**Exhibit 10.59**

**LIQUIDMETAL TECHNOLOGIES, INC.**

 

INDEMNITY AGREEMENT

 

THIS INDEMNITY AGREEMENT (“Agreement”) is made andentered into as of this          day of            , 200      ,by and between LIQUIDMETAL TECHNOLOGIES, INC., a Delaware corporation (“Company”),and                     ,a director and/or officer of the Company or an Affiliate (“Executive”).

 

WITNESSETH:

 

A.            WHEREAS,the Company and the Executive recognize that the vagaries of public policy andthe interpretation of, among other things, Delaware General Corporation LawSection 145, court opinions and the Company’s certificate of incorporation andbylaws are often ambiguous, conflicting and/or uncertain and, therefore, failto provide the Company’s directors and/or officers (collectively, “executive(s)”)with adequate or reliable advance knowledge or guidance with respect to thelegal risks and potential liabilities to which they may become personallyexposed as a result of performing their duties for the Company or by reason oftheir status as such executives.

 

B.            WHEREAS,the Company and the Executive are aware of the substantial growth in the numberof lawsuits filed against corporate directors and/or officers in connectionwith their activities in such capacities and by reason of their status as suchand, in particular, those lawsuits appearing to be promoted by attorneys whoseem to encourage and specialize in the filing of such lawsuits for the mainpurpose of seeking a settlement thereof in order to personally collectattorneys’ fees rather than attempting to obtain an equitable resolution ofsuch litigation that would ultimately be in the interests of the stockholdersof such corporation.

 

C.            WHEREAS,the Company and the Executive recognize that the cost of defending against suchlawsuits, whether or not meritorious, is typically well beyond the financialresources of most executives.

 

D.            WHEREAS,the Company and the Executive recognize that the legal risks and potentialliabilities, and the very threat thereof, associated with lawsuits filedagainst the executives, and the resultant substantial time, expense,harassment, ridicule, abuse and anxiety spent and endured in defending againstsuch lawsuits bears no reasonable or logical relationship to the amount ofcompensation received by the executives and, thus, poses a significantdeterrent to experienced and capable individuals, such as the Executive,agreeing to serve as an executive.

 

E.             WHEREAS,Section 145 of the Delaware General Corporation Law and the Company’s Bylaws,which set forth certain provisions relating to the mandatory and permissiveindemnification of directors and officers (amongst others) by the Company, arespecifically not exclusive of other rights to which those indemnifiedthereunder may be entitled under any bylaw, agreement, vote of stockholders ordisinterested directors or otherwise and

 

----

 

thus does not by itselflimit the extent to which the Company may indemnify, contribute or advanceexpenses to persons serving as its executives (amongst others).

 

F.             WHEREAS,in order to induce and encourage highly experienced and capable individuals,such as the Executive, to serve as an executive and to foster an atmosphere inwhich such executives will feel unrestrained by the threat of incurringpersonal liability and, therefore, take the business and entrepreneurial risksnecessary to ensure the continued success and growth of the Company, secure inthe knowledge that they will receive the maximum indemnification protectionagainst such risks and liabilities as may be afforded by law, the Company’sBoard of Directors (“Board”) has determined, after due consideration andinvestigation of the terms and provisions of this Agreement, in light of thecircumstances and considerations set forth in the foregoing recitals and in theexercise of its good faith business judgment, that this Agreement is not onlyreasonable, fair and prudent, but also necessary to promote and ensure the bestinterests of the Company and its stockholders.

 

NOW, THEREFORE, in consideration of the premises,mutual covenants and agreements of the parties contained herein and the mutualbenefits to be derived from this Agreement, and the delivery of other good andvaluable consideration by the Executive, the receipt and sufficiency of whichis hereby acknowledged by the Company, the parties hereto, intending to belegally bound, hereby covenant and agree as follows:

 

1.             CertainDefinitions.  The following terms asused in this Agreement shall be defined as follows:

 

a.             “Action(s)”shall include, without limitation, any threatened, pending or completed action,claim, litigation, suit or proceeding, whether civil, criminal, administrative,arbitrative or investigative, whether predicated on foreign, Federal, state orlocal law (including any brought under and/or predicated upon the SecuritiesAct of 1933, as amended, and/or the Securities Exchange Act of 1934, asamended, and/or their respective state counterparts and/or any rule orregulation promulgated thereunder), whether a Derivative Action and whetherformal or informal.

