**Exhibit10.2**

**LEASEAGREEMENT**

1.             Lease Agreement

This Lease Agreement is made and entered intoeffective the 19th day of March, 2007, by and between LARRYRUFFINO AND ROLAND RUFFINO, of Bryan, Texas, herein called “Lessor”, andLIQUIDMETAL TECHNOLOGIES D/B/A LAKE FOREST, CA / LIQUIDMETAL COATINGS GROUP, ofTexas herein called “Lessee”.

In consideration of the mutual covenants andagreements herein set forth, and other good and valuable consideration, Lessordoes hereby demise and lease to Lessee, and Lessee does hereby lease fromLessor, the premises situated at 801 FM 2821 B, Huntsville, Texas, and hereincalled the “leased premises”, and consisting of approximately 4,500 squarefeet, more or less.

Term

1.             The term of this lease shall be fora period of five (5) year(s) commencing on August 1, 2007, and ending August 1,2012, except that the lease may be terminated prior thereto in the event of thedefault by Lessee herein.

Rent

2.             A.  Lessee aggress to pay to Lessor as base rentfor the leased premises the sum of $3000.00 per month in advance on the firstday of each month, commencing on the 1st day of August 2007, at the place Lessorspecifies in Paragraph 17 herein.  If theLessor does not receive the rent by the 15th day of eachmonth, the Lessee agrees to pay the Lessor, in addition to the rent, a late feeequal to five (5%) percent of the monthly rent for that month and each monththereafter in which the Lessee is delinquent in the payment of that monthlyrental payment.

B.  Operating Expense Payment.  Lessee shall also pay as additional rentalLessee’s pro rata share of increases in ad valorem tax or casualty insurancepremiums of Lessor for the building and project of which the leased premisesare a part, using 2006 as the base year for the purpose of calculating suchincreases.  Lessor shall invoice Lesseefor Lessee’s pro rata share within on month following the close of any calendaryear for which additional rental is due under this section.  Monthly Rent for the following 12-monthperiod shall then be increased by such amount, divided by twelve.

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Security Deposit

3.             A. Lessee has previously depositedwith Lessor the additional sum of $1,500.00, receipt of which is herebyacknowledged by Lessor, as security for the full and faithful performance byLessee of the aforementioned terms, conditions, and covenants of this lease onLessee’s part to be performed and kept. This deposit does not constitute advance rental payment due herein.

B.  Excluding the final rental payment to be madeherein, if at any time during the term hereof Lessee shall be in default in thepayment of rent herein stated or any portion thereof, or of any other sumsexpressly constituting rent hereunder, Lessor may appropriate and apply anyportion of the security deposit as may be necessary to the payment of theoverdue rent or other sums expressly constituting rent hereunder.

C.  If at any time during the term hereof, Lesseeshould fail to repair any damage to the premises that he is required to repairpursuant to the terms hereof for a period greater than ten (10) days afterwritten demand to make such repair is served on Lessee by Lessor, then Lessormay appropriate and apply any portion of the security deposit as may bereasonably necessary to make such repairs.

D.  If on termination of this Agreement for anyreason, Lessee does not leave the leased premises in, as good order, repair,and condition as they were in at the effective date of this lease, excluding “normalwear and tear”, then Lessor may appropriate and apply any portion of thesecurity deposit as may be reasonably necessary to put the premises in suchcondition.  As used herein, the term “normalwear and tear” means that deterioration which occurs, based upon the use forwhich the premises herein are intended, without negligence, carelessness,accident, or abuse of the premises or equipment or chattels by the Lessor, orhis invitees or guests.

E.  In the event actual cause exists forretaining all or any portion of the security deposit, the Lessor shall returnto the Lessee the balance of the security deposit, if any, together with awritten description and itemized list of all deductions.  Such deductions shall be limited to damagesand charges for which the Lessee is legally liable under this Agreement or as aresult of breaching this Agreement.  TheLessor shall not be required to furnish a description and itemized list ofdeduction if there are any rentals due and unpaid at the time the Lesseesurrenders possession of the premises.

F.  Within thirty (30) days after Lessee surrendersthe premises, any remaining portion of the security deposit, after any lawfuldeductions as above, shall be returned to Lessee, directed to the address leftby Lessee in writing specifically for such purposes.

