**Exhibit 10.3**

 

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATESSECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATEPURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDERTHE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THIS WARRANT SHALL NOT CONSTITUTE AN OFFER TOSELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTIONIN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.  THE SECURITIES ARE “RESTRICTED” AND MAY NOTBE RESOLD OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TOREGISTRATION OR EXEMPTION THEREFROM.

 

**COMMON STOCK PURCHASE WARRANT**

 

To Purchase Shares of $0.001 Par Value Common Stock (“Common Stock”) of

 

**LIQUIDMETAL TECHNOLOGIES, INC.**

 

THIS CERTIFIES that, for value received,                                                           (the “**Purchaser**” or “**Holder**”)is entitled, upon the terms and subject to the conditions hereinafter setforth, at any time on or after the date hereof and on or prior to 8:00 p.m.New York City Time on August 2, 2010 (the “**TerminationDate**”), but not thereafter, to subscribe for and purchase fromLiquidmetal Technologies, Inc., a Delaware corporation (the “**Company**”), up to                shares of Common Stock (the “**Warrant****Shares**”) at an Exercise Price equal to $2.00 per share (asadjusted from time to time pursuant to the terms hereof, the “**Exercise****Price**”).  The Exercise Price and the number of sharesfor which the Warrant is exercisable shall be subject to adjustment as providedherein.

 

This Warrant is being issued in connection with a private placementoffering (the “**Private Placement**”) by the Companyof 7% Senior Secured Convertible Notes (the “**Notes**”)being sold only to accredited investors. This Warrant is identical to all other Warrants issued in the PrivatePlacement, except for the number of Warrant Shares issuable hereunder.  This Warrant is specifically being issued inconnection with the Securities Purchase Agreement dated August 2, 2005(the “**Purchase Agreement**”), entered intobetween the Company and the Purchaser. Capitalized terms used herein and not otherwise defined shall have themeaning ascribed thereto in the Purchase Agreement.

 

1.                                       Titleof Warrant.  Prior to the expirationhereof and subject to compliance with applicable laws, this Warrant and allrights hereunder are transferable, in whole or in part, at the office or agencyof the Company by the Holder hereof in person or by duly authorized attorney,upon surrender of this Warrant together with (a) the Assignment Form annexedhereto properly endorsed, and (b) any other documentation reasonablynecessary to satisfy the Company that such transfer is in compliance with allapplicable securities laws.  The term “**Holder**” shall refer to the Purchaser or any subsequenttransferee of this Warrant.

 

2.                                       Authorizationof Shares.  The Company covenantsthat all shares of Common Stock which may be issued upon the exercise of rightsrepresented by this Warrant will, upon exercise of the rights represented by thisWarrant and payment of the Exercise Price as set forth herein (unless theHolder exercises this Warrant through a cashless exercise, as

 

----

 

providedin Section 3(b) hereof), be duly authorized, validly issued, fullypaid and nonassessable and free from all taxes, liens and charges in respect ofthe issue thereof (other than taxes in respect of any transfer occurringcontemporaneously with such issue or otherwise specified herein).

 

3.                                       Exerciseof Warrant.

 

(a)                                  TheHolder may exercise this Warrant, in whole or in part, at any time and fromtime to time, by delivering (which may be by facsimile) to the offices of theCompany or any transfer agent for the Common Stock this Warrant, together witha Notice of Exercise in the form annexed hereto specifying the number ofWarrant Shares with respect to which this Warrant is being exercised, togetherwith payment to the Company of the Exercise Price therefor (unless the Holderexercises this Warrant through a cashless exercise, as provided in Section 3(b) hereof).

 

(b)                                 ThisWarrant may also be exercised by the Holder through a cashless exercise, asdescribed in this Section 3(b). This Warrant may be exercised, in whole or in part, by (i) thedelivery to the Company of a duly executed Notice of Exercise specifying thenumber of Warrant Shares to be applied to such exercise, and (ii) thesurrender to a common carrier for overnight delivery to the Company, or as soonas practicable following the date the Holder delivers the Notice of Exercise tothe Company, of this Warrant (or an indemnification undertaking with respect tothis Warrant in the case of its loss, theft or destruction).  The number of shares of Common Stock to beissued upon exercise of this Warrant pursuant to this Section 3(b) shallequal the value of this Warrant (or the portion thereof being canceled)computed as of the date of delivery of this Warrant to the Company using thefollowing formula:

