMETALTECHNOLOGIES, INC. AND

THE “PURCHASERS”IDENTIFIED THEREIN

 

Theundersigned hereby executes and delivers the Amended and Restated RegistrationRights Agreement to which this Signature Page is attached, which, togetherwith all counterparts of the Amended and Restated Registration Rights Agreementand Signature Pages of the Company and other “Purchasers” under the Amendedand Restated Registration Rights Agreement, shall constitute one and the samedocument in accordance with the terms of the Amended and Restated RegistrationRights Agreement.

 
| PURCHASER: | Jess S.  Morgan & Co., Inc.                                |               |
|------------|--------------------------------------------------------------------------|--------------------|
| By:        | /s/                                                                      | Gary Levenstein    |   |
| Name:      | Gary Levenstein                                                          |               |
| Title:     | President, Investment  Division Jess S. Morgan & Co., Inc. |               |
|       |
| PURCHASER: | Prana, LLC                                                               |               |
| By:        | /s/                                                                      | Renee Vallese      |   |
| Name:      | Renee Vallese                                                            |               |
| Title:     | Managing Director                                                        |               |
|       |
| PURCHASER: | DKR Soundshore Oasis  Holding Fund Ltd.                                  |               |
| By:        | /s/                                                                      | Bradford Caswell   |   |
| Name:      | Bradford Caswell                                                         |               |
| Title:     | Director                                                                 |               |
|       |
| PURCHASER: | Rodd Friedman                                                            |               |
| By:        | /s/                                                                      | Rodd Friedman      |   |
| Name:      | Rodd Friedman                                                            |               |
| Title:     | N/A                                                                      |               |
|       |
| PURCHASER: | Bruce Rosen                                                              |               |
| By:        | /s/                                                                      | Bruce Rosen        |   |
| Name:      | Bruce Rosen                                                              |               |
| Title:     | N/A                                                                      |               |
|       |
| PURCHASER: | Caydal, LLC                                                              |               |
| By:        | /s/                                                                      | Kevin Daly         |   |
| Name:      | Kevin Daly                                                               |               |
| Title:     | Managing Member                                                          |               |
|       |
| PURCHASER: | Marlin Fund, LP                                                          |               |
| By:        | /s/                                                                      | Michael W. Masters |   |
| Name:      | Michael W. Masters                                                       |               |
| Title:     | Managing Member of the  General Partner                                  |               |
|            |                                                                          |                    |  |  |  |

 

17

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| PURCHASER: | Marlin Fund II, LP                         |                          |
|------------|--------------------------------------------|-------------------------------|
| By:        | /s/                                        | Michael W. Masters            |   |
| Name:      | Michael W. Masters                         |                          |
| Title:     | Managing Member of the  General Partner    |                          |
|       |
| PURCHASER: | Marlin Fund Offshore,  Ltd.                |                          |
| By:        | /s/                                        | Michael W. Masters            |   |
| Name:      | Michael W. Masters                         |                          |
| Title:     | Managing Member of the  Investment Manager |                          |
|       |
| PURCHASER: | Larry Bouts                                |                          |
| By:        | /s/                                        | Larry Bouts                   |   |
| Name:      | Larry Bouts                                |                          |
| Title:     | N/A                                        |                          |
|       |
| PURCHASER: | Really Cool Group Ltd.                     |                          |
| By:        | /s/                                        | J. Segal                      |   |
| Name:      | J. Segal                                   |                          |
| Title:     | Director                                   |                          |
|       |
| PURCHASER: | Myron Neugeboren                           |                          |
| By:        | /s/                                        | Myron Neugeboren              |   |
| Name:      | Myron Neugeboren                           |                          |
| Title:     | N/A                                        |                          |
|       |
| PURCHASER: | Jonas Brachfeld                            |                          |
| By:        | /s/                                        | Jonas Brachfeld               |   |
| Name:      | Jonas Brachfeld                            |                          |
| Title:     | N/A                                        |                          |
|       |
| PURCHASER: | Greg Osborn                                |                          |
| By:        | /s/                                        | Greg Osborn                   |   |
| Name:      | Greg Osborn                                |                          |
| Title:     | N/A                                        |                          |
|       |
| PURCHASER: | Richard Molinsky                           |                          |
| By:        | /s/                                        | Richard Molinsky              |   |
| Name:      | Richard Molinsky                           |                          |
| Title:     | N/A                                        |                          |
|       |
| PURCHASER: | Richard and Joanne Kane                    |                          |
| By:        | /s/                                        | Richard Kane and Joanne  Kane |   |
| Name:      | Richard Kane and Joanne  Kane              |                          |
| Title:     | N/A                                        |                          |
|            |                                            |                               |  |  |  |

 

