Document:

INDEMNIFICATION AGREEMENT

             

            THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made the 22nd day of December, 2008, by and between Endurance Specialty Holdings Ltd., a Bermuda company (the “Company”), and [Director], who currently is serving as a director of the Company (the “Indemnitee”).

             

            WHEREAS, the Indemnitee is currently serving as a director of the Company;

             

            WHEREAS, the Company wishes the Indemnitee to continue to serve in such capacity or capacities and the Indemnitee is willing, under certain circumstances, to continue in such capacity or capacities;

             

            WHEREAS, as an inducement to continued service as a director by the Indemnitee and its other directors and officers, the Company has determined to provide additional protection to the Indemnitee and its other directors and officers as set forth herein;

             

            WHEREAS, the Company has concluded that additional protection is necessary for its directors and officers .

             

            NOW, THEREFORE, in consideration of the Indemnitee’s continued and future service to the Company, the parties agree as follows:

             

            
                	
                            1.

                        	
                            Indemnification. The Company agrees to indemnify the Indemnitee to the full extent permitted by Bermuda law and the Company’s Bye-Laws, as each exists now and as each may be amended in the future to permit additional indemnification for the Indemnitee.

                        

            

             

            
                	
                            2.

                        	
                            Payment of Expenses. Without limiting the indemnification provided in Section 1 and subject to the limitations, terms and conditions of this Agreement, including, but not limited to, the limitations in Section 9, the Company agrees, to the fullest extent permitted by applicable law and the Company’s Bye-Laws as in
                            effect at any time during the term of this Agreement, to pay all costs, charges and other expenses, including, but not limited to, attorneys’ fees, costs of appearance, attachment and similar bonds (hereinafter referred to as “Expenses”) incurred by the Indemnitee in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including, but not limited to, any action by
                            or in the right of the Company), to which the Indemnitee is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that the Indemnitee is, was or at any time becomes a director, officer, employee, agent or fiduciary of the Company, or is or was serving or at any time serves at the request of the Company as a director, officer, employee, agent, or fiduciary of another corporation, partnership, joint venture, trust or other
                            enterprise or with respect to any employee benefit plan (or its participants or beneficiaries) of the Company or any such other enterprise as such Expenses accrue and, in any event, within twenty (20) days after the Company has received written request therefor from or on behalf of the

                        

            

             

            
                

                 

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            Indemnitee. The Company shall continue to make such payments unless and until there has been a final adjudication by a court of competent jurisdiction establishing that the Indemnitee is not entitled to payment of such Expenses in accordance with Section 9 of this Agreement.

             

            
                	
                            3.

                        	
                            Maintenance of D&O Insurance. The Company currently maintains directors’ and officers’ liability insurance with a limit of coverage of $70,000,000 (the “D&O Policies”).

                        

            

             

            
                	
                             

                        	
                            a.

                        	
                            So long as the Indemnitee shall continue to serve in any capacity described in Section 2 and thereafter so long as the Indemnitee shall be subject to any possible action, suit or proceeding by reason of the fact that the Indemnitee served in any of said capacities, the Company will purchase and maintain in effect for the benefit of the Indemnitee one or
                            more valid, binding and enforceable policies of directors’ and officers’ liability insurance providing, in all respects, coverage and amounts at least comparable to that provided pursuant to the D&O Policies.

                        

            

             

            
                	
                             

                        	
                            b.

                        	
                            Notwithstanding Section 3(a), the Company shall not be required to maintain directors’ and officers’ liability insurance in effect if such insurance is not reasonably available or if, in the reasonable business judgment of the Board of Directors of the Company (the “Board”) as it may exist from time to time, either (i) the
                            premium cost for such insurance is substantially disproportionate to the amount of insurance or (ii) the coverage is so limited by exclusions that there is insufficient benefit provided by such insurance.

                        

            

             

            
                	
                             

                        	
                            c.

                        	
                            If the Company, acting under Section 3(b), does not purchase and maintain in effect directors’ and officers’ liability insurance, the Company shall indemnify and hold harmless the Indemnitee to the full extent of the coverage which would otherwise have been provided by the D&O Policies.

                        

            

             

            
                	
                             

                        	
                            d.

                        	
                            The Company shall pay all Expenses incurred by the Indemnitee in connection with any action, suit or proceeding to enforce the Indemnitee’s rights under the D&O Policies.

                        

            

             

            
                	
                            4.

