Document:

Exhibit 10.36

 

NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES REGULATORS 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, NOR MAY ANY INTEREST THEREIN BE,
OFFERED OR SOLD 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 AS EVIDENCED BY,
SUBJECT TO CERTAIN EXCEPTIONS, A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, IN FORM AND SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY.  THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES IN
ACCORDANCE WITH APPLICABLE LAWS.

 

LIQUIDMETAL TECHNOLOGIES,
INC.

 

COMMON STOCK PURCHASE
WARRANT

 

	
  Warrant No. [ ]

  	
   

  	
  Date of Original Issuance: December 28, 2007

  

 

Liquidmetal Technologies, Inc., a Delaware
corporation (together with any entity that shall succeed to or assume the
obligations of Liquidmetal Technologies, Inc. hereunder, the “Company”), hereby certifies that, for value received, [ ]
or its registered assigns (the “Holder”), is
entitled to purchase from the Company up to a total of [ ] shares of common
stock, par value $0.001 per share (the “Common Stock”),
of the Company (each such share, a “Warrant Share”
and all such shares, the “Warrant Shares”)
at an exercise price equal to $1.55 per share (as adjusted from time to time as
provided in Section 9, the “Exercise Price”),
at any time and from time to time from and after the date hereof and through and
including December 28, 2012; provided that with respect to any Warrant
Shares that are not covered by an effective registration statement by the date
which is one hundred twenty (120) calendars days after the Date of Original
Issuance of this Warrant (the “Extension Date”),
the expiration date of this Warrant as to such Warrant Shares shall be
extended, but not beyond the seventh (7th) anniversary of the Date
of Original Issuance, by an additional thirty (30) calendar days for every
thirty (30) day period following the Extension Date that such Warrant Shares
are not covered by an effective registration statement (the “Expiration Date”), and subject to the following terms and
conditions:

 

 

1.             Definitions.  In addition to the terms
defined elsewhere in this Warrant, capitalized terms that are not otherwise
defined herein shall have the meanings given to such terms in the Securities
Purchase Agreement dated January 3, 2007 to which the Company and the
original Holder are parties (the “Purchase Agreement”)
and the 8% Subordinated Convertible Unsecured Notes of the Company (the “Notes”) issued in connection therewith.  The term “Common Stock” shall include
the Company’s common stock, par value $0.001 per share as authorized on the
date of the Purchase Agreement and any other securities or property of the
Company or of any other person (corporate or otherwise) which the Holder at any
time shall be entitled to receive on the exercise hereof in lieu of or in
addition to such common stock, or which at any time shall be issuable in
exchange for or in replacement of such common stock.  The term “Affiliate”
shall mean any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 promulgated
by the SEC pursuant to the Securities Act of 1933, as amended.

 

2.             Holder of Warrant.  The Company shall register
this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the
record Holder hereof from time to time. 
The Company may deem and treat the registered Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent actual notice to
the contrary from the transferee and transferor.

 

3.             Recording of Transfers.  Subject to Section 6, the
Company shall register the transfer of any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of
Assignment attached hereto duly completed and signed, to the Company at its
address specified herein.  As a condition
to the transfer, the Company may request a legal opinion as contemplated by the
legend above and related terms of the Purchase Agreement.  Upon any such registration or transfer, a new
Warrant to purchase Common Stock, in substantially the form of this Warrant
(any such new Warrant, a “New Warrant”),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant.

 

4.             Exercise and Duration of
Warrants.

 

(a)           This
Warrant shall be exercisable by the registered Holder in whole or in part at
any time and from time to time on or after the date hereof to and including the
Expiration Date by delivery to the Company of a duly executed facsimile copy of
the Exercise Notice form annexed  hereto
(or such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of the Company).  At 6:30 p.m.,
New York City time on the Expiration Date, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value.  The Company may not call or redeem all or any
portion of this Warrant without the prior written consent of the Holder.  If at any time (i) this Warrant is
exercised after one year from the date of issuance of this Warrant but before
the Expiration Date and (ii) during the Trading Day period immediately
preceding the holder’s delivery of an Exercise Notice in respect of such
exercise, a Registration Statement (as defined in the Registration Rights
Agreement) covering the Warrant Shares that 

 

2

 

are the subject
of the Exercise Notice (the “Unavailable Warrant Shares”)
is not available for the resale of such Unavailable Warrant Shares, the holder
of this Warrant also may exercise this Warrant as to any or all of such
Unavailable Warrant Shares and, in lieu of making the cash payment otherwise
contemplated to be made to the Company upon such exercise in payment of the aggregate
Exercise Price, elect instead to receive upon such exercise a reduced number of
shares of Common Stock (the “Net Number”) determined
according to the following formula (a “Cashless Exercise”):

 

	
   

  	
   

  	
  Net
  Number = 

  	
  (A x B)
  - (A x C)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  B

  	
   

  	
   

  

 

For purposes of
the foregoing formula:

 

A= the total
number of shares with respect to which this Warrant is then being exercised in
a Cashless Exercise.

