Document:

Exhibit 10.68

 

THESE SECURITIES HAVE NOT BEEN REGISTERED
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”). THIS WARRANT SHALL NOT CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION
OF AN OFFER TO BUY THE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES ARE “RESTRICTED” AND MAY NOT BE
RESOLD OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO
REGISTRATION 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 set forth, at any time on or after the
date hereof and on or prior to 8:00 p.m. New York City Time on May 17, 2011
(the “Termination Date”), but not
thereafter, to subscribe for and purchase from Liquidmetal Technologies, Inc.,
a Delaware corporation (the “Company”),
up to                  
shares of Common Stock (the “Warrant
Shares”) at an initial Exercise
Price equal to $2.58 per share (as adjusted from time to time pursuant to the
terms hereof, the “Exercise  Price”). The Exercise Price and the number
of shares for which the Warrant is exercisable shall be subject to adjustment
as provided herein.

 

This Warrant is being issued in connection with a private placement
offering (the “Private Placement”)
by the Company of up to $4,000,000 in 8% Unsecured Subordinated Notes (the “Notes”)
being sold only to accredited investors. This Warrant is identical to all other
Warrants issued in the Private Placement, except for the number of Warrant
Shares issuable hereunder. This Warrant is specifically being issued in
connection with the Securities Purchase Agreement dated May 17, 2006 (the “Purchase Agreement”), entered into between
the Company and the Purchaser. Capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Purchase Agreement.

 

1.                                       Title
of Warrant. Prior to the expiration hereof and subject to compliance with
applicable laws, this Warrant and all rights hereunder are transferable, in
whole or in part, at the office or agency of the Company by the Holder hereof
in person or by duly authorized attorney, upon surrender of this Warrant together
with (a) the Assignment Form annexed hereto properly endorsed, and (b) any
other documentation reasonably necessary to satisfy the Company that such
transfer is in compliance with all applicable securities laws. The term “Holder” shall refer to the Purchaser or any
subsequent transferee of this Warrant.

 

 

2.                                       Authorization
of Shares. The Company covenants that all shares of Common Stock which may
be issued upon the exercise of rights represented by this Warrant will, upon
exercise of the rights represented by this Warrant and payment of the Exercise
Price as set forth herein (unless the Holder exercises this Warrant through a
cashless exercise, as provided in Section 3(b) hereof), be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue or otherwise specified
herein).

 

3.                                       Exercise
of Warrant.

 

(a)                                  The
Holder may exercise this Warrant, in whole or in part, at any time and from
time to time, by delivering (which may be by facsimile) to the offices of the
Company or any transfer agent for the Common Stock this Warrant, together with
a Notice of Exercise in the form annexed hereto specifying the number of
Warrant Shares with respect to which this Warrant is being exercised, together
with payment to the Company of the Exercise Price therefor.

 

(b)                                 The
Holder may also exercise this Warrant by the exchange of this Warrant in whole
or in part (with the Cashless Exercise subscription form in the form annexed
hereto duly executed) (a “Cashless Exercise”)
at the address of the Company set forth herein. Such presentation and exchange
shall be deemed a waiver of the Holder’s obligation to pay the Exercise Price
or, in the case of a partial exercise of this Warrant, of the portion of the
Exercise Price that would otherwise be payable in connection with such partial
exercise. Upon presentment of this Warrant in connection with a Cashless
Exercise, the number of Warrant Shares subject to this Warrant shall be reduced
by the number of Warrant Shares specified on the Cashless Exercise subscription
form, and in exchange for such reduction the Holder shall receive the number of
Warrant Shares, as the case may be, specified on the Cashless Exercise
subscription form (up to the total number of Warrant Shares which are subject
to this Warrant) multiplied by a fraction, the numerator of which shall be the
difference between the then current market price per share of the Common Stock
and the Exercise Price per share, and the denominator of which shall be the
then current market price per share of Common Stock. For purposes of any
computation under this Section 3(b), the then current market price shall be the
average closing price on the five (5) trading days immediately prior to the
execution of the Cashless Exercise subscription form by Holder.

 

The Company acknowledges and agrees that this
Warrant was issued for consideration received on the date of this Warrant. Consequently,
the Company acknowledges and agrees 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 144 promulgated under the Securities Act
of 1933, as amended (the “Act”),
be “tacked” to the period during which the Holder holds the Warrant Shares
received upon such cashless exercise to the extent permitted by Rule 144 under
the Act.

 

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

 

(c)                                  In
the event that the Warrant is not exercised in full, the number of Warrant
Shares shall be reduced by the number of such Warrant Shares for which this
Warrant is exercised and/or surrendered, and the Company, if requested by Holder
and at its expense, shall within three (3) Trading Days (as defined below)
issue and deliver to the Holder a new Warrant of like tenor in the name of the
Holder or as the Holder (upon payment by Holder of any applicable transfer
taxes) may request, reflecting such adjusted Warrant Shares. Notwithstanding
anything to the contrary set forth herein, upon exercise of any portion of this
Warrant in accordance with the terms hereof, the Holder shall not be required
to physically surrender this Warrant to the Company unless such Holder is
purchasing the full amount of Warrant Shares represented by this Warrant. The
Holder and the Company shall maintain records showing the number of Warrant
Shares so purchased hereunder and the dates of such purchases or shall use such
other method, reasonably satisfactory to the Holder and the Company, so as not
to require physical surrender of this Warrant upon each such exercise. The
Holder and any assignee, by acceptance of this Warrant or a new Warrant,
acknowledge and agree that, by reason of the provisions of this Section,
following exercise of any portion of this Warrant, the number of Warrant Shares
which may be purchased upon exercise of this Warrant may be less than the
number of Warrant Shares set forth on the face hereof.

 

Certificates
for shares of Common Stock purchased hereunder shall be delivered to the Holder
hereof within three (3) Trading Days after the date on which this Warrant shall
have been exercised as aforesaid. The Holder may withdraw its Notice of Exercise
at any time if the Company fails to timely deliver the relevant certificates to
the Holder as provided in this Agreement. A Notice of Exercise shall be deemed
sent on the date of delivery if delivered before 8:00 p.m. New York Time on
such date, or the day following such date if delivered after 8:00 p.m. New York
Time; provided that the Company is only obligated to deliver Warrant Shares
against delivery of the Exercise Price from the holder hereof (unless the
Holder 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 in lieu thereof).