                        	
                            Procedure for Requesting Indemnification and Payment of Expenses. To obtain indemnification and payment of Expenses under this Agreement, the Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to the Indemnitee and is
                            reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that the Indemnitee has requested indemnification. Any determination as to the eligibility of an Indemnitee to indemnification and/or payment of Expenses shall be made:

                        

            

             

            
                

                 

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                            a.

                        	
                            by the Board, by a majority vote at a meeting duly constituted by a quorum of directors not party to the proceedings or matter with regard to which the indemnification is, or would be claimed; or

                        

            

             

            
                	
                             

                        	
                            b.

                        	
                            in the case such a meeting cannot be constituted by lack of a disinterested quorum, by independent legal counsel in a written opinion.

                        

            

             

            
                	
                            5.

                        	
                            Presumptions and Effect of Certain Proceedings.

                        

            

             

            
                	
                             

                        	
                            a.

                        	
                            In making a determination with respect to entitlement to indemnification or payment of Expenses hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification or payment of Expenses under this Agreement if Indemnitee has submitted a request for indemnification or payment of Expenses in
                            accordance with Section 4 of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making of any determination contrary to that presumption.

                        

            

             

            
                	
                             

                        	
                            b.

                        	
                            If the person, persons or entity empowered or selected pursuant to Section 4 to determine whether Indemnitee is entitled to indemnification or payment of Expenses hereunder shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement shall be deemed to have
                            been made and Indemnitee shall be entitled to indemnification and/or payment of Expenses hereunder.

                        

            

             

            
                	
                             

                        	
                            c.

                        	
                            The termination of any action, suit or proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, does not create a presumption that Indemnitee is not entitled to indemnification
                            and/or payment of Expenses hereunder.

                        

            

             

            
                	
                            6.

                        	
                            Defense of Claims. With respect to any action, suit or proceeding described in Section 2, the Company may elect to assume the investigation and defense of such action, suit or proceeding with counsel it selects with the consent of the Indemnitee, which consent shall not be unreasonably withheld. After notice to the
                            Indemnitee from the Company of its election to assume the investigation and defense of such action, suit or proceeding, the Company shall not be liable to the Indemnitee under this Agreement for any expenses subsequently incurred by the Indemnitee in connection with the investigation and defense of such action, suit or proceeding other than for services requested by the Company or the counsel it selected. The Indemnitee shall have the right to employ his own counsel,
                            but the expenses incurred by the Indemnitee after notice from the Company of its assumption of the investigation and defense shall be at the expense of the Indemnitee. Notwithstanding the foregoing, however, the Indemnitee shall be entitled to separate counsel in any action, suit or proceeding brought by or on behalf of the Company or as to which

                        

            

             

            
                

                 

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            counsel for the Indemnitee reasonably concludes that there is a conflict of interest between the Company and the Indemnitee, provided that the Company shall not be required to pay the expenses of more than one such separate counsel for persons it is indemnifying in any one action, suit or proceeding unless the counsel originally chosen to represent such Indemnitees as a group
            reasonably concludes that substantial and material conflicts of interest prevent such counsel from acting for the Indemnitees as a single client.

             

            
                	
                            7.

                        	
                            Indemnitee’s Reimbursement. The Indemnitee agrees to reimburse the Company for all amounts paid by the Company pursuant to this Agreement in the event and to the extent, but only in the event and only to the extent, that there is a final adjudication by a court of competent jurisdiction establishing that the Indemnitee
                            is not entitled to be so indemnified or to have such amounts paid by the Company.

                        

            

             

            
                	
                            8.

                        	
                            Contribution. If the indemnification or payment of Expenses provided by this Agreement should be unavailable or insufficient to hold the Indemnitee harmless, then the Company agrees that, for purposes of this Section, the Company shall be treated as if it were a party to the threatened, pending or completed action, suit or
                            proceeding in which the Indemnitee was involved and that the Company shall contribute to the amounts paid or payable by the Indemnitee as a result of Expenses, judgments for both compensatory and punitive damages, fines, penalties and amounts paid in settlement. The amount of contribution provided by this Section shall be determined by (i) the relative benefits accruing to the Company on the one hand and the Indemnitee on the other which arose out of the acts or
                            omissions underlying the threatened, pending or completed action, suit or proceeding in which the Indemnitee was involved, (ii) the relative fault of the Company on the one hand and the Indemnitee on the other in connection with such acts or omissions, and (iii) any other equitable considerations appropriate under the circumstances. For purposes of this Section, the relative benefits of the Company shall be deemed to be the benefits accruing to it and the relative
                            benefit of the Indemnitee shall be deemed to be an amount not greater than the Indemnitee’s annual base salary or Indemnitee’s compensation from the Company plus any personal benefit received from such acts or omissions. The relative fault shall be determined by reference to, among other things, the fault of the Company and all of its directors, officers, employees and agents (other than the Indemnitee), as a group and treated as one entity, on the one
                            hand, and the Indemnitee’s and such group’s relative intent, knowledge, access to information and opportunity to have altered or prevented the act or omission on the other hand.