 

X = Y(A-B)/A

 

where:

 

X =the number of shares of Common Stock to be issued to the Holder under this Section 3(b);

Y =the number of Warrant Shares identified in the Notice of Exercise as beingapplied to the subject exercise;

A =the Fair Market Value price per share on such date; and

B =the Exercise Price on such delivery date

 

The Company acknowledges and agrees that this Warrant was issued forconsideration received on the date on which this Warrant was granted.  Consequently, the Company acknowledges andagrees that, if the Holder conducts a cashless exercise pursuant to this Section 3(b),the period during which the Holder held this Warrant may, for purposes of Rule 144promulgated under the Securities Act of 1933, as amended (the “**Act**”), be “tacked” to the period duringwhich the Holder holds the Warrant Shares received upon such cashless exercise.

 

2

----

 

Notwithstanding the foregoing, the Holder may conduct a cashlessexercise pursuant to this Section 3(b) only in the event that aregistration statement covering the resale of the Warrant Shares is not then effectiveat the time that the Holder wishes to conduct such cashless exercise.

 

(c)                                  Inthe event that the Warrant is not exercised in full, the number of WarrantShares shall be reduced by the number of such Warrant Shares for which thisWarrant is exercised and/or surrendered, and the Company, if requested byHolder and at its expense, shall within three (3) Trading Days (as definedbelow) issue and deliver to the Holder a new Warrant of like tenor in the nameof the Holder or as the Holder (upon payment by Holder of any applicabletransfer taxes) may request, reflecting such adjusted Warrant Shares.  Notwithstanding anything to the contrary setforth herein, upon exercise of any portion of this Warrant in accordance withthe terms hereof, the Holder shall not be required to physically surrender thisWarrant to the Company unless such Holder is purchasing the full amount ofWarrant Shares represented by this Warrant. The Holder and the Company shall maintain records showing the number ofWarrant Shares so purchased hereunder and the dates of such purchases or shalluse such other method, reasonably satisfactory to the Holder and the Company,so as not to require physical surrender of this Warrant upon each suchexercise.  The Holder and any assignee,by acceptance of this Warrant or a new Warrant, acknowledge and agree that, byreason of the provisions of this Section, following exercise of any portion ofthis Warrant, the number of Warrant Shares which may be purchased upon exerciseof this Warrant may be less than the number of Warrant Shares set forth on theface hereof.

 

Certificates for shares of Common Stock purchased hereunder shall bedelivered to the Holder hereof within three (3) Trading Days after thedate on which this Warrant shall have been exercised as aforesaid.  The Holder may withdraw its Notice ofExercise at any time if the Company fails to timely deliver the relevantcertificates to the Holder as provided in this Agreement.  A Notice of Exercise shall be deemed sent onthe date of delivery if delivered before 8:00 p.m. New York Time on suchdate, or the day following such date if delivered after 8:00 p.m. New YorkTime; provided that the Company is only obligated to deliver Warrant Sharesagainst delivery of the Exercise Price from the holder hereof (unless theHolder exercises this Warrant through a cashless exercise, as provided in Section 3(b) hereof)and surrender of this Warrant (or appropriate affidavit and/or indemnity inlieu thereof).

 

In lieu of delivering physical certificates representing the WarrantShares issuable upon exercise of this Warrant, provided the Company’s transferagent is participating in the Depository Trust Company (“**DTC**”)Fast Automated Securities Transfer (“**FAST**”) program,upon request of the Holder, the Company shall use its best efforts to cause itstransfer agent to electronically transmit the Warrant Shares issuable uponexercise to the Holder, by crediting the account of the Holder’s prime brokerwith DTC through its Deposit Withdrawal Agent Commission (“**DWAC**”)system. The time periods for delivery described above shall apply to theelectronic transmittals through the DWAC system. The Company agrees tocoordinate with DTC to accomplish this objective.

 

3

----

 

(d)                                 Theterm “**Trading Day**” means (x) if the CommonStock is not listed on the New York or American Stock Exchange but sale pricesof the Common Stock are reported on Nasdaq National Market or another automatedquotation system, a day on which trading is reported on the principal automatedquotation system on which sales of the Common Stock are reported, (y) if theCommon Stock is listed on the New York Stock Exchange or the American StockExchange, a day on which there is trading on such stock exchange, or (z) if theforegoing provisions are inapplicable, a day on which quotations are reportedby National Quotation Bureau Incorporated.

