Document:

Exhibit 10.3

 

TERM NOTE

 

	
  $1,500,000

  	
   

  	
  June 23, 2010

  

 

For
value received, LIQUIDMETAL COATINGS, LLC, a Delaware limited liability
company, and LIQUIDMETAL COATINGS SOLUTIONS, LLC (each a “Borrower” and,
collectively, the “Borrowers”), jointly and severally promise to pay to
the order of ENTERPRISE BANK & TRUST, a Missouri banking corporation
(the “Bank”; which term shall include any subsequent holder hereof), in
lawful money of the United States of America, without setoff, recoupment,
deduction or counterclaim, the principal sum of One Million Five Hundred
Thousand and 00/100 Dollars ($1,500,000.00).

 

This
Term Note (the “Note”) is the Term Note referred to in, is issued
pursuant to, and is subject to the terms and conditions of, the Credit
Agreement, dated on or about the date hereof, among the Borrowers and the Bank,
as the same may be amended, renewed, restated, replaced, consolidated or
otherwise modified from time to time (the “Credit Agreement”).  To the extent of any direct conflict between
the terms and conditions of this Note and the terms and conditions of the
Credit Agreement, the terms and conditions of the Credit Agreement shall
prevail and govern.  Capitalized terms
used and not defined in this Note have the meanings given to them in the Credit
Agreement.

 

Interest
shall accrue on the outstanding principal balance of this Note as provided in
the Credit Agreement.  Principal,
interest and all other amounts, if any, payable in respect of this Note shall
be payable as provided in the Credit Agreement. 
The Borrowers’ right, if any, to prepay this Note is subject to the
terms and conditions of the Credit Agreement.

 

The
termination of the Credit Agreement or the occurrence of an Event of Default
shall entitle the Bank, at its option, to declare the then outstanding
principal balance hereof, all accrued interest thereon, and all other amounts,
if any, payable in respect of this Note to be, and the same shall thereupon
become, immediately due and payable without notice to or demand upon the
Borrowers, all of which the Borrowers waive.

 

Time
is of the essence of this Note.  To the
fullest extent permitted by applicable law, each Borrower, for itself and its
successors and assigns, waives presentment, demand, protest, notice of
dishonor, and any and all other notices, demands and consents in connection
with the delivery, acceptance, performance, default or enforcement of this
Note, and consents to any extensions of time, renewals, releases of any parties
to or guarantors of this Note, waivers and any other modifications that may be
granted or consented to by the Bank from time to time in respect of the time of
payment or any other provision of this Note.

 

This
Note shall be governed by the laws of the State of Missouri, without regard to
any choice of law rule thereof which gives effect to the laws of any other
jurisdiction.

 

[signature page to follow]

 

 

IN
WITNESS WHEREOF, the Borrowers have executed and delivered this Note as of the
date first above written.

 

	
   

  	
  LIQUIDMETAL COATINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LIQUIDMETAL COATINGS SOLUTIONS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Term Note – Signature PageExhibit 10.4

 

SECURITY AGREEMENT

 

This
Security Agreement (the “Agreement”), dated as of June 23, 2010, is
among LIQUIDMETAL COATINGS, LLC, a Delaware limited liability company (“LMC”),
LIQUIDMETAL COATINGS SOLUTIONS, LLC, a Delaware limited liability company (“LMCS”),
and ENTERPRISE BANK & TRUST, a Missouri banking corporation (the “Bank”).  LMC and LMCS are each referred to herein as a
“Borrower” and are collectively referred to herein as the “Borrowers.”

 

Preliminary Statements

 

(a)           The Bank and the Borrowers
have entered into or intend to enter into a Credit Agreement, dated as of or on
or about the date hereof, pursuant to which, and subject to the terms and
conditions thereof, the Bank is to extend credit to or for the benefit of the
Borrowers (as amended, renewed, restated, replaced, consolidated or otherwise
modified from time to time, the “Credit Agreement”).

 

(b)           Each Borrower has agreed to
grant to the Bank a security interest in all of its existing and future
property to secure all of its existing and future obligations to the Bank,
including, without limitation, all of its obligations under the Credit
Agreement.

 

NOW,
THEREFORE, to induce the Bank to enter into the Credit Agreement and to extend
credit to the Borrowers, and in recognition that the Bank would not enter into
the Credit Agreement or extend credit to the Borrowers on the same terms and
conditions but for the Borrowers’ promises hereunder, and for other good and
valuable consideration the receipt and sufficiency of which are hereby acknowledged
by the Borrowers, the Borrowers jointly and severally covenant and agree with
the Bank as follows:

 

1.             Definitions.  Capitalized terms used and not defined herein
have the meanings given to them in the Credit Agreement.  All terms defined in the UCC and used and not
defined in this Agreement have the meanings given to them in the UCC; provided, however, that if a term is
defined in Article 9 of the UCC differently than in another Article of
the UCC, the term has the meaning given to it in Article 9.  Terms defined in this Agreement or the UCC in
the singular are to have a corresponding meaning when used in the plural and
vice versa.

