Document:

dmgadvisors.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CONSULTING
AGREEMENT

    

    This
CONSULTING AGREEMENT (the "Agreement") is made and entered into as of July 15,
2009 by and between ECOLOGY COATINGS, INC., a Nevada corporation (the
"Company"), and DMG ADVISORS, LLC, a Nevada limited liability company (the
"Consultant").

    

    1.
RETENTION OF CONSULTANT. The Company hereby engages and retains Consultant and
Consultant hereby agrees to use Consultant's best efforts to render to the
Company the consulting services for a period commencing on the date of this
Agreement and terminating on January 15, 2009 (six months),or such additional
periods as agreed upon in writing by the parties. This Agreement may not be
terminated by either the Company or Consultant during its term.

    

    2.
CONSULTANT'S SERVICES. Consultant's services under this Agreement shall consist
of the following:

    

    2.1
Advise the Company regarding its investor relations program and
initiatives;

    

    2.2
Facilitate conferences between the Company and members of the business and
financial community;

    

    2.3
Review and analyze the public securities market for the Company's securities;
and

    

    2.4
Introduce the Company to broker-dealers and institutions, as
appropriate.

    

    In
rendering its services, Consultant will deal with the CEO or Directors of the
Company.

    

    3.
PAYMENT FOR SERVICES.

    

    3.1 The
Company shall pay Consultant Five Thousand Dollars ($5,000) per
month.  For purposes of this Agreement, the $5,000 shall be deemed to
be equivalent to Twenty Five Thousand (25,000) shares of Company’s common
stock.  Company shall issue Twenty Five Thousand (25,000) shares of
Company’s common stock to Consultant upon execution of this Agreement and Twenty
Five Thousand (25,000) shares on the fifteenth day of each calendar month
following the date of this Agreement until termination through December 15,
2009.

    

    3.2 The
Company's payments under Paragraph 3.1 above shall be deemed full and complete
consideration for the services to be rendered by Consultant under this
Agreement.

    

    4.
CONSULTANT'S TIME COMMITMENT. Consultant shall devote such time as reasonably
requested by the Company for consultation, advice and assistance on matters
described in this Agreement and provides the same in such form as the Company
requests. The Company agrees that Consultant shall not be prevented or barred
from rendering services similar or dissimilar in nature for and on behalf of any
person, firm or corporation other than the Company.

    

    5. NATURE
OF SERVICES AND INDEPENDENT CONTRACTOR. The relationship created

    under
this Agreement is that of Consultant acting as an independent
contractor.  The parties acknowledge and agree that Consultant shall
have no authority to, and shall not, bind the Company to any agreement or
obligation with any third party. The parties also acknowledge that Consultant's
services will consist in part of introducing and facilitating the introduction
of parties to the Company.  Consultant will not assist in any
negotiations between the Company and such parties. Consultant is not a licensed
broker-dealer and will not provide services as a broker-dealer. Consultant will
also not provide legal or accounting services.

    

    6.
NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Consultant shall maintain as secret
and confidential all valuable information heretofore or hereafter acquired,
developed or used by the Company relating to its business, operations, employees
and customers that may give the Company a competitive advantage in its industry
(all such information is hereinafter referred to as "Confidential Information").
The parties recognize that, by reason of Consultant's duties under this
Agreement, Consultant may acquire Confidential Information. Consultant
recognizes that all such Confidential Information is the property of the
Company. During the term of Consultant's engagement by the Company, Consultant
shall exercise all due and diligent precautions to protect the integrity of any
or all of the Company's documents containing Confidential Information. In
consideration of the Company entering into this Agreement,

    Consultant
shall not, directly or indirectly, use, publish, disseminate or otherwise
disclose any Confidential Information obtained during Consultant's engagement by
the Company without the prior written consent of the Company. The parties agree
that this Paragraph 6 shall survive the termination of this
Agreement.

    

    7.
COMMUNICATIONS WITH CONSULTANT. Consultant will not independently conduct a due
diligence review of the Company and will, to a great extent, be relying upon
information provided by the Company in rendering services under this
Agreement.

