Exhibit 10.4
 
LIQUIDMETAL TECHNOLOGIES, INC.

 
SUBSCRIPTION AGREEMENT
 
Gentlemen:
 
1.           Subscription.
 
(a)  Subject to the conditions set forth in this Subscription Agreement (this
“Agreement”), the undersigned, intending to be legally bound, hereby irrevocably
subscribes to purchase from Liquidmetal Technologies, Inc., a Delaware
corporation (the “Company”), an aggregate of 7,870,307 shares of the common
stock, par value $0.001 of the Company (“Common Stock”), at a subscription price
of $0.26 per share (the Common Stock purchased pursuant hereto is hereinafter
sometimes referred to as the “Securities” herein).  This subscription is
submitted to you in accordance with and subject to the terms and conditions
described in this Agreement.
 
(b)  The purchase price for the Securities shall be made payable to the Company
and should be delivered, together with two executed and properly completed
copies of this Agreement, to the Company.
 
(c)  The undersigned may not withdraw this subscription or any amount paid
pursuant thereto.  The undersigned understands that his or her purchase of the
Securities is contingent upon the acceptance in writing of this Agreement by the
Company.  The Company reserves the right, in its sole and absolute discretion,
to withdraw, cancel, modify, or reject any subscription, in whole or in part,
for any reason.
 
2.           Representations, Warranties and Covenants of the Subscriber. The
undersigned hereby represents and warrants to, and agrees with, the Company as
follows:
 
(a)  The undersigned is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act of 1933, as amended
(the “Securities Act”).  Specifically: [PLEASE RESPOND BELOW AS APPROPRIATE]

 

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If the subscriber is an INDIVIDUAL, please answer the following questions:

 
 
(1)
Did your individual annual income during each of the two most recent years
exceed $200,000 and do you expect your annual income during the current year to
exceed $200,000?

Yes ¨         No ¨

 
(2)
If you are married, did your joint annual income with your spouse during each of
the two most recent years exceed $300,000 and do you expect your joint annual
income with your spouse during the current year to exceed $300,000?

Yes ¨         No ¨

 
(3)
Does your individual or joint (together with your spouse) net worth (including
automobiles, but excluding your primary residence) exceed $1,000,000?

Yes ¨  No ¨

IF THE ANSWERS TO ALL OF THE IMMEDIATELY PRECEDING QUESTIONS ARE “NO,” THE
SUBSCRIBER DOES NOT MEET THE REQUISITE FINANCIAL SOPHISTICATION STANDARDS AND
WILL NOT BE ACCEPTED AS A PURCHASER OF THE NOTE.

If the subscriber is a CORPORATION, LIMITED LIABILITY COMPANY, PARTNERSHIP, or
TRUST please answer the following questions:

(4)           Was the corporation, limited liability company, partnership or
trust formed for the specific purpose of investing in the Company?

Yes ¨  No x

(5)           Does the corporation, limited liability company, partnership or
trust have total assets in excess of $5,000,000?

Yes ¨  No x

If the answer to question (4) is “Yes” or the answer to question (5) is “No,”
please answer the following questions:

(6)           Please list the names of each shareholder in the corporation, each
member in the limited liability company, each partner in the partnership, and in
the case of a revocable trust, each grantor of the trust:

 
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Furniture Row, LLC 
                                     

(7)           Does each person listed in response to question (6) either (i)
have an individual annual income in excess of $200,000 in each of the two most
recent years and expect to have an annual income in excess of $200,000 during
the current year, (ii) if married, have a joint annual income with his/her
spouse in excess of $300,000 in each of the two most recent years and expect to
have an annual income in excess of $300,000 during the current year, or (iii)
have an individual or joint (together with his/her spouse) net worth (including
automobiles, but excluding the primary residence) in excess of $1,000,000?