 

In lieu of
delivering physical certificates representing the Warrant Shares issuable upon
exercise of this Warrant, provided the Company’s transfer agent 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 its transfer agent to electronically
transmit the Warrant Shares issuable upon exercise to the Holder, by crediting
the account of the Holder’s prime broker with DTC through its Deposit
Withdrawal Agent Commission (“DWAC”)
system. The time periods for delivery described above shall apply to the
electronic transmittals through the DWAC system. The Company agrees to
coordinate with DTC to accomplish this objective.

 

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(d)                                 The
term “Trading Day” means (x) if
the Common Stock is not listed on the New York or American Stock Exchange but
sale prices of the Common Stock are reported on Nasdaq National Market or
another automated quotation system, a day on which trading is reported on the
principal automated quotation system on which sales of the Common Stock are
reported, (y) if the Common Stock is listed on the New York Stock Exchange or
the American Stock Exchange, a day on which there is trading on such stock
exchange, or (z) if the foregoing provisions are inapplicable, a day on which
quotations are reported by National Quotation Bureau Incorporated.

 

4.                                       No
Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. In lieu of
issuance of a fractional share upon any exercise hereunder, the Company will
either round up to nearest whole number of shares or pay the cash value of that
fractional share, which cash value shall be calculated on the basis of the
average closing price of the Common Stock during the five (5) Trading Days
immediately preceding the date of exercise.

 

5.                                       Charges,
Taxes and Expenses. Issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder
hereof for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the Holder
of this Warrant or in such name or names 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 a name other than the name of
the Holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
hereof; and provided  further, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any
transfer involved in the issuance of any Warrant certificates or any
certificates for the Warrant Shares other than the issuance of a Warrant
Certificate to the Holder in connection with the Holder’s surrender of a
Warrant Certificate upon the exercise of all or less than all of the Warrants
evidenced thereby.

 

6.                                       Closing
of Books. The Company will at no time close its shareholder books or
records in any manner which interferes with the timely exercise of this
Warrant.

 

7.                                       No
Rights as Shareholder until Exercise. Subject to Section 12 of this Warrant
and the provisions of any other written agreement between the Company and the
Purchaser, the Purchaser shall not be entitled to vote or receive dividends or
be deemed the holder of Warrant Shares or any other securities of the Company
that may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the Purchaser, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value, or change of stock to no par value, consolidation, merger,
conveyance or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised as provided herein. However, at the time of the exercise of this
Warrant pursuant to Section 3 hereof, the Warrant Shares so purchased hereunder
shall be deemed to be issued to such Holder as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
exercised.

 

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8.                                       Assignment
and Transfer of Warrant. This Warrant may be assigned by the surrender of
this Warrant and the Assignment Form annexed hereto duly executed at the office
of the Company (or such other office or agency of the Company or its transfer
agent as the Company may designate by notice in writing to the registered
Holder hereof at the address of such Holder appearing on the books of the
Company); provided, however, that this Warrant may not be resold
or otherwise transferred except (i) in a transaction registered under the Act,
or (ii) in a transaction pursuant to an exemption, if available, from
registration under the Act and whereby, if reasonably requested by the Company,
an opinion of counsel reasonably satisfactory to the Company is obtained by the
Holder of this Warrant to the effect that the transaction is so exempt.

 

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

 

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

 

11.                                 Effect
of Certain Events. If at any time while this Warrant or any portion thereof
is outstanding and unexpired there shall be a transaction (by merger or
otherwise) in which more than 50% of the voting power of the Company is
disposed of (collectively, a “Sale or Merger
Transaction”), the Holder of this Warrant shall have the right
thereafter to purchase, by exercise of this Warrant and payment of the
aggregate Exercise Price in effect immediately prior to such action (unless the
Holder exercises this Warrant through a cashless exercise, as provided in
Section 3(b) hereof), the kind and amount of shares and other securities and
property which it would have owned or have been entitled to receive after the
happening of such transaction had this Warrant been exercised immediately prior
thereto, subject to further adjustment as provided in Section 12.

 

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12.                                 Adjustments
of Exercise Price and Number of Warrant Shares.

 

The number of
and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price (as well as the maximum exercise price) shall be subject 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 this Warrant is outstanding, (A) pay a stock dividend or
otherwise make a distribution or distributions on any equity securities
(including instruments or securities convertible into or exchangeable for such
equity securities) in shares of Common Stock, (B) subdivide outstanding shares
of Common Stock into a larger number of shares, or (C) combine outstanding
Common Stock into a smaller number of shares, then the Exercise Price (and
maximum exercise price) shall be adjusted such that the Exercise Price, as
adjusted, will be equal to the Exercise Price then in effect multiplied by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding before such event and the denominator of which shall be the number
of shares of Common Stock outstanding after such event. Any adjustment made
pursuant to this Section 12(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination. The number of
shares which may be purchased hereunder shall be increased proportionately to
any reduction in Exercise Price pursuant to this paragraph 12(a), so that after
such adjustments the aggregate Exercise Price payable hereunder for the
increased number of shares shall be the same as the aggregate Exercise Price in
effect just prior to such adjustments.

 

(b)                                 Other
Distributions. If at any time after the date hereof the Company distributes
to 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 shall
be increased to equal: (i) the number of Warrant Shares for which this Warrant
is exercisable immediately prior to such event, (ii) multiplied by a fraction,
(A) the numerator of which shall be the Fair Market Value (as defined below)
per share of Common Stock on the record date for the dividend or distribution,
and (B) the denominator of which shall be the Fair Market Value price per share
of Common Stock on the record date for the dividend or distribution minus the
amount allocable to one share of Common Stock of the value (as jointly
determined in good faith by the Board of Directors of the Company and the
Holder) of any and all such evidences of indebtedness, shares of 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 the date of
determination or, if the Common Stock is not listed or admitted to trading on
any Principal Market, and the average price cannot be determined as
contemplated above, the Fair Market Value of the Common Stock shall be as
reasonably determined in good faith by the Company’s Board of Directors and the
Holder. In the event of any adjustment pursuant to this Section, the Exercise
Price shall be reduced to equal: (i) the Exercise Price in effect immediately
before the occurrence of any such event (ii) multiplied by a fraction, (A) the
numerator of which is the number of Warrant Shares for which this Warrant is
exercisable immediately before the adjustment, and (B) the denominator of which
is the number of Warrant Shares for which this Warrant is exercisable
immediately after the adjustment.