    

    8.
EXCULPATION OF LIABILITY AND INDEMNIFICATION. All decisions with respect to
consultations or services rendered by Consultant for transactions negotiated for
and presented to the Company by Consultant shall be those of the Company, and
Consultant shall have no liability with respect to such decisions. In connection
with the services Consultant renders under this Agreement, the Company
indemnifies and holds Consultant harmless against any and all
losses,

    claims,
damages and liabilities and the expense, joint and several, to which Consultant
may become subject and will reimburse Consultant for any legal and other
expenses, including attorney's fees and disbursements incurred by Consultant in
connection with investigating, preparing or defending any actions commenced or
threatened or claim whatsoever, whether or not resulting in the liability,
insofar as such are based upon the information the Company has supplied to
Consultant under this Agreement. In connection with the services Consultant
renders under this Agreement, Consultant indemnifies and holds the Company
harmless against any and all losses, claims, damages and liabilities and the
expense, joint and several, to which Company may become subject and will
reimburse Company for any legal and other expenses, including attorney's fees
and disbursements incurred by the Company in connection with investigating,
preparing or defending any actions commenced or threatened or claim whatsoever,
whether or not resulting in the liability, insofar as such are based upon or in
connection with the services Consultant has rendered under this
Agreement.

    

    9. ENTIRE
AGREEMENT. Except for Settlement Agreement, this Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the subject matter hereof. No representation,
promise, or inducement has been made by any party that is not embodied in this
Agreement, and no party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth. If any provision of this
Agreement shall be declared void or against public policy, such provision shall
be deemed severed from this Agreement and the remaining provisions shall remain
in full force and effect and unmodified.

    

    10.
ASSIGNMENT. The Consultant may not assign or transfer any or all rights under
this Agreement without written authorization from the Company. The Company may
assign its rights, together with its obligations, hereunder in connection with
any sale, transfer or other disposition of all or substantially all of its
business or assets. In such event, the rights and obligations of the Company
shall be binding on its successors or assigns, whether by merger, consolidation
or acquisition of all or substantially all of the business or
assets.

    

    11.
AMENDMENT. This Agreement may be amended, modified, superseded, canceled,
renewed or extended and the terms or covenants hereof may be waived only by a
written instrument executed by all of the parties hereto who are thereby
affected, or in the case of a waiver, by the party waiving compliance. No waiver
by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.

    

    12.
NOTICES. All notices, consents, requests, demands and offers required or
permitted to be given under this Agreement will be in writing and will be
considered properly given or made when personally delivered to the party
entitled thereto, or when mailed by certified United States mail, postage
prepaid, return receipt requested, addressed to the addresses appearing in this
Agreement. A party may change his address by giving notice to the other party to
this Agreement.

    

    13.
COUNTERPARTS. This Agreement may be signed in any number of counterparts, each
of which shall be an original, but all of which, taken together, shall
constitute one agreement. It shall not be required that any single counterpart
hereof be signed by the parties, so long as each party signs any counterpart of
this Agreement.

    

    14.
GOVERNING LAW. This Agreement shall be governed in all respects and
for

    all
purposes by the laws of the State of Michigan and the Courts of Wayne County,
Michigan shall have exclusive jurisdiction to enforce any order or
award.

    

    15.
ATTORNEYS' FEES. In case of any action or proceeding to compel compliance with,
or for a breach of, any of the terms and conditions of this Agreement, the
prevailing party shall be entitled to recover from the losing party all costs of
such action or proceeding, including, but not limited to, reasonable attorneys'
fees.

    

    IN
WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as
of the day and year first above written.

    

    ECOLOGY
COATINGS, INC.