 

2.             Security Interest.  Each Borrower grants to the Bank a security
interest in all personal property of such Borrower, whether such property or
such Borrower’s right, title or interest therein or thereto is now owned or
existing or hereafter acquired or arising, and wherever located, including,
without limitation, all inventory, equipment, other goods, accounts, goodwill,
general intangibles, chattel paper (whether tangible or electronic),
instruments (including, without limitation, promissory notes), investment
property (including, without limitation, securities and securities accounts),
documents, deposit accounts, letter-of-credit rights and supporting
obligations, and all proceeds of the foregoing (collectively, the “Collateral”).

 

3.             Obligations Secured.  The above security interest secures the
payment and performance of all obligations of each Borrower to the Bank, whether
such obligations are existing, future, direct, indirect, acquired, monetary,
nonmonetary, liquidated, unliquidated, joint, several, joint and several,
contingent or otherwise, and however created, incurred or arising, and all
replacements, renewals, amendments and other modifications thereof, including,
without limitation, all Obligations referred to in the Credit Agreement
(collectively, the “Obligations”).

 

4.             Lien Perfection.  Each Borrower represents, warrants and
covenants to the Bank that: (a) such Borrower’s full legal name, state of
organization, organizational identification number in such state,

 

 

federal
tax identification number and chief executive office are each correctly
described on Exhibit A attached hereto; (b) each Borrower will take
such action or cause others to take such action as is necessary for the Bank to
obtain control under Articles 8 or 9 of the UCC of any Collateral consisting of
investment property, deposit accounts, letter-of-credit rights or electronic
chattel paper; (c) if any part of the Collateral is an instrument or
tangible chattel paper or is represented by a certificate of title or similar
title document, each Borrower shall promptly endorse, assign and pledge such
instrument, tangible chattel paper or title document to the Bank, together with
instruments of transfer or assignment executed in blank as the Bank may
reasonably specify from time to time; (d) if any Collateral is in the
possession of a third party at any time, each Borrower will join with the Bank
in notifying the third party of the security interest held by the Bank and
obtaining an acknowledgment from the third party that it holds the Collateral
for the benefit of the Bank; (e) if any Collateral is or becomes or any
Borrower otherwise acquires an interest in a commercial tort claim at any time,
the Bank shall be authorized, as each Borrower’s irrevocable attorney-in-fact,
to execute and deliver an amendment to this Agreement on behalf of and in the
name of each Borrower which describes such commercial tort claim in reasonable
detail and which provides that such commercial tort claim, to the extent not
already encumbered by this Agreement, either as original Collateral or as
proceeds, shall be additional Collateral under this Agreement, it being the intention
of the parties that the provisions of this clause shall act to satisfy or
constitute a wavier of the requirements of UCC §9-108(e), UCC §9-204(b) and/or
other applicable law insofar as such laws restrict or impose conditions on
assignments of commercial tort claims as security; (f) if any Collateral
at any time is of a type that compliance with any statute, regulation or treaty
of the United States is a condition to attachment, perfection or priority of,
or the Bank’s ability to enforce, the Bank’s security interest in the
Collateral, each Borrower shall execute and deliver such assignments and other
documents and authorize such filings as the Bank may request in respect
thereof; (g) each Borrower shall obtain such lien waivers and reasonable
rights of access or occupancy from mortgagees and landlords in respect of the
Collateral as the Bank may periodically request; (h) the Collateral shall
not be physically attached to any real estate so as to become a fixture; and (i) no
Borrower will change its name, type of organization, jurisdiction of
organization or organizational identification number except if permitted under
the Credit Agreement and then only upon giving the Bank at least 30 days’ prior
written notice thereof.

 

5.             Special Collateral.

 

(a)           Except as disclosed in Exhibit B
attached hereto, no Borrower has any interest in any investment property (other
than investment property consisting of direct or indirect wholly-owned
subsidiaries); chattel paper; instruments; negotiable documents (or goods covered
by negotiable documents); deposit accounts (other than with the Bank);
letter-of-credit rights; commercial tort claims; motor vehicles; registered
copyrights; other Specified Intellectual Property (as defined below); aircrafts
or aircraft engines; ships, barges or other watercraft; or railroad rolling
stock.  If, after the Closing Date, a
Borrower acquires an interest in any Collateral described in this Section 5
which is not specifically identified in Exhibit B, such Borrower shall
give the Bank prompt written notice of the same and, without limiting any other
provisions of this Agreement, such Borrower shall take such steps as the Bank
may require to perfect or protect the Bank’s security interest therein
(including, without limitation, perfecting the Bank’s security interest by “control”
or by other non-filing means or as required by applicable law other than Article 9
of the Uniform Commercial Code).