 

B= the VWAP on
the Trading Day immediately preceding the date of the Exercise Notice.

 

C= the Exercise
Price then in effect for the applicable Warrant Shares at the time of such
exercise.

 

VWAP = For any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on
a Trading Market, the daily volume weighted average price per share of the
Common Stock for such date (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by
Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern
Time to 4:02 p.m. Eastern Time); (b) if the Common Stock is not then
listed or quoted on a Trading Market and if prices for the Common Stock are
then quoted on the OTC Bulletin Board, the volume weighted average price per
share of the Common Stock for such date (or the nearest preceding date) on the
OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted
on the OTC Bulletin Board and if prices for the Common Stock are then reported
in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (d) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Holder and reasonably
acceptable to the Company.

 

There cannot be a
Cashless Exercise unless “B” exceeds “C”.

 

(b)           The
Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 4(a) or
otherwise, to the extent that after giving effect to such issuance after
exercise as set forth on the applicable Notice of Exercise, such Holder
(together with such Holder’s Affiliates, and any other person or entity acting
as a group together with such Holder or any of such Holder’s Affiliates), 

 

3

 

as set forth on
the applicable Notice of Exercise, would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For purposes of the
foregoing sentence, the number of shares of Common Stock beneficially owned by
such Holder and its Affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares of Common
Stock which would be issuable upon (A) exercise of the remaining,
nonexercised portion of this Warrant beneficially owned by such Holder or any
of its Affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without
limitation, any other Warrants or Notes) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by
such Holder or any of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 4(b), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”) and the rules and
regulations promulgated thereunder, it being acknowledged by a Holder that the
Company is not representing to such Holder that such calculation is in compliance
with Section 13(d) of the Exchange Act and such Holder is solely
responsible for any schedules required to be filed in accordance therewith. To
the extent that the limitation contained in this Section 4(b) applies,
the determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder together with any Affiliates) and of which a
portion of this Warrant is exercisable shall be in the sole discretion of a
Holder, and the submission of a Notice of Exercise shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by such Holder together with any Affiliates) and of
which portion of this Warrant is exercisable, in each case subject to such
aggregate percentage limitation, and the Company shall have no obligation to
verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder. For purposes of this Section 4(b), in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a
more recent public announcement by the Company or (z) any other notice by
the Company or the Company’s transfer agent setting forth the number of shares
of Common Stock outstanding. Upon the written or oral request of a Holder, the
Company shall within two Trading Days confirm orally and in writing to such
Holder the number of shares of Common Stock then outstanding. In any case, the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
this Warrant, by such Holder or its Affiliates since the date as of which such
number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common
Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon exercise of this Warrant. The Beneficial Ownership
Limitation provisions of this Section 4(b) may be waived by such
Holder, at the election of such Holder, upon not less than 61 days’ prior
notice to the Company to change the Beneficial Ownership Limitation to 9.99% of
the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of this Warrant,
and the provisions of this Section 4(b) shall continue to apply. Upon
such a change by a Holder of the Beneficial Ownership Limitation from such
4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation
may not be further waived by such 

 

4

 

Holder. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 4(b)) to correct this paragraph (or any portion
hereof) which may be defective or inconsistent with the intended Beneficial
Ownership Limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.

 

5.             Delivery of Warrant Shares.

 

(a)           To
effect exercises hereunder, the Holder shall not be required to physically
surrender this Warrant upon exercise unless this Warrant ceases to be further
exercisable for additional Warrant Shares. 
Upon delivery of the Exercise Notice to the Company (with the attached
Warrant Shares Exercise Log) at its address for notice set forth herein and
upon payment of the Exercise Price multiplied by the number of Warrant Shares
that the Holder intends to purchase hereunder, the Company shall promptly (but
in no event later than three Trading Days after the Date of Exercise (as
defined herein)) issue and deliver to the Holder, a certificate for the Warrant
Shares issuable upon such exercise, which, unless otherwise required by the
Purchase Agreement, shall be free of restrictive legends.  A “Date of Exercise”
means the date on which the Holder shall have delivered to Company: (i) the
Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) except in the case of a Cashless
Exercise, payment in full of the Exercise Price in immediately available funds
or federal funds for the number of Warrant Shares so indicated by the Holder to
be purchased.