Yes x  No ¨

IF THE ANSWER TO QUESTION 7 IS “NO,” THE SUBSCRIBER DOES NOT SATISFY THE
INVESTOR SUITABILITY REQUIREMENTS FOR THIS OFFERING AND WILL NOT BE ACCEPTED AS
A PURCHASER OF THE NOTE.  IN THE CASE OF A TRUST THAT IS NOT A REVOCABLE TRUST,
IF THE ANSWER TO QUESTION 4 IS “YES” OR THE ANSWER TO QUESTION 5 IS “NO”, THE
SUBSCRIBER DOES NOT SATISFY THE INVESTOR SUITABILITY REQUIREMENTS FOR THIS
OFFERING AND WILL NOT BE ACCEPTED AS A PURCHASER OF THE NOTE.

(b)           The undersigned has a fundamental understanding of the Company’s
business.
 
(c)           The undersigned has had access to and has received all materials
that have been requested by the undersigned and has had a reasonable opportunity
to ask questions of the Company and its representatives.  The Company has
answered all inquiries that the undersigned or the undersigned’s representatives
have asked the Company. The undersigned has taken all the steps necessary to
evaluate the merits and risks of an investment in the Securities.
 
(d)           The undersigned has such knowledge and experience in finance,
securities, investments and other business matters so as to be able to protect
the interests of the undersigned in connection with this transaction, and the
undersigned’s investment in the Company is not material when compared to the
undersigned’s total financial capacity.
 
(e)           The undersigned understands that there are significant risks
incident to an investment in the Company as proposed herein, and the undersigned
can afford to bear such risks, including, without limitation, the risk of losing
the entire investment.
 
 
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(f)           The undersigned understands that the Securities have not been
registered under the Securities Act, that the Securities will be issued on the
basis of the exemption provided by Section 4(2) of the Securities Act and
Regulation D promulgated thereunder and under exemptions under certain state
securities laws, that this transaction has not been reviewed by, passed on or
submitted to any federal or state agency or self-regulatory organization where
an exemption is being relied upon, and that the Company’s reliance thereon is
based in part upon the representations made by the undersigned in this
Agreement.
 
(g)           The undersigned acknowledges that the undersigned is familiar with
the limitations imposed by the Securities Act and the rules and regulations
thereunder on the transfer of the Securities.  In particular, the undersigned
agrees that the Company shall not be required to give any effect to a sale,
assignment or transfer of the Securities, unless (i) the sale, assignment or
transfer of the Securities is registered under the Securities Act, it being
understood that the Securities are not currently registered for sale and that
the Company has no obligation or intention to so register the Securities, or
(ii) such Securities are sold, assigned or transferred in accordance with all
the requirements and limitations of Rule 144 under the Securities Act, it being
understood that Rule 144 is not available at the present time for the sale of
the Securities, or (iii) such sale, assignment or transfer is otherwise exempt
from registration under the Securities Act. The undersigned further understands
that an opinion of counsel and other documents may be required to transfer the
Securities.
 
(h)           If the undersigned is an individual, the undersigned is a
bona-fide resident of the state set forth in the address provided on the
undersigned’s signature page to this Agreement.
 
(i)           If the undersigned is a partnership, trust, corporation or other
entity: (A) it has made other investments or engaged in other substantial
business activities prior to receiving an opportunity to purchase the
Securities; (B) it was not organized for the purpose of acquiring the
Securities; (C) the person executing on behalf of the partnership, trust,
corporation or other entity has the full power and authority to execute and
comply with the terms of this Agreement on behalf of such entity and to make the
representations and warranties made herein on its behalf; (D) its principal
place of business and principal office are located in the state set forth in its
address below; and (E) the investment in the Securities has been affirmatively
authorized, if required, by the governing board of such entity and is not
prohibited by the governing documents of the entity.
 
(j)           The undersigned will acquire the Securities for the undersigned’s
own account for investment and not with a view to the sale or distribution
thereof or the granting of any participation therein, and has no present
intention of distributing or selling to others any of such interest or granting
any participation therein.
 