                        

            

             

            
                	
                            9.

                        	
                            Limitations on Indemnification, Advancement and Contribution. Notwithstanding anything in the foregoing to the contrary, the Company shall not be liable under this Agreement to make any indemnity payment, advancement of Expenses or contribution in connection with any action, suit or proceeding:

                        

            

             

            
                	
                             

                        	
                            a.

                        	
                            to the extent that payment is actually made, or for which payment is available, to or on behalf of the Indemnitee under an insurance policy, except in respect

                        

            

             

            
                

                 

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            of any amount in excess of the limits of liability of such policy or any applicable deductible for such policy;

             

            
                	
                             

                        	
                            b.

                        	
                            to the extent that payment has or will be made to the Indemnitee by the Company otherwise than pursuant to this Agreement;

                        

            

             

            
                	
                             

                        	
                            c.

                        	
                            to the extent that there was a final adjudication by a court of competent jurisdiction that the Indemnitee is liable for fraud or dishonesty in relation to the Company;

                        

            

             

            
                	
                             

                        	
                            d.

                        	
                            to the extent the application of such provision is prohibited under the Bermuda Companies Act 1981, as amended from time to time; or

                        

            

             

            
                	
                             

                        	
                            e.

                        	
                            To the extent of any “short swing profit” disgorgement or similar liability arising under Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”).

                        

            

             

            
                	
                            10.

                        	
                            Enforcement of Indemnitee’s Rights. The Indemnitee shall have the right to enforce this Agreement in any court of competent jurisdiction if the Company either fails to indemnify the Indemnitee or fails to advance Expenses pursuant to the Company’s Bye-Laws or this Agreement. The Company agrees to stipulate in any
                            such suit that the Company is bound by all the provisions of this Agreement and is precluded from making any assertion to the contrary. The burden of proof shall be on the Company in any such suit to demonstrate by the weight of the evidence that the Indemnitee is not entitled to indemnification or advance payment of Expenses. The Indemnitee’s Expenses incurred in establishing his right to indemnification or advancement of Expenses, in whole or in part, in any
                            such action (or settlement thereof) shall be paid by the Company as they accrue and, in any event within twenty (20) days after the Company has received written request therefore from or on behalf of the Indemnitee. The Company shall continue to make such payments unless and until there has been a final adjudication by a court of competent jurisdiction establishing that the Indemnitee is not entitled to indemnification or advance payment of Expenses, in which event
                            the Indemnitee agrees to reimburse the Company for all amounts paid under this Section 10.

                        

            

             

            
                	
                            11.

                        	
                            Change in Control. The Company agrees that if there is a Change in Control, as defined below, of the Company (other than a Change in Control which has been approved by a majority of the Board who were directors immediately prior to such Change in Control), then (a) any determination with respect to an Indemnitee’s
                            eligibility to receive payment of Expenses under this Agreement shall be made by the members of the Board who were directors immediately prior to such Change in Control and (b) with respect to all other matters thereafter arising concerning the rights of the Indemnitee to indemnity payments and payments of Expenses under this Agreement, the Company shall seek legal advice only from special, independent counsel selected by the Indemnitee with the consent of the
                            Company (which consent shall not be unreasonably withheld), and who has not otherwise performed services

                        

            

             

            
                

                 

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            for the Company within the last five years (other than in such capacity and in connection with such matters). Such counsel, among other things, shall render a written opinion to the Company and the Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under this Agreement and applicable law. The Company agrees to be bound by such written
            opinion of the special, independent counsel, to pay the reasonable fees of such counsel and to fully indemnify such counsel against any and all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or counsel’s engagement pursuant hereto.     

             

            A "Change in Control" for purposes of this Agreement shall be deemed to have occurred upon the earliest to happen of the following:

            
                	
                             

                        	
                            a.