 

b.             “Affiliate”shall include, without limitation, any corporation, partnership, joint venture,employee benefit plan, trust, or other similar enterprise that directly orindirectly through one or more intermediaries, controls or is controlled by, oris under common control with, the Company.

 

c.             “Authority”shall mean the panel of arbitrators or independent legal counsel selected underParagraph 5 of the Agreement.

 

d.             “Breachof Duty” shall mean the Executive breached or failed to perform his duties tothe Company or an Affiliate, as the case may be, and the Executive’s breach ofor failure to perform those duties constitute:

 

(1)           a breachof “duty of loyalty” (as defined herein) to the Company or its stockholders;

 

2

----

 

(2)           acts oromissions not in “good faith” (as further defined herein) or which involveintentional misconduct or a knowing violation of the law;

 

(3)           aviolation of Section 174 of the Delaware General Corporation Law; or

 

(4)           a transactionfrom which the Executive derived an improper personal financial profit (unlesssuch profit is determined to be immaterial in light of all the circumstances).

 

In determiningwhether the Executive has acted or omitted to act otherwise than in “goodfaith,” as such term is used herein, the Authority, or the court, shalldetermine solely whether the Executive (i) in the case of conduct in his “officialcapacity” (as defined herein) with the Company, believed in the exercise of hisbusiness judgment, that his conduct was in the best interests of the Company;and (ii) in all other cases, reasonably believed that his conduct was at leastnot opposed to the best interests of the Company.

 

e.             “DerivativeAction” shall mean any Action brought by or in the right of the Company and/oran Affiliate.

 

f.              “Dutyof loyalty” shall mean a breach of fiduciary duty by the Executive whichconstitutes a willful failure to deal fairly with the Company or itsstockholders in connection with a transaction in which the Executive has amaterial undisclosed personal conflict of interest.

 

g.             “Expenses”shall include, without limitation, any and all expenses, fees, costs, charges,attorneys’ fees and disbursements, other out-of-pocket costs,reasonable compensation for time spent by the Executive in connection with theAction for which he or she is not otherwise compensated by the Company, anyAffiliate, any third party or other entity, and any and all other direct andindirect costs of any type or nature whatsoever.

 

h.             “Liabilities”shall include, without limitation, judgments, amounts incurred in settlement,fines, penalties, and, with respect to any employee benefit plan, any excisetax or penalty incurred in connection therewith, and any and all liabilities ofevery type or nature whatsoever.

 

i.              “Officialcapacity” shall mean the office of director or officer of the Company,membership on any committee of directors, any other offices of the Company heldby the Executive and any other employment or agency relationship between theExecutive and the Company and “official capacity,” as such term is used herein,shall not include service for any Affiliate or other foreign or domesticcorporation or any partnership, joint venture, trust, employee benefit plan, orother enterprise.

 

3

----

 

j.              “Statute”shall mean Delaware General Corporation Law Section 145 (or any successorprovisions).

 

k.             “TerminationDate” shall mean the date the Executive ceases, for whatever reason, to serveas a director or in an employment relationship with the Company and/or anyAffiliate.

 

2.             Notan Employment Contract.  Nothingcontained in this Agreement shall create or constitute a contract of employmentbetween the Company and the Executive and the termination of the Executive’srelationship with the Company and/or any Affiliate by either party hereto shallnot be restricted by this Agreement.

 

3.             Indemnity.

 

a.             Inconsideration of Executive’s continued service to the Company and/or itsAffiliates and the consideration set forth in the recitals to this Agreement,in all cases other than those set forth in Paragraph 3b hereof, the Companyhereby covenants and agrees, subject to the conditions and limitations setforth hereinafter in this Paragraph 3 and elsewhere in this Agreement, toindemnify and hold the Executive harmless if he is or was a party, or isthreatened to be made a party, to any Action by reason of his status as, or thefact that he is or was or has agreed to become, a director or officer of the Company,and/or is or was serving or has agreed to serve as a director or officer of anAffiliate, and/or as to acts performed in the course of the Executive’s duty tothe Company and/or to an Affiliate, against Liabilities and reasonable Expensesincurred by or on behalf of the Executive in connection with any Action,including, without limitation, in connection with the investigation, defense,settlement or appeal of any Action; provided, that it is not determined by theAuthority, or by a court, pursuant to Paragraph 5 that the Executive hasengaged in misconduct which constitutes a Breach of Duty.