 

(b)           Without limiting any other
provisions of this Agreement or any other Credit Document, if any Collateral at
any time consists of registered copyrights, copyright applications, patents,
patent applications, trademarks or trademark applications (collectively, “Specified
Intellectual Property”), the Borrowers shall (i) in the case of any
Specified Intellectual Property existing on the date hereof, identify such
Collateral in Exhibit B attached hereto and complete, execute and deliver
to the Bank one or more notices, as applicable, in the forms attached hereto as
Exhibit C, Exhibit D and/or Exhibit E, as the case may be (each,
an “IP Notice”), and (ii) in the case of any Specified Intellectual
Property in which any 

 

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Borrower
acquires an interest at any time after the date hereof, (A) give the Bank
prompt written notice of such after-acquired Collateral, and (B) complete,
execute and deliver to the Bank one or more IP Notices, as applicable, with
respect to such after-acquired Specified Intellectual Property.  The Bank shall have the right, as each Borrower’s
attorney-in-fact and agent, to execute and deliver any IP Notice in the name of
and on behalf of any Borrower if a Borrower fails to execute and deliver such
IP Notice in accordance with the terms of this Agreement or if an Event of
Default exists.

 

6.             Good Title; No Other Liens.  Each Borrower represents and warrants to the
Bank that such Borrower owns, or with respect to after-acquired property
immediately upon such Borrower’s acquisition thereof will own, the Collateral
purported to be owned by it free and clear of any Liens except for Permitted
Liens.

 

7.             Protection of Collateral;
Bank’s Rights.  Each
Borrower will, except as otherwise permitted under the Credit Agreement:
(a) maintain possession of the Collateral at all times and defend its title
to the Collateral and the security interest of the Bank therein against the
claims of all other persons; (b) use the Collateral with reasonable care
and caution; (c) keep the Collateral in good repair and order;
(d) not use, or permit the Collateral to be used, in violation of any law;
(e) not create or permit any Lien in or upon any part of the Collateral,
except for Permitted Liens; (f) not sell, lease or otherwise transfer or
dispose of any Collateral or any interest of such Borrower therein;
(g) pay when due all taxes and assessments on the Collateral;
(h) insure the Collateral of an insurable nature in commercially
reasonable amounts against loss, damage and other customary casualties with
such insurers as may be reasonably acceptable to the Bank, with the proceeds of
such insurance payable to the Bank, and deliver to the Bank certificates of
insurance evidencing the same; and (i) deliver to the Bank such schedules
or reports describing the Collateral and its value and such other information
regarding the Collateral as the Bank may reasonably request from time to
time.  Each Borrower authorizes the Bank
to file of record such Uniform Commercial Code financing statements and any
other lien documents and to take such other action, in each case whether in the
name of the Bank or such Borrower (and, in such event, such Borrower grants to
the Bank an irrevocable power of attorney to sign such documents and take such
actions in such Borrower’s name), in all cases as the Bank so elects to perfect
the security interest granted pursuant to this Agreement or to otherwise assure
the Bank with respect to its rights and remedies granted hereunder or otherwise
available at law or in equity.

 

8.             Bank’s Remedies Upon Default.  If an Event of Default exists, the Bank has and
may exercise from time to time all of the rights and remedies of a secured
party under the UCC or other applicable law and all other legal and equitable
rights and remedies to which the Bank may be entitled, all of which rights and
remedies shall be cumulative and in addition to any other rights or remedies
contained in this Agreement or any of the other Credit Documents.  Without limiting the generality of the
foregoing, if an Event of Default exists, the Bank may: (a) declare all or
any of the Obligations to be immediately due and payable, whereupon such
Obligations shall become immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby waived
by the Borrowers; (b) take immediate possession of the Collateral, or
require the Borrowers to assemble the Collateral at the Borrowers’ expense and
make it available to the Bank at a place designated by the Bank which is
reasonably convenient to the Bank and the Borrowers; (c) sell or otherwise
dispose of all or any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale or sales in lots
or in bulk, all as the Bank in its sole discretion deems advisable, or realize
on the Collateral through direct collection to the extent permitted by
applicable law; and (d) exercise any other rights or remedies available at
law, in equity or by agreement.

 

9.             Foreclosure Sales.  Each Borrower agrees that, insofar as prior
notice is required by applicable law, at least 10 days’ written notice to such
Borrower at such Borrower’s notice address in the Credit Agreement of any
public or private foreclosure sale or other disposition of any Collateral shall
be

 