(k)           The undersigned acknowledges that the representations, warranties
and agreements made by the undersigned herein shall survive the execution and
delivery of this Agreement and the purchase of the Securities.  The information
stated herein is true and complete as of the date hereof and will be true and
complete as of the date on which the Company shall sell the Securities to the
undersigned.  If, prior to the final consummation of the offer and sale of the
Securities, there should be any change in such information or any of such
information becomes incorrect or incomplete, the undersigned agrees to notify
and supply promptly corrective information to the Company.

 
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3.           Representations and Warranties of the Company.  The Company hereby
represents and warrants to the undersigned that:
 
(a)           Organization and Qualification.  The Company and its
“Subsidiaries” (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns capital stock or holds an equity or
similar interest) are corporations or other legal entities duly organized and
validly existing in good standing under the laws of the jurisdictions in which
they are organized, as set forth in the disclosure schedule attached hereto (the
“Disclosure Schedule”), and have the requisite power and authorization to own
their properties and to carry on their business as now being conducted.  The
Company and each Subsidiary is duly qualified as a foreign corporation or other
legal entity to do business and is in good standing in every jurisdiction in
which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, as set forth in the Disclosure Schedule,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect.  As used in this Agreement, “Material
Adverse Effect” means any material adverse effect on the business, properties,
assets, operations, results of operations, or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole.  The Company has no
Subsidiaries except as set forth in the Disclosure Schedule or in the SEC
Documents (as defined below).
 
(b)           Authorization; Enforcement; Validity.  The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement and to issue the Securities in accordance with
the terms hereof and thereof.  The execution and delivery of this Agreement by
the Company and the consummation by the Company of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the
Securities, have been duly authorized by the Company’s Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders.  This Agreement has been duly executed and
delivered by the Company, and constitutes the legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies, and except that any rights to
indemnity or contribution under this Agreement may be limited by federal and
state securities laws and public policy considerations.
 
(c)           Issuance of Securities.  The Securities are duly authorized and
upon issuance thereof in accordance with this Agreement will be validly issued,
fully paid and nonassessable and free from all taxes, liens and charges with
respect to the issue thereof, with the holder being entitled to all rights
accorded to a holder of Common Stock.  Assuming the accuracy of each of the
representations and warranties of the undersigned contained in Section 2 of this
Agreement, the issuance by the Company of the Securities is exempt from the
registration requirements of Section 5 of the Securities Act.

 
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(d)           No Conflicts.  The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby (including, without limitation, the issuance of the
Securities) will not (i) result in a violation of the certificate of
incorporation, any certificate of designations, preferences and rights of any
outstanding series of preferred stock or the bylaws of the Company or any of its
Subsidiaries, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture or instrument to which the Company or any of
its Subsidiaries is a party, except which are the subject of written waivers or
consents which have been obtained or effected on or prior to the date hereof or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations) applicable
to the Company or any of its Subsidiaries or by which any property or asset of
the Company or any of its Subsidiaries is bound or affected, except in the case
of clauses (ii) and (iii), for such breaches or defaults as could not reasonably
be expected to have a Material Adverse Effect.
 
(e)           Consents.  Except as disclosed in the Disclosure Schedule or in
the SEC Documents, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court,
governmental agency or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its obligations
under or contemplated by the Transaction Documents, in each case in accordance
with the terms hereof or thereof.  All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date hereof
(other than filings and reports relating to the offer and sale of the Securities
required under Regulation D or applicable securities or “Blue Sky” laws), and
the Company and its Subsidiaries are unaware of any facts or circumstances which
might prevent the Company from obtaining or effecting any of the registrations,
applications or filings pursuant to the preceding sentence.
 