 

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(c)                                  Merger,
etc. If at any time after the date hereof there shall be a merger or
consolidation of the Company with or into or a transfer of all or substantially
all of the assets of the Company to another entity, then the Holder shall be
entitled to receive upon or after such transfer, merger or consolidation
becoming effective, and upon payment of the Exercise Price then in effect, the
number of shares or other securities or property of the Company or of the
successor corporation resulting from such merger or consolidation, which would
have been received by the Holder for the shares of stock subject to this
Warrant had this Warrant been exercised just prior to such transfer, merger or
consolidation becoming effective or to the applicable record date thereof, as
the case may be. The Company will not merge or consolidate with or into any
other corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company),
or such transferee corporation, as the case may be, shall expressly assume in
writing the due and punctual performance and observance of each and every covenant
and condition of this Warrant to be performed and observed by the Company.

 

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

 

(e)                                  Exercise
Price Adjustment. In the event that on or subsequent to the Closing Date,
the Company issues or sells any Common Stock, any securities which are
convertible into or exchangeable for its Common Stock or any convertible
securities, or any warrants or other rights to subscribe for or to purchase or
any options for the purchase of its Common Stock or any such convertible
securities (other than (i) shares which are issued pursuant to the Outstanding
Notes, (ii) shares of Common Stock or options to purchase such shares issued to
employees, consultants, officers or directors in accordance with stock plans
approved by the Board of Directors, and shares of Common Stock issuable under
options or warrants that are outstanding as of the date of the Purchase
Agreement, (iii) shares of Common
Stock issued pursuant to a stock dividend, split or other similar transaction,
and (iv) shares of Common Stock that are issued in lieu of cash in the payment
of interest under the Outstanding Notes) at an effective price per share which
is less than the Exercise Price, then the Exercise Price in effect immediately
prior to such issue or sale shall be reduced effective concurrently with such
issue or sale to an amount determined by multiplying the Exercise Price then in
effect by a fraction, (x) the numerator of which shall be the sum of (1) the
number of shares of Common Stock outstanding immediately prior to such issue or
sale, plus (2) the number of shares of Common Stock which the aggregate

 

7

 

consideration received by the Company for
such additional shares would purchase at the Exercise Price then in effect; and
(y) the denominator of which shall be the number of shares of Common Stock of
the Company outstanding immediately after such issue or sale.

 

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

 

Notwithstanding
the foregoing, the adjustments described in this Section 12(e) will be made
only to the extent that they do not result in a decrease in the conversion price
of any Senior Notes or any decrease in the exercise price of other warrants
outstanding as of the date hereof.

 

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

 

13.                                 Voluntary
Adjustment by the Company. The Company may at its option, at any time
during the term of this Warrant, reduce but not increase the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.

 

14.                                 Notice
of Adjustment. Whenever the number of Warrant Shares or number or kind of
securities or other property purchasable upon the exercise of this Warrant or
the Exercise Price (or maximum exercise price) is adjusted, the Company shall
promptly mail to the Holder of this Warrant a notice setting forth the number
of Warrant Shares (and other securities or property) purchasable upon the
exercise of this Warrant and the Exercise Price of such Warrant Shares after
such adjustment and setting forth the computation of such adjustment and a
brief statement of the facts requiring such adjustment.

 

15.                                 Authorized
Shares. The Company covenants that during the period the Warrant is
outstanding and exercisable, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any and all purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates
for the Warrant Shares upon the exercise of the purchase rights under this
Warrant. The Company will take all such reasonable action as may be necessary
to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law, regulation, or rule of any applicable market
or exchange.

 

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16.                                 Compliance
with Securities Laws.

 

(a)                                  The
Holder hereof acknowledges that the Warrant Shares acquired upon the exercise
of this Warrant, if not registered (or if no exemption from registration
exists), will have restrictions upon resale imposed by state and federal securities
laws. Each certificate representing the Warrant Shares issued to the Holder
upon exercise (if not registered, for resale or otherwise, or if no exemption
from registration exists) will bear substantially the following legend:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

 

(b)                                 Without
limiting the Purchaser’s right to transfer, assign or otherwise convey the
Warrant or Warrant Shares in compliance with all applicable securities laws,
the Holder of this Warrant, by acceptance hereof, acknowledges that this
Warrant and the Warrant Shares to be issued upon exercise hereof are being
acquired solely for the Purchaser’s own account and not as a nominee for any
other party, and that the Purchaser will not offer, sell or otherwise dispose
of this Warrant or any Warrant Shares to be issued upon exercise hereof except
under circumstances that will not result in a violation of applicable federal
and state securities laws.

 

17.                                 Miscellaneous.

 

(a)                                  Issue
Date; Choice of Law; Venue; Jurisdiction. The provisions of this Warrant
shall be construed and shall be given effect in all respects as if it had been
issued and delivered by the Company on the date hereof. This Warrant shall be
binding upon any successors or assigns of the Company. This Warrant will be
construed and enforced in accordance with and governed by the laws of the State
of New York, except for matters arising under the Act, without reference to
principles of conflicts of law. Each of the parties consents to the exclusive
jurisdiction of the Federal and State Courts sitting in the County of New York
in the State of New York in connection with any dispute arising under this
Warrant and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum  non  conveniens or
venue, to the bringing of any such proceeding in such jurisdiction. EACH PARTY
HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.

 

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(b)                                 Modification
and Waiver. This Warrant and any provisions hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the same is sought. Any amendment effected in
accordance with this paragraph shall be binding upon the Purchaser, each future
holder of this Warrant and the Company. No waivers of, or exceptions to, any
term, condition or provision of this Warrant, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.

