Document:

Exhibit 10.61

 

THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR THE
SECURITIES OR BLUE SKY LAWS OF CALIFORNIA OR ANY OTHER STATE AND MAY NOT
BE SOLD, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE NOTE UNDER THE
SECURITIES ACT OF 1933, AND OTHER APPLICABLE SECURITIES OR BLUE SKY LAWS, OR AN
OPINION OF COUNSEL SATISFACTORY TO LIQUIDMETAL TECHNOLOGIES, INC. THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND APPLICABLE STATUTES.

 

SUBORDINATED
PROMISSORY NOTE

 

	
  $1,000,000

  	
   

  	
  Lake
  Forest, California

  
	
   

  	
   

  	
  March 17,
  2006

  

 

FOR VALUE RECEIVED,
LIQUIDMETAL TECHNOLOGIES, INC., a Delaware corporation (the “Maker”), promises
to pay to the order of Atlantic Realty Group, Inc., a New York corporation, or its successors or assigns (the “Holder”) at 1836 El
Camino Del Teatro, La Jolla, California 92037, or at such other place as the
Holder may designate in writing from time to time, in lawful money of the
United States of America, the principal sum of ONE MILLION DOLLARS
($1,000,000.00), such principal balance being the amount of funds advanced to
Liquidmetal Technologies, Inc. by Atlantic Realty Group, Inc.,
together with interest thereon as set forth below.

 

1.               Payment
of Interest and Conversion.

 

a)              So
long as there is no Event of Default, interest on the unpaid principal balance
under this Note shall accrue at the rate of ten percent (10%) per annum,
beginning on March 17, 2006.  If the
interest rate hereunder is determined by a court of competent jurisdiction to
be usurious or otherwise in violation of California law, the interest rate
under this Note shall equal the maximum interest rate allowable by California
law.  In all cases, interest shall accrue
during the actual number of days elapsed and shall be computed on the basis of
a 365-day year.  This Note shall be paid
as follows:

 

i)                                         Payments
of accrued but unpaid interest on the outstanding principal balance under this
Note shall be due and payable upon scheduled maturity on October 16, 2006,
unless such day is not a business day, in which case payment shall be due on
the first Business Day after such day (an “Interest Payment Date”). The Maker
may elect to repay the entire principal amount and all interest due thereon on
or before the scheduled maturity on October 16, 2006 without any
prepayment penalty but not before June 16, 2006.  The Maker shall provide written notice to the
Holder of its intent

 

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to repay to the
Holder at least three (3) days prior to the date on which the Maker
intends to repay the obligation;

 

b)             The
Maker shall be liable for all fees and expenses arising from the interpretation
or enforcement of this Note, or from the collection of amounts due hereunder, including
but not limited to reasonable legal fees and expenses (collectively, the “Additional
Amounts”).

 

c)              The
Maker agrees that upon the occurrence of an Event of Default, as defined below,
Maker shall pay a default rate of interest on any sums due at the rate of
fifteen percent (15%) per annum from the date that the Event of Default occurs
until paid in full.

 

2.               Subordination.  THE RIGHTS OF THE HOLDER OF THIS NOTE TO
RECEIVE PAYMENT OF ANY PRINCIPAL HEREOF OR INTEREST HEREON IS SUBJECT AND
SUBORDINATE TO THE PRIOR PAYMENT OF THE PRINCIPAL OF AND INTEREST ON ALL OTHER
INDEBTEDNESS OF THE MAKER, WHETHER NOW OUTSTANDING OR SUBSEQUENTLY INCURRED,
WHETHER SECURED OR UNSECURED, AND ANY DEFERRALS, RENEWALS OR EXTENSIONS OF SUCH
INDEBTEDNESS OR ANY DEBENTURES, BONDS OR NOTES EVIDENCING SUCH INDEBTEDNESS
(THE ‘SENIOR INDEBTEDNESS”).  UPON ANY
RECEIVERSHIP, INSOLVENCY, ASSIGNMENT FOR THE BENEFIT OF CREDITORS, BANKRUPTCY,
REORGANIZATION, SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS AND LIABILITIES
OF THE MAKER, OR IN THE EVENT THIS NOTE IS DECLARED DUE AND PAYABLE UPON THE
OCCURRENCE OF AN EVENT OF DEFAULT, THEN NO AMOUNT SHALL BE PAID BY THE MAKER
WITH RESPECT TO PRINCIPAL AND INTEREST HEREON UNLESS AND UNTIL THE PRINCIPAL
OF, AND INTEREST ON, ALL SENIOR INDEBTEDNESS THEN OUTSTANDING IS PAID IN FULL.