 

4.                                       NoFractional Shares or Scrip.  Nofractional shares or scrip representing fractional shares shall be issued uponthe exercise of this Warrant.  In lieu ofissuance of a fractional share upon any exercise hereunder, the Company willeither round up to nearest whole number of shares or pay the cash value of thatfractional share, which cash value shall be calculated on the basis of theaverage closing price of the Common Stock during the five (5) Trading Daysimmediately preceding the date of exercise.

 

5.                                       Charges,Taxes and Expenses.  Issuance ofcertificates for shares of Common Stock upon the exercise of this Warrant shallbe made without charge to the Holder hereof for any issue or transfer tax orother incidental expense in respect of the issuance of such certificate, all ofwhich taxes and expenses shall be paid by the Company, and such certificatesshall be issued in the name of the Holder of this Warrant or in such name ornames as may be directed by the Holder of this Warrant; provided, however,that in the event certificates for shares of Common Stock are to be issued in aname other than the name of the Holder of this Warrant, this Warrant whensurrendered for exercise shall be accompanied by the Assignment Form attachedhereto duly executed by the Holder hereof; and providedfurther,that the Company shall not be required to pay any tax or taxes which may bepayable in respect of any transfer involved in the issuance of any Warrantcertificates or any certificates for the Warrant Shares other than the issuanceof a Warrant Certificate to the Holder in connection with the Holder’ssurrender of a Warrant Certificate upon the exercise of all or less than all ofthe Warrants evidenced thereby.

 

6.                                       Closingof Books.  The Company will at notime close its shareholder books or records in any manner which interferes withthe timely exercise of this Warrant.

 

7.                                       NoRights as Shareholder until Exercise. Subject to Section 12 of this Warrant and the provisions of anyother written agreement between the Company and the Purchaser, the Purchasershall not be entitled to vote or receive dividends or be deemed the holder ofWarrant Shares or any other securities of the Company that may at any time beissuable on the exercise hereof for any purpose, nor shall anything containedherein be construed to confer upon the Purchaser, as such, any of the rights ofa stockholder of the Company or any right to vote for the election of directorsor upon any matter submitted to stockholders at any meeting thereof, or to giveor withhold consent to any corporate action (whether upon any recapitalization,issuance of stock, reclassification of stock, change of par value, or change ofstock to no par value, consolidation, merger, conveyance or otherwise) or toreceive notice of meetings, or to receive dividends or subscription rights orotherwise until the Warrant shall have been exercised as provided

 

4

----

 

herein.  However, at the time of the exercise of thisWarrant pursuant to Section 3 hereof, the Warrant Shares so purchasedhereunder shall be deemed to be issued to such Holder as the record owner ofsuch shares as of the close of business on the date on which this Warrant shallhave been exercised.

 

8.                                       Assignmentand Transfer of Warrant.  ThisWarrant may be assigned by the surrender of this Warrant and the Assignment Form annexedhereto duly executed at the office of the Company (or such other office oragency of the Company or its transfer agent as the Company may designate bynotice in writing to the registered Holder hereof at the address of such Holderappearing on the books of the Company); provided, however, thatthis Warrant may not be resold or otherwise transferred except (i) in atransaction registered under the Act, or (ii) in a transaction pursuant toan exemption, if available, from registration under the Act and whereby, ifreasonably requested by the Company, an opinion of counsel reasonablysatisfactory to the Company is obtained by the Holder of this Warrant to theeffect that the transaction is so exempt.

 

9.                                       Loss,Theft, Destruction or Mutilation of Warrant; Exchange.  The Company represents, warrants andcovenants that (a) upon receipt by the Company of evidence and/orindemnity reasonably satisfactory to it of the loss, theft, destruction ormutilation of any Warrant or stock certificate representing the Warrant Shares,and in case of loss, theft or destruction, of indemnity reasonably satisfactoryto it, and (b) upon surrender and cancellation of such Warrant or stockcertificate, if mutilated, the Company will make and deliver a new Warrant orstock certificate of like tenor and dated as of such cancellation, in lieu ofthis Warrant or stock certificate, without any charge therefor.  This Warrant is exchangeable at any time foran equal aggregate number of Warrants of different denominations, as requestedby the holder surrendering the same, or in such denominations as may berequested by the Holder following determination of the Exercise Price.  No service charge will be made for suchregistration or transfer, exchange or reissuance.