 

(c)                                  Notices.
Any notice or other communication required or permitted to be given hereunder
shall be in writing by facsimile, mail or personal delivery and shall be
effective upon actual receipt of such notice. The addresses for such
communications shall be to the addresses as shown on the books of the Company
or to the Company at the address set forth in the Purchase Agreement. A party
may from time to time change the address to which notices to it are to be
delivered or mailed hereunder by notice in accordance with the provisions of
this Section 18(c).

 

(d)                                 Severability.
Whenever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable 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 in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Warrant in such jurisdiction or
affect the validity, legality or enforceability of any provision in any other
jurisdiction, but this Warrant shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

(e)                                  Specific
Enforcement. The Company and the Holder acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions
of this Warrant and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which either of them may be
entitled by law or equity.

 

[Signature Page Follows]

 

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

 

	
  Dated: May 17, 2006

  	
   

  
	
   

  	
   

  
	
   

  	
  LIQUIDMETAL TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Ricardo A. Salas

  
	
   

  	
   

  	
  President and Chief Executive Officer

  

 

11

 

NOTICE OF EXERCISE

 

To:          Liquidmetal
Technologies, Inc.

 

(1)           The
undersigned hereby elects to exercise the attached Warrant for and to purchase
thereunder,                 
shares of Common Stock, and herewith makes payment therefor of $                    
,.

 

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

 

	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
  (Address)

  
	
   

  

 

 

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

 

	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Date)

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
				

 

 

NOTICE OF CASHLESS EXERCISE

 

To:          Liquidmetal
Technologies, Inc.

 

The undersigned Holder                                                    ,
pursuant to the provisions of the Warrant, hereby elects to exchange its
Warrant, in whole or in part, as appropriate, for               
shares of Common Stock of the Company, pursuant to the cashless exercise
provisions of Section 3(a) of the Warrant.

 

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

 

	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
  (Address)

  
	
   

  

 

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

 

	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  
			

 

 

 

ASSIGNMENT FORM

 

(To assign the foregoing
warrant, execute

this form and supply required
information.

Do not use this form to
exercise the warrant.)

 

FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to

 

                                                                                                                   
whose address is

                                                                                                                                                         .

 

 

	
   

  	
   

  	
  Dated:

  	
   

  	
  ,

  
	
   

  	
   

  
	
   

  	
  Holder’s Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Holder’s Address:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guaranteed:

  	
   

  	
   

  
									

 

NOTE:  The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant, without
alteration or enlargement or any change whatsoever, and must be guaranteed by a
bank or trust company. Officers of corporations and those acting in a fiduciary
or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.Exhibit 10.69

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights
Agreement (“Agreement”) is entered
into as of May 17 2006, between Liquidmetal Technologies, Inc., a Delaware
corporation with offices at 25800 Commercentre Dr., Suite 100, Lake Forest,
California 92630 (the “Company”)
and each of the
parties listed under “Purchasers” hereto (collectively and individually,
the “Purchaser”).

 

W I  T  N
E  S  S  E  T  H:

 

WHEREAS,
the Company and the Purchasers have entered into a Securities Purchase
Agreement of even date herewith (the “Purchase
Agreement”) pursuant to which, among other things, the Company has
on or about the date hereof issued 8% Unsecured Subordinated Notes (the “Notes”) and Warrants (collectively, the “Warrants”) to purchase shares of the Company’s
Common Stock, par value $0.001 per share (“Common
Stock”), subject to the terms and conditions set forth therein; and

 

WHEREAS,
the Warrants are exercisable into shares of Common Stock pursuant to the terms
and conditions set forth in the Warrants (the “Warrant Shares”).

 

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

 

1.     Certain
Definitions. Capitalized terms used herein and not otherwise defined shall
have the meaning ascribed thereto in the Purchase Agreement or the Warrants. As
used in this Agreement, the following terms shall have the following respective
meanings:

 

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

 

“Commission” or “SEC”
shall mean the Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.

 

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

 

“Holder” and “Holders”
shall mean the Purchaser and any permitted transferee or transferees of
Registrable Securities (as defined below) or Warrants that have not been sold
to the public and to whom the registration rights conferred by this Agreement
have been transferred in compliance with this Agreement and the Purchase
Agreement; provided that neither such person nor any affiliate of such person
is registered as a broker or dealer under Section 15(a) of the Securities
Exchange Act of 1934, as amended, or a member of the National Association of
Securities Dealers, Inc.

 

The terms “register,” “registered” and “registration”
shall refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act and applicable rules and
regulations thereunder, and the declaration or ordering of the effectiveness of
such registration statement.

 

 

“Registrable Securities” shall mean (i) the Warrant Shares and
(ii) other shares of Common Stock issued or issuable to each Holder or its
permitted transferee or designee (a) upon any exchange of or any replacement of
the Warrants, or (b) upon any conversion, exercise or exchange of any
securities issued in connection with any such exchange or replacement; provided
that all such shares shall cease to be Registrable Securities at such time as
they have been sold under a registration statement or pursuant to Rule 144
under the Securities Act or otherwise or at such time as they are eligible to
be sold pursuant to Rule 144(k).

 

“Registration Expenses” shall mean all expenses to be incurred
by the Company in connection with each Holder’s registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, and the expense of any special audits incident to or
required by any such registration.

 

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

 

“Securities Act” or “Act”
shall mean the Securities Act of 1933, as amended.

 

“Selling Expenses” shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities, as well
as all fees and disbursements of counsel for Holders not included within “Registration
Expenses.”

 

2.     Piggyback
Registration.

 

(a)   If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for persons or entities other than the Holders) any Common
Stock in connection with the public offering of such Common Stock (other than a
registration relating solely to the sale of securities of participants in a
Company stock plan, a registration relating to a corporate reorganization or
transaction under Rule 145 of the Act, a registration on any form that
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities, or a registration in which the only Common Stock being registered
is Common Stock issuable upon conversion of debt securities that are also being
registered), the Company shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by the Company in
accordance with Section 15(c), the Company shall, subject to the
provisions of Section 2(c), use best efforts to cause to be registered
under the Act all of the Registrable Securities that each such Holder requests
to be registered.