3

 

reasonable
notice thereof, and that any such sale may be at such locations as the Bank may
designate in such notice.  The Bank shall
have the right to conduct foreclosure sales on each Borrower’s premises and
without charge therefor.  All public or
private foreclosure sales may be adjourned from time to time by giving oral
notice thereof at the time and place of such sale or in such other manner
permitted by applicable law.  The Bank
shall have the right to sell, lease or otherwise dispose of any Collateral for cash,
credit, or any combination thereof, and the Bank may purchase all or any part
of the Collateral at any public sale or, if permitted by law, any private sale,
and, in lieu of actual payment of such purchase price, the Bank may setoff and
credit the amount of such price against the Obligations without impairing any
Borrower’s or any other Person’s liability for any deficiency in respect
thereof.  Except as otherwise provided in
the Credit Agreement, the proceeds realized from any sale of any Collateral may
be applied, after the Bank is in receipt of good funds, as follows:  (a) first, to the reasonable
costs and expenses, including, without limitation, reasonable attorneys’ fees
and expenses, incurred by the Bank for collection, removal, storage, processing,
protection, insurance, demonstration, sale or delivery of the Collateral, (b) second,
to any fees or expenses due the Bank under the Credit Documents, (c) third,
to interest due on any of the Obligations, (d) fourth, to the
principal of the Obligations, (e) fifth, to the Bank, for any
Obligations not included in (a) through (d) above; and (f) sixth,
and finally, to any Borrower or Borrowers or any other Person, to the extent it
is lawfully entitled to any remaining proceeds. 
If the Bank forecloses or otherwise realizes on any Collateral and
receives any proceeds thereof in any form other than cash, the Obligations
shall not be credited unless and shall only be credited to the extent that the
Bank actually receives final collected funds with respect to such non-cash
proceeds.  If any deficiency remains
after any foreclosure sale, the Borrowers and any Guarantors shall remain
jointly and severally liable for such deficiency.  Nothing in this Agreement shall obligate the
Bank to give any Borrower or any other Person any notice if such notice is not
required by applicable law.

 

10.           Pledge Provisions.  The following provisions apply to any
Collateral consisting of debt or equity interests, including, without
limitation, limited liability company interests, stock, securities and other
investment property (collectively, “Pledged Collateral”):

 

(a)           Any certificates or
instruments representing or evidencing the Pledged Collateral shall be
delivered to and held by or on behalf of the Bank pursuant hereto and shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignments in blank, all in form and
substance satisfactory to the Bank.  The
Bank shall have the right, at any time in the Bank’s discretion and without
notice to the Borrowers, to transfer to or to register in the name of the Bank
or any of the Bank’s nominees any or all of the Pledged Collateral, and to
place any or all of the Pledged Collateral, whether or not certificated, in any
securities account in the name of the Bank as sole entitlement holder thereof,
in each case subject only to the revocable rights specified in subsection (b) below.

 

(b)           So long as no Event of
Default exists, each Borrower shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement, the
Credit Agreement or any of the other Credit Documents.

 

(c)           So long as an Event of
Default exists, all rights of a Borrower to exercise the voting and other
consensual rights which such Borrower would otherwise be entitled to exercise
pursuant to subsection (b) above shall cease, and all such rights shall
become and be vested in the Bank who shall have the sole right to exercise such
voting and other consensual rights.

 

(d)           Each Borrower agrees that it
will pledge and deliver hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all additional debt or equity interests of the

 

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issuer
of any of the Pledged Collateral.  All
such additional debt or equity interests shall constitute Pledged Collateral
hereunder and shall secure the Obligations.

 

(e)           The Bank shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in the Bank’s possession if the Pledged Collateral is accorded
treatment substantially equal to that which the Bank accords the Bank’s own
property, it being understood that the Bank shall not have any responsibility
for (i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders, or other matters relative to any Pledged
Collateral, whether or not the Bank has or is deemed to have knowledge of such
matters, or (ii) taking any necessary steps to preserve rights against any
parties with respect to any Pledged Collateral.

 

(f)            With respect to any of the
Pledged Collateral that consists of securities not registered under the securities
laws of the United States or any state, each Borrower agrees that, in
connection with any foreclosure sale or other disposition of such securities,
it shall be commercially reasonable for the Bank to sell such securities to a
buyer who will represent that the buyer is purchasing solely for investment and
not with a view to the resale or distribution of such securities, or in such
other manner as counsel for the Bank may require to comply with applicable
securities laws.

 

In
connection with the foregoing pledge provisions, LMCS, as the issuer of equity
interests held by LMC, and LMC, as the sole holder of any equity interests of
LMCS, hereby consent to the provisions of this Agreement, including, without
limitation, the grant of a security interest in LMCS’ equity interests held by
LMC and all proceeds thereof, and agree that, notwithstanding anything to the
contrary in LMCS’ certificate of formation, operating agreement or any other
agreement, (i) so long as an Event of Default exists, the Bank shall have
the sole right, should it so elect, to exercise the voting and other rights
with respect to such pledged equity interests as described in clause (c) above,
(ii) if an Event of Default exists, the Bank may foreclose or otherwise
realize on such pledged equity interests and any buyer of such equity
interests, whether at foreclosure or otherwise, shall have full voting and
membership rights with respect to such pledged equity interests, (iii) none
of LMCS’ equity interests presently constitute a “security” for purposes of Article 8
of the Uniform Commercial Code as in effect in any applicable jurisdiction, and
so long as any Obligations are outstanding or the Bank has any duty to extend
credit to any Borrower, LMCS shall not take any action to “opt-in” to, or to
otherwise have any of its equity interests treated as a “security” under, Article 8
of the Uniform Commercial Code, as in effect in any applicable jurisdiction,
and (iv) if the Bank obtains a judgment against LMC or a charge or similar
judgment lien against any equity interests of LMCS, the Bank, as the holder of
such judgment, charge or similar judgment lien, shall have full voting and
other membership rights with respect to LMCS’ equity interests.