    

    By:  /s/ Robert G.
Crockett

    Robert G. Crockett

    

    Its:  CEO

    

    2701
Cambridge Court, Suite 100

    Auburn
Hills, MI  48326

    

    

    

    DMG
ADVISORS, LLC

    

    

    By:  /s/ Jeff
Holmes

    Jeff Holmes

    

    Its:  Manager

    

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SETTLEMENT
AND RELEASE AGREEMENT

    This
Settlement and Release Agreement, by and between Ecology Coatings, Inc. (“ECOC”)
and DMG Advisors, LLC, Kirk Blosch and Jeff Holmes (DMG Advisors, LLC, Kirk
Blosch and Jeff Holmes collectively referred to as “Undersigned”), is effective
July 15, 2009.

    
      	
              1.  

            	
              In
      exchange for the following:

            

    

    
      	
              ·  

            	
              The
      parties agree to terminate their Consulting Agreement dated July 26, 2007
      (“Initial Consulting Agreement”).

            

    

    
      	
              ·  

            	
              ECOC
      currently owes Undersigned $200,000 for services in connection with the
      Initial Consulting Agreement.  The parties agree to reduce the
      obligation to $100,000 which will be satisfied in full by ECOC’s issuance
      of 500,000 shares to Undersigned.

            

    

    
      	
              ·  

            	
              The
      parties will enter into a new consulting agreement which will have a term
      of 6 months and payment by ECOC of 25,000 restricted shares of ECOC stock
      per month to Undersigned.

            

    

    
      	
              ·  

            	
              The
      Undersigned shall not use any of their shares of ECOC stock for short
      selling purposes.

            

    

    Undersigned
and Ecology Coatings, Inc., its directors, officers,
employees,  agents and affiliates, including Equity 11, Ltd. (“ECOC”)
each mutually forever release, discharge and indemnify each other from any and
all claims,
demands,  actions,  causes  of  action  and  any  other  rights
which either may have against the other, based upon or arising out of the
Initial Consulting Agreement entered into by and between the Undersigned and
ECOC.  Undersigned understands and agrees that the consideration as
specified herein represents the total amount of money required under this
Agreement to be paid on behalf of ECOC and that no further payments are
necessary or required.

    2. Undersigned acknowledges and agrees
this agreement constitutes the entire agreement between Undersigned and ECOC
with regard to the matter set forth herein and shall be binding upon and inure
to the benefit of the executors, administrators, personal representatives,
heirs, successors and assigns of each.

    
      	 
      	
              DMG
      ADVISORS, LLC, UNDERSIGNED

            	 
      	
              ECOLOGY
      COATINGS, INC.

            
	 
      	 
      	 
      	 
      
	
              By:

            	
              /s/
      Jeff Holmes

            	
              By:

            	
              /s/
      Robert G. Crockett

            
	 
      	
              Jeff
      Holmes

            	 
      	
              Robert
      G. Crockett

            
	 
      	 
      	 
      	 
      
	
              Its:

            	
              Manager

            	
              Its:

            	
              CEO

            
	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Kirk Blosch

            	 
      	 
      
	 
      	
              Kirk
      Blosch, Individually, UNDERSINGED

            	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              /s/
      Jeff Holmes

            	 
      	 
      
	 
      	
              Jeff
      Holmes, Individually, UNDERSINGEDmarquezpromnote.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ECOLOGY
COATINGS, INC.

     

    CONVERTIBLE
PROMISSORY NOTE

     

    $300,000                                                                                                Note
Number:

     

    February 26, 2006

     

    FOR VALUE RECEIVED, ECOLOGY COATINGS,
INC., a California corporation (“Company”), promises to pay to Chris L.
Marquez (“Holder”), or its registered assigns, in lawful money of the United
States of America the principal sum of THREE HUNDRED THOUSAND DOLLARS
($300,000), or such lesser amount as shall equal the outstanding principal
amount hereof, together with interest from the date of this Convertible
Promissory Note (the “Note”) on the unpaid principal balance at a rate equal to
fifteen percent (15%) per annum, computed on the basis of the actual number of
days elapsed and a year of 365 days.  All unpaid principal, together
with any then unpaid and accrued interest and other amounts payable hereunder,
shall be due and payable on the earlier of (i) August 26, 2007 (the “Maturity
Date”), or (ii) when, upon or after the occurrence of an Event of Default (as
defined below), such amounts are declared due and payable by Holder or made
automatically due and payable in accordance with the terms
hereof.  This Note is one of a duly authorized series of Convertible
Promissory Notes of the Company that may be issued by the Company from time to
time of like tenor and effect (except for such variations as may be necessary to
express the name of the payee, the number, the date, and the principal amount of
each note) each dated on or after February 28, 2006 (the “Bridge
Notes”).