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Use

4.             A. The leased premises shall be used only as office and warehousespace.  Lessee shall not permit theleased premises or any part thereof to be used for:  (a) the conduct of any offensive, noisy, ordangerous activity that would increase the premiums for fire insurance on theleased premises; (b) the creation or maintenance of a public nuisance; or (c)anything t\which is against public regulations or rules or any public authorityat any time applicable to the leased premises.

B.  Signs. NO signs of any type or description shall be erected, placed or paintedin or about the leased premises or project except those signs submitted toLessor in writing and approved by Lessor in writing.

Utilities andService

5.             A. Building Services.  Lessee shallfurnish water, gas, and electricity during the term of the Lease.  Lessee shall pay all telephone charges.  Lessee shall also furnish routinemaintenance, painting and electric lighting service for all public areas andspecial service areas of the building in the manner and to the extent deemed bylessor to be standard.  Lessor shallarrange for all lawn and landscape maintenance at the Leased Premises andLessee shall pay one-half of the cost of such maintenance monthly as additionalrent.  Lessor may, in its solediscretion, provide additional services not enumerated herein.  Failure by Lessor to any extent to furnishany other services not enumerated, or any cessation thereof, shall not renderLessor liable in any respect for damages to either person or property, beconstrued as an eviction of Lessee, work an abatement of rent or relieve Lesseefrom fulfillment of any covenant in this Lease.

B.  Theft or Burglary.  Lessor shall not be liable to Lessee forlosses due to theft or burglary, or for damages done by unauthorized persons tothe leased premises or the building.

C.  Janitorial Service.  Lessee shall furnish his own janitorialservice to the leased premises and public areas of the building during the termof this Lease.

IndemnityAgreement and Liability Insurance

6.             Lessee agrees to indemnify and holdLessor and the property of Lessor, including the leased premises, free andharmless from any and all liability for injury to or death of any person,including Lessee and guests and invitees of Lessee, or for damage to propertyarising from the use and occupancy of the leased premises by Lessee or from theact or omission of any person or persons, including Lessee and guests andinvitees of Lessee, in or about the leased premises.  Lessee shall keep and maintain a currentgeneral comprehensive liability policy in the leased premises for a minimumamount of $1,000,000.00, naming Lessor and Lessee as insured parties.

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Alterations andImprovements

7.             Lessee shall make no alterations tothe buildings on the leased premises nor construct any buildings or otherimprovements on the leased premises without first having provided to the Lessoror his designated agents the plans and specifications for the proposedalterations and improvements and the name of the proposed contractor.  After receipt of such plans andspecifications and the name of the building contractor, Lessor or hisdesignated agents shall have the right to inspect the leased premises andinvestigate the proposed alterations and improvements at a reasonable time.  After review of the plans and specificationsand any inspection, Lessor or his designated agents shall notify the Lessee inwriting as to its approval or disapproval of the proposed alterations andimprovements and the proposed contractor. If Lessor disapproves either or both, then Lessee shall not undertakethe construction until approval of both the construction and the contractor isobtained from the Lessor.  Lessee agreesto construct the alterations and improvements according to the submitted andapproved plans and specifications and to use the contractor whose name wasapproved by the Lessor or his designated agents.

Conditions ofPremises

8.             Lessee stipulates that he hasexamined the leased premises, as well as all buildings and improvements locatedthereon, and they are all, at the effective date of this lease, in good order,repair, and in safe and clean condition.

Maintenance ofPremises

9.             A. Lessee shall, at his own costs and expense, maintain the leased premisesand the buildings and improvements on the leased premises in a good order,repair, and condition as they were in at the effective date of this lease,reasonable wear and tear excepted. Lessee shall be specifically responsible for all maintenance and repairof the leased premises and the buildings and improvements on the leasedpremises, including but not limited to all plate glass, electrical fixtures andappliances, air-conditioning and heating units, cabinets, doors, plumbingaccessories and systems and all items dealing with the inside and outsideappearance of the leased premises. Further, it shall be construed as an act of default under this lease ifLessee permits by neglect or otherwise exterior windows, and the generalcleanliness and outward appearance of the leased premises to fall into a stateof disrepair as determined by periodic inspections by Lessor.  If such condition of disrepair is found bythe Lessor, the Lessor shall give Lessee thirty (30) days notice of suchdefault, and if Lessee does not correct the condition of default, then Lessormay proceed with any remedies available under this lease or those available atlaw.