(f)           Acknowledgment Regarding the Subscriber’s Purchase of
Securities.  The Company acknowledges and agrees that the undersigned is acting
solely in the capacity of arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby and that, except
as set forth in the Disclosure Schedule or in the SEC Documents, the undersigned
is not (i) an officer or director of the Company, (ii) an “affiliate” of the
Company (as defined in Rule 144) or (iii) to the knowledge of the Company, a
“beneficial owner” of more than 10% of the Common Stock (as defined for purposes
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)).  The Company further acknowledges that the undersigned is not acting as
a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by the undersigned or any of its
representatives or agents in connection with the Transaction Documents and the
Transactions contemplated hereby and thereby is merely incidental to the
undersigned’s purchase of the Securities.

 
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(g)           No General Solicitation; Placement Agent’s Fees.  Neither the
Company, nor any of its affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the
Securities.  The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for
persons engaged by the undersigned or its investment advisor) relating to or
arising out of the transactions contemplated hereby.
 
(h)           No Integrated Offering.  None of the Company, its Subsidiaries,
any of their affiliates, or any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the Securities Act or cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of the
Securities Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated.
 
(i)           Rights Agreement.  The Company has not adopted a stockholder
rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company.
 
(j)           SEC Documents.  Except for its Form 10-K for the year ended
December 31, 2009 (the “2009 10-K”) and its Form 10-Q for the quarter ended
March 31, 2009 (the “3/31/10 10-Q”), the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the United States Securities and Exchange Commission (the “SEC”) pursuant to the
reporting requirements of the Exchange Act.  True, correct and complete drafts
of the 2009 10-K and the 3/31/10 10-Q, as of the date hereof, have been provided
to the undersigned (All of the foregoing filed prior to the date hereof (whether
or not required to be filed), the draft 2009 10-K and 3/31/10 10-Q, and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the
“SEC Documents”).  As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and, to the Company’s knowledge, none of the SEC Documents, at the
time they were filed with the SEC or are intended to be filed with the SEC,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
 
(k)           Financial Statements.  As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).

 
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(l)           Conduct of Business.  Neither the Company nor any of its
Subsidiaries is in violation of any term of or in default under its Certificate
of Incorporation or Bylaws or its organizational charter or bylaws,
respectively.  Except as disclosed in the Disclosure Schedule or in the SEC
Documents, neither the Company nor any of its Subsidiaries is in violation of
any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or its Subsidiaries, and neither the Company nor any
of its Subsidiaries will conduct its business in violation of any of the
foregoing, except for possible violations which would not, individually or in
the aggregate, have a Material Adverse Effect.
 
(m)           Regulatory Permits.  The Company and its Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates,
authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.
 
(n)           Equity Capitalization.  As of the date hereof, the number of
shares and type of all authorized, issued, and outstanding capital stock of the
Company, and all shares of Common Stock reserved for issuance under the
Company’s employee and director benefit, incentive, or option plans, is set
forth in the Disclosure Schedule.  All of such outstanding shares have been, or
upon issuance will be, validly issued and are fully paid and nonassessable.  All
of such outstanding shares of capital stock are duly authorized, validly issued,
fully paid and nonassessable.  No shares of capital stock of the Company are
subject to preemptive rights or any other similar rights of the shareholders of
the Company or any liens or encumbrances imposed through the actions or failure
to act of the Company.  Except as disclosed in the Disclosure Schedule and other
than pursuant to this Agreement, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, or rights of first refusal, and
(ii) there are no agreements, understandings, claims, antidilution protection or
other commitments or rights of any character whatsoever that could require the
Company to issue additional shares of capital stock of the Company or adjust the
purchase or exercise price of any such instrument.  Except as disclosed in the
Disclosure Schedule, there are no agreements or arrangements (other than the
Registration Rights Agreement, dated as of May 1, 2009, between the Company and
the buyers signatory thereto) under which the Company is obligated to register
the sale of any of its securities under the Securities Act.
 