    

    The
following is a statement of the rights of Holder and the conditions to which
this Note is subject, and to which Holder, by the acceptance of this Note,
agrees:

    

    
      	
              1.  

            	
              Definitions.  As
      used in this Note, the following capitalized terms have the following
      meanings:

            

    

    

    
      	
              (a)  

            	
              “Business
      Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is
      not a day on which banking institutions in the State of Ohio are
      authorized or obligated by law or executive order to
  close.

            

    

    
      	
              (b)  

            	
              “Company”
      includes the corporation initially executing this Note and any Person
      which shall succeed to or assume the Obligations of Company under this
      Note.

            

    

    
      	
              (c)  

            	
              “Event
      of Default” has the meaning given in Section 4
  hereof.

            

    

    
      	
              (d)  

            	
              “Holder”
      means the Person specified in the introductory paragraph of this Note or
      any Person who shall at the time be the registered Holder of this Note,
      and “Bridge Holders” shall refer to all such Persons holding
      then-outstanding Bridge Notes.

            

    

    
      	
              (e)  

            	
              “Lien”
      means with respect to any property, any security interest, mortgage,
      pledge, lien, claim, charge or other encumbrance in, of, or on such
      property or the income therefrom, including, without limitation, the
      interest of a vendor or lessor under a conditional sale agreement, capital
      lease or other title retention agreement, or any agreement to provide any
      of the foregoing, and filing of any financing statement or similar
      instrument under the Uniform Commercial Code or comparable law of any
      jurisdiction.

            

    

    
      	
              (f)  

            	
              “Majority-in-Interest
      of the Bridge Holders” means Bridge Holders holding more than fifty
      percent (50%) of the aggregate outstanding principal amount of the
      then-outstanding Bridge Notes.

            

    

    
      	
              (g)  

            	
              “Material
      Adverse Effect” shall mean a material adverse effect on (a) the business,
      assets, operations, prospects or financial or other condition of the
      Company; (b) the ability of the Company to pay or perform the Obligation
      in accordance with the terms of this Note and each of the other Bridge
      Notes and to avoid an Event of Default, or an event which, with the giving
      of notice or the passage of time or both, would constitute an Event of
      Default, under any Bridge Notes; or (c) the rights and remedies of Holder
      under this Note or any related documents, instrument or
      agreement.

            

    

    
      	
              (h)  

            	
              “Obligations”
      means and includes all loans, advances, debts, liabilities and obligation
      howsoever arising, owned by Company to the Bridge Holders of every kind
      and description (whether or not evidenced by any note or instrument and
      whether or not for the payment of money), now existing or hereafter
      arising under or pursuant to the terms of the Bridge Notes, including all
      interest, fees, charges, expenses, attorneys’ fees and costs and
      accountants’ fees and costs chargeable to and payable by Company hereunder
      and thereunder, in each case, whether direct or indirect, absolute or
      contingent, due or to become due, and whether or not arising after the
      commencement of a proceeding under Title 11 of the United State Code 17
      USC Section 101 et. Seq.) as amended from time to time (including
      post-petition interest) and whether or not allowed or allowable as a claim
      in any such proceeding.

            

    

    
      	
              (i)  

            	
              “Person”
      means and includes an individual, a partnership, a corporation (including
      a business trust), a joint stock company, a limited liability company, an
      unincorporated association, a joint venture or other entity or a
      governmental authority.

            

    

    
      	
              (j)  

            	
              “Securities
      Act” means the Securities Act of 1933, as
  amended.

            

    

    

    2. Interest.  Subject
to Section 3 and 8 of this Note, accrued interest on this Note shall be first
payable on the Maturity Date.