                        	
                            The acquisition, in one or more transactions, of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) by any person or entity or any group of persons or entities who constitute a group (within the meaning of Rule 13d-3 of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit
                            plan of the Company or a subsidiary, of any securities of the Company if, as a result of such acquisition, such person, entity or group either (i) beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, more than 30% of the Company's outstanding voting securities entitled to vote on a regular basis for a majority of the members of the Board or (ii) otherwise has the ability to elect, directly or indirectly, a majority of
                            the members of the Board;

                        

            

            
                	
                             

                        	
                            b.

                        	
                            A change in the composition of the Board such that a majority of the members of the Board are not Continuing Directors. A "Continuing Director" means, as of any date of determination, any member of the Board who (i) was a member of the Board on the date of this Agreement, or (ii) was nominated and elected to such Board with the affirmative vote of a
                            majority of the Continuing Directors who were members of the Board at the time of such nomination or election; or

                        

            

            
                	
                             

                        	
                            c.

                        	
                            The shareholders of the Company approve (i) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the
                            surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (ii) a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company (in one or more transactions) of all or substantially all of the Company's assets.  

                        

            

            
                	
                            12.

                        	
                            Settlement. The Company shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action, suit or proceeding without its written consent, which consent shall not be unreasonably withheld. The

                        

            

             

            
                

                 

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            Company shall not settle any action, suit or proceeding which would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent, which consent shall not be unreasonably withheld. In the event that consent is not given and the parties hereto are unable to agree on a proposed settlement, independent legal counsel shall be retained by the Company,
            at its expense, with the consent of the Indemnitee, which consent shall not be unreasonably withheld, for the purpose of determining whether or not the proposed settlement is reasonable under all of the circumstances, and if independent legal counsel determines the proposed settlement is reasonable, the settlement may be consummated without the consent of the other party.

             

            
                	
                            13.

                        	
                            Company Subrogation Rights. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee against any person or organization and the Indemnitee shall execute all papers required and shall do everything that may be reasonably
                            necessary to secure such rights.

                        

            

             

            
                	
                            14.

                        	
                            Non-Exclusive. Nothing in this Agreement shall diminish or otherwise restrict, and this Agreement shall not be deemed exclusive of, the Indemnitee’s rights to indemnification or advancement of Expenses under any provision of Bermuda law or the Bye-Laws of the Company or otherwise.

                        

            

             

            
                	
                            15.

                        	
                            Notice to the Company. The Indemnitee will promptly notify the Company of any threatened, pending or completed action, suit or proceeding against the Indemnitee described in Section 2. The failure to notify or promptly notify the Company shall not relieve the Company from any liability which it may have to the Indemnitee
                            otherwise than under this Agreement, and shall relieve the Company from liability hereunder only to the extent the Company has been prejudiced.

                        

            

             

            
                	
                            16.

                        	
                            Notices. Any notice that is required or permitted to be given under this Agreement shall be in writing and shall be personally delivered or deposited in the United States mail, certified or registered mail with proper postage prepaid and addressed:

                        

            

             

            If to the Company, to:

             

            Endurance Specialty Holdings Ltd.

            Wellesley House

            90 Pitts Bay Road

            Pembroke HM08

            Bermuda

            Attn: Secretary

             

            If to the Indemnitee:

             

            [Director Address]

             

            
                

                 

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            or at such other address as the party may furnish to the other party by ten (10) days prior written notice.

             

            
                	
                            17.

                        	
                            Supersedes Prior Agreements. This Agreement replaces and supersedes any other agreement or agreements, oral or written, that the Company may have with Indemnitee with respect to the subject matter covered by this Agreement.

                        

            

             

            
                	
                            18.

                        	
                            Separability. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other
                            provisions.

                        

            

             

            
                	
                            19.

                        	
                            Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Bermuda, without regard to the principles of conflicts of laws.

                        

            

             

            
                	
                            20.

                        	
                            Duration of Agreement. Unless otherwise terminated pursuant to Section 22 hereof, this Agreement shall continue in effect until and terminate upon the later of (a) ten (10) years after the Indemnitee has ceased to occupy any of the positions or have any of the relationships described in Section 2 of this Agreement and (b)
                            the final termination of all pending or threatened actions, suits, proceedings or investigations with respect to Indemnitee.

                        

            

             

            
                	
                            21.

                        	
                            Binding Effect. This Agreement shall be binding upon the Indemnitee and upon the Company, its successors and assigns, and shall inure to the benefit of the Indemnitee, his heirs, personal representatives and assigns and to the benefit of the Company, its successors and assigns.