 

(b)   The Company shall have the right to terminate
or withdraw any registration initiated by it under this Section 2 prior to
the effectiveness of such registration whether or not any Holder has elected to
include securities in such registration.

 

(c)   In connection with any offering involving an
underwriting of shares of the Company’s Common Stock, the Company shall not be
required under this Section 2 to include any of the Holders’ securities in
such underwriting unless they accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by the

 

2

 

Company (or by
other persons entitled to select the underwriters) and enter into an
underwriting agreement in customary form with such underwriters, and then only
in such quantity as the underwriters determine in their sole discretion will
not jeopardize the success of the offering by the Company. If the total amount
of Registrable Securities requested to be included in such offering exceeds the
amount of Registrable Securities that the underwriters determine in their sole
discretion is compatible with the success of the offering (after taking into
account the maximum number of shares to be sold by the Company and the other
selling stockholders, if any, in the offering), then the Company shall be
required to include in the offering only that number of Registrable Securities
that the underwriters determine in their sole discretion will not jeopardize
the success of the offering. In the event that the underwriters determine that
less than all of the Registrable Securities requested to be registered can be
included in such offering, then the Registrable Securities that are included in
such offering shall be apportioned pro rata among the selling Holders based on
the number of Registrable Securities held by all selling Holders or in such
other proportions as shall mutually be agreed to by all such selling Holders.

 

3.     Demand
Registration Rights.

 

(a)   Subject to the conditions of this
Section 3, if at any time following the 180th day after the date
of this Agreement, the Company receives a written request from the Holders of fifty
percent (50%) or more of the Registrable Securities then outstanding (for
purposes of this Section 3, the “Initiating Holders”, and such request the “Demand”)
that the Company file a registration statement under the Act covering the
registration of Registrable Securities, then the Company shall, within twenty
(20) days of the receipt thereof, give written notice of such request to all
Holders, and subject to the limitations of this Section 3, use best
efforts to effect, as soon as practicable, the registration under the Act of
all Registrable Securities that the Holders request to be registered in a
written request received by the Company within twenty (20) days of the mailing
of the Company’s notice pursuant to this Section 3(a). Notwithstanding the
foregoing, the Holders shall not have the rights set forth in Section 3 if all of the Warrant Shares subject
to Warrants outstanding on the date of this Agreement could have been included
in a registration described in Section 2 above.

 

(b)   If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 3, and the Company shall include such information
in the written notice referred to in Section 3. In such event the right of
any Holder to include its Registrable Securities in such registration shall be
conditioned upon such Holder’s participation in such underwriting and the inclusion
of such Holder’s Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Initiating Holders and such
Holder) to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company). Notwithstanding
any other provision of this Section 3, if the underwriter advises the
Company that marketing factors require a limitation on the number of securities
underwritten (including Registrable Securities), then the Company shall so
advise all Holders of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the number of shares that may be included in
the underwriting shall be allocated to the Holders of such Registrable

 

3

 

Securities pro
rata based on the number of Registrable Securities held by all such Holders
(including the Initiating Holders). In no event shall any Registrable
Securities be excluded from such underwriting unless all other securities are
first excluded. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.

 

(c)   Notwithstanding the foregoing, the Company
shall not be required to effect a registration pursuant to this Section 3:

 

(A)  in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, unless the Company is already subject to service
in such jurisdiction and except as may be required under the Act; or

 

(B)   after the Company has effected one (1)
registration pursuant to this Section 3, and such registration has been
declared or ordered effective; or

 

(C)   during the period starting with the date
sixty (60) days prior to the Company’s good faith estimate of the date of
the filing of and ending on a date one hundred eighty (180) days following
the effective date of a Company-initiated registration subject to Section 2
above, provided that the Company is actively employing in good faith efforts to
cause such registration statement to become effective; or

 

(D)  if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 3 a
certificate signed by the Company’s Chief Executive Officer or Chairman of the
Board stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such registration statement to be effected at such time, in which event the
Company shall have the right to defer such filing for a period of not more than
one hundred twenty (120) days after receipt of the request of the Initiating
Holders, provided that such right shall be exercised by the Company not more
than once in any twelve (12)-month period and provided further that the
Company shall not register any
securities for the account of itself or any other stockholder during such one
hundred twenty (120) day period (other than a registration relating solely to
the sale of securities of participants in a Company stock plan, a registration
relating to a corporate reorganization or transaction under Rule 145 of
the Act, a registration on any form that does not include substantially the
same information as would be required to be included in a registration
statement covering the sale of the Registrable Securities, or a registration in
which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities that are also being registered).

 

4

 

(d)   If the Registration Statement has not been declared effective
within one hundred twenty (120) days of the Demand (the “Required
Effective Date”) other than by reason of the operation of Section
3(c), then the Company will make a payment to each Holder for such delay (each
a “Late Registration Payment”). Each Late
Registration Payment will be equal to 1% of the Warrant exercise price
multiplied by the number of then-outstanding and unexercised Warrants held by
the Holder for each 30-day period past the Required Effective Date that the
Registration Statement has been declared effective. In no event shall payments
pursuant to this Section 3(d) exceed 10% in the aggregate. The Late
Registration Payments will be prorated on a daily basis during the 30-business
day period and will be paid to the Holders in the form of cash or shares of
Common Stock, at the Company’s option, within ten (10) business days following
the end of each 30-business day period as to which payment is due hereunder.
The Holders may make a claim for additional damages as a remedy for the
Company’s failure to comply with the timelines set forth in this Section, but
acknowledgement of such right in this Agreement shall not constitute an
admission by the Company that any such damages exist or may exist. Nothing
contained in the preceding sentence shall be read to limit the ability of the
Holders to seek specific performance of this Agreement. Notwithstanding the
foregoing, each Holder hereby intentionally and unconditionally subordinates
the Late Registration Payments to all of the Company’s previously issued 6%
Senior Secured Notes Due July 29, 2007 (the “July 2007
Notes”), the 7% Senior Secured Convertible Notes Due August 2007
(the “August 2007 Notes”), and any other
notes that may be issued by the Company after the date hereof in exchange for
or in satisfaction of any July 2007 Notes or August 2007 Notes (collectively
referred to as the “Senior Notes”).
The Holder further acknowledges and agrees that its right to payment under the
Late Registration Payments is hereby subordinated to the Senior Notes in all
respects and the right to payment of the holders of the Senior Notes. Until the
Senior Notes are satisfied in full through payment or conversion, the Company may
not and will not make any payments of Late Registration Payments hereunder, and
the Holder hereby agrees not to collect, accept or receive any such payments
(whether in cash or otherwise) from the Company, or otherwise take any actions
to collect any such payments, prior to the date that all obligations of Company
under the Senior Notes are satisfied in full. The Company’s inability to pay
the Late Registration Payments as a result of the preceding three sentences
shall not constitute a breach of this Agreement or a default under the Notes.