    

    3. Prepayment.  Company
may prepay this Note in whole or in part only upon the prior written consent of
the Bridge Holder.

    

     

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

    

     

    
      	
              (a)  

            	
              Failure
      to Pay.  The Company shall fail to pay when due any principal or
      interest payment on the date
hereunder;

            

    

    
      	
              (b)  

            	
              Voluntary
      Bankruptcy or Insolvency Proceedings.  The Company shall (i)
      apply for or consent to the appointment of a receiver, trustee, liquidator
      or custodian of itself of all or a substantial part of its property, (ii)
      be unable, or admit in writing its inability, to pay its debts general as
      they mature, (iii) make a general assignment for the benefit of its or any
      of its creditors, (iv) be dissolved or liquidated, (v) become insolvent
      (as such term may be defined or interpreted under any applicable statute),
      (vi) commence a voluntary case or other proceeding seeking liquidation,
      reorganization or other relief with respect to itself or its debts under
      any bankruptcy, insolvency or other similar law now or hereafter in effect
      or consent to any such relief or to the appointment of or taking
      possession of its property by any official in an involuntary case or other
      proceeding commenced against it, or (vii) take any action for the purpose
      of effecting any of the foregoing;
or

            

    

    
      	
              (c)  

            	
              Involuntary
      Bankruptcy or Insolvency Proceedings.  Proceedings for the
      appointment of a receiver, trustee, liquidator or custodian of the Company
      or of all or a substantial part of the property thereof, or an involuntary
      case or other proceedings seeking liquidation, reorganization or other
      relief with respect to the Company or the debts thereof under any
      bankruptcy, insolvency or other similar law now or hereafter in effect
      shall be commenced and an order for relief entered or such proceeding
      shall not be dismissed or discharged within thirty (30) days of
      commencement.

            

    

    

    5. Rights of
Holder Upon Default.  Upon the occurrence or existence of any Event of
Default (other than an Event of Default described in Sections 4(b) or 4(c)) and
at any time thereafter during the continuance of such Event of Default, Holder
may, with the consent of a Majority-in-Interest of the Bridge Holders, by
written notice to the Company, declare all outstanding Obligation payable by
Company hereunder to be immediately due and payable without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived.  Upon the occurrence or existence of any Event of Default
described in Sections 4(b) and 4(c), immediately and without notice, all
outstanding Obligations payable by the Company hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived.

    

    
      	
              6.  

            	
              Representations
      and Warranties of the Company.  The Company represents and
      warrants to Holder that:

            

    

    

     

    
      	
              (a)  

            	
              Due
      Incorporation, Qualification, etc.  The Company (i) is a
      corporation duly organized, validly existing and in good standing under
      the laws of its state of incorporation; (ii) has the power and authority
      to own, lease and operate its properties and carry on its business as now
      conducted; and (iii) is duly qualified, licensed to do business and in
      good standing as a foreign corporation in each jurisdiction where the
      failure to be so qualified or licensed could reasonably be expected to
      have a Material Adverse Effect.

            

    

    
      	
              (b)  

            	
              Authority.  The
      execution, delivery and performance by the Company of this Note (i) are
      within the power of the Company and (ii) have been duly authorized by all
      necessary actions on the part of the
Company.

            

    

    
      	
              (c)  

            	
              Enforceability.  This
      Note has been or will be, duly executed and delivered by the Company and
      constitutes, or will constitute, a legal, valid and binding obligation of
      the Company, enforceable against the Company in accordance with its terms,
      except as limited by bankruptcy, insolvency or other laws of general
      application relating to or affecting the enforcement of creditors’ rights
      generally and general principles of
equity.