 

b.             To theextent the Executive has been successful on the merits or otherwise inconnection with any Action, including, without limitation, the settlement,dismissal, abandonment or withdrawal of any such Action where the Executivedoes not pay, incur or assume any material Liabilities, or in connection withany claim, issue or matter therein, he shall be indemnified by the Companyagainst reasonable Expenses incurred by or on behalf of him in connectiontherewith.  The Company shall pay suchExpenses to the Executive (net of all Expenses, if any, previously advanced tothe Executive pursuant to Paragraph 4), or to such other person or entity asthe Executive may designate in writing to the Company, within ten (10) daysafter the receipt of the Executive’s written request therefor, without regardto the provisions of Paragraph 5.  In theevent the Company refuses to pay such requested Expenses, the Executive may petitiona court to order the Company and the Shareholder to make such payment pursuantto Paragraph 6.

 

c.             Notwithstandingany other provisions contained in this Agreement to the contrary, the Companyshall not:

 

4

----

 

(1)           indemnify,contribute or advance Expenses to the Executive with respect to any Actioninitiated or brought voluntarily by the Executive and not by way of defense,except with respect to Actions:

 

(a)           brought toestablish or enforce a right to indemnification, contribution and/or an advanceof Expenses under Paragraph 6 of this Agreement or under the Statute as it maythen be in effect or any other applicable statute or law or otherwise asrequired;

 

(b)           initiatedor brought voluntarily by the Executive to the extent the Executive issuccessful on the merits or otherwise in connection with such Action inaccordance with and pursuant to Paragraph 3b. of this Agreement; or

 

(c)           as towhich the Board determines it be appropriate.

 

(2)           indemnifythe Executive against judgments, fines or penalties incurred in a DerivativeAction if the Executive is finally adjudged liable to the Company by a court(unless the court before which such Derivative Action was brought determinesthat the Executive is fairly and reasonably entitled to indemnity for any orall of such judgments, fines or penalties); or

 

(3)           indemnifythe Executive under this Agreement for any amounts paid in settlement or anyAction effected without the Company’s written consent.

 

The Company shallnot settle any Action in any manner which would impose any Liabilities or othertype of limitation on the Executive without the Executive’s writtenconsent.  Neither the Company nor theExecutive shall unreasonably withhold their consent to any proposed settlement.

 

d.             TheExecutive’s conduct with respect to an employee benefit plan sponsored by orotherwise associated with the Company and/or an Affiliate for a purpose hereasonably believed to be in the interests of the participants in andbeneficiaries of such plan is conduct which does not constitute a breach orfailure to perform his duties to the Company or an Affiliate, as the case maybe.

 

4.             AdvancePayment of Expenses.

 

a.             TheCompany shall pay to the Executive, or such other person or entity as theExecutive may designate in writing to the Company, in advance of the finaldisposition or conclusion of any Action (or claim, issue or matter associatedwith such Action) the Executive’s reasonable Expenses incurred by or on behalfof the Executive in connection with such Action (or claim, issue or matterassociated with any such Action), within ten (10) days after the receipt ofExecutive’s written request therefor; provided, the following conditions aresatisfied:

 

5

----

 

(1)           theExecutive has first requested an advance of such Expenses in writing (anddelivered a copy of such request to the Company)  from the insurance carrier(s), if any, towhom a claim has been reported under an applicable insurance policy purchasedby the Company and each such insurance carrier, if any, has declined to makesuch an advance;

 

(2)           theExecutive furnishes to the Company an executed written statement affirming hisgood faith belief that he has not engaged in misconduct constituting a Breachof Duty; and

 

(3)           theExecutive furnishes to the Company an executed written agreement to repay anyadvances made under this Paragraph 4 if it is ultimately determined that he isnot entitled to be indemnified by the Company for such Expenses pursuant tothis Agreement.

 

b.             In theevent the Company makes an advance payment of Expenses to the Executivepursuant to this Paragraph 4, the Company shall be subrogated to every right ofrecovery the Executive may have against any insurance carrier from whom theCompany has purchased insurance for such purpose.