 

4.     Obligations of the Company  Whenever required under Section 2 or 3 of
this Agreement to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:

 

(a)   prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use reasonable
commercial efforts to cause such
registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or, if earlier, until the distribution contemplated in the registration
statement has been completed or the Warrant Shares can be sold pursuant to Rule
144(k) under the Act;

 

(b)   prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such registration statement;

 

5

 

(c)   furnish to the Holders such number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them;

 

(d)   notify the Holders promptly and, if
requested, confirm such advice in writing (i) when a registration statement has
become effective and when any post-effective amendments and supplements thereto
become effective, and (ii) of the issuance by the SEC or any state securities
commission of any stop order suspending the effectiveness of a registration
statement;

 

(e)   use best efforts to register and qualify the
securities covered by such registration statement under such other securities
or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders;

 

(f)    in the event of any underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of such
offering;

 

(g)   notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;

 

(h)   provide a transfer agent and registrar for
all Registrable Securities registered pursuant to this Agreement and a CUSIP
number for all such Registrable Securities, in each case not later than the
effective date of such registration;

 

(i)    cooperate with the Holders and the managing underwriter,
if any, to facilitate the timely preparation and delivery of certificates not
bearing any restrictive legends representing the Registrable Securities to be
sold, and cause such Registrable Securities to be issued in such denominations
and registered in such names in accordance with the underwriting agreement
prior to any sale of Registrable Securities to the underwriters or, if not an
underwritten offering, in accordance with the instructions of the Holders, and
instruct any transfer agent and registrar of Registrable Securities to release
any stop transfer orders in respect thereto;

 

(j)            deliver promptly to the Holders’
counsel and each underwriter, if any, copies of all correspondence between the
SEC and the Company, its counsel or auditors and all memoranda relating to
discussions with the SEC or its staff with respect to the registration
statement, other than those portions of any such memoranda which contain
information subject to attorney-client privilege with respect to the Company,
and, upon receipt of such confidentiality agreements as the Company may
reasonably request, make reasonably available for inspection by the Holders or
their counsel, by any underwriter, if any, participating in any disposition to
be effected pursuant to such registration statement and any attorney,
accountant or

 

6

 

other agent
retained by any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company’s officers, directors and employees to supply all information
reasonably requested by the Holders or their counsel or such underwriter,
attorney, accountant or agent in connection with such registration statement;

 

(k)   use best efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration statement; and

 

(l)    upon written request, furnish to the Holders
without charge at least one conformed copy of the registration statement and
any post-effective amendments thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference).

 

Notwithstanding the provisions of this Section 4, the Company shall be
entitled to postpone or suspend, for a reasonable period of time and upon
written notice to the Holders (a “Suspension Notice”), the filing,
effectiveness or use of, or trading under, any registration statement if the
Company shall determine that any such filing or the sale of any securities
pursuant to such registration statement would in the good faith judgment of the
Board of Directors of the Company:

 

(A)  materially impede, delay or interfere with any
material pending or proposed financing, acquisition, corporate reorganization
or other similar transaction involving the Company for which the Board of
Directors of the Company has authorized negotiations;

 

(B)   materially adversely impair the consummation
of any pending or proposed material offering or sale of any class of securities
by the Company; or

 

(C)   require disclosure of material nonpublic
information that, if disclosed at such time, would be materially harmful to the
interests of the Company and its stockholders; provided, however,
that during any such period all executive officers and directors of the Company
are also prohibited from selling securities of the Company (or any security of
any of the Company’s subsidiaries or affiliates).

 

In the event of the suspension of effectiveness of any registration
statement pursuant to this Section 4, the applicable time period during which
such registration statement is to remain effective shall be extended by that
number of days equal to the number of days the effectiveness of such
registration statement was suspended.

 

5.     [Intentionally left blank]

 

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

 

7

 

7.     Indemnification.

 

(a)   Company Indemnity. The Company will
indemnify each Holder, each of its officers, directors, agents and partners,
and each person controlling each of the foregoing, within the meaning of
Section 15 of the Securities Act and the rules and regulations thereunder with
respect to which registration, qualification or compliance has been effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls, within the meaning of Section 15 of the Securities Act and the rules
and regulations thereunder, any underwriter, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any final prospectus (as amended or supplemented if the Company
files any amendment or supplement thereto with the SEC), registration statement
filed pursuant to this Agreement or any post-effective amendment thereof or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, or any
violation by the Company of the Securities Act or any state securities law or
in either case, any rule or regulation thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration, qualification or compliance, and will reimburse each Holder,
each of its officers, directors, agents and partners, and each person
controlling each of the foregoing, for any reasonable legal fees of a single
counsel and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to a Holder to
the extent that any such claim, loss, damage, liability or expense arises out
of or is based on (i) any untrue statement or omission based upon written
information furnished to the Company by such Holder or underwriter (if any)
therefor and stated to be specifically for use therein, (ii) any failure by any
Holder to comply with prospectus delivery requirements or the Securities Act or
Exchange Act or any other law or legal requirement applicable to them or any
covenant or agreement contained in the Purchase Agreement or this Agreement or
(iii) an offer of sale of Warrant Shares occurring during a period in which
sales under the registration statement are suspended as permitted by this
Agreement. The indemnity agreement contained in this Section 7(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent will not be unreasonably withheld).