            

    

    
      	
              (d)  

            	
              Non-Contravention.  The
      execution and delivery by the Company of this Note and the performance and
      consummation of the transactions contemplated thereby do no and will not
      (i) violate the Company’s Articles of Incorporation or Bylaws (“Charter
      Documents”) or any material judgment, order, writ, decree, statute, rule
      or regulation applicable to the Company; (ii) violated any provision of,
      or result in the breach of the acceleration of, or entitle any other
      Person to accelerate (whether after the giving of notice or lapse of time
      or both), any material mortgage, indenture, agreement, instrument or
      contract to which the Company is a party or by which it is bound; or (iii)
      result in the creation or imposition of any Lien upon any property, asset
      or revenue of the Company or the suspension, revocation, impairment,
      forfeiture, or nonrenewal of any material permit, license, authorization
      or approval applicable to the Company, its business or operations, or any
      of its assets or properties.

            

    

    
      	
              (e)  

            	
              Approvals.  No
      consent, approval, order or authorization of, or registration, declaration
      or filing with, any governmental authority or other Person (including,
      without limitation, the shareholders of any person) is required in
      connection with the execution and delivery of this Note and the
      performance and consummation of the transactions contemplated
      thereby.

            

    

    
      	
              (f)  

            	
              No
      Violation of Default.  The Company is not in violation of or in
      default with respect to (i) its Charter Documents or any material
      judgment, order, writ, decree, statute, rule or regulation applicable to
      such Person; or (ii) any material mortgage, indenture, agreement,
      instrument or contract to which such Person is a party or by which it is
      bound (no is there any waiver in effect which, if not in effect, would
      result in such a violation or default), where, in each case, such
      violation or default, individually, or together with all such violations
      or defaults, could reasonably be expected to have a Material Adverse
      Effect.

            

    

    

    7. Representations
and Warranties of Holder.  Holder represents and warrants to the
Company upon the acquisition of this Note as follows:

    

    
      	
              (a)  

            	
              Binding
      Obligation.  Holder has full legal capacity, power and authority
      to execute and deliver this Note and to perform its obligations
      hereunder.  This Note is a valid and binding obligation of
      Holder, enforceable in accordance with its terms, except as limited by
      bankruptcy, insolvency or other laws of general application relating to or
      affecting the enforcement of creditors’ rights generally and general
      principles of equity.

            

    

    
      	
              (b)  

            	
              Securities
      Law Compliance.  Holder has been advised that this Note and the
      underlying securities have not been registered under the Securities Act,
      or any state securities laws and, therefore, cannot be resold unless they
      are registered under the Securities Act, and applicable state securities
      laws or unless an exemption from such registration requirements is
      available.  Holder is aware that the Company is under no
      obligation to effect any such registration with respect to this Note or
      the underlying securities or to file for or comply with any exemption from
      registration.  Holder has not been formed solely for the purpose
      of making this investment and is purchasing this Note for its own account
      for investment, not as a nominee or agent, and not with a view to, or for
      resale in connection with, the distribution thereof.  Holder has
      such knowledge and experience in financial and business matters that
      Holder is capable of evaluating the merits and risks of such investment,
      is able to incur a complete loss of such investment and is able to bear
      the economic risk of such investment for an indefinite period of
      time.  Holder is an accredited investor as such term is defined
      in Rule 501 of Regulation D under the Securities
  Act.

            

    

    
      	
              (c)  

            	
              Tax
      Advisors.  Holder acknowledges that it has had the opportunity
      to review with its own tax advisors the federal, state, local and foreign
      tax consequences of this investment and the transactions contemplated by
      this Note.  Holder further acknowledges and agrees that Holder
      (and not the Company) shall be responsible for its own tax liability that
      may arise as a result of this investment or the transactions contemplated
      by this Note.

            

    

    

    
      	
              8.  

            	
              Acceleration
      of Payment/Optional Conversion.