 

10.                                 Saturdays,Sundays, Holidays, etc.  If the lastor appointed day for the taking of any action or the expiration of any rightrequired or granted herein shall be a Saturday, Sunday or a legal holiday, thensuch action may be taken or such right may be exercised on the next succeedingday not a legal holiday.

 

11.                                 Effectof Certain Events. If at any time while this Warrant or any portion thereofis outstanding and unexpired there shall be a transaction (by merger orotherwise) in which more than 50% of the voting power of the Company isdisposed of (collectively, a “**Sale or Merger Transaction**”),the Holder of this Warrant shall have the right thereafter to purchase, byexercise of this Warrant and payment of the aggregate Exercise Price in effectimmediately prior to such action (unless the Holder exercises this Warrantthrough a cashless exercise, as provided in Section 3(b) hereof), thekind and amount of shares and other securities and property which it would haveowned or have been entitled to receive after the happening of such transactionhad this Warrant been exercised immediately prior thereto, subject to furtheradjustment as provided in Section 12.

 

5

----

 

12.                                 Adjustmentsof Exercise Price and Number of Warrant Shares.

 

The number of and kind of securities purchasable upon exercise of thisWarrant and the Exercise Price (as well as the maximum exercise price) shall besubject to adjustment from time to time as set forth in this Section 12.

 

(a)                                  Subdivisions,Combinations, Stock Dividends and other Issuances.   If the Company shall, at any time while thisWarrant is outstanding, (A) pay a stock dividend or otherwise make adistribution or distributions on any equity securities (including instrumentsor securities convertible into or exchangeable for such equity securities) inshares of Common Stock, (B) subdivide outstanding shares of Common Stockinto a larger number of shares, or (C) combine outstanding Common Stockinto a smaller number of shares, then the Exercise Price (and maximum exerciseprice) shall be adjusted such that the Exercise Price, as adjusted, will beequal to the Exercise Price then in effect multiplied by a fraction, thenumerator of which shall be the number of shares of Common Stock outstandingbefore such event and the denominator of which shall be the number of shares ofCommon Stock outstanding after such event. Any adjustment made pursuant to this Section 12(a) shallbecome effective immediately after the record date for the determination ofstockholders entitled to receive such dividend or distribution and shall becomeeffective immediately after the effective date in the case of a subdivision orcombination.  The number of shares whichmay be purchased hereunder shall be increased proportionately to any reductionin Exercise Price pursuant to this paragraph 12(a), so that after suchadjustments the aggregate Exercise Price payable hereunder for the increasednumber of shares shall be the same as the aggregate Exercise Price in effectjust prior to such adjustments.

 

(b)                                 OtherDistributions. If at any time after the date hereof the Company distributesto holders of its Common Stock, other than as part of its dissolution,liquidation or the winding up of its affairs, any shares of its capital stock,any evidence of indebtedness or any of its assets (other than Common Stock),then the number of Warrant Shares for which this Warrant is exercisable shallbe increased to equal: (i) the number of Warrant Shares for which thisWarrant is exercisable immediately prior to such event, (ii) multiplied bya fraction, (A) the numerator of which shall be the Fair Market Value (asdefined below) per share of Common Stock on the record date for the dividend ordistribution, and (B) the denominator of which shall be the Fair MarketValue price per share of Common Stock on the record date for the dividend ordistribution minus the amount allocable to one share of Common Stock of thevalue (as jointly determined in good faith by the Board of Directors of theCompany and the Holder) of any and all such evidences of indebtedness, sharesof capital stock, other securities or property, so distributed.  For purposes of this Warrant, “**Fair Market Value**” shall equal the average closing trading price of the Common Stock on the Principal Market(as defined in the Purchase Agreement) for the 5 Trading Days preceding thedate of determination or, if the Common Stock is not listed or admitted totrading on any Principal Market, and the average price cannot be determined ascontemplated above, the Fair Market Value of the Common Stock shall be asreasonably determined in good faith by the Company’s Board

 

6

----

 

of Directors and the Holder.  In the event of any adjustment pursuant tothis Section, the Exercise Price shall be reduced to equal: (i) theExercise Price in effect immediately before the occurrence of any such event (ii) multipliedby a fraction, (A) the numerator of which is the number of Warrant Sharesfor which this Warrant is exercisable immediately before the adjustment, and (B) thedenominator of which is the number of Warrant Shares for which this Warrant isexercisable immediately after the adjustment.