                        

            

             

            
                	
                            22.

                        	
                            Amendment and Termination. Except for any automatic termination pursuant to Section 20 hereof, no amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties.

                        

            

             

            
                	
                            23.

                        	
                            Headings. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

                        

            

             

            
                	
                            24.

                        	
                            Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original, but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to
                            evidence the existence of this Agreement.

                        

            

             

            
                

                 

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

             

            

            	
                    	
                        ENDURANCE SPECIALTY HOLDINGS LTD.

                    	
                    
	
                    	 	
                    
	
                    	 	
                    
	
                    	 	
                    
	
                    	
                    	
                    	
                    	
                    	
                    
	
                    	
                    	
                    	
                    	
                    	
                    
	
                    	
                    	
                    	
                    	
                    	
                    
	
                    	
                        By:

                    	
                    	
                    	
                    	
                    
	
                    	
                    	
                        

                    	
                    	
                    	
                    
	
                    	
                    	
                        Name:

                    	
                    	
                    	
                    
	
                    	
                    	
                        Title:

                    	
                    	
                    	
                    
	
                    	
                    	 	
                    	
                    	
                    
	
                    	
                    	 	
                    	
                    	
                    
	
                    	
                    	 	
                    	
                    	
                    
	
                    	
                    	
                    	
                    	
                    	
                    
	
                    	
                    	
                    	
                    	
                    	
                    
	
                    	
                    	
                        

                    	
                    	
                    	
                    
	
                    	
                    	
                        [Director]

                    	
                    	
                    	
                    

            

            

            
                                                                                         

             

            
                

                 

                9form8kexhibit.htm

    
      
         

      

       

      
         

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

     

     

    

    
      	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
              US
    $20,000

            	 
      	
              December
      24, 2008

            

    

    PROMISSORY NOTE

         FOR VALUE
RECEIVED, the
undersigned, Ecology Coatings, Inc., a Nevada corporation (the “The Maker”),
promises to pay to the order of Seven Industries (the “Holder”), the principal
amount Twenty Thousand and 00/100 dollars ($20,000.00), together with interest
thereon as provided below.

    ARTICLE
I

    TERMS OF
REPAYMENT

    

    
      	
              1.  

            	
              Interest.
      The Note shall bear interest (“Interest”) equal to five (5%)
      percent per annum on the unpaid principal balance, computed on a three
      hundred and sixty-five (365) day year, during the term of the Note.
      The Maker shall pay all Interest on or before the Maturity Date. In no
      event shall the rate of Interest payable on this Note exceed the maximum
      rate of interest permitted to be charged under applicable
    law.

            

    

    

    
      	
              2.  

            	
              Payments.
      All payments by the Maker under this Note shall first be credited
      against costs and expenses provided for hereunder, second to the payment
      of any penalties, third to the payment of accrued and unpaid interest, if
      any, and the remainder shall be credited against principal. All payments
      due hereunder shall be payable in legal tender of the United States of
      America, and in same day funds delivered to the Holder by cashier’s check,
      certified check, or any other means of guaranteed funds to the mailing
      address provided below, or at such other place as the Holder or any holder
      hereof shall designate in writing for such purpose from time to time. If a
      payment hereunder otherwise would become due and payable on a Saturday,
      Sunday or legal holiday, the due date thereof shall be extended to the
      next succeeding business day, and Interest, if any, shall be payable
      thereon during such extension.

            

    

    

     

    

    
      	
              3.  

            	
              Maturity
      Date. All outstanding principal and interest shall be payable on
      June 30, 2009 (the “Maturity Date”). At its sole option, the Maker
      may extend the Maturity Date for an additional thirty (30) days upon
      delivery to Holder of an option to purchase fifteen thousand (15,000)
      shares of the Maker’s Common Stock (the “Extension Option”). The Company
      shall pay the Note on or before the Maturity Date on a pro rata basis with
      all three (3) Notes on even date
herewith.

            

    

    

    
      	
              4.  