 

(b)   Holder Indemnity. Each Holder will,
severally but not jointly, if Registrable Securities held by it are included in
the securities as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors, officers, agents
and partners, and any other stockholder selling securities pursuant to the registration
statement and any of its directors, officers, agents, partners, and any person
who controls such stockholder within the meaning of the Securities Act or
Exchange Act and each underwriter, if any, of the Company’s securities covered
by such a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act and the
rules and regulations thereunder, each other Holder (if any), and each of their
officers, directors and partners, and each person controlling such other
Holder(s) against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or
alleged untrue statement) of a material fact contained in any such final
prospectus (as amended or supplemented if the Company files any amendment or
supplement

 

8

 

thereto with
the SEC), registration statement filed pursuant to this Agreement or any
post-effective amendment thereof or based on any omission (or alleged omission)
to state therein a material fact required to be stated therein or necessary to
make the statement therein not misleading in light of the circumstances under
which they were made or (ii) failure by any Holder to comply with prospectus
delivery requirements or the Securities Act, Exchange Act or any other law or
legal requirement applicable to them or any covenant or agreement contained in
the Purchase Agreement or this Agreement, and will reimburse the Company and
such other Holder(s) and their directors, officers and partners, underwriters
or control persons for any reasonable legal fees or any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such final prospectus (as amended or
supplemented if the Company files any amendment or supplement thereto with the
SEC), registration statement filed pursuant to this Agreement or any
post-effective amendment thereof in reliance upon and in conformity with
written information furnished to the Company by such Holder and stated to be specifically
for use therein, and provided that the maximum amount for which such Holder
shall be liable under this indemnity shall not exceed the net proceeds received
by the Holders from the sale of the Registrable Securities pursuant to the
registration statement in question. The indemnity agreement contained in this
Section 7(b) shall not apply to amounts paid in settlement of any such claims,
losses, damages or liabilities if such settlement is effected without the
consent of such Holder (which consent shall not be unreasonably withheld).

 

(c)   Procedure. Each party entitled to
indemnification under this Section 7 (the “Indemnified
Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim in any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at its own expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 7 except to the extent that the Indemnifying Party is
materially and adversely affected by such failure to provide notice. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such non-privileged
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

 

8.     Contribution.
If the indemnification provided for in Section 7 herein is unavailable to the
Indemnified Parties in respect of any losses, claims, damages or liabilities
referred to herein (other than by reason of the exceptions provided therein),
then each such Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such losses, claims, damages or liabilities

 

9

 

as between the Company on the one hand and any Holder(s) on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder(s) in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder(s) on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by such

Holder(s).

 

In no event shall the
obligation of any Indemnifying Party to contribute under this Section 8 exceeds
the amount that such Indemnifying Party would have been obligated to pay by way
of indemnification if the indemnification provided for under Section 7(a) or 7(b)
hereof had been available under the circumstances.

 

The Company and the Holders
agree that it would not be just and equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraphs. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages and liabilities referred to in
the immediately preceding paragraphs shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section, no Holder
shall be required to contribute any amount in excess of the amount equal to the
net proceeds received by such Holder from the sale of Registrable Securities
pursuant to the registration statement in question. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

 

9.     Survival.
The indemnity and contribution agreements contained in Sections 7 and 8 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement or the Purchase Agreement, and (ii) the consummation of the
sale or successive resales of the Registrable Securities.

 

10.   Information
by Holders. As a condition to the obligations of the Company to complete
any registration pursuant to this Agreement with respect to the Registrable
Securities of each Holder, such Holder will furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended methods of disposition of the Registrable Securities held by it as is
reasonably required by the Company to effect the registration of the
Registrable Securities. At least ten business days prior to the first
anticipated filing date of a registration statement for any registration under
this Agreement, the Company will notify each Holder of the information the
Company requires from that Holder whether or not such Holder has elected to
have any of its Registrable Securities included in the registration statement. If
the Company has not received the requested information from a Holder by the
business day prior to the anticipated filing date, then the Company may file
the registration statement without including Registrable Securities of that
Holder.

 

10

 

11.   Further
Assurances. Each Holder will cooperate with the Company, as reasonably
requested by the Company, in connection with the preparation and filing of any registration
statement hereunder, unless such Holder has notified the Company in writing of
such Holder’s irrevocable election to exclude all of such Holder’s Registrable
Securities from such registration statement.

 

12.   Suspension
of Sales. Upon receipt of any Suspension Notice from the Company, each
Holder will immediately discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until (i) it receives copies of a supplemented or amended prospectus or (ii)
the Company advises the Holder that a suspension of sales under Section 4 has
terminated. If so directed by the Company, each Holder will deliver to the
Company (at the expense of the Company) or destroy all copies in the Holder’ s
possession (other than a limited number of file copies) of the prospectus
covering such Registrable Securities that is current at the time of receipt of
such notice.

 

13.   Replacement
Certificates. The certificate(s) representing the Warrant Shares held by
the Purchaser (or then Holder) may be exchanged by the Purchaser (or such
Holder) at any time and from time to time for certificates with different
denominations representing an equal aggregate number of shares of Common Stock,
as reasonably requested by such Purchaser (or such Holder) upon surrendering
the same. No service charge will be made for such registration or transfer or
exchange.

 

14.   Transfer
or Assignment. Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns. The rights granted to the Purchaser by the Company under
this Agreement to cause the Company to register Registrable Securities may be
transferred or assigned (in whole or in part) to a transferee or assignee of
the Warrants, and all other rights granted to the Purchaser by the Company
hereunder may be transferred or assigned to any transferee or assignee of the
Warrants or Registrable Securities; provided in each case that (i) the Company
is given written notice by the Purchaser at the time of or within a reasonable
time after such transfer or assignment, stating the name and address of said
transferee or assignee and identifying the securities with respect to which
such registration rights are being transferred or assigned; and provided
further that the transferee or assignee of such rights agrees in writing to be
bound by the registration provisions of this Agreement, (ii) such transfer or
assignment is not made under the registration statement or Rule 144, (iii) such
transfer is made according to the applicable requirements of the Purchase
Agreement, and (iv) the transferee has provided to the Company an investor
questionnaire (or equivalent document) evidencing that the transferee is a “qualified
institutional buyer” or an “accredited investor” defined in Rule
501(a)(1),(2),(3), or (7) of Regulation D.