B.  Additionally, if any damage to or requiredrepair of the leased premises or any building or improvement thereon is causedby any act or negligence of Lessee or Lessee’s guests or invitees, Lessee shallbe required, at Lessee’s expense, to the extent such damage or repair costs arenot covered by insurance maintained by Lessor, to repair and pay for same.  In this connection, repair work for damagecovered wholly or partially 

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by Lessor’sinsurance shall be paid for by Lessor’s insurance and Lessee shall beresponsible only for such part of the repair costs in excess of the insurancecoverage.

ImprovementsProperty of Lessor

10.           All alterations, changes, andimprovements built, constructed, or placed on the leased premises by Lessee,other than moveable personal property, shall, unless otherwise provided bywritten agreement between Lessor and Lessee, be the property of Lessor andremain on the leased premises at the expiration or sooner termination of thislease or Lessor may require the removal of such alterations, at Lessor’soption.  Nothing contained in thisparagraph, however, shall authorize Lessee to make or place any suchalterations, changes, or improvements on the leased premises without havingfirst obtained the written consent of Lessor as provided in Paragraph (7)herein.

Casualty andInsurance

11.           A. Partial destruction of the leased premises shall not render this leasevoid or voidable, or terminate it except as herein provided.  If the leased premises are partiallydestroyed during the term of this lease, Lessor shall repair same, to theextent that he receives any insurance proceeds for such repairs; providedhowever, Lessor shall do so only if such repairs can be made in conformity withlocal, state and federal laws and regulations within one hundred twenty (120)days of the partial destruction.  Rentfor the leased premises will be reduced proportionately to the extent to whichthe repair operations interfere with the Lessee’s normal use and occupancy ofthe premises.  If the repairs cannot beso made within the time limited, Lessor has the option to make them within areasonable time and continue this lease in effect with proportional rentrebated to Lessee as provided for herein. If the repairs cannot be so made in one hundred twenty (120) days and ifLessor does not elect to make them within a reasonable time, either partyhereto has the option to terminate this lease. If the leased premises are totally destroyed, either party hereto hasthe option to terminate this lease.

B.  Substantial Destruction.  If the leased premises should be totallydestroyed by fire or other casualty, or if the leased premises should be sodamaged so that rebuilding cannot reasonably be completed within 120 workingdays after the date of written notification by Lessee to Lessor of thedestruction, this Lease shall terminate and the rent shall be abated for theunexpired portion of the Lease, effective as of the date of the written notification.

C.  Property insurance.  Lessor shall at all times during the term ofthis Lease maintain a policy or policies of insurance with the premiums paid inadvance, issued by and binding upon some solvent insurance company, insuringthe building against all risk of direct physical loss in an amount equal toninety percent of the full replacement cost of the building structure and itsimprovements as of the date of the loss; provided, that Lessor shall not beobligated in any way or manner to insure any personal property (including, butnot limited to, any furniture, machinery, goods or supplies) of Lessee upon orwithin the leased premises, any fixtures installed by or paid for by Lesseeupon 

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or within theleased premises, or any improvements which Lessee may construct on the leasedpremises.  Lessee shall have no right inor claim to the proceeds of any policy of insurance maintained by Lessor evenif the costs of such insurance is borne by Lessee as set forth in Section 2.

D.  Waiver of Subrogation.  Anything in this Lease to the contrarynotwithstanding, Lessor and Lessee hereby waive and release each other of andfrom any and all rights or recovery, claim, action or cause of action, againsteach other, their agents, officers and employees, for any loss or damage thatmay occur to the leased premises, improvements to the building of which theleased premises are a part or personal property within the building, by reasonof fire or the elements regardless of cause or origin, including negligence ofLessor or Lessee and their agents, officers and employees.  Because this section will preclude theassignment of any claim mentioned in it by way of subrogation or otherwise toan insurance company or any other person, each party to this Lease agreesimmediately to give to each insurance company which has issued to it policiesof insurance covering all risk of direct physical loss, written notice of theterms of the mutual waivers contained in this section and to have the insurancepolicies properly endorsed, if necessary, to prevent the invalidation of theinsurance coverages by reason of the mutual waivers contained in this section.

Assignment andSubletting

12.           Lessee shall not assign this leasenor sublet the leased premises or any interest therein without first obtainingthe written consent of Lessor.  A consentby Lessor to one assignment or subletting shall not be deemed to be a consentto any subsequent assignment or subletting. An assignment or subletting without the written consent of Lessor, or anassignment or subletting by operation of law, shall be void, and shall, at theoption of Lessor, terminate this lease. Lessor may sell the leased premises and such sale shall release Lessorof liability under this lease.