 
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(o)           Indebtedness and Other Contracts.  Except as disclosed in the
Disclosure Schedule or in the SEC Documents, neither the Company nor any of its
Subsidiaries (i) has any outstanding Indebtedness, or (ii) is in violation of
any term of or in default under any contract, agreement or instrument relating
to any Indebtedness.  For purposes of this Agreement:  (x) “Indebtedness” of any
Person means, without duplication (A) all indebtedness for borrowed money, (B)
all obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business), (C) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent
Obligations (as defined below) in respect of indebtedness or obligations of
others of the kinds referred to in clauses (A) through (G) above; (y)
“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; and (z)
“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
 
(p)           Absence of Litigation.  Except as disclosed in the Disclosure
Schedule or in the SEC Documents, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, the Common Stock or any of
the Company’s Subsidiaries that would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
 
(q)           Insurance.  The Company and each of its Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company reasonably believes to be
prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged.  Neither the Company nor any such Subsidiary has been
refused any insurance coverage sought or applied for and neither the Company nor
any such Subsidiary has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

 
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(r)           Employee Relations.  Except as disclosed in the Disclosure
Schedule or in the SEC Documents, neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or employs any
member of a union.  The Company and its Subsidiaries believe that their
relations with their employees are good.  No executive officer of the Company
(as defined in Rule 501(f) of the Securities Act) has notified the Company that
such officer intends to leave the Company or otherwise terminate such officer’s
employment with the Company.  No executive officer of the Company, to the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant.  The Company and its
Subsidiaries are in compliance with all federal, state, local and foreign laws
and regulations respecting employment and employment practices, terms and
conditions of employment and wages and hours, except where failure to be in
compliance would not, either individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
 
(s)           Title.  The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Disclosure Schedule or in the SEC
Documents or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company and any of its Subsidiaries.  Any real property and facilities held
under lease by the Company and any of its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries.
 
(t)           Intellectual Property Rights.  To the knowledge of the Company and
except as set forth in the Disclosure Schedule or in the SEC Documents, the
Company and its Subsidiaries own or possess adequate rights or licenses to use
all trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and other intellectual property
rights (“Intellectual Property Rights”) necessary to conduct their respective
businesses as now conducted.  The Company does not have any knowledge of any
infringement by the Company or its Subsidiaries of Intellectual Property Rights
of others.  Except as set forth in the Disclosure Schedule or in the SEC
Documents, there is no claim, action or proceeding being made or brought, or to
the knowledge of the Company, being threatened, against the Company or its
Subsidiaries regarding its Intellectual Property Rights which could have a
Material Adverse Effect.
 
(u)           Environmental Laws.  The Company and its Subsidiaries (i) are in
material compliance with any and all Environmental Laws (as hereinafter
defined), (ii) have received all material permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in material compliance with all terms and conditions of
any such permit, license or approval where, in each of the foregoing clauses
(i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect.  The term
“Environmental Laws” means all federal, state, local or foreign laws relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic
or hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.

 
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(v)           Tax Status.  The Company and each of its Subsidiaries (i) has made
or filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction in which such filings are required,
(ii) has paid all taxes and other governmental assessments and charges that are
owed by it, including all taxes shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and for
which adequate reserves have been established on the Company’s books, and (iii)
has set aside on its books provision reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply.  There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction.
 
(w)           Disclosure.  The Company confirms that it has not provided the
undersigned or its agents or counsel with any information that will constitute
material, nonpublic information as of the date hereof, other than information
and documentation regarding the transactions contemplated by this Agreement,
which information shall be included on a Form 8-K to be filed by the Company in
connection with this transaction, and information included in draft SEC
Documents that have not yet been filed.  The Company understands and confirms
that the undersigned will rely on the foregoing representations in effecting
transactions in securities of the Company.  The Company acknowledges and agrees
that the undersigned does not make and has not made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2 of this Agreement.
 
(x)           Manipulation of Price.  The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or paid anyone any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to
pay to any person any compensation for soliciting another to purchase any other
securities of the Company.
 