            	
              Pre-Payment
      Demand. If at any time before the Maturity Date the Maker completes
      an underwritten public offering of its common stock or other form of
      security convertible into common stock pursuant to an effective
      registration statement under the Securities Act of 1933 (the “Act”), as
      amended, or a managed private offering exempt from registration under
      Section 4(2) of the Act and Regulation D promulgated thereunder
      (collectively, a “New Offering”) which results in proceeds received by the
      Maker net of underwriting discounts and commissions, of at least One
      Million and 00/100 dollars ($1,000,000.00) (a “Pre-Payment Event”), then
      at the sole and absolute discretion of the Holder, and upon written demand
      to the Maker (the “Pre-Payment Notice”), all amounts owed under this Note
      shall become due and payable within fifteen (15) days following
      Maker’s receipt of the Pre-Payment
Notice.

            

    

    

     

    

    
      	
              5.  

            	
              Exemption
      from Restrictions. It is the intent of the Maker and the Holder in
      the execution of this Note that the indebtedness hereunder be exempt from
      the restrictions of the usury laws of any applicable jurisdiction. The
      Maker and the Holder agree that none of the terms and provisions contained
      herein shall be construed to create a contract for the use, forbearance or
      detention of money requiring payment of interest at a rate in excess of
      the maximum interest rate permitted to be charged by the laws of any
      applicable jurisdiction. In such event, if any holder of this Note shall
      collect monies which are deemed to constitute interest which would
      otherwise increase the effective interest rate on this Note to a rate in
      excess of the maximum rate permitted to be charged by the laws of any
      applicable jurisdiction, all such sums deemed to constitute interest in
      excess of such maximum rate shall, at the option of such holder, be
      credited to the payment of this principal amount due hereunder or returned
      to the Maker.

            

    

    

    ARTICLE
II

    COVENANTS

    

    
      	
              6.  

            	
              Conversion
      into Common Stock. If at any time before the Maturity Date, the
      Maker completes a New Offering, the Maker shall give the Holder the option
      to convert this Note, in whole or in part, into Common Stock of the Maker
      based on a conversion price equal to the lower of: (a) the closing
      bid price per share of the Common Stock on the date first above written as
      reported on the Over-The-Counter Bulletin Board, or if there is not such
      price on the Effective Date, then the last bid price on the date nearest
      preceding the date first above written, or; (b) the average price at
      which the Maker sells its Common Stock in the New Offering (the
      “Conversion Price”)(the “Conversion
Shares”).

            

    

    

    
      	
              7.  

            	
              Piggyback
      Registration. If the Conversion Shares and the Underlying Shares
      (collectively, the “Shares”) have not been otherwise registered and at any
      time the Maker proposes to file a registration statement, whether or not
      for sale for the Maker’s own account, on a form and in a manner that would
      also permit registration of shares (other than in connection with a
      registration statement on Forms S-4 or S-8 or any similar or successor
      form) the Maker shall give to Holder, written notice of such proposed
      filing promptly, but in any case at least twenty (20) days before the
      anticipated filing. The notice referred to in the preceding sentence shall
      offer the holder(s) holding the Shares the opportunity to register such
      amount of the Shares as he may request (a “Piggyback Registration”).
      Subject to this Section, the Maker will include in each such Piggyback
      Registration (and any related qualification under state blue sky laws and
      other compliance filings, and in any underwriting involved therein) that
      portion of the Shares with respect to which the Maker has received written
      requests for inclusion therein within twenty (20) days after the
      written notice from the Maker is given. The holders holding any portion of
      the Shares will be permitted to withdraw all or part of the Shares from a
      Piggyback Registration at any time prior to the effective date of such
      Piggyback Registration. Notwithstanding the foregoing, the Maker will not
      be obligated to effect any registration of shares under this
      Paragraph 7 as a result of the registration of any of its securities
      solely in connection with mergers effected pursuant to a Form S-4
      Filing.

            

    

    

    
      	
              8.  

            	
               Covenants
      Regarding Registration

            

    

    
      	 
      	
              a.

            	 
      	
              The
      Maker shall use its best efforts to have any registration statement
      declared effective at the earliest possible time, and shall furnish such
      number of prospectuses as shall be reasonably required.

               

            
	 
      	
              b.

            	 
      	
              The
      Maker shall bear all costs, fees and expenses in connection with a
      Piggyback Registration,

            
	 
      	 
      	 
      	 
      
	 
      	
              c.

            	 
      	
              The
      Maker will take all necessary action which may be required in qualifying
      qualifying or registering the Shares included in any Piggyback
      Registration for offering and sale under the securities or blue sky laws
      of such states as are requested by the holders of such Shares, provided
      that the Maker shall not be obligated to execute or file any general
      consent to service or process or to qualify as a foreign corporation to do
      business under the laws of any such jurisdiction.