 

(c)                                  Merger,etc. If at any time after the date hereof there shall be a merger orconsolidation of the Company with or into or a transfer of all or substantiallyall of the assets of the Company to another entity, then the Holder shall beentitled to receive upon or after such transfer, merger or consolidationbecoming effective, and upon payment of the Exercise Price then in effect, thenumber of shares or other securities or property of the Company or of thesuccessor corporation resulting from such merger or consolidation, which wouldhave been received by the Holder for the shares of stock subject to thisWarrant had this Warrant been exercised just prior to such transfer, merger orconsolidation becoming effective or to the applicable record date thereof, asthe case may be.  The Company will notmerge or consolidate with or into any other corporation, or sell or otherwisetransfer its property, assets and business substantially as an entirety toanother corporation, unless the corporation resulting from such merger orconsolidation (if not the Company), or such transferee corporation, as the casemay be, shall expressly assume in writing the due and punctual performance andobservance of each and every covenant and condition of this Warrant to beperformed and observed by the Company.

 

(d)                                 Reclassification,etc.  If at any time after the datehereof there shall be a reorganization or reclassification of the securities asto which purchase rights under this Warrant exist into the same or a differentnumber of securities of any other class or classes, then the Holder shallthereafter be entitled to receive upon exercise of this Warrant, during theperiod specified herein and upon payment of the Exercise Price then in effect,the number of shares or other securities or property resulting from suchreorganization or reclassification, which would have been received by theHolder for the shares of stock subject to this Warrant had this Warrant at suchtime been exercised.

 

(e)                                  ExercisePrice Adjustment.  In the event thaton or subsequent to the Closing Date, the Company issues or sells any CommonStock, any securities which are convertible into or exchangeable for its CommonStock or any convertible securities, or any warrants or other rights tosubscribe for or to purchase or any options for the purchase of its CommonStock or any such convertible securities (other than (A) pursuant to warrants, convertiblenotes, or other Convertible Securities (as defined herein) issued prior to thegrant date of this Warrant, (B) pursuant to warrants or convertible notesgranted pursuant to the Purchase Agreement, (C) shares of Common Stock oroptions to purchase such shares issued to employees, consultants, officers ordirectors in accordance with stock plans approved by the Board of Directors,and shares of Common Stock issuable under options or warrants that areoutstanding as of the date of the Purchase Agreement, (D) shares of CommonStock issued pursuant to a stock dividend, split or other similar transaction,and (E) shares of Common Stock issued at a price not less than the averageclosing price per

 

7

----

 

share of Common Stock for the 5Trading Days immediately preceding the date of issuance, to Growell Metal Co.,Ltd. pursuant to the Settlement Agreement, dated on or about January 10,2004, between Growell Metal Co., Ltd. and the Company’s South Korean subsidiary)at an effective price per share which is less than the Exercise Price, then theExercise Price in effect immediately prior to such issue or sale shall bereduced effective concurrently with such issue or sale to an amount determinedby multiplying the Exercise Price then in effect by a fraction, (x) thenumerator of which shall be the sum of (1) the number of shares of CommonStock outstanding immediately prior to such issue or sale, plus (2) thenumber of shares of Common Stock which the aggregate consideration received bythe Company for such additional shares would purchase at the Exercise Pricethen in effect; and (y) the denominator of which shall be the number of sharesof Common Stock of the Company outstanding immediately after such issue orsale.

 

For the purposes of the foregoing adjustments, in the case of theissuance of any convertible securities, warrants, options or other rights tosubscribe for or to purchase or exchange for, shares of Common Stock (**“Convertible Securities”**), the maximum number of shares ofCommon Stock issuable upon exercise, exchange or conversion of such ConvertibleSecurities shall be deemed to be outstanding, provided that no furtheradjustment shall be made upon the actual issuance of Common Stock uponexercise, exchange or conversion of such Convertible Securities.