 

11.           Collection; Power of
Attorney.  So long as
an Event of Default exists, each Borrower shall be deemed to have irrevocably
appointed the Bank as such Borrower’s attorney-in-fact to periodically execute
and deliver such documents and take such actions as the Bank deems necessary or
appropriate, and whether acting in the Bank’s or such Borrower’s name, to (a) exercise
any of the Bank’s rights and remedies under this Agreement or otherwise
available to the Bank, and (b) to exercise any of such Borrower’s rights
and remedies with respect to any Collateral or any person obligated on
otherwise liable with respect to any Collateral, including, without limitation,
(i) insofar as any Collateral consists of accounts, general intangibles,
instruments or chattel paper, to enforce, compromise, release and generally
exercise all of such Borrower’s rights and remedies in respect of such
Collateral and any proceeds of the foregoing, and (ii) to endorse any
checks or other items of payment in respect of such Collateral which come into
the Bank’s possession or control.  Without
limiting the generality of the foregoing, so long as an Event of Default
exists, the Bank may adjust, compromise or otherwise settle any Collateral,
including, without limitation, file and settle any insurance claims relating to
any Collateral, and any insurer shall be entitled to rely conclusively on the
Bank’s rights and the power-of-attorney granted to it by the Borrowers under
this Agreement.  All powers-of-attorney
granted by the Borrowers to the Bank under this 

 

5

 

Agreement
shall be deemed coupled with an interest and therefore irrevocable until the
Obligations have been indefeasibly paid in full and the Bank has no duty to
extend credit to or for the benefit of any Borrower.

 

12.           Expenses; Bank May Perform;
Indemnification.  Upon demand
by the Bank, the Borrowers shall jointly and severally pay to the Bank the
amount of all reasonable costs and expenses, including, without limitation,
reasonable attorneys’ fees and expenses, which the Bank incurs following an
Event of Default in connection with (a) the custody, preservation, use of,
or the sale of, collection from or other realization upon any of the
Collateral, (b) the exercise or enforcement of any of the Bank’s rights
under this Agreement, or (c) the failure by any Borrower to pay, perform
or observe any of its obligations under this Agreement.  The Bank may, but shall not be obligated, to
perform any obligation of any Borrower under this Agreement if the same is not
performed by such Borrower in accordance with the terms hereof.  Each Borrower irrevocably appoints the Bank
as such Borrower’s agent and attorney-in-fact to pay and perform any unpaid or
unperformed obligations of any Borrower under this Agreement so long as any
Default or Event of Default exists.  Each
Borrower indemnifies the Bank and its directors, officers, employees and
agents, from and against any and all claims, losses and liabilities now or
hereafter arising out of or relating to this Agreement or any of the
Obligations (including, without limitation, enforcement of this Agreement and
the Bank’s exercise of its rights and remedies hereunder), except claims,
losses or liabilities resulting solely from an indemnified party’s gross
negligence or willful misconduct.

 

13.           Bank’s Duties.  The powers conferred on the Bank under this
Agreement are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the safe custody of any Collateral
in the Bank’s possession and the accounting for monies actually received by the
Bank under this Agreement, the Bank shall have no duty in respect of any
Collateral nor shall the Bank have any duty to take any steps to preserve any
rights against any Collateral or against any person.

 

14.           Borrowers Remain Liable.  If any Collateral consists of contracts or
agreements, (a) the applicable Borrower shall remain liable under such
contracts or agreements to the extent set forth therein to perform all of such
Borrower’s duties thereunder to the same extent as if this Agreement had not
been executed, (b) the exercise by the Bank of any of its rights under
this Agreement shall not release any Borrower from any its duties under any
such contracts or agreements, and (c) the Bank shall have no obligation or
liability under such contracts or agreements by reason of this Agreement, nor
shall the Bank be obligated to perform any of the duties of any Borrower
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

 

15.           Standards
for Exercising Rights and Remedies.
To the extent that applicable law imposes duties on the Bank to exercise
remedies in a commercially reasonable manner, each Borrower acknowledges and
agrees that it is not commercially unreasonable for the Bank (a) to fail
to incur expenses reasonably deemed significant by the Bank to prepare
Collateral for disposition or otherwise to fail to complete raw material or
work in process into finished goods or other finished products for disposition,
(b) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of, (c) to fail to exercise
collection remedies against account debtors or other persons obligated on
Collateral or to fail to remove liens or encumbrances on or any adverse claims
against Collateral, (d) to exercise collection remedies against account
debtors and other persons obligated on Collateral directly or through the use
of collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature, (f) to
contact other persons, whether or not in the same business as such Borrower,
for expressions of interest in acquiring all or any portion of the Collateral, (g) to
hire one or more professional auctioneers to assist in the disposition of
Collateral,