               

            

    

    
      	
              9.  

            	
              Indemnification.
      The Maker shall, at The Maker’s expense, protect, defend,
      indemnify, save and hold Holder harmless against any and all claims,
      demands, losses, expenses, damages, causes of action (whether legal or
      equitable in nature) asserted by any person or entity arising out of,
      caused by or relating to the Note, including without limitation the
      construction of the Note and the use or application of the proceeds of the
      Note, and The Maker shall pay Holder upon demand all claims, judgments,
      damages, losses and expenses (including court costs and reasonable
      attorneys’ fees and expenses) incurred by Holder as a result of any legal
      or other action arising out of the Note as
  aforesaid.

            

    

    

    
      	
              10.  

            	
              Attorneys
      Fees. The Maker shall reimburse Holder for all reasonable costs,
      attorney’s fees, and all other expenses in connection with this
      Note.

            

    

    

    
      	
              11.  

            	
              Notice of
      Default. So long as any amount under this Note shall remain unpaid,
      the Holder will, unless the Maker otherwise consents in writing, promptly
      give written notice to the Maker in reasonable detail of the occurrence of
      any Event of Default, or any condition, event or act which with the giving
      of notice or the passage of time or both would constitute an Event of
      Default.

            

    

    

     

    ARTICLE
III

    DEFAULT

    

    
      	
              12.  

            	
               Events
      of Default. Any of the following events shall constitute an “Event
      of Default” hereunder:

            

    

    

    
      	 
      	
              a.

            	 
      	
              Failure
      by the Maker to pay the principal or Interest, if any, of this Note when
      due and payable on the Maturity Date.

            
	 
      	 
      	 
      	 
      
	 
      	
              b.

            	 
      	
              The
      entry of an order for relief under Federal Bankruptcy Code as to the Maker
      or approving a petition in reorganization or other similar relief under
      bankruptcy or similar laws in the United States of America or any other
      competent jurisdiction, and if such order, if involuntary, is not
      satisfied or withdrawn within sixty (60) days after entry thereof; or
      the filing of a petition by the Maker seeking any of the foregoing,
      or

            
	 
      	 
      	 
      	
              consenting
      thereto; or the filing of a petition to take advantage of any debtor’s
      act; or making a general assignment for the benefit of creditors; or
      admitting in writing inability to pay debts as they mature;
    or

            
	 
      	 
      	 
      	 
      
	 
      	
              c.

            	 
      	
              Failure
      by the Maker to pay the principal and Interest, if any, of this Note
      concurrent with a Pre-Payment Event; or

            
	 
      	 
      	 
      	 
      
	 
      	
              d.

            	 
      	
              The
      breach of any covenant made by the Maker in this
  Note.

            

    

         

    
      	
              13.  

            	
              Acceleration.
      Upon any Event of Default (in addition to any other rights or
      remedies provided for under this Note), at the option of the Holder or any
      holder hereof, all sums evidenced hereby, including all principal, accrued
      but unpaid Interest, fees and all other amounts due hereunder, shall
      become immediately due and payable. If an Event of Default relating to
      certain events of bankruptcy or insolvency of the Maker occurs and is
      continuing, the principal of and interest, if any, on this Note will
      become and be immediately due and payable without any declaration or other
      act on the part of the Holder or any holder hereof. This Note shall bear
      interest at the rate of ten (10%) percent per annum upon the occurrence of
      an Event of Default (“Default Interest”). Payments of the Default Interest
      shall be due every thirty (30) days following the occurrence Event of
      Default.

            

    

    

    
      	
              14.  

            	
              No Waiver.
      Failure of the Holder or any holder hereof to exercise any option
      hereunder shall not constitute a waiver of the right to exercise the same
      in the event of any subsequent Event of Default, or in the event of
      continuance of any existing Event of Default after demand or performance
      thereof.

            

    

    

    
      	
              15.  

            	
               Pursuit
      of any Remedy. The Holder or holder hereof may pursue any remedy
      under this Note without notice or presentment. The Holder or any holder
      hereof has the right to direct the time, method and place of conducting
      any proceeding for exercising any remedy available to the Holder or any
      such holder hereof under this Note.

            

    

    

    ARTICLE
IV

    MISCELLANEOUS

    

    
      	
              16.  

            	
              Amendments.
      No amendment or waiver of any provision of this Note, nor consent
      to any departure by the Maker herefrom, shall in any event be effective
      unless the same shall be in writing and signed by the Holder, and then
      such waiver or consent shall be effective only in the specific instance
      and for the specific purpose for which
given.