 

(b)           If
by the third Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required pursuant to Section 5(a),
then the Holder will have the right to rescind such exercise.

 

(c)           If
by the third Trading Day after a Date of Exercise the Company fails to deliver
the required number of Warrant Shares in the manner required pursuant to Section 5(a),
and if after such third Trading Day and prior to the receipt of such Warrant
Shares, the Holder purchases in a bona fide arm’s length transaction for fair
market value (in an open market transaction or otherwise) the number of shares
of Common Stock necessary to deliver in satisfaction of a bona fide arm’s
length sale for fair market value by the Holder of the Warrant Shares which the
Holder was entitled to receive upon such exercise (a “Buy-In”),
then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the Holder’s total sales
price (including brokerage commissions, if any) for the shares of Common Stock
so sold and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder.  The
Holder shall provide the Company written notice and reasonably detailed
documentation indicating the amounts requested by the Holder in respect of the
Buy-In.

 

5

 

(d)           The
Company’s obligations to issue and deliver Warrant Shares in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right
to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.

 

6.             Charges, Taxes and Expenses.  Issuance and delivery of
certificates for shares of Common Stock upon exercise of this Warrant shall be
made without charge to the Holder for any issue or transfer tax, withholding
tax, transfer agent fee or other incidental tax or expense in respect of the
issuance of such certificates, all of which taxes and expenses shall be paid by
the Company; provided, however, that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the
registration of any certificates for Warrant Shares or Warrants in a name other
than that of the Holder.  The Holder
shall be responsible for all other tax liability that may arise as a result of
holding or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

 

7.             Replacement of Warrant.  If this Warrant is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
ownership thereof and customary and reasonable indemnity.  Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe.  If a New Warrant is requested
as a result of a mutilation of this Warrant, then the Holder shall deliver such
mutilated Warrant to the Company as a condition precedent to the Company’s
obligation to issue the New Warrant.

 

8.             Reservation of Warrant Shares.  The Company covenants that it
will at all times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the
purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as
herein provided, the number of Warrant Shares which are then issuable and
deliverable upon the exercise of this entire Warrant, free from preemptive
rights or any other contingent purchase rights of persons other than the Holder
(taking into account the adjustments and restrictions of Section 9).
The Company covenants that all Warrant Shares so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable.

 

9.             Certain Adjustments.  The Exercise Price and number
of Warrant Shares issuable upon exercise of this Warrant are subject to
adjustment from time to time as set forth in this Section 9.

 

6

 

(a)           Stock
Dividends and Splits, Recapitalizations, Etc.  If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock or subdivides the outstanding shares of Common Stock
into a larger number of shares (by any stock split, recapitalization or
otherwise), then in each such case the Exercise Price shall be proportionately
reduced and the number of Warrant Shares shall be proportionately increased,
and (ii) combines outstanding shares of Common Stock into a smaller number
of shares (by reverse stock split, recapitalization, or otherwise), then in
each such case the Exercise Price shall be proportionately increased and the
number of Warrant Shares shall be proportionately decreased.  Any adjustment made pursuant to clauses (i) and
(ii) of this paragraph shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or
distribution or immediately after the effective date of such subdivision or
combination (as the case may be). If any event requiring an adjustment under
this paragraph occurs during the period that an Exercise Price is calculated
hereunder, then the calculation of such Exercise Price shall be adjusted
appropriately to reflect such event.

 

(b)           Pro
Rata Distributions.  If the Company,
at any time while this Warrant is outstanding, distributes to all holders of
Common Stock (i) evidences of its indebtedness, (ii) any security
(other than a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or (iv) any
other asset (in each case, “Distributed Property”),
then in each such case the Exercise Price shall be appropriately adjusted.  Any adjustment made pursuant to this
paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such distribution.  If any event requiring an adjustment under
this paragraph occurs during the period that an Exercise Price is calculated
hereunder, then the calculation of such Exercise Price shall be adjusted
appropriately to reflect such event.