 

5.             Determinationof Right to Indemnification.

 

a.             Exceptas otherwise set forth in this Paragraph 5 or in Paragraph 3c, anyindemnification to be provided to the Executive by the Company under Paragraph3a. of this Agreement upon the final disposition or conclusion of any Action,or a claim, issue or matter associated with any such Action, unless otherwiseordered by a court, shall be paid by the Company to the Executive (net of allExpenses, if any, previously advanced to the Executive pursuant to Paragraph4), or to such other person or entity as the Executive may designate in writingto the Company within sixty (60) days after the receipt of Executive’s writtenrequest therefor.  Such request shallinclude an accounting of all amounts for which indemnification is beingsought.  No further corporateauthorization for such payment shall be required other than this Paragraph 5a.

 

b.             Notwithstandingthe foregoing, the payment of such requested indemnifiable amounts pursuant toParagraph 3a may be denied by the Company in the event:

 

(1)           the Boardby a majority vote thereof determines that the Executive engaged in misconductwhich constitutes a Breach of Duty; or

 

(2)           a majorityof the Board are party in interest to such Action.

 

In either event ofnonpayment, the Board shall immediately authorize and direct, by resolution,that an independent determination be made as to whether the Executive engagedin misconduct which constitutes a Breach of Duty and, therefore, whetherindemnification of the Executive is proper pursuant to this Agreement.

 

6

----

 

c.             Suchindependent determination shall be made, at the option of the Executive, by (i)a panel of three arbitrators (selected as set forth in Paragraph 5e from thepanels of arbitrators of the American Arbitration Association) in OrangeCounty, California in accordance with the Commercial Arbitration Rules thenprevailing of the American Arbitration Association; (ii) an independent legalcounsel mutually selected by the Executive and the Board by a majority vote ofa quorum thereof consisting of directors who were not parties in interest tosuch Action (or, if such quorum is not obtainable, by a majority vote of theentire Board); or (iii) a court in accordance with Paragraph 5i of thisAgreement.

 

d.             In anysuch determination there shall exist a rebuttable presumption that theExecutive has not engaged in misconduct which constitutes a Breach of Duty and,therefore, is entitled to indemnification pursuant to this Agreement.  The burden of rebutting such presumption byclear and convincing evidence shall be on the Company, the Shareholder and anyother party challenging such indemnification.

 

e.             In theevent a panel of arbitrators is to be employed hereunder, one of sucharbitrators shall be selected by the Board by a majority vote of a quorumthereof consisting of directors who were not parties in interest to such Action(or, if such quorum is not obtainable, by an independent legal counsel chosenby a majority vote of the entire Board), the second by the Executive and thethird by the previous two arbitrators.

 

f.              TheAuthority shall make its independent determination hereunder within sixty (60)days of being selected and shall simultaneously submit a written opinion of itsconclusions to the Company and the Executive.

 

g.             In theevent the Authority determines that the Executive is entitled to be indemnifiedfor any amounts pursuant to this Agreement, the Company shall pay such amountsto the Executive (net of all Expenses, if any, previously advanced to theExecutive pursuant to Paragraph 4), or to such other person or entity as theExecutive may designate in writing to the Company, within ten (10) days ofreceipt of such opinion.

 

h.             TheExpenses associated with the indemnification process set forth in thisParagraph 5, including, without limitation, the Expenses of the Authorityselected hereunder, shall be paid by the Company.

 

i.              In theevent that the Executive elects to have the independent determination made by acourt pursuant to Paragraph 5c(iii), the following shall apply:

 

(i)                    Ifthe court determines that the Executive has engaged in misconduct whichconstitutes a Breach of Duty, it may nonetheless order indemnification to bepaid by the Company if it determines that the Executive is fairly andreasonably entitled to indemnification in view of all of the circumstances ofsuch Action.

 

7

----

 

(ii)                   Inthe event the court determines that the Executive is entitled to be indemnifiedfor any Liabilities and/or Expenses, or to receive the advancement of Expenses,pursuant to this Agreement, unless otherwise ordered by such court, the Companyshall pay such Liabilities and/or Expenses to the Executive (net of allExpenses, if any, previously advanced to the Executive pursuant to Paragraph4), including reasonable interest thereon as provided in Paragraph 8c, or tosuch other person or entity as the Executive may designate in writing to theCompany, within ten (10) days of the rendering of such determination.

 

(iii)                  TheExecutive shall pay all Expenses incurred by the Executive in connection withany judicial determination provided in this Paragraph 5i, unless it shallultimately be determined by the court that he is entitled, in whole or in part,to be indemnified by, or to receive advances from, the Company as authorized bythis Agreement.  All Expenses incurred bythe Executive in connection with any subsequent appeal of any judicialdetermination provided for in this Paragraph 5i shall be paid by the Executiveregardless of the disposition of such appeal.