 

(f)                                    Inthe event of any adjustment in the number of Warrant Shares issuable hereunderupon exercise, the Exercise Price shall be inversely proportionately increasedor decreased as the case may be, such that aggregate purchase price for WarrantShares upon full exercise of this Warrant shall remain the same.  Similarly, in the event of any adjustment inthe Exercise Price, the number of Warrant Shares issuable hereunder uponexercise shall be inversely proportionately increased or decreased as the casemay be, such that aggregate purchase price for Warrant Shares upon fullexercise of this Warrant shall remain the same.

 

 13.                              VoluntaryAdjustment by the Company.  TheCompany may at its option, at any time during the term of this Warrant, reducebut not increase the then current Exercise Price to any amount and for anyperiod of time deemed appropriate by the Board of Directors of the Company.

 

14.                                 Noticeof Adjustment.  Whenever the numberof Warrant Shares or number or kind of securities or other property purchasableupon the exercise of this Warrant or the Exercise Price (or maximum exerciseprice) is adjusted, the Company shall promptly mail to the Holder of thisWarrant a notice setting forth the number of Warrant Shares (and othersecurities or property) purchasable upon the exercise of this Warrant and theExercise Price of such Warrant Shares after such adjustment and setting forththe computation of such adjustment and a brief statement of the facts requiringsuch adjustment.

 

15.                                 AuthorizedShares.  The Company covenants thatduring the period the Warrant is outstanding and exercisable, it will reservefrom its authorized and unissued Common

 

8

----

 

Stocka sufficient number of shares to provide for the issuance of the Warrant Sharesupon the exercise of any and all purchase rights under this Warrant.  The Company further covenants that itsissuance of this Warrant shall constitute full authority to its officers whoare charged with the duty of executing stock certificates to execute and issuethe necessary certificates for the Warrant Shares upon the exercise of thepurchase rights under this Warrant.  TheCompany will take all such reasonable action as may be necessary to assure thatsuch Warrant Shares may be issued as provided herein without violation of anyapplicable law, regulation, or rule of any applicable market or exchange.

 

16.                                 Compliancewith Securities Laws.

 

(a)                                  TheHolder hereof acknowledges that the Warrant Shares acquired upon the exerciseof this Warrant, if not registered (or if no exemption from registrationexists), will have restrictions upon resale imposed by state and federalsecurities laws.  Each certificaterepresenting the Warrant Shares issued to the Holder upon exercise (if notregistered, for resale or otherwise, or if no exemption from registrationexists) will bear substantially the following legend:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTEREDWITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANYSTATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BEOFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO ANEFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO ANAVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATESECURITIES LAWS.

 

(b)                                 Withoutlimiting the Purchaser’s right to transfer, assign or otherwise convey theWarrant or Warrant Shares in compliance with all applicable securities laws,the Holder of this Warrant, by acceptance hereof, acknowledges that thisWarrant and the Warrant Shares to be issued upon exercise hereof are beingacquired solely for the Purchaser’s own account and not as a nominee for anyother party, and that the Purchaser will not offer, sell or otherwise dispose ofthis Warrant or any Warrant Shares to be issued upon exercise hereof exceptunder circumstances that will not result in a violation of applicable federaland state securities laws.

 

17.                                 Miscellaneous.

 

(a)                                  IssueDate; Choice of Law; Venue; Jurisdiction. The provisions of this Warrant shall be construed and shall be giveneffect in all respects as if it had been issued and delivered by the Company onthe date hereof.  This Warrant shall bebinding upon any successors or assigns of the Company.  This Warrant will be construed and enforcedin accordance with and governed by the laws of the State of New York, exceptfor matters arising under the

 

9

----

 

Act,without reference to principles of conflicts of law.  Each of the parties consents to the exclusivejurisdiction of the Federal and State Courts sitting in the County of New Yorkin the State of New York in connection with any dispute arising under thisWarrant and hereby waives, to the maximum extent permitted by law, anyobjection, including any objection based on forumnonconveniensor venue, to the bringing of any such proceeding in such jurisdiction.  EACH PARTY HERETO WAIVES THE RIGHT TO A TRIALBY JURY.