            

    

    

    
      	
              17.  

            	
              Notices.
      All notices and other communications provided for hereunder shall
      be in writing (including telecopier communication) and mailed, telecopied,
      or delivered, to the Maker or the Holder, as applicable, at their
      respective addresses specified on the signature pages hereof, or, as to
      each party, at such other address as shall be designated by such party in
      a written notice to the other party. All such notices and communications
      shall, when mailed or telecopied, be effective when deposited in the mails
      or telecopied with receipt confirmed,
  respectively.

            

    

    

     

    

    
      	
              18.  

            	
              No Waiver;
      Remedies. No failure on the part of the Holder to exercise, and no
      delay in exercising, any right hereunder shall operate as a waiver
      thereof, nor shall any single or partial exercise of any right hereunder
      preclude any other or further exercise thereof or the exercise of any
      other right. All rights, powers and remedies of the Holder in connection
      with this Note are cumulative and not exclusive, and shall be in addition
      to any other rights, powers or remedies provided by law or
      equity.

            

    

    

    
      	
              19.  

            	
              Severability;
      Headings. If any one or more provisions of this Note shall be held
      to be illegal, invalid or otherwise unenforceable, the same shall not
      affect any other provisions of this Note and the remaining provisions of
      this Note shall remain in full force and effect. Article and paragraph
      headings in this Note are included herein for convenience of reference
      only and shall not constitute a part of this Note for any other purpose or
      be given any substantive effect.

            

    

    

     

    

    
      	
              20.  

            	
              Binding
      Effect; Transfer. This Note shall be binding upon and inure to the
      benefit of the Maker and the Holder and their respective successors and
      assigns. The Holder may not assign or otherwise transfer, or grant
      participations in, this Note or all or any portion of its rights hereunder
      or its interest herein to any person or entity, without the prior written
      consent of the Maker which consent shall not be unreasonably withheld. The
      Maker may not assign or otherwise transfer its rights or obligations
      hereunder or any interest herein without the prior written consent of the
      Holder. Any attempted assignment by the Maker or the Holder in
      contravention of this paragraph shall be null and void and of no force or
      effect.

            

    

    

    
      	
              21.  

            	
              Enforcement.
      It is agreed that time is of the essence of this Note and in the
      event of default of the terms of this Note, the Maker agrees to pay all
      costs of collection or enforcement, including reasonable attorneys’ fees
      and if there is a default in payment of any sum due
    hereunder.

            

    

    

    
      	
              22.  

            	
              Governing
      Law. This Note shall be governed by, and shall be construed and
      enforced in accordance with, the internal laws of the State of Michigan
      without regard to conflicts of laws principles. The venue of any legal
      proceeding taken in connection with this Note will be in Pontiac,
      Michigan.

            

    

    

    
      	
              23.  

            	
              Independence
      of Covenants. All covenants hereunder shall be given independent
      effect so that if a particular action or condition is not permitted by any
      of such covenants, the fact that it would be permitted by an exception to,
      or be otherwise within the limitations of, another covenant shall not
      avoid the occurrence of an Event of Default or event which with notice or
      lapse of time or both would become an Event of Default if such action is
      taken or condition exists.

            

    

    

    
      	
              24.  

            	
               Interpretation.
      The Holder and the Maker hereby waive the benefit of any statute or
      rule of law or judicial decision which would otherwise require that the
      provisions of this Note be construed or interpreted more strongly against
      the party responsible for the drafting
thereof.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

     

         IN WITNESS
WHEREOF, this Note has been issued as of date first written
above.

    
      
        	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                MAKER:

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                Ecology
      Coatings, Inc.

              	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                 /s/Robert
      G. Crockett

              	 
      	 
      
	 
      	 
      	
                 

                Robert
      G. Crockett

              	 
      	 
      
	 
      	 
      	
                Chief
      Executive Officer

              	 
      	 
      

      

    

    

    
      	 
      	 
      	 
      
	
              Mailing
      Address of Holder:

            	 
      	 
      
	
               Seven
      Industries

            	 
      	 
      
	
              2701
      Cambridge Court

            	 
      	 
      
	
              Suite
      425, Auburn Hills, MI  48326

            	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    Mailing
Address of Maker:

    Ecology
Coatings, Inc.

    2701
Cambridge Court

    Suite
100

    Auburn
Hills, MI  48326

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