 

6

 

whether or not the Collateral is of a
specialized nature, (h) to dispose of Collateral by utilizing internet
sites that provide for the auction of assets of the types included in the
Collateral or that have the reasonable capability of doing so, or that match
buyers and sellers of assets, (i) to dispose of assets in wholesale rather
than retail markets, (j) to disclaim disposition warranties, (k) to
purchase insurance or credit enhancements to insure the Bank against risks of
loss, collection or disposition of Collateral or to provide to the Bank a
guaranteed return from the collection or disposition of Collateral, or (l) to
the extent deemed appropriate by the Bank, to obtain the services of other
brokers, investment bankers, consultants and other professionals to assist the
Bank in the collection or disposition of any of the Collateral.  Each Borrower acknowledges that the purpose
of this Section is to provide non-exhaustive indications of what actions
or omissions by the Bank would fulfill the Bank’s duties under the Uniform
Commercial Code or other law of any other relevant jurisdiction in the Bank’s
exercise of remedies against the Collateral and that other actions or omissions
by the Bank shall not be deemed to fail to fulfill such duties solely on
account of not being indicated in this Section. Without limitation upon the
foregoing, nothing contained in this Section shall be construed to grant
any rights to any Borrower or to impose any duties on the Bank that would not
have been granted or imposed by this Agreement or by applicable law in the
absence of this Section.

 

16.           Further Assurances.            Each Borrower agrees to
execute and deliver such documents and to take such other action as the Bank
may reasonably request from time to time to evidence or further protect or
preserve the Bank’s rights granted or intended to be granted hereby.

 

17.           Governing Law.  This Agreement shall be governed by the laws
of the State of Missouri without regard to any choice of law rule thereof
which gives effect to the laws of any other jurisdiction, except to the extent
the laws of any other jurisdiction shall govern the perfection, the effect of
perfection or nonperfection, or the priority of any security interests created
under this Agreement.

 

18.           Joint and Several Liability.  Notwithstanding anything in this Agreement to
the contrary, each Borrower’s obligations under this Agreement shall be the
joint and several obligations of all Borrowers.

 

19.           Miscellaneous.  No amendment or waiver of any provision of
this Agreement nor consent to any departure by a Borrower herefrom shall be
effective unless the same shall be in writing and signed by the Bank and the
Borrowers, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.  The section headings herein are solely for
convenience and shall not be deemed to limit or otherwise affect the meaning or
scope of any part of this Agreement.  This document shall be construed without
regard to any presumption or rule requiring construction against the party
causing such document or any portion thereof to be drafted.  If any provision of this Agreement shall be
unlawful, then such provision shall be null and void, but the remainder of this
Agreement shall remain in full force and effect and be binding on the
parties.  This Agreement shall be binding
upon the successors and assigns of the parties, except that no Borrower may
assign any of its duties hereunder without obtaining the Bank’s prior written
consent, which consent may be withheld in the Bank’s sole and absolute
discretion.  The Bank may assign any of
its rights under this Agreement without the consent of the Borrowers.  This Agreement may be validly executed and
delivered by fax, e-mail or other means, and by use of multiple counterpart
signature pages.

 

[signature page(s) to follow]

 

7

 

IN
WITNESS WHEREOF, the parties have entered into this Agreement as of the date
first written above.

 

 

	
   

  	
  LIQUIDMETAL
  COATINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LIQUIDMETAL
  COATINGS SOLUTIONS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ENTERPRISE
  BANK & TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Security Agreement — Signature Page

 

 

LMT Consent

 

To
the extent Liquidmetal Technologies, Inc. (“LMT”) had, currently
has or hereafter acquires any interest in any intellectual property or any
other property in which Liquidmetal Coatings, LLC (“LMC”) and/or
Liquidmetal Coatings Solutions, LLC (“LMCS”) has or hereafter acquires
any interest (collectively, “LMC Property”), and without regard to
whether LMT’s interest in the LMC Property is that of an assignor, licensee,
sublicensor or otherwise, and to induce Enterprise Bank & Trust to
extend credit to or for the benefit of LMC or LMCS, LMT hereby:

 

(1)           consents to the terms and provisions of the attached
Security Agreement and, without limiting the foregoing, consents to LMC’s and
LMCS’ grant of a security interest in the LMC Property to Enterprise Bank &
Trust (together with its successors and assigns, the “Bank”), whether
pursuant to the attached Security Agreement or pursuant to any other agreement
entered into at any time between LMC, LMCS and Bank, and the exercise by the
Bank of any rights or remedies it may have at any time with respect to the LMC
Property;