18

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| PURCHASER: | Ricardo A. Salas                           |                               |
|------------|--------------------------------------------|------------------------------------|
| By:        | /s/                                        | Ricardo A. Salas                   |   |
| Name:      | Ricardo A. Salas                           |                               |
| Title:     | N/A                                        |                               |
|       |
| PURCHASER: | Wry Ltd.                                   |                               |
| By:        | /s/                                        | J. Segal                           |   |
| Name:      | J. Segal                                   |                               |
| Title:     | Director                                   |                               |
|       |
| PURCHASER: | Keith Barksdale                            |                               |
| By:        | /s/                                        | Keith Barksdale                    |   |
| Name:      | Keith Barksdale                            |                               |
| Title:     | N/A                                        |                               |
|       |
| PURCHASER: | Winvest Venture  Partners, Inc.       |                               |
| By:        | /s/                                        | Chang Ki Cho                       |   |
| Name:      | Chang Ki Cho                               |                               |
| Title:     | President and CEO                          |                               |
|       |
| PURCHASER: | Eric Brachfeld                             |                               |
| By:        | /s/                                        | Eric Brachfeld                     |   |
| Name:      | Eric Brachfeld                             |                               |
| Title:     | N/A                                        |                               |
|       |
| PURCHASER: | Edward Neugeboren                          |                               |
| By:        | /s/                                        | Edward Neugeboren                  |   |
| Name:      | Edward Neugeboren                          |                               |
| Title:     | N/A                                        |                               |
|       |
| PURCHASER: | Dolphin Offshore  Partners, LP             |                               |
| By:        | /s/                                        | Peter E. Salas                     |   |
| Name:      | Peter E. Salas                             |                               |
| Title:     | General Partner                            |                               |
|       |
| PURCHASER: | Harvard  Developments, Inc.           |                               |
| By:        | /s/                                        | Arden Giesbrecht and  Terry Downie |   |
| Name:      | Arden Giesbrecht and  Terry Downie         |                               |
| Title:     | Controller and VP,  Finance (respectively) |                               |
|       |
| PURCHASER: | Echo Capital Growth  Corporation           |                               |
| By:        | /s/                                        | Paul J. Hill                       |   |
| Name:      | Paul J. Hill                               |                               |
| Title:     | President                                  |                               |
|            |                                            |                                    |  |  |  |

 

19

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| PURCHASER: | Terrence L. Mealy                        |                       |
|------------|------------------------------------------|----------------------------|
| By:        | /s/                                      | Terrence L. Mealy          |   |
| Name:      | Terrence L. Mealy                        |                       |
| Title:     | Self                                     |                       |
|       |
| PURCHASER: | Shinnston Enterprises,  Ltd.             |                       |
| By:        | /s/                                      | James K.  Murray, Jr. |   |
| Name:      | James K.  Murray, Jr.               |                       |
| Title:     | Limited Partner                          |                       |
|       |
| PURCHASER: | Shea Diversified  Investments, Inc. |                       |
| By:        | /s/                                      | Ronald Lakey               |   |
| Name:      | Ron Lakey                                |                       |
| Title:     | Assistant Secretary                      |                       |
|       |
| PURCHASER: | Commonwealth  Associates, LP             |                       |
| By:        | /s/                                      | Robert A. O’Sullivan  |   |
| Name:      | Robert A. O’Sullivan                |                       |
| Title:     | CEO and President                        |                       |
|       |
| PURCHASER: | Neal I. Goldman                          |                       |
| By:        | /s/                                      | Neal I. Goldman            |   |
| Name:      | Neal I. Goldman                          |                       |
| Title:     | N/A                                      |                       |
|       |
| PURCHASER: | LBJ Holdings, LLC                        |                       |
| By:        | HSP Group, Inc.  (Its Manager)      |                       |
| By:        | /s/                                      | Brian Potiker              |   |
| Name:      | Brian Potiker                            |                       |
| Title:     | Vice President                           |                       |
|       |
| PURCHASER: | John D. Stout                            |                       |
| By:        | /s/                                      | John D. Stout              |   |
| Name:      | John D. Stout                            |                       |
| Title:     | Individually                             |                       |
|       |
| PURCHASER: | MicroCapital Fund Ltd.                   |                       |
| By:        | /s/                                      | Christopher P. Swenson     |   |
| Name:      | Christopher P. Swenson                   |                       |
| Title:     | Vice President                           |                       |
|       |
| PURCHASER: | MicroCapital Fund LP                     |                       |
| By:        | /s/                                      | Christopher P. Swenson     |   |
| Name:      | Christopher P. Swenson                   |                       |
| Title:     | Vice President                           |                       |
|            |                                          |                            |  |  |  |

 

20

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| PURCHASER: | Journeys End Partners,  LLC                     |             |
|------------|-------------------------------------------------|------------------|
| By:        | /s/                                             | Gerald B. Cramer |   |
| Name:      | Gerald B. Cramer                                |             |
| Title:     | Manager                                         |             |
|       |
| PURCHASER: | Wynnefield Partners  Small Cap Value, LP        |             |
| By:        | /s/                                             | Nelson Obus      |   |
| Name:      | Nelson Obus                                     |             |
| Title:     | Managing Member                                 |             |
|       |
| PURCHASER: | Wynnefield Partners  Small Cap Value, LP I      |             |
| By:        | /s/                                             | Nelson Obus      |   |
| Name:      | Nelson Obus                                     |             |
| Title:     | Managing Member                                 |             |
|       |
| PURCHASER: | Wynnefield Small Cap  Value Offshore Fund, Ltd. |             |
| By:        | /s/                                             | Nelson Obus      |   |
| Name:      | Nelson Obus                                     |             |
| Title:     | President                                       |             |
|       |
| PURCHASER: | Min Capital Corp  Retirement Trust              |             |
| By:        | /s/                                             | Robert Friedman  |   |
| Name:      | Robert Friedman                                 |             |
| Title:     | Trustee                                         |             |
|            |                                                 |                  |  |  |  |

 

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