 

3.               Events
of Default.  The occurrence of any of
the following events shall constitute an “Event of Default” under this Note:

 

a)              any
failure by the Maker to pay principal, accrued but unpaid interest or other
amounts when due under this Note, unless such failure is cured in full within
fifteen (15) days after receiving written notice informing the Maker of such
failure;

 

b)             any
material breach, violation or default (including but not limited to technical
and non-monetary defaults) by the Maker with respect to any of its other
covenants, obligations or duties under this Note, unless such breach, violation
or default is cured in full within sixty (60) Business Days after receiving
written notice informing the Maker of such breach, violation or default;

 

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c)              the
filing against the Maker of any bankruptcy petition that is not dismissed
within ninety (90) days after filing or the filing by or on behalf of the Maker
of any bankruptcy petition;

 

d)             the
appointment of receiver, custodian or trustee to operate or manage the Maker or
substantially all of its assets or businesses;

 

e)              the
dissolution or liquidation of the Maker; or

 

f)                any
merger involving, consolidation involving, sale of all or substantially all
assets by, or share exchange by, the Maker.

 

4.               Rights
Remedies and Waivers.  The Holder
shall have all rights and remedies available at law, in equity or by
constitution, statute, rule, regulation or ordinance, including but not limited
to rights and remedies granted in this Note with respect to any Event of
Default.

 

Without limiting the
generality of the foregoing provisions of this Section, the Holder shall have
the right, upon any Event of Default, to declare the entire principal balance
and accrued but unpaid interest due from the Maker to be immediately due and
payable in full.  The Maker shall be
liable for Additional Amounts, as defined in Section 1.b. of this Note.

 

In no event shall a
waiver of rights or remedies arise solely from the oral representations of the
Holder or from any delay by it in exercising, or any past failures to exercise,
rights or remedies.  A waiver of rights
and remedies by the Holder shall not be effective or binding unless, and then
only to the extent that, such waiver appears in this Note, or the Holder signs
an express written waiver of rights or remedies and causes such written waiver
to be delivered to the Maker.

 

The Maker, to the maximum
extent permitted by law, hereby waives each of the following: (a) the
benefit of, and the right to assert, any statute of limitations defenses
affecting the Maker’s rights, duties or obligations under this Note; (b) presentation,
demand, protest, notices of dishonor and protest and the benefits of homestead
exemptions; and (c) all defenses and pleas with respect to any extensions
of the time for payment under this Note, except as may be granted expressly by
the Holder, in its sole discretion, in a written instrument signed by the
Holder and delivered to the Maker.

 

5.               Governing
Law.  The Holder shall be entitled to
have all of its claims, causes of action, suits, demands, counterclaims and
defenses under this Note interpreted and enforced in accordance with the laws
of the State of California, without regard to any conflicts of law provisions
or principles thereof to the contrary.

 

6.               Modification.  This Note shall not be modified unless, and
then only to the extent that, a written modification is executed by the Holder
and the Maker, or its respective successors and assigns.

 

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7.               Assignment.  The Maker shall not assign or delegate,
whether in whole or in part, any of its rights, duties or obligations under
this Note, and any attempted assignment or delegation in violation of this Note
shall be void.

 

8.               Severable
Provisions.  All provisions in this
Note are severable and each valid and enforceable provision shall remain in
full force and effect, regardless of any determination that is binding upon the
parties hereto and that renders other provisions of this Note invalid or
unenforceable.  To the extent, if any,
that a court of competent jurisdiction determines that certain provisions of
this Note are invalid or unenforceable, the Maker and the Holder hereby authorize
such court to modify such provisions, in a manner consistent with the intent of
the Maker and the Holder, as such court deems reasonably necessary to make such
provisions valid and enforceable.

 

9.               Terms
of Convenience.  References to this
Note mean this Subordinated Promissory Note, as it may be amended or replaced
from time to time.  Terms such as “hereof,”
“herein,” “hereto,” “hereby,” “hereunder” and similar references to this Note
shall be deemed to refer to this Note as a whole and not to any particular section or
provision of this Note.  Captions and
headings are used in this Note for convenience only and shall not be construed
to affect the meaning of this Note.