 

j.              In theevent the Company does not (a) advance requested Expenses to the Executivewithin ten (10) days of the Executive’s compliance with Paragraph 4; or (b)indemnify the Executive with respect to requested Expenses under Paragraph 3bwithin ten (10) days of Executive’s written request therefor, the Executive maypetition the court before which such Action was brought, if any, or any othercourt of competent jurisdiction to order the Company to pay such reasonableExpenses immediately.  Such court, aftergiving any notice the court considers necessary, shall order the Company to paysuch Expenses if it determines that the Executive has complied with theapplicable provisions of Paragraph 4 or 3b, as the case may be.

 

6.             Terminationof an Action Nonconclusive.  Theadverse termination of any Action against the Executive by judgment, order,settlement, conviction, or upon a plea of no contest or its equivalent, shallnot, of itself, create a presumption that the Executive has engaged inmisconduct which constitutes a Breach of Duty.

 

7.             PartialIndemnification; Reasonableness; Interest.

 

a.             In theevent it is determined by the Authority, or by a court, that the Executive isentitled to indemnification as to some claims, issues or matters, but not as to

 

8

----

 

other claims, issues or matters, involved in any Action, the Authority,or the court, shall authorize the reasonable proration and payment by theCompany of such Liabilities and/or reasonable Expenses, with respect to whichindemnification is sought by the Executive, among such claims, issues ormatters as the Authority, or the court, shall deem appropriate in light of allof the circumstances of such Action.

 

b.             In theevent it is determined by the Authority, or by a court, that certain Expensesincurred by the Executive are for whatever reason unreasonable in amount, theAuthority, or the court, shall nonetheless authorize indemnification to be paidby the Company to the Executive for such Expenses as the Authority, or thecourt, shall deem reasonable in light of all of the circumstances of suchAction.

 

c.             Interestshall be paid by the Company to the Executive, to the extent deemed appropriateby the Authority, or a court, at a reasonable interest rate, for amounts forwhich the Company indemnifies or advances to the Executive.

 

8.             Insurance;Subrogation.

 

a.             TheCompany may purchase and maintain insurance on behalf of the Executive againstany Liability and/or Expense asserted against him and/or incurred by or onbehalf of him in such capacity as an executive or other employee or agent ofthe Company and/or of an Affiliate, or arising out of his status as such,whether or not the Company would have the power to indemnify him against suchLiability or advance of Expenses under the provisions of this Agreement orunder the Statute as it may then be in effect. Except as expressly provided herein, the purchase and maintenance ofsuch insurance shall not in any way limit or affect the rights and obligationsof the Company and/or the Executive under this Agreement and the execution anddelivery of this Agreement by the Company and the Executive shall not in anyway be construed to limit or affect the rights and obligations of the Companyand/or of the other party or parties thereto under any such policy or agreementof insurance.

 

b.             In theevent the Executive shall receive payment from any insurance carrier and/orfrom the plaintiff in any Action against the Executive in respect ofindemnified amounts after payments on account of all or part of suchindemnified amounts have been made by the Company pursuant to this Agreement,the Executive shall promptly reimburse the Company for the amount, if any, bywhich the sum of such payment by such insurance carrier and/or such plaintiffand payments by the Company to the Executive exceeds such indemnified amounts;provided, however, that such portions, if any, of such insurance proceeds thatare required to be reimbursed to the insurance carrier under the terms of itsinsurance policy, such as co-insurance, retention or deductible amounts, shallnot be deemed to be payments to the Executive hereunder.

 

c.             Inaddition, upon payment of indemnified amounts under this Agreement, the Companyshall be subrogated to the Executive’s right against any insurance carrier inrespect of such indemnified amounts and the Executive shall execute and deliverany

 

9

----

 

and all instruments and/or documents and perform any and all other actsor deeds which the Company deems necessary or advisable to secure suchrights.  The Executive shall do nothingto prejudice such rights of recovery or subrogation.

 

9.             WitnessExpenses.  The Company shall pay inadvance or reimburse any and all reasonable Expenses incurred by the Executivein connection with his appearance as a witness in any Action at a time when hehas not been formally named a defendant or respondent to such an Action, withinten (10) days after the receipt of the Executive’s written request therefor.