 

(b)                                 Modificationand Waiver.  This Warrant and any provisionshereof may be changed, waived, discharged or terminated only by an instrumentin writing signed by the party against which enforcement of the same issought.  Any amendment effected inaccordance with this paragraph shall be binding upon the Purchaser, each futureholder of this Warrant and the Company. No waivers of, or exceptions to, any term, condition or provision ofthis Warrant, in any one or more instances, shall be deemed to be, or construedas, a further or continuing waiver of any such term, condition or provision.

 

(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 such notice.  The addresses for such communications shallbe to the addresses as shown on the books of the Company or to the Company atthe address set forth in the Purchase Agreement.  A party may from time to time change theaddress to which notices to it are to be delivered or mailed hereunder bynotice in accordance with the provisions of this Section 17(c).

 

(d)                                 Severability.  Whenever possible, each provision of thisWarrant shall be interpreted in such manner as to be effective and valid underapplicable law, but if any provision of this Warrant is held to be invalid,illegal or unenforceable in any respect under any applicable law or rule inany jurisdiction, such invalidity, illegality or unenforceability shall notaffect the validity, legality or enforceability of any other provision of thisWarrant in such jurisdiction or affect the validity, legality or enforceabilityof any provision in any other jurisdiction, but this Warrant shall be reformed,construed and enforced in such jurisdiction as if such invalid, illegal or unenforceableprovision had never been contained herein.

 

(e)                                  SpecificEnforcement.  The Company and theHolder acknowledge and agree that irreparable damage would occur in the eventthat any of the provisions of this Warrant were not performed in accordancewith their specific terms or were otherwise breached.  It is accordingly agreed that the partiesshall be entitled to an injunction or injunctions to prevent or cure breachesof the provisions of this Warrant and to enforce specifically the terms andprovisions hereof, this being in addition to any other remedy to which eitherof them may be entitled by law or equity.

 

10

----

 

(f)                                    Registration.  The Warrant Shares underlying this Warrantwill be subject to a Registration Rights Agreement to be entered into betweenthe Company and the Holder, in such form as shall be reasonably satisfactory tothe Company and the Holder.

 

*[Signature Page Follows]*

 

11

----

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executedby its officers thereunto duly authorized.

 

Dated:  August 2, 2005

 
|   | LIQUIDMETAL  TECHNOLOGIES, INC. |
|--------|---------------------------------|
|   |                            |
|   |                            |
|   | By:                             |   |   |
|   |                            | John Kang |
|   |                            | President and  Chief Executive Officer |

 

12

----

 

NOTICE OF EXERCISE

 

To:                              LiquidmetalTechnologies, Inc.

 

(1)                                  Theundersigned hereby elects to exercise the attached Warrant for and to purchasethereunder,               shares of Common Stock, and herewith makes payment therefor of $              ,or elects to use the cashless exercise option of the Warrant.

 

(2)                                  Pleaseissue a certificate or certificates representing said shares of Common Stock inthe name of the undersigned or in such other name as is specified below:

 
|      |   |
|-----------|--------|
| (Name)    |
|      |
|      |   |
| (Address) |
|      |   |

 

(3)                                  Pleaseissue a new Warrant for the unexercised portion of the attached Warrant in thename of the undersigned or in such other name as is specified below:

 
|                     |      |   |
|--------------------------|-----------|--------|
|                     | (Name)    |
|                     |      |
|                     |      |   |   |
| (Date)  (Signature) |      |
|                     |      |   |
|                     | (Address) |
|                     |
| Dated:                   |
|                     |      |
| Signature                |
|                          |           |        |  |  |  |  |  |  |

 

----

 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply requiredinformation.

Do not use this form to exercise the warrant.)

 

FORVALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby arehereby assigned to

 

                                                                                                                                    whose address is

 

                                                                                                                                                                        .

 

 
|   |   | Dated:                         , |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
|                   | Holder’s  Signature: |   |   |
|------------------------|---------------------------|--------|--------|
|                   |                      |   |
|                   | Holder’s  Address:   |   |   |
|                   |                      |   |
|                   |                      |   |   |
|                   |
|                   |
| Signature  Guaranteed: |                      |   |
|                        |                           |        |        |  |  |

 

 

NOTE:  The signature to this Assignment Form mustcorrespond with the name as it appears on the face of the Warrant, withoutalteration or enlargement or any change whatsoever, and must be guaranteed by abank or trust company.  Officers ofcorporations and those acting in a fiduciary or other representative capacityshould file proper evidence of authority to assign the foregoing Warrant.

 

----