 

10.         Restrictions
on Use of Proceeds.  The proceeds of
this Note shall be used by Maker solely for working capital of the Maker or
expansion purposes of Maker’s business and shall not be used to pay accrued or
future salaries or bonuses to any officers, directors, or employees of Maker

 

11.         Maximum
Interest Rate.  In no event shall any
agreed to or actual exaction charged, reserved or taken as an advance or
forbearance by Holder as consideration for this Note exceed the limits (if any)
imposed or provided by the law applicable from time to time to the Note for the
use or detention of money or for forbearance in seeking its collection; Holder
hereby waives any right to demand such excess. 
If the rate of interest under this Note should be above such maximum
rate of interest permitted by applicable law (if any), then notwithstanding any
contrary provision in this Note and without necessity of further agreement or
notice by Holder or Maker, the unpaid principal balance of the Note shall
thereupon bear interest at such maximum lawful rate.  In the event that the interest provisions of
this Note or any exactions provided for in this Note shall result at any time
or for any reason in an effective rate of interest that transcends the maximum
interest rate permitted by applicable law (if any), then without further
agreement or notice the obligation to be fulfilled shall be automatically
reduced to such limit and all sums received by Holder in excess of those
lawfully collectible as interest shall be applied against the principal of the Note
immediately upon Holder’s receipt thereof, with the same force and effect as
though the Maker had specifically designated such extra sums to be so applied
to principal.

 

12.         WAIVER
OF JURY TRIAL.  THE MAKER HEREBY, AND
THE HOLDER BY ITS ACCEPTANCE OF THIS PROMISSORY NOTE, KNOWINGLY, VOLUNTARILY
AND

 

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INTENTIONALLY
WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
PROMISSORY NOTE AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. 
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER ACCEPTING THIS
PROMISSORY NOTE AND MAKING ANY LOAN, ADVANCE OR OTHER EXTENSION OF CREDIT TO
THE MAKER.

 

 

IN WITNESS WHEREOF, this
Subordinated Promissory Note has been executed as of the first date written
above.

 

 

	
  MAKER:

  	
  LIQUIDMETAL
  TECHNOLOGIES, INC.

  
	
   

  	
  a Delaware Corporation

  
	
   

  	
   

  
	
   

  	
  By: /s/ Ricardo A.
  Salas

  	
   

  
	
   

  	
  Ricardo A. Salas,
  President

  

 

5Exhibit 10.62

 

THIS WARRANT AND THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR QUALIFIED UNDER STATE SECURITIES LAWS AND MAY NOT BE
OFFERED, SOLD OR TRANSFERRED IN VIOLATION OF SUCH ACT OR LAW OR THE PROVISIONS
OF THIS WARRANT.

 

 

WARRANT FOR
PURCHASE

OF

SHARES OF COMMON
STOCK

OF

LIQUIDMETAL
TECHNOLOGIES, INC.

 

 

For value received, Atlantic
Realty Group, Inc., a New York corporation (“Holder”), is entitled
to purchase from LIQUIDMETAL TECHNOLOGIES, INC., a Delaware corporation
(the “Company”), that amount of fully paid and nonassessable shares of
the Company’s Common Stock, as set forth in Section 2.4 hereof,
pursuant to and subject to the terms and conditions set forth in this Warrant.

 

This Warrant is subject
to the following provisions, terms and conditions.

 

1.             Definitions.

 

In addition to the terms
defined elsewhere in this Warrant, the following terms have the following
respective meanings:

 

“Common Stock”
shall mean the Company’s Common Stock, par value $.001 per share.

 

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

 

“Exercise Date”
shall mean the date on which this Warrant is exercised.

 

“Exercise Period”
shall mean the period commencing on the date of this Warrant and terminating on
March 17, 2009.

 

“Exercise Price”
per share of Common Stock shall mean Two Dollars ($2.00).

 

“Expiration Date”
shall mean the last day of the Exercise Period.

 

“Securities Act”
shall mean the Securities Act of 1933, as amended, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.

 

 

“Underlying Shares”
shall mean the aggregate number of shares of Common Stock issuable upon
exercise of this Warrant, as set forth in Section 2.3 to this
Warrant, and as adjusted pursuant to Section 3 of this Warrant.

 

2.             Exercise
of Warrant.

 

2.1           Exercise
Generally. Subject to the conditions hereinafter set forth, this Warrant is
exercisable in whole or in part as to the Underlying Shares during the
Exercise Period, but in no event subsequent to the end of the Exercise Period,
by delivery to the Company of an Exercise Notice (in the form set forth at
the end hereof duly completed and executed), together with the Exercise Price,
at the principal office of the Company in Lake Forest, California specified in Section 12.2.
This Warrant and all rights and options hereunder shall expire at the
Expiration Date, and shall be wholly null and void to the extent this Warrant
is not exercised before that time. The Exercise Price shall be paid in cash,
unless the Holder elects to exercise through a cashless exercise, as described
in this Section 2.2 below.