            

    

    

    
      	
              (a)  

            	
              Automatic
      Conversion.  In the event the Company consummates, prior to the
      Maturity Date an equity financing pursuant to which it sells shares of its
      Stock (the “Stock”) with the principal purpose of raising capital and with
      aggregate gross proceeds to the Company of at least $5,000,000 (including
      the principal amount of any Bridge Notes that convert into Stock in such
      financing)(the “Qualified Equity Financing”), the Holder may, at its sole
      option, (i) elect to have the Company pay to Holder the entire outstanding
      principal amount of and all accrued interest under this Note upon the
      consummation of the Qualified Equity Financing or (ii) elect to have the
      outstanding principal amount of and all accrued interest under this Note
      convert into shares of Stock on the same terms and conditions (except for
      price) as the other investors that purchase the Stock in the Qualified
      Equity Financing at a conversion price per share equal to eighty percent
      (80%) of the price per share paid by the other investors that purchase the
      Stock in the Qualified Equity Financing (the “Discount
      Price”).

            

    

    
      	
              (b)  

            	
              Conversion
      Procedure.  In the event Holder elects to convert this Note
      pursuant to Section 8(a), Holder agrees to deliver the original of this
      Note (or a notice to the effect that the original Note has been lost,
      stolen or destroyed and an agreement acceptable to the Company whereby
      Holder agrees to indemnify the Company from any loss incurred by it in
      connection with this Note) at the closing of the Qualified Equity
      Financing for cancellation.  In addition, upon conversion of
      this Note in connection with a Qualified Equity Financing, Holder hereby
      further agrees to execute and deliver to the Company all transaction
      documents related to the Qualified Equity Financing, including a purchase
      agreement and other ancillary agreements, with customary representations
      and warranties and transfer restrictions (including a 180-day, or such
      shorter period established by the lead underwriter, lock-up agreement in
      connection with an initial public offering), and having the same terms as
      those agreements entered into by the other investors that purchase the
      Stock.

            

    

    
      	
              (c)  

            	
              Delivery
      of Stock Certificate; No Fractional Shares.  In the event of the
      conversion of this Note pursuant to Section 8(a), Company shall deliver to
      Holder not more than ten (10) Business Days after delivery by Holder of
      this Note to Company a certificate representing the shares of Stock issued
      upon conversion of this Note and cash in lieu of any fractional shares
      pursuant to the next sentence.  No fractions of shares or scrip
      representing fractions of shares will be issued upon conversion, but
      instead of any fractional interest, Company shall pay a cash adjustment,
      computed on the basis of the Discount
Price.

            

    

    

    9. Successors
and Assigns.  Subject to the restrictions on transfer described in
Section 11 and 12 below, the rights and Obligation of Company and Holder of this
Note shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.

    

    10. Waiver
and Amendment.  Any provision of this Note may be amended, waived or
modified upon the written consent of Company and a Majority-in-Interest of the
Bridge Holders.

    

     

    11. Transfer
of this Note or Securities Issuable on Conversion Hereof.  Holder
agrees that this Note and the securities issuable upon conversion of this Note
may not be offered, sold, transferred or disposed of in any other way without
the prior written consent of the Company.  With respect to any offer,
sale or other disposition of this Note or securities into which such Note may be
converted, Holder will give written notice to Company prior thereto, describing
briefly the manner thereof, together, if requested, with a written opinion of
Holder’s counsel, or other evidence if reasonably satisfactory to the Company,
to the effect that such offer, sale or other distribution may be effected
without registration or qualification (under any federal or state law then in
effect).  Upon receiving such written notice and reasonably
satisfactory opinion, if so requested, or other evidence, Company, as promptly
as practicable, shall notify Holder whether or not Holder may sell or otherwise
dispose of this Note or such securities, all in accordance with the terms of the
notice delivered to Company.  If a determination has been made
pursuant to this Section 11 that the opinion of counsel for Holder, or other
evidence, is not reasonably satisfactory to Company, Company shall so notify
Holder promptly after such determination has been made.  After Holder
ahs been notified in writing that the Company consents to the offer, sale, or
other disposition of this Note or such securities, Holder may sell or otherwise
dispose of this Note or such securities in accordance with the terms of the
notice delivered to Company.  Each Note thus transferred and each
certificate representing the securities thus transferred shall bear a legend as
to the applicable restrictions on transferability in order to ensure compliance
with the Securities Act, unless in the opinion of counsel for Company such
legend is not required in order to ensure compliance with the Securities
Act.  Company may issue stop transfer instructions to its transfer
agent in connection with such restrictions.  Subject to the foregoing,
transfers of this Note shall be registered upon registration books maintained
for such purpose by or on behalf of Company.  Prior to presentation of
this Note for registration of transfer, Company shall treat the registered
Holder hereof as the owner and Holder of this Note for the purpose of receiving
all payments of principal and interest hereon and for all other purposes
whatsoever, whether or not this Note shall be overdue and Company shall not be
affected by notice to the contrary.