 

10.           Contribution.

 

a.             Subjectto the limitations of this Paragraph 10, in the event the indemnity providedfor in Paragraph 3 of this Agreement is unavailable to the Executive for anyreason whatsoever, the Company, in lieu of indemnifying the Executive, shallcontribute to the amount incurred by or on behalf of the Executive, whether forLiabilities and/or for reasonable Expenses in connection with any Action, insuch proportion as is deemed fair and reasonable by the Authority, or by acourt, in light of all of the circumstances of such Action in order to reflect:

 

(1)           therelative benefits received by the Company and the Executive as a result of theevent(s) and/or transaction(s) giving cause to such Action; and/or

 

(2)           therelative fault of the Company (and its other executives, employees and/oragents) and the Executive in connection with such event(s) and/or transaction(s).

 

b.             Therelative fault of the Company (and its other executives, employees and/oragents), on the one hand, and of the Executive, on the other hand, shall bedetermined by reference to among other things, the parties’ relative intent,knowledge, access to information and opportunity to correct or prevent thecircumstances resulting in such Liabilities and/or Expenses.  The Company and the Executive agree that itwould not be just and equitable if contribution pursuant to this Paragraph 10were determined by pro rata allocation or any other method of allocation whichdoes not take into account the foregoing equitable considerations.

 

c.             TheExecutive shall not be entitled to contribution from the Company under thisParagraph 10 in the event it is determined by the Authority, or by a court,that the Executive engaged in misconduct which constitutes a Breach of Duty,unless a court otherwise determines.

 

d.             TheCompany’s payment of, and the Executive’s right to, contribution under thisParagraph 10 shall be made and determined in accordance with, pursuant to andin the same manner as, the provisions in Paragraph 5 and/or 6 hereof relatingto the Company’s payment of, and the Executive’s right to, indemnificationunder this Agreement.

 

10

----

 

11.           Nonexclusivityof Agreement.  The rights toindemnification, contribution and the advancement of Expenses provided to theExecutive by this Agreement shall not be deemed exclusive of any other rightsto which the Executive may be entitled under any charter provision, bylaw,agreement, resolution, vote of stockholders or disinterested directors of theCompany or otherwise, including, without limitation, under the Statute as itmay then be in effect, both as to acts in his official capacity as suchexecutive or other employee or agent of the Company and/or of an Affiliate oras to acts in any other capacity while holding such office or position, whetheror not the Company would otherwise have the power to indemnify, contribute oradvance Expenses to the Executive.

 

12.           Noticeto the Company; Defense of Actions.

 

a.             TheExecutive agrees to promptly notify the Company in writing upon being servedwith or having actual knowledge of any citation, summons, complaint, indictmentor any other similar document relating to any Action which may result in aclaim of indemnification, contribution or advancement of Expenses hereunder,but the omission so to notify the Company will not relieve the Company from anyliability which it may have to the Executive otherwise than under thisAgreement unless the Company shall have been irreparably prejudiced by suchomission.

 

b.             Withrespect to any such Action as to which the Executive notifies the Company ofthe commencement thereof:

 

(1)           The Companyshall be entitled to participate therein at its own expense; and

 

(2)           Except asotherwise provided below, to the extent that it may wish, the Company (or anyother indemnifying party, including any insurance carrier, similarly notifiedby the Executive and/or the Company) shall be entitled to assume the defensethereof, with counsel selected by the Company (or such other indemnifyingparty) and reasonably satisfactory to the Executive.

 

c.             Afternotice from the Company (or such other indemnifying party) to the Executive ofits election to assume the defense of an Action, the Company shall not beliable to the Executive under this Agreement for any Expenses subsequentlyincurred by the Executive in connection with the defense thereof other thanreasonable costs of investigation or as otherwise provided below.  The Executive shall have the right to employhis counsel in such Action but the Expenses of such counsel incurred afternotice from the Company (or such other indemnifying party) of its assumption ofthe defense thereof shall be at the expense of the Executive unless (i) theemployment of counsel by the Executive has been authorized by the Company; (ii)the Executive shall have reasonably concluded that there may be a conflict ofinterest between the Company (or such other indemnifying party) and theExecutive in the conduct of the defense of such Action; or (iii) the Company(or such other indemnifying party) shall not in fact have employed counsel toassume the defense of such Action, in each of which

 

11

----

 

cases the Expenses of counsel shall be at the expense of theCompany.  The Company shall not beentitled to assume the defense of any Derivative Action or any Action as towhich the Executive shall have made the conclusion provided for in clause (ii)above.