Default by Lessee

13.           A. If Lessee shall allow the rent to be in arrears more than thirty (30)days after written notice of such delinquency, or shall remain in default underany other condition of this lease for a period of thirty (30) days afterwritten notice from Lessor, or should any other person than Lessee securepossession of the premises, or any part thereof, by reason of any receivership,bankruptcy proceedings, or other operation of law in any manner whatsoever,Lessor may at his option, without notice to Lessee, terminate this lease.  In the alternative, Lessor may reenter andtake possession of said premises, changing locks if necessary, and remove allpersons and property therefrom and lock them out, without being deemed guiltyof any manner of trespass, and relet the premises or any part thereof, for allor any part of the remainder of said term, to a party satisfactory to Lessor,and at such monthly rental as Lessor may with reasonable diligence be able tosecure.  Should Lessor be unable to reletafter reasonable efforts to do so, or should such monthly rental be less thanthe rental Lessee was obligated to pay under this lease, or any 

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renewal thereof,plus the expense of reletting, then Lessee shall pay the amount of suchdeficiency to Lessor.

B.  Landlord’s Lien.  As security for payment of rent, damages andall other payments required to be made by this Lease, Lessee hereby grants to aLessor a lien upon all property of Lessee now or subsequently located upon theleased premises.  If Lessee abandons orvacates any substantial portion of the leased premises or is in default in thepayment of any rentals, damages or other payments of any rentals, damages orother payments required to be made by this Lease or is in default of any otherprovision of this Lease.  Lessor mayenter upon the leased premises, by picking or changing locks if necessary, andtake possession of all or any part of the personal property, and may sell allor any part of the personal property at a public or private sale, in one ormore successive sales, with or without notice, to the highest bidder for cash,and, on behalf of Lessee, sell and convey all or part of the personal propertyto the highest bidder, delivering to the highest bidder all of Lessee’s titleand interest in the personal property sold. The proceeds of the sale of the personal property shall be applied byLessor toward the reasonable costs and expenses of the sale, including attorney’sfees, and then toward the payment of all sums then due by Lessee to Lessorunder the terms of this Lease.  Anyexcess remaining shall be paid to Lessee or any other person entitled theretoby law.

C.  Uniform Commercial Code.  This Lease is intended as and constitutes asecurity agreement within the meaning of the Uniform Commercial Code of thestate in which the leased premises are situated and, Lessor, in addition to therights prescribed in this Lease, shall have all of the rights, titles, liens,and interest in and to Lessee’s property now or hereafter located upon theleased premises which are granted a secured party, as that term is defined,under the Uniform Commercial Code to secure to Lessor payment of all sums dueunder the full performance of all Lessee’s covenants under this Lease.  Lessee will on request execute and deliver toLessor a financing statement for the purpose of perfecting Lessor’s securityinterest under this Lease or Lessor may file this Lease or a copy thereof as afinancing statement.  Unless otherwiseprovided by law and for the purpose of exercising any right pursuant to thissection, Lessor and Lessee agree that reasonable notice shall be met if suchnotice is given by ten days written notice, certified mail, return receiptrequested to Lessor or Lessee at the addresses specified herein.

Right ofInspection

14.           Lessor and his agents have the rightat all reasonable times during the term of this lease to enter the leasedpremises for the purpose of inspecting them and all buildings and improvementsthereon, provided a thirty (30) day written notice is given.

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Holdover by Lessee

15.           Should Lessee remain in possession ofthe leased premises with the consent of Lessor after the expiration of thislease, a new tenancy from month to month subject to all the other terms andconditions of this lease but which shall be terminable by thirty (30) dayswritten notice served by either Lessor or Lessee on the other party to thislease.

Notices

16.           Any notice required or permitted bythis lease to be given to either party to this lease by the other party heretoshall be in writing and shall be deposited in the United States mail, postageprepaid, by certified mail, return receipts requested, addressed to Lessee atthe address of the leased premises and to Lessor at P.O. Box 4166, Bryan, Texas77805.  Any such notice shall be deemedto have been received as of the earlier of (i) three (3) days after mailing ofsuch notice in accordance herewith, or (ii) the date of the signed receipt forsuch notice to such party.  From time totime either party hereto may change his address for the purpose of this paragraphby giving written notice of such change to the other party not less than ten(10) days advance written notice of such change of address.

Location for RentPayment

17.           All rent payable under this leaseshall be paid to Lessor at P.O. Box 4166, Bryan, Texas 77805, unless changed bywritten notice pursuant to the provisions in the paragraph above.