    

    12. Assignment
by Company.  Neither this Note nor any of the rights, interests or
Obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by Company without the prior written consent of a
Majority-in-Interest of the Bridge Holders.

    

     

    
      	
              (a)  

            	
              Notices.  All
      notices, request, demands, consent, instructions or other communications
      required or permitted hereunder shall be in writing and faxed, mailed or
      delivered to each party as follows:  (i) if to Holder, at
      Holder’s address of facsimile number set forth on the signature page
      hereto, or at such other address as Holder shall have furnish the Company
      in writing, or (ii) if to the Company, at the following address of
      facsimile number (or at such other address or facsimile number as the
      Company shall have furnished to the Investors in
  writing):

            

    

    

    Company:                      Ecology
Coatings, Inc.

    1238 Brittain Road

    Akron,
Ohio  44310

    Telephone:  (33)
633-3500

    Facsimile:   (330)
633-3464

    Attn:  Chief Financial
Officer

    

    All such
notices and communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the business day following
the deposit with such service; (b) when mailed, by registered or certified mail,
first class postage prepaid and addressed as aforesaid through the United States
Postal Service, four days after being deposited in the mail; (c) when delivered
by hand, upon delivery; and (d) when faced, upon confirmation of
receipt.

    

    13. Withholding
Rights.  The Company shall be entitled to deduct and withhold from any
payments made pursuant to this Note such amounts as the Company is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended, or any provision of state or local
tax law.  To the extent that amounts are so withheld by the Company,
such withheld amounts shall be treated for all purposes of this Note as having
been paid to Holder in respect of which such deduction and withholding was made
by Company.

    

    14. Pari
Passu Notes.  Holder acknowledges and agrees that the payment of all
or any portion of the outstanding principal amount of this Note and all interest
hereon shall be pari
passu in right of payment and in all other respects to the other Bridge
Notes.  In the event Holder receives payments in excess of its pro
rata share of Company’s payments to the Bridge Holder holding the other Bridge
Notes, then Holder shall hold in trust and such excess payments for the benefit
of the Bridge Holders holding the other Bridge Notes and shall pay such amounts
held in trust to such other Bridge Holders upon demand by such
Investors.

    

     

    15. Usury.  In
the event any interest is paid on this Note which is deemed to be in excess of
the then legal maximum rate, then that portion of the interest payment
representing an amount in excess of the then legal maximum rate shall be deemed
a payment of principal and applied against the principal of this
Note.

    

     

    16. Waivers.  Company
hereby waives notice of default, presentment or demand for payment, protest or
notice of nonpayment or dishonor and all other notices or demands relative to
this instrument.

    

     

    17. Partial
Invalidity.  If at any time any provision of this Note is or becomes
illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Note nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be affected
or impaired thereby.

    

     

    18. Governing
Law.  This Note and all actions arising out of or in connection with
this Note shall be governed by and construed in accordance with the laws of the
State of California, without regard to the conflicts of law provisions of the
State of California, or of any other state.

    

     

    IN
WITNESS WHEREOF, the Company and Holder have caused this Second Allonge to be
executed and delivered as of the date and year first above written.

     

    

     

    ECOLOGY COATINGS, INC.

     

    

     

    

     

    

     

    By:  /s/ Richard
Stromback

     

    Richard Stromback

     

    Its:           CEO

     

    

     

    

     

    Accepted and agreed to:

     

    

     

    

     

    /s/ Chris L
Marquez

     

    CHRIS L. MARQUEZ

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