 

(2)           agrees that all intellectual property rights and all
other LMC Property previously transferred by LMT to LMC and/or LMCS, whether
any such transfer in the form of a sale, license or otherwise, (a) are
valid and subsisting transfers and have not been revoked or rescinded in any
respect; (b) are fully transferrable by LMC or LMCS, as applicable, and
its assigns, in each case without restriction; (c) are not executory in
nature, there being no continuing material obligation to be paid or performed
by LMT, LMC or LMCS in connection therewith (any such obligation being hereby
waived); and (d) either by the terms of such transfers or the provisions
of clause (3) below, are not subject to any right of revocation,
termination, suspension or other impairment by or on behalf of LMT or its
assigns; and further agrees that any intellectual property rights or other LMC
Property transferred by LMT to LMC and/or LMCS in the future shall comply with the
provisions of this clause (2)

 

(3)           agrees that no action or inaction by LMC or LMCS or
any other person at any time, including, without limitation, any failure by LMC
or LMCS to pay any royalties, license fees or other compensation due LMT at any
time, shall result in any revocation, termination, suspension, limitation on
usage or other impairment of the rights of LMC or LMCS or their respective
assigns (including, without limitation, the Bank) with respect to the
ownership, use and any other aspect of any LMC Property; and that, without
limiting the foregoing, the Bank and any other collateral or absolute assignee
of any LMC Property shall take the same free of any existing or future claims
or defenses LMT may have against LMC or LMCS or any other person;

 

(4)           agrees that the Bank may foreclose or otherwise
realize on any LMC Property at any time, in each case without giving notice to
or obtaining the consent of LMT, and that that the Bank and any buyer at
foreclosure, as the case may be, and their respective successors and assigns,
shall be entitled to own, use, transfer and enjoy all other benefits relating
to the LMC Property, in each case without any notice to, consent or other
action by, or any duty to, LMT; and

 

(5)           agrees that the Bank may modify any of the terms and
provisions of the attached Security Agreement, and any other agreements between
or among the Bank, LMC and/or LMCS at any time, including by way of example but
without limitation, by increasing the amount of obligations secured thereby and
by extending, releasing or otherwise modifying, as the case may be, the
maturity of, collateral for, persons liable on, economic terms of and any other
provisions of such obligations; and that no such modification or the like shall
impair or otherwise affect LMT’s representations, warranties and agreements
above.

 

	
   

  	
  LIQUIDMETAL
  TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Exhibit A

 

(Debtor Information)

 

	
  1.

  	
  Liquidmetal
  Coatings, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  State
  of Organization:

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
   

  	
  Organizational
  Identification Number in State of Organization:

  	
  4385035

  
	
   

  	
   

  	
   

  
	
   

  	
  Chief
  Executive Office:

  	
  900
  Rockmead

  
	
   

  	
   

  	
  Suite 240

  
	
   

  	
   

  	
  Kingwood,
  TX 77339

  
	
   

  	
   

  	
   

  
	
   

  	
  Federal
  Tax Identification Number:

  	
  26-0488264

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Liquidmetal
  Coatings Solutions, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  State
  of Organization:

  	
  Delaware

  
	
   

  	
   

  	
   

  
	
   

  	
  Organizational
  Identification Number in State of Organization:

  	
  4385038

  
	
   

  	
   

  	
   

  
	
   

  	
  Chief
  Executive Office:

  	
  900
  Rockmead

  
	
   

  	
   

  	
  Suite 240

  
	
   

  	
   

  	
  Kingwood,
  TX 77339

  
	
   

  	
   

  	
   

  
	
   

  	
  Federal
  Tax Identification Number:

  	
  26-0488329

  

 

 

Exhibit B

 

(Special Collateral)

 

Motor
Vehicles:

 

1996
Box Truck

1997
Box Truck

2008
Chevrolet Silverado Pick-Up Truck

 

Patents:

 

5,030,519
— WC Containing Coating, Issued 7/9/91

5,695,825
— Ti-Containing Hard-Facing Coating, Issued 12/9/97

5,942,289
— Apparatus for Hard-Facing Coating, Issued 8/24/99

6,376,091
— Zirconia Containing Coating, Issued 4/23/02

4,725,512
— Materials Transformable (Armacore), Issued 2/16/88

 

Patent
Applications:

 

61,300,381-
Nickel Based Thermal Spray Powder (8080)

61,315,661
- Molybdenum-Containing Ferrous Alloy for

Improved
Thermal Spray Deposition Hard-Facing (X-80)

 

Trademarks:

 

“ARMACOR”

“DUOCOR”

“LIQUIDMETAL
COATINGS” in India

 

Web
Sites and URLs:

 

www.liquidmetalcoating.com

www.armacor.com

www.armacorbanding.com

www.liquidmetalcoatingsolutions.com

 

 

Exhibit C

 