 

2.2           Cashless
Exercise. This Warrant may be exercised, in whole or in part, through
a cashless exercise by (i) the delivery to the Company of a duly executed
Exercise Notice specifying the number of Underlying Shares to be applied to the
aggregate Exercise Price, and (ii) the surrender to a common carrier for
overnight delivery to the Company, or as soon as practicable following the date
the Holder delivers the Notice of Exercise to the Company, of this Warrant (or
an indemnification undertaking with respect to this Warrant in the case of its
loss, theft or destruction). The number of shares of Common Stock to be issued
upon exercise of this Warrant pursuant to this Section 2.2 shall equal the
value of this Warrant (or the portion thereof being canceled) computed as of
the date of delivery of this Warrant to the Company using the following
formula:

 

X
= Y(A-B)/A

 

where:

 

X = the number of shares
of Common Stock to be issued to the Holder under this Section 2.2;

Y = the number of Underlying
Shares identified in the Notice of Exercise as being applied to the aggregate Exercise
Price;

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

B = the Exercise Price on
such delivery date

 

The Company acknowledges and agrees that this Warrant was issued for
consideration received on the date on which this Warrant was granted. 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, be “tacked” to the period during which the Holder holds the
Warrant Shares received upon such cashless exercise. For purposes of this
Warrant, “Fair Market Value” shall equal the average closing trading price of the

 

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Common Stock on the Principal Market for the five
(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. The term “Principal Market” means
the OTC Bulletin Board or any other exchange, market, or quotation service on
which the Company’s Common Stock is primarily traded, listed, or quoted.

 

2.3           Holder
Representations and Warranties. In connection with any exercise of this
Warrant, the Holder agrees to make such representations and warranties as may be
necessary to demonstrate compliance with applicable securities laws, as may be
reasonably requested by the Company.

 

2.4           Number
of Shares. The number of shares issuable pursuant to this Warrant shall be
One Hundred Twenty Five Thousand (125,000) shares of Common Stock.

 

3.             Reorganization.

 

3.1           Modifications
of Number of Shares and Exercise Price. The number of shares purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment as follows:

 

(a)           Stock
Dividends. If at any time after the date of the issuance of this Warrant (i) the
Company shall fix a record date for the issuance of any stock dividend payable
in shares of common shares or (ii) the number of shares of common shares
shall have been increased by a subdivision or split-up of shares of common
shares, then, on the record date fixed for the determination of holders of
common shares entitled to receive such dividend or immediately after the
effective date of subdivision or split-up, as the case may be, the number
of shares to be delivered upon exercise of this Warrant will be increased so
that the Holder will be entitled to receive the number of shares of common
shares that such Holder would have owned immediately following such action had
this Warrant been exercised immediately prior thereto, and the Exercise Price
will be adjusted as provided below in paragraph (f).

 

(b)           Combination
of Stock. If the number of shares of common shares outstanding at any time
after the date of the issuance of this Warrant shall have been decreased by a
combination of the outstanding shares of common shares, then, immediately after
the effective date of such combination, the number of shares of common shares
to be delivered upon exercise of this Warrant will be decreased so that the
Holder thereafter will be entitled to receive the number of shares of common
shares that such Holder would have owned immediately following such action had
this Warrant been exercised immediately prior thereto, and the Exercise Price
will be adjusted as provided below in paragraph (f).

 

(c)           Reorganization,
etc. If any capital reorganization of the Company, or any

 

3

 

reclassification of the
common shares, or any consolidation of the Company with or merger of the
Company with or into any other person or any sale, lease or other transfer of
all or substantially all of the assets of the Company to any other person,
shall be effected in such a way that the holders of common shares shall be
entitled to receive stock, other securities or assets (whether such stock,
other securities or assets are issued or distributed by the Company or another
person) with respect to or in exchange for common shares, then, upon exercise
of this Warrant the Holder shall have the right to receive the kind and amount
of stock, other securities or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer that
such Holder would have been entitled to receive upon exercise of this Warrant
had this Warrant been exercised immediately before such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer,
subject to adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant.