 

13.           Continuationof Rights and Obligations.  Subjectto Paragraph 15, the terms and provisions of this Agreement shall continue asto the Executive subsequent to the Termination Date, and such terms andprovisions shall inure to the benefit of the heirs, executors, estate andadministrators of the Executive and the successors and assigns of the Company,including, without limitation, any successor to the Company by way of merger,consolidation and/or sale or disposition of all or substantially all of theassets or capital stock of the Company. Except as provided herein, all rights and obligations of the Company andthe Executive hereunder shall continue in full force and effect despite thesubsequent amendment or modification of the Company’s Certificate ofIncorporation or bylaws, as such are in effect on the date hereof, and suchrights and obligations shall not be affected by any such amendment ormodification, any resolution of directors or stockholders of the Company, or byany other corporate action which conflicts with or purports to amend, modify,limit or eliminate any of the rights or obligations of the Company and/or ofthe Executive hereunder.

 

14.           Amendment.  This Agreement may only be amended, modifiedor supplemented by the written agreement of the Company and the Executive.

 

15.           Assignment.  This Agreement shall not be assigned by theCompany or the Executive without the prior written consent of the other partyhereto, except that the Company may freely assign its rights and obligationsunder this Agreement to any Affiliate for whom the Executive is serving as anexecutive thereof; provided, however, that no permitted assignment shallrelease the Company from its obligations hereunder.

 

16.           GoverningLaw.  All matters with respect tothis Agreement, including, without limitation, matters of validity,construction, effect and performance shall be governed by the internal laws ofthe State of Delaware applicable to contracts made and to be performed thereinbetween the residents thereof (regardless of the laws that might otherwise beapplicable under principles of conflicts of law).

 

17.           Counterparts.  This Agreement may be executed in two or morefully or partially executed counterparts each of which shall be deemed anoriginal binding the signer thereof against the other signing parties, but allcounterparts together shall constitute one and the same instrument.  Executed signature pages may be removed fromcounterpart agreements and attached to one or more fully executed copies ofthis Agreement.

 

18.           Headings.  The headings used in this Agreement are forconvenience and reference purposes only and shall not affect in any way themeaning or interpretation of this Agreement.

 

19.           Severability. If any provision of this Agreement shallbe deemed invalid or inoperative, or in the event a court of competent jurisdictiondetermines that any of the

 

12

----

 

provisions of this Agreement contravene public policy in any way, thisAgreement shall be construed so that the remaining provisions shall not beaffected, but shall remain in full force and effect, and any such provisionswhich are invalid or inoperative or which contravene public policy shall bedeemed, without further action or deed on the part of any person, to bemodified, amended and/or limited, but only to the limited extent necessary torender the same valid and enforceable, and the Company shall indemnify and holdharmless the Executive against Liabilities and reasonable Expenses with respectto any Action to the fullest extent permitted by any applicable provision ofthis Agreement that shall not have been invalidated and otherwise to thefullest extent otherwise permitted by the Statute as it may then be in effect.

 

20.           Notices.  All notices, requests, demands and othercommunications required or permitted hereunder shall be in writing and shall bedeemed to have been duly given when delivered by hand or when mailed bycertified registered mail, return receipt requested, with postage prepaid:

 

If to the Executive, to his or her address as setforth on the signature page below.

or to such otherperson or address which the Executive shall furnish to the Company in writingpursuant to the above.

 

If to the Company, to:

 

LiquidmetalTechnologies, Inc.

25800 CommercentreDr.

Suite 100

Lake Forest,California 92630Attention:  ChiefExecutive Officer

 

or to such otherperson or address as the Company shall furnish to the Executive in writingpursuant to the above.

 

13

----

 

IN WITNESS WHEREOF, the parties hereto have causedthis Agreement to be duly executed, all as of the day and year first abovewritten.

 

LIQUIDMETALTECHNOLOGIES, INC.

(“Company”)

 
| By:    |                                              |   |
|--------|---------------------------------------------------|--------|
|   | John Kang,  President and Chief Executive Officer |
|        |                                                   |        |  |

 

 
| EXECUTIVE |   |
|-----------|--------|
|      |
| Sign:     |   |   |
|      |
| Name:     |   |   |
|      |
| Address:  |   |   |
|      |   |
|      |   |
|           |        |  |  |  |

 

 

14

----