 

(c)           Adjustment
of Exercise Price upon Issuance of Common Stock.  If and whenever on or after the Issuance
Date, the Company issues or sells, or in accordance with this Section 7(a) is
deemed to have issued or sold, any shares of Common Stock (including the
issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding shares of Common Stock deemed to have been issued
or sold by the Company in connection with any Excluded Security) for a
consideration per share (the “New Securities
Issuance Price”) less than a price (the “Applicable Price”) equal to the Conversion Price in effect
immediately prior to such issue or sale (the foregoing a “Dilutive Issuance”), then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be
reduced to the New Securities Issuance Price. 
For purposes of determining the adjusted Exercise Price under this Section 9(c),
the following shall be applicable:

 

(i)            Issuance
of Options.  If the Company in any
manner grants or sells any Options and the lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange or exercise of any Convertible Securities issuable upon
exercise of such Option is less than the Applicable Price, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the granting or sale of such Option for such
price per share.  For purposes of this Section 9(c)(i),
the “lowest price per share for which one share of Common Stock is issuable
upon the exercise of any such Option or upon conversion or exchange 

 

7

 

or exercise of
any Convertible Securities issuable upon exercise of such Option” shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock upon
granting or sale of the Option, upon exercise of the Option and upon conversion
or exchange or exercise of any Convertible Security issuable upon exercise of
such Option.  No further adjustment of
the Exercise Price shall be made upon the actual issuance of such Common Stock
or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such Common Stock upon conversion or exchange or exercise of
such Convertible Securities.

 

(ii)           Issuance
of Convertible Securities.  If the
Company in any manner issues or sells any Convertible Securities and the lowest
price per share for which one share of Common Stock is issuable upon such
conversion or exchange or exercise thereof is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding and to have
been issued and sold by the Company at the time of the issuance of sale of such
Convertible Securities for such price per share.  For the purposes of this Section 9(c)(ii),
the “price per share for which one share of Common Stock is issuable upon such
conversion or exchange or exercise” shall be equal to the sum of the lowest
amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the issuance or sale of the
Convertible Security and upon the conversion or exchange or exercise of such
Convertible Security.  No further
adjustment of the Exercise Price shall be made upon the actual issuance of such
Common Stock upon conversion or exchange or exercise of such Convertible
Securities, and if any such issue or sale of such Convertible Securities is
made upon exercise of any Options for which adjustment of the Exercise Price
had been or are to be made pursuant to other provisions of this Section 9(c),
no further adjustment of the Exercise Price shall be made by reason of such
issue or sale.

 

(iii)          Change
in Option Price or Rate of Conversion. 
If the purchase price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exchange or exercise
of any Convertible Securities, or the rate at which any Convertible Securities
are convertible into or exchangeable or exercisable for Common Stock changes at
any time, the Exercise Price in effect at the time of such change shall be
adjusted to the Exercise Price which would have been in effect at such time had
such Options or Convertible Securities provided for such changed purchase
price, additional consideration or changed conversion rate, as the case may be,
at the time initially granted, issued or sold. 
Notwithstanding
anything in this Warrant to the contrary, in the event that the Company agrees
to decrease the conversion price of any of its 7% Convertible Secured Promissory
Notes due August 2007 in connection with an agreement by the holder of any
such notes to convert the same, such decrease in the conversion price will not
result in any adjustment to the Exercise Price pursuant to this Section 9(c) of
this Warrant.

 

(iv)          Calculation
of Consideration Received.  In case
any Option is issued in connection with the issue or sale of other securities
of the Company, together comprising one integrated transaction in which no
specific consideration is allocated to such Options by the parties thereto, the
Options will be deemed to have been issued for a consideration of $.01.  If any Common Stock, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefor will be deemed to be the net amount
received by the Company therefor.  If any
Common Stock, Options 

 

8

 

or Convertible
Securities are issued or sold for a consideration other than cash, the amount
of the consideration other than cash received by the Company will be the fair
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company
will be the Closing Sale Price of such securities on the date of receipt.  If any Common Stock, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefor will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Options or Convertible Securities, as the case may be.  The fair value of any consideration other than
cash or securities will be determined by the Company.