 

15.   Miscellaneous.

 

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

 

11

 

(b)   Jurisdiction. Each of the Company and
the Purchaser (i) hereby irrevocably submits to the exclusive jurisdiction of
the United States District Court, the New York state courts and other courts of
the United States sitting in New York, New York for the purposes of any suit,
action or proceeding arising out of or relating to this Agreement and (ii)
hereby waives, and agrees not to assert in any such suit action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper. The Company and the
Purchaser consent to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
in this paragraph shall affect or limit any right to serve process in any other
manner permitted by law.

 

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

 

 

to the Company:

 

Liquidmetal Technologies, Inc.

25800 Commercentre Dr., Suite 100

Lake Forest, California  92630

Telephone: 
(949) 206-8002

Fax: 
(949) 206-8008

Attention: 
John Kang, President

 

 

with a copy to:

 

Foley & Lardner LLP

100 North Tampa Street, Suite 2700

Tampa, FL 33602-5804

Telephone: 
813-229-2300

Facsimile: 
813-221-4210

Attention: Curt P. Creely

 

If to the Purchasers, to the addresses set
forth on Schedule I to the Purchase Agreement:

 

 

with a copy to:

 

Indigo Securities, LLC

780 Third Avenue, 23rd Floor

New York, New York 10017

Facsimile: 
(212) 298-9933

Attention: Eric Brachfeld

 

12

 

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

 

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

 

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

 

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

 

(g)   Entire Agreement; Amendment. This
Agreement, together with the Purchase Agreement, the Notes, the Warrants, and
the agreements and documents contemplated hereby and thereby, contains the
entire understanding and agreement of the parties, and may not be amended,
modified or terminated except by a written agreement signed by the Company and
the Holder of the Registrable Securities seeking registration of such
securities.

 

(h)   Governing Law. This Agreement and the
validity and performance of the terms hereof shall be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
executed and to be performed entirely within such state, except to the extent
that the law of the State of Delaware regulates the Company’s issuance of
securities.

 

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

 

(j)    Force Majeure. The Company shall not
be deemed in breach of its commitments under this Agreement shall be required
if the Company is unable to fulfill its obligations hereunder in a timely
fashion if the SEC or the Nasdaq National Market are closed or operating on a
limited basis as a result of the occurrence of a Force Majeure. As used herein,
“Force Majeure” means war or armed
hostilities or other national or international calamity, or one or more acts of
terrorism, which are having a material adverse effect on the financial markets
in the United States.

 

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

 

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

 

13

 

In Witness
Whereof, the parties hereto have caused this Agreement
to be duly executed as of the date first above written.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  LIQUIDMETAL TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ricardo A. Salas

  	
   

  
	
   

  	
   

  	
  Ricardo A.
  Salas, President and Chief Executive Officer

  
	
   

  	
   

  

 

14

 

COUNTERPART SIGNATURE PAGE

TO REGISTRATION RIGHTS AGREEMENT,

DATED MAY 17 2006,

AMONG LIQUIDMETAL TECHNOLOGIES, INC. AND

THE “PURCHASERS” IDENTIFIED THEREIN

 

The undersigned hereby executes
and delivers the Registration Rights Agreement to which this Signature Page is
attached, which, together with all counterparts of the Registration Rights
Agreement and Signature Pages of the Company and other “Purchasers” under the Registration
Rights Agreement, shall constitute one and the same document in accordance with
the terms of the Registration Rights Agreement.

 

	
  PURCHASER:

  	
    Gryphon Master Fund, L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ E.B. Lyon, IV

  	
   

  
	
   

  	
   

  
	
  Name:

  	
     E.B. Lyon, IV

  	
   

  
	
   

  	
   

  
	
  Title:

  	
      Authorized Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    GSSF Master Fund, LP

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ E.B. Lyon, IV

  	
   

  
	
   

  	
   

  
	
  Name:

  	
    E.B. Lyon, IV

  	
   

  
	
   

  	
   

  
	
  Title:

  	
     Authorized Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Triage Capital Management L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Leon Frenkel

  	
   

  
	
   

  	
   

  
	
  Name:

  	
    Leon Frenkel

  	
   

  
	
   

  	
   

  
	
  Title:

  	
      Senior Manager

  	
   

  
						

 

15

 

	
  PURCHASER:

  	
    Triage Capital Management B, L.P.

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Leon Frenkel

  	
   

  
	
   

  	
   

  
	
  Name:

  	
     Leon Frenkel

  	
   

  
	
   

  	
   

  
	
  Title:

  	
       Sr Manager

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Leon Frenkel

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Leon Frenkel

  	
   

  
	
   

  	
   

  
	
  Name:

  	
     Leon Frenkel

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Stratford Partners, LP

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Chad Comiteau

  	
   

  
	
   

  	
   

  
	
  Name:

  	
     Chad Comiteau

  	
   

  
	
   

  	
   

  
	
  Title:

  	
       G.P.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/Kenneth P. Lisiak

  	
   

  
	
   

  	
   

  
	
  Name:

  	
    Kenneth P. Lisiak

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Vestal Venture Capital

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Allan R. Lyons

  	
   

  
	
   

  	
   

  
	
  Name:

  	
    Allan R. Lyons

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    Managing Member of the GP of
  Vestal Venture Capital,

  	
   

  
	
   

  	
  21st Century Strategic
  Investment Planning, LC

  	
   

  
						

 

 

16

 

	
  PURCHASER:

  	
    James Kang

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ James Kang

  	
   

  
	
   

  	
   

  
	
  Name:

  	
     James Kang

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    Founder

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Ricardo A. Salas

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/  Ricardo A. Salas

  	
   

  
	
   

  	
   

  
	
  Name:

  	
    Ricardo A. Salas

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    CEO/President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Kurtis Jang

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/  Kurtis Jang

  	
   

  
	
   

  	
   

  
	
  Name:

  	
    Kurtis Jang

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    Individual

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Charles Kim

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Charles Kim

  	
   

  
	
   

  	
   

  
	
  Name:

  	
     Charles Kim

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    Self/Individual

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
    Chuck Myong

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Chuck Myong

  	
   

  
	
   

  	
   

  
	
  Name:

  	
     Chuck Myong

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    Individual

  	
   

  
						

 

17

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