 

(d)           Fractional
Shares. No fractional shares of common shares shall be issued to any Holder
in connection with the exercise of this Warrant. Instead of any fractional
shares of Common Shares that would otherwise be issuable to such Holder, the
Company will pay to such Holder a cash adjustment in respect of such fractional
interest in an amount equal to that fractional interest of the then current
Closing Price per share of common shares.

 

(e)           Carryover.
Notwithstanding any other provision of this Warrant, no adjustment shall be
made to the number of shares of common shares to be delivered to the Holder (or
to the Exercise Price) if such adjustment represents less than 1% of the number
of shares to be so delivered, but any lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which together with any adjustments so carried forward shall amount
to 1% or more of the number of shares to be so delivered.

 

(f)            Exercise
Price Adjustment. Whenever the number of shares purchasable upon the
exercise of the Warrant is adjusted, as herein provided, the Exercise Price
payable upon the exercise of this Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable upon the exercise
of the Warrant immediately prior to such adjustment, and of which the
denominator shall be the number of Warrant Shares purchasable immediately
thereafter.

 

(g)           Notice
of Adjustment. Whenever the number of shares or the Exercise Price of such
shares is adjusted, as herein provided, the Company shall promptly mail by
first-class, postage prepaid, to the Holder, notice of such adjustment or
adjustments.

 

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4.             No
Impairment.

 

The Company may not,
by amendment of its Certificate of Incorporation or Bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of
securities, sale of assets or any other voluntary action, willfully avoid or
seek to avoid the observance or performance of any of the terms of this
Warrant, but shall 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 against impairment. Without
limiting the generality of the foregoing, the Company will take all such action
as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Common Stock upon the
exercise of this Warrant.

 

5.             Reservations.

 

The Company shall at all
times reserve and keep available such number of authorized shares of its Common
Stock, solely for the purpose of issue upon the exercise of the rights
represented by this Warrant, as may at any time be issuable upon the
exercise of this Warrant.

 

6.             Fractional
Shares.

 

Fractional shares shall
not be issued upon the exercise of this Warrant. The Company shall, at its sole
option, in lieu of issuing any fractional share (i) pay the Holder
entitled to such fraction a sum in cash equal to the full market value of any
such fractional interest as it shall appear on the public market or if there is
no public market for such shares, then as shall be reasonably determined by the
Company, or (ii) round-up to the nearest whole number.

 

7.             Fully
Paid Stock; Voting Rights; Taxes.

 

7.1           The
Company covenants and agrees that the shares of its capital stock represented
by each certificate to be delivered on the exercise of this Warrant shall, at
the time of such delivery, be validly issued and outstanding, and be fully paid
and nonassessable. The Company covenants and agrees that, upon issuance of the
Underlying Shares, the Underlying Shares shall have voting rights equivalent to
those of any other holder of Common Stock.

 

7.2           The
Company covenants and agrees that it shall pay, when due and payable, any and
all federal and state issuance or transfer taxes that may be payable in
respect of this Warrant or any Common Stock or certificates issued hereunder. The
Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the transfer and delivery of
stock certificates in the name other than that of the Holder, and any such tax
shall be paid by the Holder at the time of presentation.

 

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8.             Closing
of Transfer Books.

 

The right to exercise this
Warrant shall not be suspended during any period that the stock transfer books
of the Company for its Common Stock may be closed. The Company shall not
be required, however, to deliver stock certificates upon such exercise while
such books are duly closed for any purpose, but the Company may postpone
the delivery of such certificates until the opening of such books. In such
case, the certificates shall be delivered promptly after the books are opened.

 

9.             Restrictions
on Transferability of Warrant and Shares; Compliance With Laws.

 

Notwithstanding anything
contained in this Warrant to the contrary, the terms and provisions of this Section 9
shall remain in full force and effect at all times up to and including the end
of the Exercise Period and, unless otherwise specified herein, the term “Warrant”
shall include the Underlying Shares.

 

9.1           In
General. This Warrant shall be transferable in whole or in part upon
the conditions hereinafter specified, which conditions are intended to ensure
compliance with the provisions of the Securities Act (or any similar federal
statute at the time in effect) and any applicable state securities laws in
respect of the transfer of this Warrant.

 

9.2           Restrictive
Legends. Each certificate for Restricted Stock shall, unless otherwise
permitted by the provisions of this Section 9.2, bear on the face
thereof a legend reading substantially as follows:

 

THE SHARES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SUCH ACT AND ANY STATE SECURITIES LAWS THAT MAY BE APPLICABLE.