 

(v)           Record
Date.  If the Company takes a record
of the holders of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in Common Stock, Options or in
Convertible Securities or (B) to subscribe for or purchase Common Stock,
Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

 

(d)           Fundamental
Transactions.  If, at any time while
this Warrant is outstanding, (1) the Company effects any merger or
consolidation of the Company with or into another Person, (2) the Company
effects any sale of all or substantially all of its assets in one or a series
of related transactions, (3) any tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, or (4) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental
Transaction”), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternate
Consideration”).  For purposes
of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common
Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction. 
At the Holder’s option and request, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder a
new warrant substantially in the form of this Warrant and consistent with the
foregoing provisions and evidencing the Holder’s right to purchase the
Alternate Consideration for the aggregate Exercise Price upon exercise
thereof.  Any such successor or surviving
entity shall be deemed to be required to comply with the provisions of this
paragraph (d) and shall insure that the Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent 

 

9

 

transaction
analogous to a Fundamental Transaction. 
Notwithstanding the foregoing, in the event of a Fundamental Transaction
that constitutes a Change in Control (as defined in the Notes), at the request
of the Holder delivered before the 90th day after such Fundamental Transaction
is consummated, the Company (or the successor to the Company) shall purchase
this Warrant from the Holder by paying to the Holder, within five Business Days
after such request (or, if later, on the effective date of the Fundamental
Transaction), cash in an amount equal to the Black Scholes Value of the
remaining unexercised portion of this Warrant on the date such Fundamental
Transaction is consummated.  For the
purpose of this Warrant, “Black Scholes Value”
means the value, as reasonably calculated by the Company, of this Warrant based
on the Black-Scholes Option Pricing Model, provided that the Black Sholes Value
of this Warrant shall not for this purpose exceed an amount equal to $5.00
multiplied by the number of shares of Common Stock for which this Warrant is
exercisable at the time the Fundamental Transaction is consummated (with such
$5.00 cap being subject to adjustment for stock dividends, stock splits,
reverse stock splits, and the like).

 

(e)           Number
of Warrant Shares.  Simultaneously
with any adjustment to the Exercise Price pursuant to paragraph (a) of
this Section, the number of Warrant Shares that may be purchased upon exercise
of this Warrant shall be increased or decreased proportionately, so that after
such adjustment the aggregate Exercise Price payable hereunder for the adjusted
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.

 

(f)            Calculations.  All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share,
as applicable.  The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Stock.

(g)           Notice
of Adjustments.  Upon the occurrence
of each adjustment pursuant to this Section 9, the Company at its
expense will promptly compute such adjustment in accordance with the terms of
this Warrant and prepare a certificate setting forth such adjustment, including
a statement of the adjusted Exercise Price and adjusted number or type of
Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based.  Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company’s Transfer Agent.  No adjustment
in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such rate; provided, however,
that any adjustments which by reason of this Section 9(g) are not
required to be made shall be carried forward 
and taken into account in any subsequent adjustment.

 

(h)           Notice
of Corporate Events.  If the Company (i) declares
a dividend or any other distribution of cash, securities or other property in
respect of its Common Stock, including without limitation any granting of
rights or warrants to subscribe for or purchase any capital stock of the
Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, 

 

10

 

then the Company
shall deliver to the Holder a notice describing the material terms and
conditions of such transaction, at least five calendar days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that
the Holder is given the practical opportunity to exercise this Warrant prior to
such time so as to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any defect
therein shall not affect the validity of the corporate action required to be
described in such notice.

 

10.           Payment of Exercise Price.  Upon exercise of this Warrant the Holder
shall pay the Exercise Price in immediately available funds unless it is a
Cashless Exercise in accordance with Section 4 hereof.

 

11.           No Fractional Shares.  No fractional shares of
Warrant Shares will be issued in connection with any exercise of this
Warrant.  In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the closing price of one Warrant
Share as reported by Bloomberg L.P. (or the successor to its function of
reporting share prices) on the date of exercise.

 

12.           Notices.  Any and all notices or other communications
or deliveries hereunder (including, without limitation, any Exercise Notice)
shall be in writing and shall be deemed given and effective on the earliest of (i) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section prior to 6:30 p.m.
(New York City time) on a Trading Day, (ii) the next Trading Day after the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any
Trading Day, (iii) the Trading Day following the date of mailing, if sent
and delivered by nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be given.  The addresses for such communications shall
be:  (i) if to the Company, to Liquidmetal
Technologies, Inc., 30452 Esperanza, Rancho Santa Margarita, CA  92688. 
Attn: Chief Executive Officer, Facsimile No.: (949) 635-2108, or (ii) if
to the Holder, to the address or facsimile number appearing on the Warrant
Register or such other address or facsimile number as the Holder may provide to
the Company in accordance with this Section.