(y)           Internal Accounting and Disclosure Controls.  The Company and each
of its Subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference.  Except as set forth in the Disclosure Schedule or in the SEC
Documents, the Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-14 under the Exchange Act) that are effective in
ensuring that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the rules and
forms of the SEC, including, without limitation, controls and procedures
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management, including its principal executive
officer or officers and its principal financial officer or officers, as
appropriate, to allow timely decisions regarding required disclosure.  Except as
set forth in the Disclosure Schedule or in the SEC Documents, during the twelve
months prior to the date hereof neither the Company nor any of its Subsidiaries
have received any notice or correspondence from any accountant relating to any
potential material weakness in any part of the system of internal accounting
controls of the Company or any of its Subsidiaries.

 
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(z)           Investment Company Status.  The Company is not, and upon
consummation of the sale of the Securities will not be, an “investment company,”
a company controlled by an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company” as such terms
are defined in the Investment Company Act of  1940, as amended.
 
(aa)           U.S. Real Property Holding Corporation.  The Company is not, nor
has it ever been, a U.S. real property holding corporation within the meaning of
Section 897 of the Internal Revenue Code of 1986, as amended, and the Company
shall so certify upon the request of the undersigned.
 
(bb)           Bank Holding Company Act.  Neither the Company nor any of its
Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries
or affiliates owns or controls, directly or indirectly, five percent (5%) or
more of the outstanding shares of any class of voting securities or twenty-five
(25%) or more of the total equity of a bank or any equity that is subject to the
BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of
its Subsidiaries or affiliates exercises a controlling influence over the
management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
 
(cc)           Shell Company Status.  The Company is not, nor has it at any time
previously been, considered a “shell company” within the meaning of Rule
144(i)(1)(i) (or any successor rule) under the Securities Act.
 
(dd)           Survivability of Company’s Representations and Warranties.  The
Company acknowledges that the representations, warranties and agreements made by
the Company herein shall survive the execution and delivery of this Agreement
and the Company’s delivery of the Securities. The information stated herein is
true and complete as of the date hereof and will be true and complete as of the
date on which the undersigned shall purchase the Securities from the
Company.  If, prior to the final consummation of the offer and sale of the
Securities, there should be any change in such information or any of such
information becomes incorrect or incomplete, the Company agrees to notify and
supply promptly corrective information to the undersigned.

 
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4.           Indemnification. The undersigned agrees to indemnify and hold
harmless the Company and each officer, director, employee, agent and controlling
person of the Company from and against any and all loss, damage or liability due
to or arising out of a breach of any representation or warranty in this
Agreement.
 
5.           Miscellaneous.
 
(a)  This Agreement shall be binding upon and inure to the benefit of the
parties hereto, the successors and assigns of the Company, and the permitted
successors and assigns of the undersigned.
 
(b)  This Agreement does not create, and shall not be construed as creating, any
rights enforceable by any person not a party to this Agreement.
 
(c)  The validity, construction, enforcement, and interpretation of this
Agreement are governed by the laws of the State of California and the United
States of America, without regard to principles of conflict of laws.
 
(d)  The undersigned hereby agrees that the venue of any action, proceeding,
counterclaim, crossclaim, or other litigation relating to, involving, or
resulting from this Agreement shall be the state or federal courts located in
Orange County, California.
 
(e)  This Agreement may not be amended except in a writing specifically intended
for the purpose and executed by the party against whom enforcement of the
amendment is sought.
 
(f)   This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
 
(g)  This Agreement may be executed in counterparts, each of which shall
constitute an original, and all of which, together, shall constitute the same
instrument.
 
[SIGNATURES FOLLOW]

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year this subscription has been accepted by the Company as set forth
below.