NOTICE

OF

GRANT OF SECURITY INTEREST

IN

COPYRIGHTS

 

United
States Copyright Office

 

Ladies
and Gentlemen:

 

Please
be advised that pursuant to the Security Agreement, dated as of June 23,
2010 (as the same may be amended, consolidated, restated, replaced or otherwise
modified from time to time, the “Security Agreement”), by and among
Liquidmetal Coatings, LLC, Liquidmetal Coatings Solutions, LLC (each a “Borrower”)
and Enterprise Bank & Trust (the “Bank”), the undersigned
Borrower(s) have granted to the Bank, as security for the Obligations
referred to in the Security Agreement, a continuing security interest in and
continuing lien upon the copyrighted works, including the copyright
registrations and copyright applications therefor described below:

 

COPYRIGHTS

 

	
   

  	
   

  	
   

  	
   

  	
  Date of

  	
   

  
	
  Copyright No.

  	
   

  	
  Description of Work

  	
   

  	
  Copyright Registration

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

COPYRIGHT APPLICATIONS

 

	
  Copyright

  	
   

  	
   

  	
   

  	
  Date of Copyright

  	
   

  
	
  Application No.

  	
   

  	
  Description of Work

  	
   

  	
  Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

The
undersigned Borrower(s) and the Bank agree that the security interest in
and lien upon the foregoing copyrighted works, including the copyright
registrations and copyright applications therefor (a) may only be
terminated in accordance with the terms of the Security Agreement and the
Credit Agreement referred to therein, and (b) is not to be construed as an
absolute assignment of any copyright or copyright application.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [Borrower]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  Acknowledged and Accepted:

  	
   

  
	
   

  	
   

  
	
  ENTERPRISE
  BANK & TRUST

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

Exhibit D

 

NOTICE

OF

GRANT OF SECURITY INTEREST

IN

PATENTS

 

United
States Patent and Trademark Office

 

Ladies
and Gentlemen:

 

Please
be advised that pursuant to the Security Agreement, dated as of June 23,
2010 (as the same may be amended, consolidated, restated, replaced or otherwise
modified from time to time, the “Security Agreement”), by and among
Liquidmetal Coatings, LLC, Liquidmetal Coatings Solutions, LLC (each a “Borrower”)
and Enterprise Bank & Trust (the “Bank”), the undersigned
Borrower(s) have granted to the Bank, as security for the Obligations
referred to in the Security Agreement, the patents and patent applications
described below:

 

PATENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Date of Issuance

  	
   

  
	
  Patent
  No.

  	
   

  	
  Title of Patent

  	
   

  	
  of Patent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PATENT APPLICATIONS

 

	
  Patent

  	
   

  	
   

  	
   

  	
  Date of Patent

  	
   

  
	
  Application No.

  	
   

  	
  Title of Patent

  	
   

  	
  Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The
undersigned Borrower(s) and the Bank agree that the security interest in and
lien upon the foregoing patents and patent applications (a) may only be
terminated in accordance with the terms of the Security Agreement and the
Credit Agreement referred to therein, and (b) is not to be construed as an
absolute assignment of any patent or patent application.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [Borrower]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  Acknowledged and Accepted:

  	
   

  
	
   

  	
   

  
	
  ENTERPRISE
  BANK & TRUST

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

Exhibit E

 

NOTICE

OF

GRANT OF SECURITY INTEREST

IN

TRADEMARKS

 

United
States Patent and Trademark Office

 

Ladies
and Gentlemen:

 

Please
be advised that pursuant to the Security Agreement, dated as of June 23,
2010 (as the same may be amended, consolidated, restated, replaced or otherwise
modified from time to time, the “Security Agreement”), by and among
Liquidmetal Coatings, LLC, Liquidmetal Coatings Solutions, LLC (each a “Borrower”)
and Enterprise Bank & Trust (the “Bank”), the undersigned
Borrower(s) have granted to the Bank, as security for the Obligations referred
to in the Security Agreement, a continuing security interest in and continuing
lien upon the trademarks and trademark applications described below, and the
goodwill associated with such works:

 

TRADEMARKS

 

	
  Trademark No.

  	
   

  	
  Description of Trademark

  	
   

  	
  Date of Filing/Registration

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

TRADEMARK APPLICATIONS

 

	
  Trademark

  	
   

  	
   

  	
   

  	
  Date of Trademark

  	
   

  
	
  Applications No.

  	
   

  	
  Description of Trademark

  	
   

  	
  Application

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The
undersigned Borrower(s) and the Bank agree that the security interest in
and lien upon the foregoing trademarks and trademark applications (a) may
only be terminated in accordance with the terms of the Security Agreement and
the Credit Agreement referred to therein, and (b) is not to be construed
as an absolute assignment of any trademark or trademark application.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [Borrower]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  Acknowledged and Accepted:

  	
   

  
	
   

  	
   

  
	
  ENTERPRISE
  BANK & TRUST

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]