 

13.           Warrant Agent.  The Company shall serve as
warrant agent under this Warrant.  Upon
30 days’ notice to the Holder, the Company may appoint a new warrant
agent.  Any corporation into which the Company
or any new warrant agent may be merged or any corporation resulting from any
consolidation to which the Company or any new warrant agent shall be a party or
any corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business
shall be a successor warrant agent under this Warrant without any further
act.  Any such successor warrant agent
shall promptly cause notice of its succession as warrant agent to be mailed (by
first class mail, postage prepaid) to the Holder at the Holder’s last address
as shown on the Warrant Register.

 

11

 

14.           Miscellaneous.

 

(a)           This
Warrant shall be binding on and inure to the benefit of the parties hereto and
the respective successors and assigns of the Holder it being understood that
transfers of this Warrant by the Holder are subject to the legend set forth of
the face hereof.  Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. 
This Warrant may be amended only in writing signed by the Company and
the Holder and their successors and assigns.

 

(b)           All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. 
Each party agrees that all legal proceedings to resolve any dispute
concerning the interpretations, enforcement and defense of this Warrant and the
transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan (the “New York Courts”), although depositions may be taken in
other locations.  Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and
agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of
or relating to this Warrant or the transactions contemplated hereby.  If either party shall commence a Proceeding
to enforce any provisions of this Warrant, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and prosecution
of such Proceeding.

 

(c)           The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

 

(d)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

 

(e)           The
Company will not, by amendment of its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of 

 

12

 

any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
against such impairment.

 

(f)            This
Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof.  In connection with an exercise of this
Warrant in accordance with the terms hereof, upon the surrender of this Warrant
and the payment of the aggregate Exercise Price (or by means of a Cashless
Exercise if permitted hereunder), the Warrant Shares so purchased shall be and
be deemed to be issued to such Holder as the record owner of such shares as of
the close of business on the later of the date of such surrender or payment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

 

13

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed by its authorized officer as of the date first
indicated above.

 

	
   

  	
  LIQUIDMETAL
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  
	
   

  	
  Name:

  	
  John
  Kang

  
	
   

  	
  Title:

  	
  Chairman

  
				

 

14

 

EXERCISE NOTICE

 

To Liquidmetal Technologies, Inc.

 

The undersigned hereby
irrevocably elects to purchase  ______________
shares of common stock, par value $0.001 per share, of Liquidmetal Technologies, Inc.
(“Common Stock”), pursuant to Warrant No. [  ], originally issued January 3, 2007
(the “Warrant”), and, if not a Cashless
Exercise in accordance with Section 4, encloses herewith $_______ in cash,
federal funds or other immediately available funds, which sum represents the
aggregate Exercise Price (as defined in the Warrant) for the number of shares
of Common Stock to which this Exercise Notice relates, together with any
applicable taxes payable by the undersigned pursuant to the Warrant.

 

The undersigned  hereby certifies to the Company that the
undersigned’s exercise of the amount set forth above will not directly result
in the undersigned (together with the undersigned’s affiliates) beneficially
owning in excess of 4.99% of the number of shares of Common Stock outstanding
immediately after giving effect to such exercise, calculated in accordance with
Section 4(b) of the Warrant; provided that if the undersigned has
waived the 4.99% beneficial ownership requirement  by providing the Company with notice at least
61 days prior to the date hereof, the undersigned hereby certifies to the
Company that the undersigned’s exercise of the amount set forth above will not
directly result in the undersigned (together with the undersigned’s affiliates)
beneficially owning in excess of 9.99% of the number of shares of Common Stock
outstanding immediately after giving effect to such conversion, calculated in
accordance with Section 4(b) of the Warrant.

 

The undersigned requests
that certificates for the shares of Common Stock issuable upon this exercise be
issued in the name of

 

	
   

  	
   

  	
  Print Name of Holder:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HOLDER’S SOCIAL SECURITY OR

  
	
   

  	
   

  	
  TAX IDENTIFICATION NUMBER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Holder’s Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
						

 

 

Warrant Shares Exercise Log

 

	
  Date

  	
   

  	
  Number of Warrant

  Shares Available to be

  Exercised

  	
   

  	
  Number of Warrant Shares

  Exercised

  	
   

  	
  Number of

  Warrant Shares

  Remaining to

  be Exercised

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

FORM OF ASSIGNMENT

 

[To be completed and signed only upon transfer of
Warrant]

 

FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________ the right
represented by the within Warrant to purchase 
____________ shares of Common Stock of Liquidmetal Technologies, Inc.
to which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of the Company with full power of substitution
in the premises.