Date of Subscription: August 10, 2010
         
Norden, LLC
 
X 
/s/ Gregory A, Ruegsegger, Vice President
(Print Name of Subscriber)
 
(Signature of Subscriber or Authorized Person
   
on behalf of Subscriber if Subscriber is an Entity)
           
Gregory A, Ruegsegger, Vice President
   
(Print Name and Title of Authorized Person if
   
Subscriber is an Entity)
         
X 
 
(Print Name of Joint Subscriber,
 
(Signature of Joint Subscriber, if any)
if any)
         
Address:
 
Social Security Number or other Taxpayer Identification Number:
     
8641 N. Broadway
 
74-3096138
Denver, CO 80216
         

 
ACCEPTED BY:
 
Liquidmetal Technologies, Inc.
       
By:
/s/ Tony Chung
 
Name:
Tony Chung
 
Title:
Chief Financial officer
       
Date:
8/10/10
 

 
 
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DISCLOSURE SCHEDULE

 

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Schedule 3 (a)
 
Subsidiaries

Name of Subsidiary
 
Jurisdiction of
Incorporation or
Organization
 
Jurisdictions in which
Qualified to Do Business as a
Foreign Corporation or
Entity
         
Liquidmetal Golf
 
California corporation
 
None
         
Liquidmetal Korea Co., Ltd.
 
South Korea organized entity
 
South Korea
         
Amorphous Technologies International (Asia) PTE Ltd.
 
Singapore organized entity(inactive, dissolution in process)
 
Singapore
         
Liquidmetal Coatings, LLC
 
Delaware Limited Liability Company
 
None
         
Crucible Intellectual Property, LLC
 
Delaware Limited Liability Company
 
None

 

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Schedule 3(e)

None.

 

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Schedule 3(f)

None other than that disclosed in SEC Documents.

 

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Schedule 3(l)

None other than that disclosed in SEC Documents.

 

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Schedule 3(m)

None.

 

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Schedule 3(n)

   
Outstanding
as of August
10, 2010**
   
As converted into
common stock**
 
Shares Outstanding
           
Common shares
    55,950,201       55,950,201  
Series A-1 Preferred Shares outstanding*
    680,000       34,000,000  
Series A-1 Accrued Dividends*
    52,715       2,635,750  
Series A-2 Preferred Shares outstanding*
    2,444,663       55,560,523  
Series A-2 Accrued Dividends*
    219,298       4,984,045                    
Total Outstanding
    59,346,877       153,130,519                    
Options and Warrants Outstanding
               
1996 stock option plan
    53,734       53,734  
2002 Equity incentive plan
    5,648,993       5,648,993  
2002 non employee director stock option plan
    90,000       90,000  
Warrants
    52,732,484       52,732,484  
Options not issued under plan
    1,591,399       1,591,399                    
Total Options and Warrants Outstanding
    60,116,610       60,116,610                    
Total Shares
    119,463,487       213,247,129  

* In addition to the above, the Company intends to make a conversion offer to
the holders of preferred shares to convert their shares plus accrued but unpaid
dividends, plus any dividends that would have accrued through June 1, 2011, into
common shares at their respective exercise prices of $.10 for the Series A-1
shares and $.22 for the Series A-2 shares.
** This table does not take into account (i) any shares of common stock issued
pursuant to preferred stock conversions or warrant exercises on August 10, 2010,
or (ii) shares issuable in payment of $250,000 in fees owing to Abdi Mahamedi,
as the number of shares issuable will be based on the closing price of the
Company's common stock on August 12, 2010, or (iii) up to approximately 214,000
shares that the company is authorized to issue to directors in lieu of director
fees.

 

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Schedule 3(o)

None other than that disclosed in SEC Documents.

 

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Schedule 3(p)

None other than that disclosed in SEC Documents.

 

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Schedule 3(r)

None other than that disclosed in SEC Documents.

 

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Schedule 3(s)

None other than that disclosed in SEC Documents.

 

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Schedule 3(t)

None other than that disclosed in SEC Documents.

 

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Schedule 3(u)

None.

 

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Schedule 3(y)

None other than that disclosed in SEC Documents.

 

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