 

If the Company shall
receive an opinion of counsel reasonably satisfactory to the Company (which
shall include counsel to the Company and counsel to the original purchaser
hereof) that, in the opinion of such counsel, such legend is not, or is no
longer, necessary or required (including, without limitation, because of the
availability of any exemption afforded by Rule 144 of the Commission), the
Company shall, or shall instruct its transfer agents and registrars to, remove
such legend from the certificates evidencing the Restricted Stock or issue new
certificates without such legend.

 

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10.           Lost,
Stolen Warrants, Etc.

 

If this Warrant shall be
mutilated, lost, stolen or destroyed, the Company shall issue a new Warrant of
like date, tenor and denomination and deliver the same in exchange and
substitution for and upon surrender and cancellation of the mutilated Warrant,
or in lieu of the Warrant lost, stolen or destroyed, upon receipt of evidence
satisfactory to the Company of the loss, theft or destruction of such Warrant,
and upon receipt of indemnity satisfactory to the Company.

 

11.           Severability.

 

Should any part of
this Warrant for any reason be declared invalid, such decision shall not affect
the validity of any remaining portion, which shall remain in force and effect
as if this Warrant had been executed with the invalid portion thereof
eliminated. It is hereby declared the intention of the parties hereto that they
would have executed and accepted the remaining portion of this Warrant without
including therein any such part, parts or portion which may, for any reason, be
hereafter declared invalid.

 

12.           Miscellaneous.

 

12.1         Holder
Not A Stockholder. Except as otherwise specifically provided herein, prior
to the exercise of this Warrant, the Holder shall not be entitled to any of the
rights of a stockholder of the Company with respect to any of the Underlying
Shares, including the right as a stockholder to (a) vote or consent or (b) receive
dividends or any other distributions made to stockholders.

 

12.2         Notices.
All notices, requests, consents and other communications required or permitted
hereunder shall be in writing and shall be delivered or mailed first class postage
prepaid, registered or certified mail return receipt requested:

 

(a)           If
to the Holder or Holders of the Company Stock, addressed to such Holder at its
address as shown on the books of the Company, or at such other address as such
Holder may specify by written notice to the Company; or

 

(b)           If
to the Company, at 25800 Commercentre Drive, Suite 100, Lake Forest, CA
92630, or at such other address as the Company may specify by written
notice to all Holders and Holders of Conversion Stock,

 

and such notices and
other communication shall for all purposes of this Warrant be treated as being
effective or having been given (i) when delivered, or (ii) if sent by
mail, 48 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of United States mail, addressed and postage prepaid
as aforesaid, if the addressee refuses to accept or does not claim the mailed
item.

 

12.3         Successors
and Assigns. This Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors and permitted assigns of the
Company

 

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and the Holder. This
Warrant is assignable by Holder, in whole or in part, without the prior written
consent of the Company.

 

12.4         Amendments.
This Warrant sets forth the entire agreement and understanding of the parties
with respect to the transactions contemplated hereby and supersede all prior
agreements, arrangements and understandings relating to the subject matter
hereof. This Warrant may not be modified, supplemented, varied or amended
except by an instrument in writing signed by the Company and the Holder.

 

12.5         Headings.
The index and the descriptive headings of sections of this Warrant are provided
solely for convenience of reference and shall not, for any purpose, be deemed a
part of this Warrant.

 

12.6         Governing
Law. THIS WARRANT AND ALL MATTERS CONCERNING THIS WARRANT SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF CALIFORNIA FOR CONTRACTS ENTERED INTO AND TO BE
PERFORMED IN SUCH STATE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed and delivered by a duly authorized
officer as of the 17th day of March 2006.

 

 

	
   

  	
  LIQUIDMETAL
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Ricardo
  A. Salas

  	
   

  
	
   

  	
   

  	
  Ricardo A. Salas,
  President

  

 

8

 

EXERCISE NOTICE

 

TO LIQUIDMETAL TECHNOLOGIES:

 

The undersigned
registered holder of the Warrant dated as of March 17, 2006 (the “Warrant”)
hereby irrevocably exercises the Warrant, purchases the number of shares of
Common Stock in the Company determined pursuant to Section 2.3 of
the Warrant, and herewith makes payment of the Exercise Price (as defined in
the Warrant), and requests that the certificate(s) for such shares be issued in
the name of the undersigned Holder and delivered to it at Holder’s address
specified in Section 12.2 of the Warrant, all on the terms and
subject to the conditions specified in the Warrant.

 

 

	
  Date:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [signature]

  

 

9

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