 

Dated:    ______________, ____

 

 

	
   

  	
   

  
	
   

  	
  (Signature
  must conform in all respects to name of

  holder as specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  of Transferee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Tax
  Identification Number or Social Security Number of Transferee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

In
the presence of:

 

 

_________________________Exhibit
10.37

 

 

October 31, 2007

 

	
  To:

  	
   

  	
  Holders
  of 8% Unsecured Subordinated Notes

  	
   

  
	
   

  	
   

  	
  of
  Liquidmetal Technologies, Inc.

  	
   

  

 

This letter is being sent to
each Holder (a “Holder”) of the 8% Unsecured Subordinated Notes (the “Outstanding
Notes”) issued by Liquidmetal Technologies, Inc. (the “Company”)
between May and December 2006. 
The purpose of this letter is to provide for, subject to the due date
extension of the Outstanding Note to allow the Company to finalize its current
joint venture and licensing relationship negotiations, the amendment of your
Outstanding Note and the amendment of the Common Stock Purchase Warrant
previously granted to you in connection with the Outstanding Note (the “Outstanding
Warrant”).  Please return an executed
copy of this letter to the Company to confirm your agreement to the following:

 

(1)  The second
sentence of the first paragraph of your Outstanding Note is hereby amended by
deleting said sentence in its entirety and replacing it with the
following:  “All principal and interest
under this Note shall become due and payable on November 30, 2007 (the “Maturity Date”).”

 

(2)  With respect to
your Outstanding Warrant and in consideration of the due date extension of your
Outstanding Note as described in the preceding paragraph, the Exercise Price
(as defined in the Outstanding Warrant) shall be adjusted to $1.75 per share,
which adjustment shall be effective as of the date of this letter, and the
maximum number of Warrant Shares (as defined in the Outstanding Warrant) that
may be purchased upon the exercise of the Outstanding Warrant shall be
increased as of the date of this letter by an amount equal to thirty percent
(30%) of the maximum number of Warrant Shares subject to the Outstanding
Warrant immediately prior to such increase.

 

(3)  The following
information correctly reflects the original issue date of your Outstanding Note
and Outstanding Warrant, the original principal amount of your Outstanding
Note, the original number of Warrant Shares included in your Outstanding Warrant,
and the number of Warrant Shares that will be subject to your Outstanding
Warrant as a result of the upward adjustment described in the preceding
paragraph.

 

	
  HOLDER’S NAME

  	
   

  	
  ORIGINAL ISSUE

  DATE OF

  OUTSTANDING

  NOTE AND

  WARRANT

  	
   

  	
  ORIGINAL

  PRINCIPAL

  AMOUNT OF

  OUTSTANDING

  NOTE

  	
   

  	
  ORIGINAL # OF

  WARRANT SHARES

  SUBJECT TO

  OUTSTANDING

  WARRANT*

  	
   

  	
  TOTAL # OF WARRANT

  SHARES SUBJECT TO

  OUTSTANDING WARRANT

  AS A RESULT OF ABOVE-

  DESCRIBED ADJUSTMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[letter
continues on next page]

 

 

We kindly request that you sign
and return this letter as soon as possible to the Company.

 

If you have any questions
regarding the matters set forth herein, please do not hesitate to call John
Kang at (949) 635-2100.

	
   

  	
   

  
	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ John Kang

  
	
   

  	
   

  
	
   

  	
  John Kang, Chairman of the Board

  
	
   

  	
   

  

 

	
  AGREED
  TO AND ACKNOWLEDGED:

  	
   

  
	
   

  	
   

  
	
  Name
  of

  	
   

  
	
  Holder:

  	
   

  	
   

  
	
  

  By:

  	
   

  	
   

  
	
  

  Name:

  	
   

  	
   

  
	
  

  Title:

  	
   

  	
   

  
	
  

  

  Date:

  	
   

  	
  ,
  2007

  	
   

  
						

 

 

Please
complete, sign, and return as soon as possible to:

 

Won
Chung, Vice President- Finance

Liquidmetal
Technologies, Inc.

30452 Esperanza

Rancho Santa Margarita, California 92688

Fax No.: (949) 635-2108

won.chung@liquidmetal.com

 

2

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