Attorney’s Fees

18.           Should any litigation be commencedbetween the parties hereto concerning the leased premises, this lease, or therights and duties of either party in relation thereto, the party prevailing insuch litigation shall be entitled, in addition to such other relief as may begranted, to a reasonable sum as and for this attorney’s fees in suchlitigation.

Waiver of Breach

19.           The waiver by Lessor of any breach ofany provision of this lease shall not constitute a continuing waiver or awaiver of any subsequent breach of the same or different provision of thislease.

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Time of Essence

20.           Time is expressly declared to be ofthe essence of this lease.

Binding of Heirsand Assigns

21.           Subject to the provisions of thislease against assignment of the Lessee’s interest hereunder, all provisions ofthis lease shall extend to and bind, or inure to the benefit not only of theparties hereto but to each and every one of the heirs, executors,administrators, legal representatives, successors, and assigns of Lessor orLessee.

Rights andRemedies Cumulative

22.           The rights and remedies provided bythis Agreement are cumulative, and the use of any one right or remedy by eitherparty shall not preclude or waive its right to use any or all otherremedies.  Said rights and remedies aregiven in addition to any other rights the parties may have by law, statute, orordinance, or otherwise.

Texas Law to Apply

23.           This Agreement shall be construedunder and in accordance with the laws of the State of Texas, and allobligations of the parties created hereunder are performable in Brazos County,Texas.

Legal Construction

24.           In case any one or more of theprovisions contained in the Agreement shall for any reason be held to beinvalid, illegal, or unenforceable in any respect, such invalidity, illegality,or unenforceability shall not affect any other provision thereof and thisAgreement shall be construed as if such invalid, illegal, or unenforceableprovision had never been contained herein.

Prior AgreementsSuperseded

25.           This Agreement constitutes the soleand only agreement of the parties hereto and supersedes any priorunderstandings or written or oral agreements between the parties respecting theLease Agreement.

Amendment

26.           No amendment, modification, oralteration of the terms hereof shall be binding unless the same be in writing,dated subsequent to the date hereof and duly executed by the parties hereto.

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WarrantyLimitation

27.  Limitation of Warranties.  Lessor and Lessee expressly agree that thereare and shall be no implied warranties of merchantability, habitability,fitness for a particular purpose or of any other kind arising out of thisLease.

THISAGREEMENT IS EXECUTED in multiple copies, each of which shall be deemed to bean original for all purposes.

LESSOR:
|                   |     |                       |
|------------------------|----------|----------------------------|
| Date: January 24, 2007 | /s/      | Larry Ruffino              |
|                   |     | Larry Ruffino              |
|                   | Address: | 2130 E. Wm. J. Bryan Pkwy. |
|                   |     | Bryan, Texas 77802         |
|                   | Phone:   | 979-776-5685               |
|                   | Fax:     | 979-774-7713               |
|                   |     |                       |
| Date: January 24, 2007 | /s/      | Roland Ruffino             |
|                   |     | Roland Ruffino             |
|                   | Address: | 2130 E. Wm. J. Bryan Pkwy. |
|                   |     | Bryan, Texas 77802         |
|                   | Phone:   | 979-776-5685               |
|                   | Fax:     | 979-774-7713               |
|                        |          |                            |  |

LESSEE:
| Date:March, 1, 2007 |     | LIQUIDMETAL TECHNOLOGIES       |
|---------------------|----------|--------------------------------|
|                |     |                           |
|                |     |                           |
|                | BY:      | /s/ Larry E. Buffington        |
|                | Address: | 25800 Commercentre Drive, #100 |
|                |     | Lake Forest, CA 92630          |
|                | Phone:   | 949-206-8000                   |
|                | Fax:     | 949-206-8088                   |

 

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ADDENDUMS

1)              Lease shall commenceon or before August 1st.

2)              Lessee shall payutilities and 1⁄2 (half) of lawn maintenance.

3)              Rent will increaseonly if Taxes and or Insurance increase.

4)              Improvements include— make ready of offices, warehouse, front entry door, slab at back overheaddoor.

a.               Plugs in officeswere needed

b.              Door from dock tooffices

c.               Door openingsbetween offices

d.              Paint and cleanoffices like new

e.               Remove carpet andseal floor per Jean

5)              Gate on left side ofproperty and back drive way go with this lease (B).

6)              Tenant shall havethe right to assign or sublease the premises per the landlord’s standard leasedocument.

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